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Section 3. Sale of mortgaged property; effect. — When the defendant, after being
REPUBLIC ACT No. 7653: THE NEW CENTRAL BANK ACT directed to do so as provided in the next preceding section, fails to pay the amount of
CHAPTER II – THE BANGKO SENTRAL AND THE MEANS OF PAYMENT the judgment within the period specified therein, the court, upon motion, shall order
Section 60. Legal Character. - Checks representing demand deposits do not have legal the property to be sold in the manner and under the provisions of Rule 39 and other
tender power and their acceptance in the payment of debts, both public and private, is regulations governing sales of real estate under execution. Such sale shall not affect the
at the option of the creditor: Provided, however, That a check which has been cleared rights of persons holding prior encumbrances upon the property or a part thereof, and
and credited to the account of the creditor shall be equivalent to a delivery to the when confirmed by an order of the court, also upon motion, it shall operate to divest
creditor of cash in an amount equal to the amount credited to his account. the rights in the property of all the parties to the action and to vest their rights in the
purchaser, subject to such rights of redemption as may be allowed by law.
The maximum amount of coins to be considered as legal tender is adjusted as follows: Upon the finality of the order of confirmation or upon the expiration of the period of
1. One thousand pesos (P1,000.00) for denominations of 1-Piso, 5-Piso and 10- redemption when allowed by law, the purchaser at the auction sale or last
Piso coins; and redemptioner, if any, shall be entitled to the possession of the property unless a third
2. One hundred pesos (P100.00) for denominations of 1-sentimo, 5-sentimo, party is actually holding the same adversely to the judgment obligor. The said purchaser
10-sentimo, and 25-sentimo coins. or last redemptioner may secure a writ of possession, upon motion, from the court
This Circular shall take effect after fifteen (15) days following its publication in the which ordered the foreclosure.
Official Gazette or in a newspaper of general circulation.
Section 4. Disposition of proceeds of sale. — The amount realized from the foreclosure
BSP CIRCULAR NO. 799 (June 21, 2013) sale of the mortgaged property shall, after deducting the costs of the sale, be paid to
In the absence of a contract expressly providing for a different rate, the rate of interest the person foreclosing the mortgage, and when there shall be any balance or residue,
for the loan or forbearance of any money, goods or credits and the rate allowed in after paying off the mortgage debt due, the same shall be paid to junior encumbrancers
judgments has been reduced from twelve percent (12%) to six percent (6%) per annum. in the order of their priority, to be ascertained by the court, or if there be no such
encumbrancers or there be a balance or residue after payment to them, then to the
D. REM mortgagor or his duly authorized agent, or to the person entitled to it.

