Article 2091.
The contract of pledge or mortgage which obligation shall be satisfied with the proceeds
may secure all kinds of obligations, be they pure(not
subj to cond.) or subject to a suspensive or
resolutory condition.
-basta valid lang ang contract mao lang jd na
ARTICLE 2092. A promise to constitute a pledge or
mortgage gives rise only to a personal action
between the contracting parties, without prejudice
to the criminal responsibility incurred by him who
defrauds another, by offering in pledge or mortgage
as unencumbered, things which he knew were
subject to some burden, or by misrepresenting
himself to be the owner of the same
-personal right ra ang naa walay real right ky dli mn
valid ang pledge or mortgage: pledge to be valid is
to deliver, mortgage kay execution of mort contra
-remedy is to compel the fulfillment of their promise
to deliver thething or execute necessary contract for
mortg
-if no pledge or mortg then no provision or pl or
mort can govern
-criminal liab is when there is fraud or deceit
practice upon by such person layk siya dw ang tag
iya sa gi mortg or gi dispose niya ang prop then ana
siya clean title dw toh
Real estate Mortgage
Two types of mortgage:
Chattel mortgage- involving personal properties .
Pledge, chattel mortgage or real estate mortgages
referred to security contracts.
-These are accessory contracts entered into to
secure the performance of an obligation. These
kinds of contracts, pledge and mortgages, you have
a specific property which acts as a security for the
obligation.
Real estate mortgage
- It is a contract whereby the debtor secures to the
creditor the fulfillment of a principal obligation
specially subjecting to such security immovable
property or real rights over immovable property
of the sale of said property or rights in case said
obligation is not complied with at the time
stipulated.
Real estate mortgage (the slightly chattel mortgage)
is an accessory contract. It cannot exist without a
valid and existing principal obligation. for a contract
to validly exist it must have the essential elements
of consent, object, and consideration.
Art. 2124. Only the following proper may be the
object of a contract of mortgage:
(1) Immovables;
(2) Alienable real rights in accordance with the laws,
imposed upon immovables.
Nevertheless, movables may be the object of a
chattel mortgage.
-it should involve immovables meaning real
properties or alienable real rights is imposed upon
movables.
-alienable real rights- are rights attached to a real
property. Example usufruct- It is a real right over an
immovable property where in the usufructuary is
given the right to use or the right to use that real
property.
Subject matter
 Immovables
 Alienable real rights in accordance with the
laws imposed upon immovables.
 Includes natural accessions, improvements,
growing fruits, rents or income not yet
received when the obligation becomes due.
Basta in connection sa real property
Kinds of Real Estate Mortgages
 VOLUNTARY - one which is agreed between
the parties or constituted by will of the
owner of the property. Voluntary execute
mort
 EQUITABLE - one which, although it lacks
the formalities of a mortgage shows the
intention of the parties to make the
property as security for the debt. Contract
is sale intention is mort
 LEGAL - one required by law to be executed
in favor of certain persons.
Art. 2125. In addition to the requisite’s stated in
Article 2085, it is indispensable(require/necessary),
in order that a mortgage may be validly constituted,
that the document in which it appears be recorded
in the Registry of Property. If the instrument is not
recorded, the mortgage is nevertheless binding
between the parties.
- if it is not recorded in ROD. Wla na annotates sa
title- it is valid between the parties. However,
-to third persons, it must be annotated and
registered with the registry of deeds
-so if ikaw credit. Dapat ipa annotate ky pag
ibaligya ni debtor ang mortgage sa 3 rd p and in good
faith siya valid ilang contract
The persons in whose favor the law
establishes a mortgage have no other right than to
demand the execution and the recording of the
document in which the mortgage is formalized.
-crd can demand it to have notarized. It is required
not because of enforceability but to be record in rop
in rod ky dli mudawat si rod ug private contract.
Essential Requisites:
 Constituted to secure the fulfillment of a
principal obligation.
 The mortgagor is the absolute owner of the
thing mortgaged.
