473

VIII
ANTICHRESIS*
(Arts. 2132-2139.)

Chapter 4

ANTICHRESIS

ART. 2132. By the contract of antichresis the creditor

acquires the right to receive the fruits of an immovable of
his debtor, with the obligation to apply them to the pay-
ment of the interest, if owing, and thereafter to the princi-
pal of his credit. (1881)

Definition of the contract

of antichresis.
The above article defines the contract of antichresis.

Characteristics of the contract.

Antichresis is:
(1) an accessory contract because it secures the performance
of a principal obligation. Manresa, however, believes that it is an
independent contract (see 12 Manresa 547.); and
(2) a formal contract because it must be in a specified form to
be valid, i.e., “in writing.” (Art. 2134.)

*Title XVI, Book IV, Civil Code.

473
474 COMMENTS AND CASES ON CREDIT Art. 2132
TRANSACTIONS

Delivery of property.
Antichresis requires the delivery by the debtor of the property
given as security to the creditor. But such delivery is required
only in order that the creditor may receive the fruits and not that
the contract shall be binding.
The contract does not cover the immovable but only its fruits.

Right of creditor to the fruits.

Antichresis normally covers all the fruits of the encumbered
property, but the law gives the parties the freedom to stipulate
otherwise. (see Art. 1306.) The reduction of the amount of fruits
available to the creditor does not vary the nature of the contract.
(Villanueva vs. Ipondo, [CA] No. 885-R [1947], 44 O.G. 4377.)

Obligation to pay interest not essential.

The obligation to pay interest is not of the essence of the
contract of antichresis, any more than it is indispensable in a
contract of loan.
The words “if owing” (interest) reveal that it is not essential
that the loan should earn interest in order that it can be guaranteed
with a contract of antichresis, there being nothing in the Code
to show that antichresis is only applicable to securing the
payment of interest-bearing loans. On the contrary, antichresis
is susceptible of guaranteeing all kinds of obligations, pure or
conditional. (Javier vs. Valliser, [CA] No. 2648-R, April 29, 1950;
Sta. Rosa vs. Noble, 35 O.G. 27241.)

ILLUSTRATIVE CASE:
In consideration of the payment of mortgagor’s indebtedness to
mortgagee, payor was given possession of mortgaged property until
he is fully reimbursed.
Facts: After the foreclosure by DBP (mortgagee) of the
mortgage on the property of A (mortgagor), the latter entered
into a contract with B entitled “Deed of Sale with Assumption
of Mortgagee.” Under the contract, B would assume and pay
the indebtedness of A to DBP and in consideration therefor, B
was given the possession, the enjoyment and use of the lands
Art. 2132 ANTICHRESIS 475

until A can reimburse fully B the amounts paid by the latter to

DBP.
Issue: What is the nature of the contract entered into
between A and B?
Held: The agreement between A and B is one of those
innominate contracts under Article 1307 of the New Civil Code
whereby A and B agreed “to give and to do” certain rights and
obligations respecting the lands and the mortgage debts of A
which would be acceptable to the bank, but partaking of the
nature of antichresis insofar as the principal parties A and B,
are concerned. (Dizon vs. Gaborro, 83 SCRA 688 [1978].)

Antichresis and pledge compared.

The distinctions are as follows:
(1) Antichresis refers to real property, while pledge, to per-
sonal property; and
(2) Antichresis is perfected by mere consent, while pledge is
perfected by the delivery of the thing pledged; and
(3) Antichresis is a consensual contract, while pledge is a real
contract.
Both are similar in that the debtor loses control of the subject
matter of the contract.

Antichresis and real mortgage compared.

The following are the distinctions:
(1) In antichresis, the property is delivered to the creditor,
while in mortgage, the debtor usually retains possession of the
property;
(2) In antichresis, the creditor acquires only the right to
receive the fruits of the property; hence, it does not produce a
real right, while in mortgage, the creditor does not have any
right to receive the fruits, but mortgage creates a real right over
the property which is enforceable against the whole world;
(3) In antichresis, the creditor, unless there is a stipulation
to the contrary, is obliged to pay the taxes and charges upon the
476 COMMENTS AND CASES ON CREDIT Art. 2132
TRANSACTIONS

estate (Art. 2135.), while in mortgage, the creditor has no such

obligation; and
(4) In antichresis, it is expressly stipulated that the creditor
given possession of the property shall apply the fruits thereof to
the payment of interest, if owing, and thereafter to the principal
of the credit, while in a mortgage, there is no such obligation on
the part of the mortgagee.
Both are similar in that the subject matter is real property. Like
pledge and mortgage, antichresis gives a real and not merely a
personal right if it is registered in the Registry of Property. (12
Manresa 547-548.)

