ANTICHRESIS
(ARTICLES 2132-2139)
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. (1881)
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)
Art. 2134. The amount of the principal and of the interest shall be specified in writing; otherwise, the contract of antichresis shall be void. (n)
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. (1882)
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. (1883)
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. (1884a)
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)
Art. 2139. The last paragraph of Article 2085, and Articles 2089 to 2091 are applicable to this contract. (1886a)
ANTICHRESIS
> The creditor acquires the right to receive the fruits of an immovable of his debtor, with the obligation to apply them o the payment of the interest, if owing, and thereafter to the principal of his credit
> Arrangement that the fruits will be used to liquify the principal obligation
> Doesn't create a lien but only the grant of the use of the fruits
CHARACTERISTICS OF AN ANTICHRESIS
1. Accessory contract
2. Formal contract—it must be in writing; the principal obligation and the interest secured must be in writing
THERE IS NO NEED TO TRANSFER POSSESSION. WHAT IS ESSENTIAL IS THE GRANT OF THE USE OF THE FRUITS.
ADDITIONAL BENEFIT IN HAVING A CONTRACT OF ANTICHRESIS
> In the absence of a contract of antichresis, the debtor could just issue a special power of attorney in favor of the creditor for the collection of the fruits of the immovable.
> The additional benefit is that at the failure of the debtor to pay the principal obligation, the creditor may have the property subject of antichresis foreclosed
MEASURE OF APPLICATION OF FRUITS TO INTEREST AND PRINCIPAL
> Must be appraised at their actual market value at the time of application
FORM OF CONTRACT
> The amount of the principal and interest shall be specified in writing
> Otherwise, the contract is void
DEFAULT RULES TO BE FOLLOWED (TAKE NOTE SO THAT YOU WILL KNOW WHEN TO OPT OUT OF THE RULES)
1. The creditor advances for the taxes, charges, as well as the necessary expenses for the preservation of the property
2. The law uses the term “advances” as the fruits of the immovable may be applied to the expenses and charges. If the creditor doesn't want to advance, he may just surrender the immovable to the debtor
3. The debtor may not reacquire the enjoyment of the thing until full payment of the obligation.
4. The creditor doesn't acquire ownership of the immovable for nonpayment of the debt within the period agreed upon. Every stipulation to the contrary is void. The creditor may petition the court to foreclose the property.
