Act 4118 – Act 3135 as amended and
governs extrajudicial foreclosures
Last updated on May 4, 2015 by Jay Castillo | Filed Under: Real Estate Laws4 Comments
As mentioned in my previous post which contains the full text of Act No. 3135, I am
posting here Act No. 4118 which amends the original Act 3135. However, after reading
the contents of Act No. 4118, I am inclined to believe that the full text of Act 3135 which
I shared in my previous post was already Act 3135 as amended by Act 4118.
Why am I posting these? For starters, I just want to be sure that we are all on the same
page when it comes to extrajudicial foreclosure sales in the Philippines. Please continue
reading to find out more…
ACT NO. 4118 – AN ACT TO AMEND ACT NUMBERED THIRTY-ONE HUNDRED
AND THIRTY-FIVE, ENTITLED “AN ACT TO REGULATE THE SALE OF PROPERTY
UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL-ESTATE
MORTGAGES.”
SECTION 1. Section six of Act Numbered Thirty-one hundred and thirty-five, entitled
“An Act to regulate the sale of property under special powers inserted in or annexed to
real-estate mortgages,” is hereby amended to read as follows:
“Section 6. In all cases in which an extrajudicial sale is made under the special power
herein before referred to, the debtor, his successors in interest or any judicial creditor or
judgment creditor of said debtor, or any person having a lien on the property
subsequent to the mortgage or deed of trust under which the property is sold, may
redeem the same at any time within the term of one year from and after the date of the
sale; and such redemption shall be governed by the provisions of sections four hundred
and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in
so far as these are not inconsistent with the provisions of this Act.”
SECTION 2. The following three sections are hereby inserted after section six of said
Act Numbered Thirty-one hundred and thirty-five:
“Section 7. In any sale made under the provisions of this Act, the purchaser may
petition the Court of First Instance of the province or place where the property or any
part thereof is situated, to give him possession thereof during the redemption period,
furnishing bond in an amount equivalent to the use of the property for a period of twelve
months, to indemnify the debtor in case it be shown that the sale was made without
violating the mortgage or without complying with the requirements of this Act. Such
petition shall be made under oath and filed in form of an ex parte motion in the
registration or cadastral proceedings if the property is registered, or in special
proceedings in the case of property registered under the Mortgage Law or under section
one hundred and ninety-four of the Administrative Code, or of any other real property
encumbered with a mortgage duly registered in the office of any register of deeds in
accordance with any existing law, and in each case the clerk of the court shall, upon the
filing of such petition, collect the fees specified in paragraph eleven of section one
hundred and fourteen of Act Numbered Four hundred and ninety-six, as amended by
Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of
the bond, order that a writ of possession issue, addressed to the sheriff of the province
in which the property is situated, who shall execute said order immediately.
“Section 8. The debtor may, in the proceedings in which possession was requested, but
not later than thirty days after the purchaser was given possession, petition that the sale
be set aside and the writ of possession cancelled, specifying the damages suffered by
him, because the mortgage was not violated or the sale was not made in accordance
with the provisions hereof, and the court shall take cognizance of this petition in
accordance with the summary procedure provided for in section one hundred and
twelve of Act Numbered Four hundred and ninety-six; and if it finds the complaint of the
debtor justified, it shall dispose in his favor of all or part of the bond furnished by the
person who obtained possession. Either of the parties may appeal from the order of the
judge in accordance with section fourteen of Act Numbered Four hundred and ninety-
six; but the order of possession shall continue in effect during the pendency of the
appeal.
“Section 9. When the property is redeemed after the purchaser has been given
possession, the redeemer shall be entitled to deduct from the price of redemption any
rentals that said purchaser may have collected in case the property or any part thereof
was rented; if the purchaser occupied the property as his own dwelling, it being town
property, or used it gainfully, it being rural property, the redeemer may deduct from the
price the interest of one per centum per month provided for in section four hundred and
sixty-five of the Code of Civil Procedure.”
SECTION 3. The number of the present section seven of said Act Numbered Thirty-one
hundred and thirty-five is hereby changed, making it section ten.
SECTION 4. This Act shall take effect on its approval.
Approved, December 7, 1933
Source: http://www.chanrobles.com/acts/actsno4118.html
To date I have only been featuring information and listings of two of the most common
types of foreclosures we can invest in here in the Philippines. These are bank
foreclosed properties or acquired assets and real property being sold through tax
foreclosure auctions.
Soon I will be posting listings and information about a third type of foreclosures which
are properties that are to be sold through an extrajudicial foreclosure sale. This is
governed by Act 3135 as amended by Act 4118 hence if you are interested in
participating in such auctions, you can use these as reference on how they are
generally conducted.