 That the persons constituting the mortgage
have the free disposal of the property or are
legally authorized to do so
 Must be in public document.so it can be
register in rod nonetheless it is still binding w/n
parties
-if principal is void-mortg is void but if mort is void-
principal still valid
Effects of an Invalid Mortgage
 The principal obligation subsists.
 The right to foreclose the subject property is
not available.(foreclosed-take possession of
mortg prop due to failure to pay)

The mortgage deed remains as evidence of
personal obligation of the debtor.
 If mortgage is in a public document but is not
recorded - mortgage is nonetheless binding on the
parties
 If the mortgage is in a private document, the
mortgagee may demand reduction of mortgage in
a public instrument.
Effect of Non-Registration:
Registration only operates as a notice of the
mortgage to others but does NOT add to the validity
of the mortgage or convert an invalid mortgage into
a valid one
-if ex dli jd siya ang owner sa iyang gi mortgage dli
ma valid ang contract even if gi register niya ky wa
mn nag constitute ang contract ug essential
elements of a mortgage contract
Art. 2126. The mortgage directly and immediately
Real estate mortgage Pledge
 Constituted on  Constituted on movable personal
immovable or real properties.
properties.  Delivery to the pledge or a third
 Delivery is NOT person, by common agreement, is
required. REQUIRED.
 It is not valid against  It is not valid as to third persons
third persons unless unless a description of the thing
it is registered pledged and the date of pledge
appear in a public instrument
subjects the property upon which it is imposed,
whoever the possessor may be, to the fulfillment of
the obligation for whose security it was constituted.
-Once register it constitute real right (bind angst the
whole word), while personal right is right agst
specific person
-mortgage has a real right even if it is sold to the
other person
Effects of Mortgage:
 creates a real right until the obligation is
discharged. (mortgagor needs to get copy of
cancellation from mortgagee and represent in rd)
 It follows the property wherever it goes and
subsists notwithstanding it change of ownership.
 If the mortgagor sells the property, the subject
matter remains subject to the fulfillment of the
obligation secured by it.
-MORTGAGEE HAS A BETTER RIGHT IF NAKA
REGISTER
Art. 2127. The mortgage extends to the natural
accessions, to the improvements growing fruits, and
the rents or income not yet received when the
obligation becomes due, and to the amount of the
indemnity granted or owing to the proprietor from
the insurers of the property mortgaged, or in virtue
of expropriation for public use, with the
declarations, amplifications and limitations
established by law, whether the estate remains the
possession of the mortgagor, or it passes into the
hands of a third person as long as duly register in
rod
-ex mortgage ky house then nasunog if naa toy
insurance ang mortgage ky mu extend siya atong
insurance mismo. Also, if gi demolish for pub use
ang consideration na ihatag ky mahimo mortgage
na
Art. 2128. The mortgage credit may be alienated or
assigned to a third person, in whole or in part, with
the formalities required by law.
-creditor can assign someone to become the new
mortgagee
-assignment not need be registerd
Art. 2129. The creditor may claim from a third
person in possession of the mortgaged property,
the payment of the part of the credit secured by the
property which said third person possesses, in the
terms and with the formalities which the law
establishes.
-creditor may demand the possessor of mortgage
the payment but he cannot force if dli nay rights si
creditor to foreclose the prop
Art. 2130. A stipulation forbidding the owner from
alienating the immovable mortgaged shall be void.
-dli nmo ma force ang mortgagor na dli isell ang
prop by stipulation
-if naa silay stipulation void toh siya ky ang remedy
lang jd if isell ni mortgagor ky ang pag register sa
mortgage
Art. 2131. The form, extent and consequences of a
mortgage, both as to its constitution, modification
and extinguishment, and as to other matters not
included in this Chapter, shall be governed by the
provisions of the Mortgage Law and of the Land
Registration Law.