RULE 68: Foreclosure of Real Estate Mortgage Section 5. How sale to proceed in case the debt is not all due. — If the debt for which
Section 1. Complaint in action for foreclosure. — In an action for the foreclosure of a the mortgage or encumbrance was held is not all due as provided in the judgment as
mortgage or other encumbrance upon real estate, the complaint shall set forth the date soon as a sufficient portion of the property has been sold to pay the total amount and
and due execution of the mortgage; its assignments, if any; the names and residences of the costs due, the sale shall terminate; and afterwards as often as more becomes due
the mortgagor and the mortgagee; a description of the mortgaged property; a for principal or interest and other valid charges, the court may, on motion, order more
statement of the date of the note or other documentary evidence of the obligation to be sold. But if the property cannot be sold in portions without prejudice to the
secured by the mortgage, the amount claimed to be unpaid thereon; and the names and parties, the whole shall be ordered to be sold in the first instance, and the entire debt
residences of all persons having or claiming an interest in the property subordinate in and costs shall be paid, if the proceeds of the sale be sufficient therefor, there being a
right to that of the holder of the mortgage, all of whom shall be made defendants in the rebate of interest where such rebate is proper.
Section 6. Deficiency judgment. — If upon the sale of any real property as provided in
Section 2. Judgment on foreclosure for payment or sale. — If upon the trial in such the next preceding section there be a balance due to the plaintiff after applying the
action the court shall find the facts set forth in the complaint to be true, it shall proceeds of the sale, the court, upon motion, shall render judgment against the
ascertain the amount due to the plaintiff upon the mortgage debt or obligation, defendant for any such balance for which, by the record of the case, he may be
including interest and other charges as approved by the court, and costs, and shall personally liable to the plaintiff, upon which execution may issue immediately if the
render judgment for the sum so found due and order that the same be paid to the court balance is all due at the time of the rendition of the judgment; otherwise; the plaintiff
or to the judgment obligee within a period of not less than ninety (90) days nor more shall be entitled to execution at such time as the balance remaining becomes due under
than one hundred twenty (120) days from the entry of judgment, and that in default of the terms of the original contract, which time shall be stated in the judgment.
such payment the property shall be sold at public auction to satisfy the judgment.
Section 7. Registration. — A certified copy of the final order of the court confirming the collect a fee of five pesos each day of actual work performed, in addition to his
sale shall be registered in the registry of deeds. If no right of redemption exists, the expenses.
certificate of title in the name of the mortgagor shall be cancelled, and a new one issued
in the name of the purchaser. Sec. 5. At any sale, the creditor, trustee, or other persons authorized to act for the
creditor, may participate in the bidding and purchase under the same conditions as any
Where a right of redemption exists, the certificate of title in the name of the mortgagor other bidder, unless the contrary has been expressly provided in the mortgage or trust
shall not be cancelled, but the certificate of sale and the order confirming the sale shall deed under which the sale is made.
be registered and a brief memorandum thereof made by the registrar of deeds upon the
certificate of title. In the event the property is redeemed, the deed of redemption shall Sec. 6. In all cases in which an extrajudicial sale is made under the special power
be registered with the registry of deeds, and a brief memorandum thereof shall be hereinbefore referred to, the debtor, his successors in interest or any judicial creditor or
made by the registrar of deeds on said certificate of title. judgment creditor of said debtor, or any person having a lien on the property
subsequent to the mortgage or deed of trust under which the property is sold, may
If the property is not redeemed, the final deed of sale executed by the sheriff in favor of redeem the same at any time within the term of one year from and after the date of the
the purchaser at the foreclosure sale shall be registered with the registry of deeds; sale; and such redemption shall be governed by the provisions of sections four hundred
whereupon the certificate of title in the name of the mortgagor shall be cancelled and a and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in
new one issued in the name of the purchaser. so far as these are not inconsistent with the provisions of this Act.

Section 8. Applicability of other provisions. — The provisions of sections 31, 32 and 34 of Sec. 7. In any sale made under the provisions of this Act, the purchaser may petition the
Rule 39 shall be applicable to the judicial foreclosure of real estate mortgages under this Court of First Instance of the province or place where the property or any part thereof is
Rule insofar as the former are not inconsistent with or may serve to supplement the situated, to give him possession thereof during the redemption period, furnishing bond
provisions of the latter. in an amount equivalent to the use of the property for a period of twelve months, to
indemnify the debtor in case it be shown that the sale was made without violating the
ACT NO. 3135 - AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL mortgage or without complying with the requirements of this Act. Such petition shall be
POWERS INSERTED IN OR ANNEXED TO REAL-ESTATE MORTGAGES made under oath and filed in form of an ex parte motion in the registration or cadastral
Section 1. When a sale is made under a special power inserted in or attached to any proceedings if the property is registered, or in special proceedings in the case of
real-estate mortgage hereafter made as security for the payment of money or the property registered under the Mortgage Law or under section one hundred and ninety-
fulfillment of any other obligation, the provisions of the following election shall govern four of the Administrative Code, or of any other real property encumbered with a
as to the manner in which the sale and redemption shall be effected, whether or not mortgage duly registered in the office of any register of deeds in accordance with any
provision for the same is made in the power. existing law, and in each case the clerk of the court shall, upon the filing of such petition,
collect the fees specified in paragraph eleven of section one hundred and fourteen of
Sec. 2. Said sale cannot be made legally outside of the province in which the property Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-
sold is situated; and in case the place within said province in which the sale is to be eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a
made is subject to stipulation, such sale shall be made in said place or in the municipal writ of possession issue, addressed to the sheriff of the province in which the property is
building of the municipality in which the property or part thereof is situated. situated, who shall execute said order immediately.

