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 contractit 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.