-naay special law
ACT NO. 3135
-judicial foreclosure- can foreclose judicially by filing
in court
-extrajudicial foreclosure- provided in act 3135. Not
need to file a case but need to file a petition before
executive clerk of court
Section 1. When a sale is made under special power
inserted in or attached to any real-estate mortgage
hereafter made as security for the payment of
money or the fulfillment of any other obligation, the
provisions of the following election shall govern as
to the manner in which the sale and redemption
shall be effected, whether or not provision for the
same is made in the power.
-In real estate mortgage contract if may nakalagay
doon in case the death or defaults or fails to pay his
obligation. The mortgagee is hereby authorized to
foreclose the property. This is called special power
-special power, refers to the authority to extra
judicially foreclose the property, kung walay
authority, or special power inserted in the mortgage
contract. You can Still foreclose but judicial na
-so if no special power mas dugay ug gasto ky mag
hire pag lawyer while pag extrajudic ky mag take
place even if wlay lawyer.
Section 2. Said sale cannot be made legally outside
of the province which the property sold is situated;
and in case the place within said province in which
the sale is to be made is subject to stipulation, such
sale shall be made in said place or in the municipal
building of the municipality in which the property or
part thereof is situated.
-foreclosure sale must take place where the
property is situated.
-so if naa sa davao city iforeclose dnhi sa DC and the
petition for foreclosure must be file in executive
clerck in DC
Sec. 3. Notice shall be given by posting notices of
the sale for not less than twenty days in at least
three public places of the municipality or city where
the property is situated, and if such property is
worth more than four hundred pesos, such notice
shall also be published once a week for at least
three consecutive weeks in a newspaper of general
circulation in the municipality or city
- notice of a sale is: this property will be sold
through a public auction by virtue of the mortgage
contract, was defaulted, the public auction will be
held on this day, at this time.
-public auction is usually in the court
-place of notice to be posted is in court, city hall,
barangay
-must post in a publication once a week in 3
consecutive weeks in a newspaper in municipality
General rule: An action to foreclose mortgage must
be limited to the amount mentioned in the
mortgage.
-Mortgage must be limited to the amount mention
in the mortgage. If nanghiram ug 1m mortg contr
obligation is 1m
Exception: But the amounts named as consideration
in a contract of mortgage do not limit the amount
for which the mortgage may stand as long as the
intention is to secure future loans or advancements
and other indebtedness
DRAGNET CLAUSE also known as blanket mortgage
clause.
A clause which subsumes debts of past or
future origin. By virtue of this clause, the mortgage
secures future loans or advancements.
-ex. nangutang ko ug 1m, but I will execute a
mortgage contract wherein this specific property
will secure this 1 million pesos and all other future
obligations in the future
-so in this clause mortgage will now also secure the
future loans advancements and not only the 1m
-so even if nay loan sa future nga wala na apil sa
registration covered ghapon siya ky future oblig mn
ghapon
If the debtor defaults:
Mortgagee chooses between filing
collection case or foreclosing the mortgage.
Three ways to collect is:
 Collection case
 Judicially foreclose.
 Extrajudicially foreclose.
-if the debtor defaults and there was some
mortgage contract, executed the Creditor
Mortgage, can choose between filing a collection
case, File a collection for sum of money support or
foreclosing, the mortgage, whether judicially or
extrajudicially
-if no mortgage then file a sum of money
-if naa mas better if extrajudicially foreclose but
make sure nay special power
EXTRAJUDICIAL FORECLOSURE
1. File an application/petition for foreclosure
through Clerk of Court
2. Posting of notice of sale and publication of sale
3. Clerk of court issues receipt and application is
raffled
4. Public auction takes place. Sale must have at least
2 bidders. If less than 2 on the first sale, a second
sale is scheduled. If none, lone bidder declared as
winning bid.