Application of the fruits to interest

and then to principal.
It is not an essential requisite to a mortgage that possession of
mortgaged premises be retained by the mortgagor.
To be antichresis, it must be expressly agreed between
creditor and debtor that the former, having been given possession
of the properties given as security, is to apply their fruits to the
payment of interest, if owing, and thereafter to the principal of
his credit (Art. 2132.); so that if a contract of loan with security
does not stipulate the payment of interest but provides for
the delivery to the creditor by the debtor of the real property
constituted as security for the payment therefor, in order that the
creditor may administer the same and avail himself of its fruits,
without stating that said fruits are to be applied to the payment
of the interest, if any, and afterwards to that of the principal of
the credit, the contract shall be considered to be one of mortgage
and not of antichresis. (Legaspi and Salcedo vs. Celestial, 66 Phil.
372 [1938]; Alojado vs. Lim Siongco, 51 Phil. 339 [1927]; Diego
vs. Fernando, 109 Phil. 143 [1960]; Adrid vs. Morga, 108 Phil. 927
[1960].)
In a case, the court held the contract as one of mortgage in
view of the existence of three provisions which are indicative of
the contract of mortgage: (1) The agreement that the full amount
of the indebtedness must be returned to the lenders before the
borrowers could demand the return of the property, which is
contrary to an antichretic contract wherein the products of the
Arts. 2133-2135 ANTICHRESIS 477

land should be applied to the interest and then to the principal;

(2) the use of the term “mortgage” in various parts of the contract;
and (3) the agreement that the lenders are not to pay rentals on
the property in consideration of the fact that the borrowers do not
pay interest on the sum which they obtained as a loan. (Verzosa
vs. Bucag, [Unrep.] 97 Phil. 996 [1955].)

ART. 2133. The actual market value of the fruits at the

time of the application thereof to the interest and principal
shall be the measure of such application. (n)

Measure of application of fruits

to interest and principal.
The contract does not cover the immovable but only its fruits.
The fruits of the immovable which is the object of the antichresis
must be appraised at their actual market value at the time of the
application. (see Art. 2138.) “The foregoing rule will forestall the
use of antichresis for purposes of usury.” (Report of the Code
Commission, p. 158.)

ART. 2134. The amount of the principal and of the inter-

est shall be specified in writing; otherwise, the contract of
antichresis shall be void. (n)

Form of the contract.

Article 2134 is an instance when the law requires that a
contract be in some form in order that it may be valid (Art. 1356.)
and not only to affect third persons. Even if the antichresis is
void, the principal obligation, however, is still valid.
This article, like Articles 2133 and 2138, is intended to forestall
the use of antichresis for purposes of usury. (see Report of the
Code Commission, p. 158.)

ART. 2135. The creditor, unless there is a stipulation to

the contrary, is obliged to pay the taxes and charges upon
the estate.
He is also bound to bear the expenses necessary for
its preservation and repair.
478 COMMENTS AND CASES ON CREDIT Art. 2136
TRANSACTIONS

The sums spent for the purposes stated in this article

shall be deducted from the fruits. (1882.)

Obligations of the antichretic creditor.

The creditor acquires, by virtue of the contract of antichresis,
the right to enjoy the fruits of the property delivered to him. (Art.
2132.) This right carries two obligations (pars. 1 and 2.) which
are the necessary consequences of the contract because they arise
from its very nature.
(1) Payment of taxes and charges upon the estate. — The creditor
is obliged, unless there is a stipulation to the contrary, to pay the
taxes and charges upon the estate. If he does not pay the taxes,
he is by law (Art. 1170.) required to pay indemnity for damages
to the debtor. (Pando vs. Gimenez, 54 Phil. 459 [1980].) Where the
debtor has paid for the taxes on the property which the creditor
should have paid, the amount is to be applied to the payment of
the debt, and the debtor is entitled to the return of the property
free from all encumbrances if he, in effect, by advancing the
taxes, had already discharged the debt. (Rosales vs. Tanseco, 90
Phil. 459 [1951].)
(2) Application of the fruits of the estate. — Another obligation
of the creditor is to apply the fruits, after receiving them, to the
interest, if owing, and thereafter to the principal (Art. 2132.) in
accordance with the provisions of Article 2133 or 2138; hence,
the duty of the creditor to render an account of said fruits to the
debtor, and the corresponding right of the latter to apply the said
fruits to the debt. (Barretto vs. Barretto, 37 Phil. 234 [1917]; Diaz
and Rubillos vs. De Mendezona, 48 Phil. 666 [1926]; Macapinlac
vs. Gutierrez Repide, 43 Phil. 770 [1922].)
The sums spent by the creditor in fulfillment of the obligations
under the article shall be charged against the fruits of the property.

