Short answer. No. Article 2137 provides that the creditor does not acquire ownership of the real estate for non-payment of the debt within the period agreed upon, and that every stipulation to the contrary is void. He must go to court for payment or for the sale of the property.
What the law says
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.
Civil Code, Article 2137 — No Automatic Ownership. Read the full provision →
Default does not transfer the land
Article 2137 provides that 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. The prohibition is absolute and it is aimed at the clause, not merely at the conduct. An antichresis document providing that title consolidates in the creditor on default carries a void provision, and the creditor who acted on it has taken something the law never let him take.
Why the rule exists
It is the same policy that Article 2088 applies to pledge and mortgage, under which the creditor cannot appropriate the things given as security or dispose of them, and any stipulation to the contrary is null and void. Security is meant to guarantee payment, not to become a means of acquiring property worth several times the loan from a borrower in no position to argue. Requiring a court sale keeps the value of the land and the size of the debt separate questions, and puts a public process between a defaulting debtor and the loss of his real estate.
What the creditor may do instead
The article gives him two routes, both through the courts: he may petition for the payment of the debt, or for the sale of the real property. Where he takes the second, the article directs that the Rules of Court on the foreclosure of mortgages apply, so an antichretic creditor ends up in essentially the position of a mortgagee seeking foreclosure. Meanwhile Article 2136 governs the interim: the debtor cannot reacquire the enjoyment of the immovable without first paying totally what he owes, though the creditor may always compel him to resume enjoyment to escape the obligations imposed on him.
The obligations that ride with the fruits
Antichresis is not merely a right to collect. Article 2132 defines it as giving the creditor the right to receive the fruits of an immovable of his debtor with the obligation to apply them to the interest, if owing, and thereafter to the principal. Article 2133 measures that application by the actual market value of the fruits at the time it is made. Article 2135 obliges the creditor, unless otherwise stipulated, to pay the taxes and charges on the estate and to bear the expenses necessary for its preservation and repair, deducting those sums from the fruits. Ask for that accounting.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Sps. Charito M. Reyes and Roberto Reyes, et al. vs. Heir of Benjamin Malance, et al, G.R. No. 219071, August 24, 2016 — read the decision on LawPhil →
- Home Guaranty Corporation vs. La Savoie Development Corporation, G.R. No. 168616, January 28, 2015 — read the decision on LawPhil →
Related provisions
- Civil Code, Article 2137 — No Automatic Ownership
- Civil Code, Article 2132 — Antichresis Defined
- Civil Code, Article 2133 — Measure of Application
- Civil Code, Article 2135 — Creditor's Obligations
- Civil Code, Article 2088 — Pactum Commissorium Void