5. Certificate of Sale is issued then registered
Sec. 6. In all cases in which extrajudicial sale is made
under the special power hereinbefore referred to,
the debtor, his successors in interest or any judicial
creditor or 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 redeem the same at any time
within the term of one year from and after the date
of the sale; xxx
-debtor or his succession in interest or other creditor
of same debtor have a lien in same property. From
time it was sold or from its foreclosure. Debtor can
still redeem it w/n term of 1 yr from and after date
of sale
-1 yr after from the time that the sale was
registered not the actual sale in short basehan sa
registration
-redemption is the highest paid plus other expenses
EQUITY OF REDEMPTION
Right of the mortgagor to redeem the property after
his default in the performance of the conditions of
the mortgage BUT before the confirmation of the
auction sale of the mortgaged property.
-before na register ang sale ang equity redemption
General Rule: Available only in judicial foreclosure;
90 to 120 days from receipt of judgment in favor of
the creditor OR before the confirmation of the sale
at the discretion of the court
Exception: In extrajudicial foreclosure where the
mortgagor is a juridical entity, until but not after the
registration of certificate of foreclosure sale which
shall not be more than 3 months after _ foreclosure,
WHICHEVER IS EARLIER (Republic Act 8791)
-ex if corpo mortgagor, corpo redemption is until,
but not after the registration of certificate w/c shall
not be more than 3 months after foreclosure w/c
ever is earlier
-so pwede siya w/n 3 months after foreclosure sale
or before the certification
SECTION 47. Foreclosure of Real Estate Mortgage
Notwithstanding Act 3135, juridical persons
whose property is being sold pursuant to an
extrajudicial foreclosure, shall have the right to
redeem the property in accordance with this
provision until, but not after, the registration of the
certificate of foreclosure sale with the applicable
Register of Deeds which in no case shall be more
than three (3) months whichever is earlier: Owners
of property that a foreclosure sale prior to the
effectivity of this Act shall retain their redemption
rights until their expiration.
-gen rule of extrajudicial foreclosure is right of
redemption
RIGHT OF REDEMPTION
The right of the mortgagor redeem the mortgaged
property within a certain period AFTER it was sold
for the satisfaction of the debt.
General Rule: Extrajudicial foreclosure within one
year from registration of certificate of sale.
Certification of sale not the actual sale
Exception: In judicial foreclosure where the
mortgagee is a banking institution, within one year
from registration of the foreclosure sale
SECTION 47. Foreclosure of Real Estate Mortgage.
— In the event of foreclosure, whether judicially or
extrajudicially, of any mortgage on real estate which
is security for any loan or other credit
accommodation granted, the mortgagor or debtor
whose real property has been sold for the full or
partial payment of his obligation shall have the right
within one year after the sale of the real estate, to
redeem the property by paying the amount due
under the mortgage deed, with interest thereon at
the rate specified in the mortgage, and all the costs
and expenses incurred by the bank or institution
from the sale and custody of said property less the
income derived therefrom. Xxx\
-as long as bank si mortgagor whether judicial or
extra, 1 yr from the date of sale of the real estate.
Except if juridical person w/c is corpo as it is either 3
months or registration of sale w/c ever is earlier
Who can redeem?
 Mortgagor or one who is in privity of title
with mortgagor.
 Successor-in-interest
 Sec. 7. In any sale made under the provision of this
Act, the purchaser may petition the Court of First
Instance of the province or place where the
property or any part thereof is situated, to give him
possession thereof during the redemption period,
furnishing bond 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 mortgage or
without complying with the requirements of the
Act. Xxx
-si highest bidder can file petition for the property
para ma possess niya during redemption per. BUT
req. to furnish a bond amnt equal to use of property
for 12 mnths
* In case of deficiency, the creditor. mortgagee can
demand it from the debtor.
