Practice question
A mortgage deed says that one missed payment makes the mortgagee the owner without sale or further voluntary conveyance. A later lawful public foreclosure auction is separately proposed under the governing procedure. The mortgagor argues both arrangements are equally prohibited by Article 2088. What is correct?
- Both are prohibited because no secured property may ever be sold.
- The automatic appropriation clause is always valid because it is printed.
- The clause is prohibited pactum commissorium, while a properly conducted foreclosure is a lawful enforcement mechanism.
- The auction automatically validates the prohibited clause retroactively.
- No mortgage can be enforced after default.
Legal references
- https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html — Civil Code, articles 2085,2087–2092 and2124–2130.
- https://lawphil.net/judjuris/juri2024/aug2024/gr_217368_2024.html — Ruby Shelter Builders v Tan, GR 217368, August 5 2024, main opinion: pactum commissorium distinguished from consensual later disposition.
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