Sec. 3. Notice shall be given by posting notices of the sale for not less than twenty days Sec. 8. The debtor may, in the proceedings in which possession was requested, but not
in at least three public places of the municipality or city where the property is situated, later than thirty days after the purchaser was given possession, petition that the sale be
and if such property is worth more than four hundred pesos, such notice shall also be set aside and the writ of possession cancelled, specifying the damages suffered by him,
published once a week for at least three consecutive weeks in a newspaper of general because the mortgage was not violated or the sale was not made in accordance with the
circulation in the municipality or city. provisions hereof, and the court shall take cognizance of this petition in accordance with
the summary procedure provided for in section one hundred and twelve of Act
Sec. 4. The sale shall be made at public auction, between the hours or nine in the Numbered Four hundred and ninety-six; and if it finds the complaint of the debtor
morning and four in the afternoon; and shall be under the direction of the sheriff of the justified, it shall dispose in his favor of all or part of the bond furnished by the person
province, the justice or auxiliary justice of the peace of the municipality in which such who obtained possession. Either of the parties may appeal from the order of the judge
sale has to be made, or a notary public of said municipality, who shall be entitled to
in accordance with section fourteen of Act Numbered Four hundred and ninety-six; but thereon, with interest thereon, and the amount of any liens held by the last
the order of possession shall continue in effect during the pendency of the appeal. redemptioner prior to his own, with interest.

Sec. 9. When the property is redeemed after the purchaser has been given possession, Written notice of any redemption must be given to the officer who made the sale and a
the redeemer shall be entitled to deduct from the price of redemption any rentals that duplicate filed with the registry of deeds of the place, and if any assessments or taxes
said purchaser may have collected in case the property or any part thereof was rented; are paid by the redemptioner or if he has or acquires any lien other than that upon
if the purchaser occupied the property as his own dwelling, it being town property, or which the redemption was made, notice thereof must in like manner be given to the
used it gainfully, it being rural property, the redeemer may deduct from the price the officer and filed with the registry of deeds; if such notice be not filed, the property may
interest of one per centum per month provided for in section four hundred and sixty- be redeemed without paying such assessments, taxes, or liens.
five of the Code of Civil Procedure.
Section 29. Effect of redemption by judgment obligor, and a certificate to be delivered
RULE 39: Execution, Satisfaction and Effect of Judgments and recorded thereupon; to whom payments on redemption made. — If the judgment
Section 27. Who may redeem real property so sold. — Real property sold as provided in obligor redeems he must make the same payments as are required to effect a
the last preceding section, or any part thereof sold separately, may be redeemed in the redemption by a redemptioner, whereupon, no further redemption shall be allowed and
manner hereinafter provided, by the following persons: he is restored to his estate. The person to whom the redemption payment is made must
execute and deliver to him a certificate of redemption acknowledged before a notary
(a) The judgment obligor; or his successor in interest in the whole or any part of the public or other officer authorized to take acknowledgments of conveyances of real
property; property. Such certificate must be filed and recorded in the registry of deeds of the
place in which the property is situated and the registrar of deeds must note the record
(b) A creditor having a lien by virtue of an attachment, judgment or mortgage on the thereof on the margin of the record of the certificate of sale. The payments mentioned
property sold, or on some part thereof, subsequent to the lien under which the property in this and the last preceding sections may be made to the purchaser or redemptioner,
was sold. Such redeeming creditor is termed a redemptioner. or for him to the officer who made the sale.