* In case of excess, the debtor- mortgagor is
entitled to it
PERSONAL PROPERTY SECURITY ACT
-Purpose is to secure the performance of an oblig
-grantor(mortgagor), security creditor(mortgagee)
VERY IMPORTANT REQUIREMENT
The control agreement must be registered with the
land registration authority or the notice of security
interest a lien personal property may be registered
CHAPTER 1: DEFINITIONS AND SCOPE
Section 3. Definition of Terms
b. Control agreement - an agreement in writing
between the grantor and the secured creditor which
perfects the security interests over intangible asset
(IRR)
(1) With respect to securities, means an agreement
in writing among the issuer or the
intermediary, the grantor and the secured
creditor, according to which the issuer or the
intermediary agrees to follow instructions from
the secured creditor with respect to the
security, without further consent from the
grantor;
- control agreement will be executed, if the
Securities is the subject matter of such personal
property security
(2) With respect to rights to deposit account, means
an agreement in writing among the deposit-
taking institution, the grantor and the secured
creditor, according to which the deposit-taking
institution agrees to follow instructions from
the secured creditor with respect to the
payment of funds credited to the deposit
account without further consent from the
grantor;
- I could also have a control agreement with regard
to the deposit account money in the bank,
that's personal property.
(3) With respect to commodity contracts, means an
agreement in writing among the grantor,
secured creditor, and intermediary, according
to which the commodity intermediary will
apply any value distributed on account of the
commodity contract as directed by the secured
creditor without further consent by the
commodity customer or grantor;
-personal property rin
c. Grantor- no longer called as mortgagor but
grantor
(1) The person who grants a security interest in
collateral to secure its own obligation or that of
another person;
(2) A buyer or other transferee of a collateral
that acquires its right subject to a security
interest;
(3) A transferor in an outright transfer of an
accounts receivable; or if itransfer ang AR sa
creditor it would be called grantor
(4) A lessee of goods.
g. Purchase money security interest - a security
interest in goods taken by the seller to secure the
price or by a person who gives value to enable the
grantor to acquire the goods to the extent that the
credit is used for that purpose.
h. Registry - the centralized and nationwide
electronic registry established in the Land
Registration Authority (LRA) where notice of a
security interest and a lien in personal property may
be registered.
i. Secured creditor - a person that has a security
interest. For the purposes of registration and
priority only, it includes a buyer of account
receivable and a lessor of goods under an operating
lease for not less than one (1) year.
- This is the person who has a security interest over
the personal property
j. Security interest - a property right in collateral that
secures payment or other performance of an
obligation, regardless of whether the parties have
denominated it as a security interest, and regardless
of the type of asset, the status of the grantor or
secured creditor, or the nature of the secured
obligation; including the right of a buyer of accounts
receivable and a lessor under an operating lease for
not less than one (1) year
-personal property secure the payment or
performance of an obligation. We consider it as a
security interest, regardless of the type of asset, but
of course, personal property. But as to what kind of
personal property, it would still be considered as a
security interest.
k. Writing - for the purpose of this Act includes
electronic records such as emails
Chapter 2: CREATION OF SECURITY INTEREST
Section 5. Creation of a Security Interest. —
(a) A security interest shall be created by a security
agreement,
(b) A security agreement may provide for the
creation of a security interest in a future property,
but the security interest in that property is created
only when the grantor acquires rights in it or the
power to encumber it.
-security agreement is the contract itself wherein
the parties agree that this personal property will
secure the performance of these specific obligation,
-could also execute sec. agreem. Creating a security
interest over personal property wherein oblig is yet
to exist or the PROPERTY is yet to exist. Ex. If I would
by a car in the future it can be used as a security for
the payment of my oblig
-in pledge no future prop req ky delivery is needed
for the perfection while mortgage ky bawal ky
dapat ispecify kung unsa nang specific prop ang
iused as a security
Section 6. Security Agreement. — A security
agreement must be contained in a written contract
signed by the parties. It may consist of one or more
writings that, taken together, establish the intent of
the parties to create a security interest.
The security agreement shall likewise
provide for the language to be used in agreements
and notices. The grantor shall be given the option to
have the agreement and notices in Filipino. The
Department of Finance (DOF) shall prepare model
agreements in plain English and Filipino.
-security agrem dli pwede verbal
Section 7. Description of Collateral.— A description
of collateral shall be considered sufficient, whether
it is specific or general, if it reasonably identifies the
collateral. A description such as "all personal
property", "all equipment", "all inventory", or "all
personal property within a generic category" of the
grantor shall be sufficient.
