Antichresis

ANTICHRESIS
A. General Concepts:
● Civil Code, Art. 2132, Art. 2133, Art. 2135, Art. 2138
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 payment of the
interest, if owing, and thereafter to the principal of his credit.
In relation to:
Art. 544 A possessor in good faith is entitled to the fruits received before the possession
is legally interrupted. Natural and industrial fruits are considered received from the time
they are gathered or severed. Civil fruits are deemed to accrue daily and belong to the
possessor in good faith on that proportion. (451)
● Definition: Antichresis, from the Latin, in place of interest

● It is a real security transaction that arises by contract, with the antichretic creditor
acquiring the right to receive the fruits of an immovable of the antichretic debtor,
and the obligation to apply them to the payment of the interest, if owing, and
thereafter to the principal.
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.
● Actual Market Value: at the time of the application of the fruits toward the debt
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. The sums spent for the purposes stated in this article shall be
deducted from the fruits.
The creditor is obliged to pay:

● Taxes and charges/expenses: paid by the antichretic creditor
- unless with stipulation to the contrary
● If fruits are insufficient: still paid by the creditor if no stipulation
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.
● As to the interest: parties may stipulate that it can be compensated with

the fruits of the property
● If the value of the fruit exceeds the allowable interest, the excess will
apply to the principal.
B. Form of Antichresis
Art. 2134 The amount of the principal and of the interest shall be specified in writing;
otherwise, the contract of antichresis shall be void.
● Form: shall be in writing specifying the amount of the principal and of the interest
● Securing debts: amount must be specified
● existing debts
● future debts – those with specified maximum amount and interest applicable
ONLY
C. Obligations Secured
ANTICHRESIS
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Civil Code: Art. 2139, Art. 2085, Art. 2089, Art. 2090, Art. 2091
Art. 2139 The last paragraph of Article 2085, and Articles 2089 to 2091 are applicable to
this contract.
Art. 2085 The following requisites are essential to the contracts of pledge and mortgage:
(1) That they be constituted to secure the fulfillment of a principal obligation;
(2) That the pledgor or mortgagor be the absolute owner of the thing pledged or
mortgaged;
(3) That the persons constituting the pledge or mortgage have the free disposal of their
property, and in the absence thereof, that they be legally authorized for the purpose.
Third persons who are not parties to the principal obligation may secure the latter by
antichresis of their own property
● Who are the parties?

1. Antichretic creditor
2. Principal debtor
3. Antichretic debtor
o Third person securing the principal obligation using their own property
● Subject: Immovable only
● Application of proceeds:
1. Expenses for preservation and repair of the property
2. Taxes and charges
3. Interest
4. Principal
Art. 2089 An antichresis is indivisible, even though the debt may be divided among the
successors in interest of the debtor or of the creditor. Therefore, the debtor's heir who
has paid a part of the debt cannot ask for the proportionate extinguishment of the
antichresis as long as the debt is not completely satisfied.
Neither can the creditor's heir who received his share of the debt cancel the antichresis,
to the prejudice of the other heirs who have not been paid. From these provisions is
expected the case in which, there being several things given in antichresis, each one of
them guarantees only a determinate portion of the credit. The debtor, in this case, shall
have a right to the extinguishment of the antichresis as the portion of the debt for which
each thing is specially answerable is satisfied.
Art. 2090 The indivisibility of an antichresis is not affected by the fact that the debtors
are not solidarily liable.
Indivisibility of an antichresis:
● GR: An antichresis is indivisible. There can be no proportionate extinguishment
or cancellation of antichresis due to partial payment of the debt
● XPN: There being several things given in antichresis, each one of them
guarantees only a determinate portion of the credit. Here, the debtor has a right
to extinguish the antichresis as the portion of the debt corresponding to a thing is
satisfied. This applies even if debtors are not solidarily liable.
Art. 2091 The contract of antichresis may secure all kinds of obligations, be they pure or
subject to a suspensive or resolutory condition.
Object of Antichresis: Secures all kinds of obligations

● Pure
● Subject to suspensive condition
● Subject to resolutory condition
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D. Right of Retention
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 obligations imposed upon him by the preceding article, may always compel the
debtor to enter again upon the enjoyment of the property, except when there is a
stipulation to the contrary.
● Right of retention - means of extinguishing an obligation

- The debtor cannot reacquire enjoyment of the immovable until he has
actually paid what he owes the creditor.
● GR: Debtor cannot reacquire enjoyment of the immovable without full payment of
the debt
● XPN: Creditor compels the debtor to enter again upon the enjoyment of the
property to exempt himself (creditor) from the obligations imposed upon him
under Act 3135 (ACT NO. 3135 - AN ACT TO REGULATE THE SALE OF
PROPERTY UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO
REAL-ESTATE MORTGAGES)
● XPN to XPN: Stipulation to the contrary
E. Foreclosure of Antichresis
Art. 2137 The creditor does not acquire the ownership of the real estate for non-payment
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.
● Because of the right of the creditor to judicially foreclose on the immovable

owned by the debtor, antichresis is viewed as a species of real estate mortgage
in which the mortgagee retains possession of the collateral and takes the fruits
(such as rents) of the property in lieu of interest on the debt.
● Stipulation on the transfer of ownership: void
● property cannot be appropriated to the creditor to extinguish the debt
● Who owns the property subject of antichresis?
- Antichretic debtor/third person
● Remedies:
1. specific performance
2. judicial foreclosure (if no stipulation)
3. extraducial foreclosure
Void stipulation: Creditor does not acquire ownership of real estate for non-payment of
a debt. Every stipulation to the contrary shall be void.
Likened to REM but differences are: Mortgagee retains possession of the collateral
and takes fruits in lieu of interest on the debt. Retention of possession allows the creditor
to apply the fuits to the interest.
- Possession also involves symbolic possession even if there is a third party

- Possession also allows the creditor to foreclose on the property
ANTICHRESIS
CANLAS-GARCIA
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● Definition: Antichresis, from the Latin, in place of interest

The creditor is obliged to pay:

● As to the interest: parties may stipulate that it can be compensated with

● Who are the parties?

● Subject: Immovable only

Object of Antichresis: Secures all kinds of obligations

● Right of retention - means of extinguishing an obligation

● Because of the right of the creditor to judicially foreclose on the immovable

- Possession also involves symbolic possession even if there is a third party

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