Section 28. Time and manner of, and amounts payable on, successive redemptions; Section 30. Proof required of redemptioner. — A redemptioner must produce to the
notice to be given and filed. — The judgment obligor, or redemptioner, may redeem the officer, or person from whom he seeks to redeem, and serve with his notice to the
property from the purchaser, at any time within one (1) year from the date of the officer a copy of the judgment or final order under which he claims the right to redeem,
registration of the certificate of sale, by paying the purchaser the amount of his certified by the clerk of the court wherein the judgment or final order is entered, or, if
purchase, with the per centum per month interest thereon in addition, up to the time of he redeems upon a mortgage or other lien, a memorandum of the record thereof,
redemption, together with the amount of any assessments or taxes which the purchaser certified by the registrar of deeds, or an original or certified copy of any assignment
may have paid thereon after purchase, and interest on such last named amount at the necessary to establish his claim; and an affidavit executed by him or his agent, showing
same rate; and if the purchaser be also a creditor having a prior lien to that of the the amount then actually due on the lien. (32a)
redemptioner, other than the judgment under which such purchase was made, the
amount of such other lien, with interest. Section 31. Manner of using premises pending redemption; waste restrained. — Until
the expiration of the time allowed for redemption, the court may, as in other proper
Property so redeemed may again be redeemed within sixty (60) days after the last cases, restrain the commission of waste on the property by injunction, on the
redemption upon payment of the sum paid on the last redemption, with two per application of the purchaser or the judgment obligee, with or without notice; but it is
centum thereon in addition and the amount of any assessments or taxes which the last not waste for a person in possession of the property at the time of the sale, or entitled
redemptioner may have paid thereon after redemption by him, with interest on such to possession afterwards, during the period allowed for redemption, to continue to use
last named amount, and in addition, the amount of any liens held by said last it in the same manner in which it was previously used, or to use it in the ordinary course
redemptioner prior to his own, with interest. The property may be again, and as often as of husbandry; or to make the necessary repairs to buildings thereon while he occupies
a redemptioner is so disposed, redeemed from any previous redemptioner within sixty the property.
(60) days after the last redemption, on paying the sum paid on the last previous
redemption, with two per centum thereon in addition, and the amounts of any Section 32. Rents, earnings and income of property pending redemption. — The
assessments or taxes which the last previous redemptioner paid after the redemption purchaser or a redemptioner shall not be entitled to receive the rents, earnings and
income of the property sold on execution, or the value of the use and occupation
thereof when such property is in the possession of a tenant. All rents, earnings and Any petition in court to enjoin or restrain the conduct of foreclosure proceedings
income derived from the property pending redemption shall belong to the judgment instituted pursuant to this provision shall be given due course only upon the filing by the
obligor until the expiration of his period of redemption. petitioner of a bond in an amount fixed by the court conditioned that he will pay all the
damages which the bank may suffer by the enjoining or the restraint of the foreclosure
Section 33. Deed and possession to be given at expiration of redemption period; by proceeding. Notwithstanding Act 3135, juridical persons whose property is being sold
whom executed or given. — If no redemption be made within one (1) year from the pursuant to an extrajudicial foreclosure, shall have the right to redeem the property in
date of the registration of the certificate of sale, the purchaser is entitled to a accordance with this provision until, but not after, the registration of the certificate of
conveyance and possession of the property; or, if so redeemed whenever sixty (60) days foreclosure sale with the applicable Register of Deeds which in no case shall be more
have elapsed and no other redemption has been made, and notice thereof given, and than three (3) months after foreclosure, whichever is earlier. Owners of property that
the time for redemption has expired, the last redemptioner is entitled to the has been sold in a foreclosure sale prior to the effectivity of this Act shall retain their
conveyance and possession; but in all cases the judgment obligor shall have the entire redemption rights until their expiration
period of one (1) year from the date of the registration of the sale to redeem the
property. The deed shall be executed by the officer making the sale or by his successor F. Chattel Mortgage
in office, and in the latter case shall have the same validity as though the officer making
the sale had continued in office and executed it. ACT NO. 1508 - AN ACT PROVIDING FOR THE MORTGAGING OF PERSONAL PROPERTY
Upon the expiration of the right of redemption, the purchaser or redemptioner shall be Section 1. The short title of this Act shall be "The Chattel Mortgage Law."
substituted to and acquire all the rights, title, interest and claim of the judgment obligor
to the property as of the time of the levy. The possession of the property shall be given Sec. 2. All personal property shall be subject to mortgage, agreeably to the provisions of
to the purchaser or last redemptioner by the same officer unless a third party adversely this Act, and a mortgage executed in pursuance thereof shall be termed chattel
to the judgment obligor. mortgage.