-description sa property can be specific or general
Chap 3: PERFECTION OF SECURITY INTEREST
Section 11. Perfection of Security Interest. —
(a) A security interest shall be perfected when it has
been created and the secured creditor has taken
one of the actions in accordance with Section 12.
(b) On perfection, a security interest becomes
effective against third parties.
-walang separate req to bind 3 rd parties. Once
perfected then it is already effective and binding
against 3rd person
Section 12. Means of Perfection — a security
interest may be perfected by:
(a) Registration of a notice with the Registry.
(b) Possession of the collateral by the secured
creditor; and
(c) Control of investment property and deposit
account
-sec int. can be perfected or created under any of
the ff. three.
Section 13. Perfection by Control—
(a) A security interest in a deposit account or
investment property may be perfected by control
through:
(1) The creation of the security interest in favor of
the deposit- taking institution or the
intermediary.
(2) The conclusion of a control agreement; or
(3) For an investment property that is an electronic
security not held with an intermediary(broker
or middleman), the notation of the security
interest in the books maintained by or on
behalf of the issuer for the purpose of
recording the name of the holder of the
securities.(b) Nothing in this Act shall require a
deposit-taking institution(bank) or an
intermediary to enter into a control agreement,
even if the grantor so requests. A deposit-
taking institution or an intermediary that has
entered into such an agreement shall not be
required to confirm the existence of the
agreement to another person unless requested
to do so by the grantor.
CHAP 4: PRIORITY OF SECURITY INTERES
Section 21. Transferee Exceptions. -Any party who
obtains, in the ordinary course of business, any
movable property containing a security interest shall
take the same free of such security interest
provided he was in good faith. No such good faith
shall exist if the security interest in the movable
property was registered prior to his obtaining the
property.
-if 3rd person obtain a mov property with sec int
provided that he is in good faith he has a better
right against sec creditor
-if mas nauna ug register ang prop as sec int then
even if in good faith wala siyay better rights
CHAP 5: REGISTRATION —- REGISTRY
Section 26. Establishment of Electronic Registry-
(a) The Registry shall be established in and
administered by the LRA.
(b) The Registry shall provide electronic means for
registration and searching of notices.
Section 27. Public Record.—
(a) Information contained in a registered notice shall
be considered as a public record.
(b) Any person may search notices registered in the
Registry.
(c) The electronic records of the Registry shall be the
official records.
-once registered kung ano ang naka lagay a registry
is considered public record and any person can
search such notices in the registry and kung unsay
naa sa electro. Record sa registry shall be the official
record.
CHAP 6: ENFORCEMENT OF SECURITY INTEREST
SECURED CREDITOR’S RIGHTS
Section 45. Right of Redemption-
(a) Any person who is entitled to receive a
notification of disposition in accordance with this
Chapter is entitled to redeem the collateral by or
otherwise perf the secured obligation in full, the
reasonable cost of enforcement.
(b) The right of redemption may be exercised,
unless:
-kaning 1,2&3 instances ky walay right of
redemption
(1) The person entitled to redeem has not, after
the default, waived in writing the right to
redeem;
-gi waived niya iyang right to redeem in writing
(2) The collateral is sold or otherwise disposed
of, acquired or collected by the secured creditor
or until the conclusion of an agreement by the
secured creditor for that purpose; and
-once sold or acquired by the sec credit no right
to redeem na
(3) The secured creditor has retained the
collateral.
 -if gi appropriate niya to himself then not
available na ang redemption
-for pledge once the prop is sold no redemption
same as mortgage once foreclose dli na maka
redeem makipag negotiate na lang ka sa higher
bidder to buy the property
-the right to redeem in this sec is not after the sale
but exercise prior to the sale
Section 52. Application of Proceeds. —
(a) The proceeds of disposition shall be applied in
the following order:
(1) The reasonable expenses of taking, holding,
preparing for disposition, and disposing of the
collateral, including reasonable attorneys’ fees
and legal expenses incurred by the secured
creditor;
(2) The satisfaction of the obligation secured by
the security interest of the enforcing secured
creditor; and
(3) The satisfaction of obligations secured by any
subordinate security interest or when in the
collateral if a written demand and proof of the
interest are received before distribution of the
proceeds is completed.