ART. 2136. The debtor cannot reacquire the enjoyment

of the immovable without first having totally paid what he
owes the creditor.
But the latter, in order to exempt himself from the ob-
ligations imposed upon him by the preceding article, may
Art. 2137 ANTICHRESIS 479

always compel the debtor to enter again upon the enjoy-

ment of the property, except when there is a stipulation to
the contrary. (1883)

Right of antichretic debtor to reacquire

enjoyment of property.
The property delivered stands as a security for the payment
of the obligation of the debtor in antichresis. Hence, the debtor
cannot demand its return until the debt is totally paid. (see Arts.
2098, 2105; see Macapinlac vs. Gutierrez Repide, supra.)
However, if the creditor does not want to pay the taxes and
incur the expenses necessary for the preservation and repair of
the property (Art. 2135.), he may compel the debtor to reacquire
the enjoyment of the same except when there is a contrary
stipulation. (Art. 2136.)

ART. 2137. The creditor does not acquire the owner-

ship of the real estate for nonpayment of the debt within
the period agreed upon.
Every stipulation to the contrary shall be void. But the
creditor may petition the court for the payment of the debt
or the sale of the real property. In this case, the Rules of
Court on the foreclosure of mortgages shall apply. (1884a)

Remedy of creditor in case of nonpayment

of debt.
If the debt is not paid, it is clear enough that the creditor
does not acquire ownership of the real estate since what was
transferred is not the ownership but merely the right to receive
its fruits. (Art. 2132.) A stipulation authorizing the antichretic
creditor to appropriate the property upon the nonpayment of the
debt within the period agreed upon is void. (see Art. 2088.)
The remedy of the creditor is (1) to bring an action for specific
performance; or (2) to petition for the sale of the real property as
in a foreclosure of mortgages under Rule 68 of the Rules of Court.
The parties, however, may agree on an extrajudicial foreclosure
in the same manner as they are allowed in contracts of mortgage
480 COMMENTS AND CASES ON CREDIT Art. 2138
TRANSACTIONS

and pledge. (see Art. 1307; Tavera vs. El Hogar Filipino, Inc., 68
Phil. 712 [1939].)

Acquisition by creditor of property

by prescription.
The creditor in antichresis and his successors-in-interest
cannot ordinarily acquire by prescription the land given to him,
any agreement to the contrary being void. (Valencia vs. Alcala, 42
Phil. 177 [1921]; Bernardo vs. Barretto, 37 Phil. 234 [1917]; Trillana
vs. Manansala, 96 Phil. 865 [1955].)
Possession, for the purpose of acquisitive prescription, must
be in the concept of an owner. (Art. 1118.) The possession of
an antichretic creditor is not in the concept of an owner. (Art.
2132.) He is a mere holder placed in possession of the land by the
debtor, the owner. (Ramirez vs. Court of Appeals, 144 SCRA 292
[1986]; see Art. 540.) He cannot acquire the ownership of the real
estate subject of the antichresis unless he repudiates his status as
an antichretic creditor.

ART. 2138. The contracting parties may stipulate that

the interest upon the debt be compensated with the fruits
of the property which is the object of the antichresis,
provided that if the value of the fruits should exceed the
amount of interest allowed by the laws against usury, the
excess shall be applied to the principal. (1885a)

Interest in antichresis subject

to the Usury Law.
The antichretic creditor is under obligation to apply the fruits
of the property in satisfaction, first, of whatever interest on the
debt is due, and secondly, to the payment of the principal. (Art.
2132.)
The fruits must be appraised on the basis of their actual
market value at the time of the application. (Art. 2133.) If their
value should exceed the amount of interest allowed by the Usury
Law, the excess shall be applied to the principal.
Note: The rate of interest on loan or forbearance of money,
Art. 2139 ANTICHRESIS 481

goods, or credit is no longer subject to any ceiling prescribed

under the Usury Law. (see II–The Usury Law, supra.)

ART. 2139. The last paragraph of Article 2085, and Ar-

ticles 2089 to 2091 are applicable to this contract. (1886a)

Applicability of certain articles.

Please see comments under Article 2085 and Articles 2089 to
2091 which are provisions on pledge and mortgage.

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