Lex Rex Ph

Pactum Commissorium

A stipulation in a contract which provides that the creditor or pledgee will automatically appropriate the thing mortgaged or pledged as security for a principal obligation when the debtor or pledgor did not pay within the stipulated period. This stipulation is void by virtue of Article 2088.

The creditor cannot appropriate the things given by way to pledge or mortgage, or dispose of them. Any stipulation to the contrary is null and void.

ART. 2088, New Civil Code

2 Elements of Pactum Commissorium

  • (1) PLEDGE or MORTGAGE as SECURITY for PRINCIPAL OBLIGATION. that there should be a pledge or mortgage wherein a property is pledged or mortgaged by way of security for the payment of the principal obligation; and
  • (2) AUTOMATIC APPROPRIATION if NO PAYMENT in a PERIOD. that there should be a stipulation for an automatic appropriation by the creditor of the thing pledged or mortgaged in the event of non-payment of the principal obligation within the stipulated period.

Francisco Realty and Development vs. CA

Other Content You May Be Interested In:

Criminal Negligence

Imprudence is an act of carelessness (reckless imprudence) which, had it been intentional, would otherwise constitute a felony (Article 365 of RPC): If grave felony:

Read More »

Business Judgment Rule

The will of the majority of the Board members control corporate affairs and contracts intra vires and the courts will not interfere unless such contracts

Read More »

Lim vs. CA Digest

January 24, 2000 Facts In 1994, Pastor Y. Lim died intestate. Surviving spouse Rufina filed a petition for administration of his estate. The properties of

Read More »

ABS-CBN vs. Hilario

July 10, 2019 Facts Mr. Edmund Ty incorporated CCI to engage in the business of making props for TV programs et al. Honorato and Banting

Read More »

Chi Ming Tsoi v CA Digest

“Love is Useless Unless Shared” CHI MING TSOI, petitioner,vs.COURT OF APPEALS and GINA LAO-TSOI, respondents. IN RELATION TO COURSE: Persons under Psychological Incapacity, Nullity of

Read More »

Onas vs. Javillo Digest

Onas vs. Javillo 59 Phil 733G.R. No. L-39670             March 20, 1934Full Text Link Complete Names of PartiesIn the matter of the intestate estate of the deceased

Read More »
en_USEnglish