(b).The secured creditor shall count to the grantor
for any surplus, and, unless otherwise agreed, the
debtor is liable for any deficiency.
-pag sobra the grantor is entitled to the excess while
if deficiency grantor/debtor shall be liable otherwise
agreed
Section 54. Retention of Collateral by Secured
Creditor—
(a) After default, the secured creditor may propose
to the debtor to take all or part of the collateral in
total or partial satisfaction of the secured obligation,
and shall send a proposal to:
-there is a default when there is a judicial or
extrajud demand and despite that debtor fails to
meet his obligations
-if in default pwede mag propose si cred to debto na
kuhaun niya tanan or a part sa collateral to satisfy
debtors oblig and mag send siyag proposal to:
(1) The debtor and the grantor.(maybe same or
diff persons)
(2) Any other secured creditor or lien holder
who, 5 days before the proposal is sent to the
debtor and the grantor, perfected its security
interest or lien by registration; and
(3) Any other person with an interest in the
collateral who has given a written notification to
the secured creditor before the proposal is sent
to the debtor and the grantor.
(b) The secured creditor may retain the collateral in
the case of:
(1) A proposal for the acquisition of the collateral
in full satisfaction of the secured obligation,
unless the secured creditor receives an objection
in writing from any person entitled to receive
such a proposal within 20 days after the proposal
is sent to that person; or
-Pwede ma retain if proposal is in for full
satisfaction unless objected within 20 days after
sending the proposal
(2) A proposal for the acquisition of the collateral
in partial satisfaction of the secured obligation,
only if the secured creditor receives the
affirmative consent of each addressee of the
proposal in writing within twenty (20) days after
the proposal is sent to that person.
-pwede sad partial basa naa ray affirmative consent
sa 3 ka tao na sendan ug proposal after 20 days
-if lampas 20 days, cred is given the right to retain
but if nay objection w/n 20 days hindi ma ret ni cred
CHAP 7: TRANSITIONAL PROVISIONS
Section 56. Creation of Prior interest –
(a) Creation of prior interest shall be determined by
prior laws.
(b) A prior interest remains effective between the
parties notwithstanding its creation did not comply
with the creation requirements of this Act.
-if interest over personal property is made before
effectivity of the PPSA, it is valid provided it
complies with prior loss
Section 57. Perfection of Prior Interest—
(a) A prior interest that was perfected under prior
law continues to be perfected under this Act until
the earlier of: (so it was created and perfected prior
effectivity of PPSA such perfection cont. until the
earlier of)
(1) The time the prior interest would cease to be
perfected under prior law; and (ex.oblig is
extinguish)
(2) The expiration of the transitional period.
(b) If the perfection requirements of this Act are
satisfied before the perfection of a prior interest
ceases in accordance with subsection
(a) of this section, the prior interest continues to be
perfected under this Act from the time when it was
perfected under the prior law.
(c) If the perfection requirements of this Act are not
satisfied before the perfection of a prior interest
ceases in accordance with subsection (a) of this
section, the prior interest is perfected only from the
time it is perfected under this Act.
(d) A written agreement between a grantor and a
secured creditor creating a prior interest is sufficient
to constitute authorization by the grantor of the
registration of a notice covering assets described in
that agreement under this Act.
(e) If a prior interest referred to in subsection (b) of
this section was perfected by the registration of a
notice under prior law, the time of registration
under the prior law shall be the time to be used for
purposes of applying the priority rules of this Act.

CHAP 8: CONGRESSIONAL OVERSIGHT AND

MISCELLANEOUS PROVISIONS
Section 68. Implementation. — Notwithstanding
the entry into force of this Act under Section 67, the
implementation of the Act shall be conditioned
upon the Registry being established and operational