What is Pactum Commissorium? ~ Pinoy Reviews

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Sunday, March 23, 2008

What is Pactum Commissorium?

Pactum Commissorium can be found in Article 2088 of the civil code which provides: The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose of them. Any stipulation to the contrary is null and void.

Simply put, it is a stipulation in a contract of mortgage of pledge which provides that the mortgagee will automatically own the property mortgaged in case the mortgagor fails to pay the loan. This stipulation is VOID.

Though to some people this might seem convenient in Mortgages but the law disallows this because it wants to give the mortgagor the right to redeem his property and not be automatically deprived of it.

So if you happen to have lost your property due to this automatic appropriation clause, contact a lawyer so that you could redeem your property.

1 Comment:

Anonymous said...

pag sure oi!