RA 133: AN ACT TO AUTHORIZE THE MORTGAGE OF PRIVATE REAL PROPERTY IN Sec. 3. Chattel mortgage defined. — A chattel mortgage is a conditional sale of personal
FAVOR OF ANY INDIVIDUAL, CORPORATION, OR ASSOCIATION SUBJECT TO CERTAIN property as security for the payment of a debt, or the performance of some other
CONDITIONS obligation specified therein, the condition being that the sale shall be void upon the
Section 1. Any provision of law to the contrary notwithstanding, private real property seller paying to the purchaser a sum of money or doing some other act named. If the
may be mortgaged for a period not exceeding five years, renewable for another five, in condition is performed according to its terms the mortgage and sale immediately
favor of any individual, corporation, or association, but the mortgagee or his successor become void, and the mortgagee is thereby divested of his title.
in interest, if disqualified to acquire or hold lands of the public domain in the
Philippines, shall not bid or take part in any sale of such real property as a consequence Sec. 4. Validity. — A chattel mortgage shall not be valid against any person except the
of such mortgage. mortgagor, his executors or administrators, unless the possession of the property is
delivered to and retained by the mortgagee or unless the mortgage is recorded in the
RA 8791: AN ACT PROVIDING FOR THE REGULATION OF THE ORGANIZATION AND office of the register of deeds of the province in which the mortgagor resides at the time
OPERATIONS OF BANKS, QUASI-BANKS, TRUST ENTITIES AND FOR OTHER PURPOSES of making the same, or, if he resides without the Philippine Islands, in the province in
Section 47. Foreclosure of Real Estate Mortgage. - In the event of foreclosure, whether which the property is situated: Provided, however, That if the property is situated in a
judicially or extra-judicially, of any mortgage on real estate which is security for any loan different province from that in which the mortgagor resides, the mortgage shall be
or other credit accommodation granted, the mortgagor or debtor whose real property recorded in the office of the register of deeds of both the province in which the
has been sold for the full or partial payment of his obligation shall have the right within mortgagor resides and that in which the property is situated, and for the purposes of
one year after the sale of the real estate, to redeem the property by paying the amount this Act the city of Manila shall be deemed to be a province.
due under the mortgage deed, with interest thereon at rate specified in the mortgage,
and all the costs and expenses incurred by the bank or institution from the sale and Sec. 5. Form. — A chattel mortgage shall be deemed to be sufficient when made
custody of said property less the income derived therefrom. However, the purchaser at substantially in accordance with the following form, and shall be signed by the person or
the auction sale concerned whether in a judicial or extra-judicial foreclosure shall have persons executing the same, in the presence of two witnesses, who shall sign the
the right to enter upon and take possession of such property immediately after the date mortgage as witnesses to the execution thereof, and each mortgagor and mortgagee,
of the confirmation of the auction sale and administer the same in accordance with law. or, in the absence of the mortgagee, his agent or attorney, shall make and subscribe an
affidavit in substance as hereinafter set forth, which affidavit, signed by the parties to "We severally swear that the foregoing mortgage is made for the purpose of securing
the mortgage as above stated, and the certificate of the oath signed by the authority the obligation specified in the conditions thereof, and for no other purpose, and that
administering the same, shall be appended to such mortgage and recorded therewith. the same is a just and valid obligation, and one not entered into for the purpose of
"This mortgage made this ____ day of ______19____ by _______________, a resident "At ___________, in the Province of _________, personally appeared ____________,
of the municipality of ______________, Province of ____________, Philippine Islands the parties who signed the foregoing affidavit and made oath to the truth thereof
mortgagor, to ____________, a resident of the municipality of ___________, Province before me.
of ______________, Philippine Islands, mortgagee, witnesseth:
"That the said mortgagor hereby conveys and mortgages to the said mortgagee all of (Notary public, justice of the peace, 1 or other officer, as the case may be.)
the following-described personal property situated in the municipality of
______________, Province of ____________ and now in the possession of said Sec. 6. Corporations. — When a corporation is a party to such mortgage the affidavit
mortgagor, to wit: required may be made and subscribed by a director, trustee, cashier, treasurer, or
manager thereof, or by a person authorized on the part of such corporation to make or
(Here insert specific description of the property mortgaged.) to receive such mortgage. When a partnership is a party to the mortgage the affidavit
may be made and subscribed by one member thereof.
"This mortgage is given as security for the payment to the said ______, mortgagee, of
promissory notes for the sum of ____________ pesos, with (or without, as the case may Sec. 7. Descriptions of property. — The description of the mortgaged property shall be
be) interest thereon at the rate of ___________ per centum per annum, according to such as to enable the parties to the mortgage, or any other person, after reasonable
the terms of __________, certain promissory notes, dated _________, and in the words inquiry and investigation, to identify the same.
and figures following (here insert copy of the note or notes secured).
If the property mortgaged be large cattle," as defined by section one of Act Numbered
"(If the mortgage is given for the performance of some other obligation aside from the Eleven and forty-seven, 2 and the amendments thereof, the description of said property
payment of promissory notes, describe correctly but concisely the obligation to be in the mortgage shall contain the brands, class, sex, age, knots of radiated hair
performed.) commonly known as remolinos, or cowlicks, and other marks of ownership as described
and set forth in the certificate of ownership of said animal or animals, together with the
"The conditions of this obligation are such that if the mortgagor, his heirs, executors, or number and place of issue of such certificates of ownership.
administrators shall well and truly perform the full obligation (or obligations) above
stated according to the terms thereof, then this obligation shall be null and void. If growing crops be mortgaged the mortgage may contain an agreement stipulating that
the mortgagor binds himself properly to tend, care for and protect the crop while
"Executed at the municipality of _________, in the Province of ________, this _____ day growing, and faithfully and without delay to harvest the same, and that in default of the
of 19_____ performance of such duties the mortgage may enter upon the premises, take all the
necessary measures for the protection of said crop, and retain possession thereof and
____________________ sell the same, and from the proceeds of such sale pay all expenses incurred in caring for,
(Signature of mortgagor.) harvesting, and selling the crop and the amount of the indebtedness or obligation
secured by the mortgage, and the surplus thereof, if any shall be paid to the mortgagor
"In the presence of or those entitled to the same.

"_________________ A chattel mortgage shall be deemed to cover only the property described therein and
"_________________ not like or substituted property thereafter acquired by the mortgagor and placed in the
(Two witnesses sign here.) same depository as the property originally mortgaged, anything in the mortgage to the
contrary notwithstanding.
Sec. 8. Failure of mortgagee to discharge the mortgage. — If the mortgagee, assign,
administrator, executor, or either of them, after performance of the condition before or If the sale includes any "large cattle," a certificate of transfer as required by section
after the breach thereof, or after tender of the performance of the condition, at or after sixteen of Act Numbered Eleven hundred and forty-seven 5 shall be issued by the
the time fixed for the performance, does not within ten days after being requested treasurer of the municipality where the sale was held to the purchaser thereof.
thereto by any person entitled to redeem, discharge the mortgage in the manner
provided by law, the person entitled to redeem may recover of the person whose duty it
is to discharge the same twenty pesos for his neglect and all damages occasioned
thereby in an action in any court having jurisdiction of the subject-matter thereof.

Sec. 9-12. (inclusive) 3

Sec. 13. When the condition of a chattel mortgage is broken, a mortgagor or person
holding a subsequent mortgage, or a subsequent attaching creditor may redeem the
same by paying or delivering to the mortgagee the amount due on such mortgage and
the reasonable costs and expenses incurred by such breach of condition before the sale
thereof. An attaching creditor who so redeems shall be subrogated to the rights of the
mortgagee and entitled to foreclose the mortgage in the same manner that the
mortgagee could foreclose it by the terms of this Act.

Sec. 14. Sale of property at public auction; Officer's return; Fees; Disposition of
proceeds. — The mortgagee, his executor, administrator, or assign, may, after thirty
days from the time of condition broken, cause the mortgaged property, or any part
thereof, to be sold at public auction by a public officer at a public place in the
municipality where the mortgagor resides, or where the property is situated, provided
at least ten days' notice of the time, place, and purpose of such sale has been posted at
two or more public places in such municipality, and the mortgagee, his executor,
administrator, or assign, shall notify the mortgagor or person holding under him and the
persons holding subsequent mortgages of the time and place of sale, either by notice in
writing directed to him or left at his abode, if within the municipality, or sent by mail if
he does not reside in such municipality, at least ten days previous to the sale.

The officer making the sale shall, within thirty days thereafter, make in writing a return
of his doings and file the same in the office of the register of deeds where the mortgage
is recorded, and the register of deeds shall record the same. The fees of the officer for
selling the property shall be the same as in the case of sale on execution as provided in
Act Numbered One hundred and ninety, 4 and the amendments thereto, and the fees of
the register of deeds for registering the officer's return shall be taxed as a part of the
costs of sale, which the officer shall pay to the register of deeds. The return shall
particularly describe the articles sold, and state the amount received for each article,
and shall operate as a discharge of the lien thereon created by the mortgage. The
proceeds of such sale shall be applied to the payment, first, of the costs and expenses of
keeping and sale, and then to the payment of the demand or obligation secured by such
mortgage, and the residue shall be paid to persons holding subsequent mortgages in
their order, and the balance, after paying the mortgages, shall be paid to the mortgagor
or person holding under him on demand.