Short answer. No. Article 2130 makes void any stipulation forbidding the mortgaged property's owner from alienating it. You remain free to sell the mortgaged property even with the loan unpaid; the buyer simply takes it subject to the existing mortgage, which the lender can still enforce.
What the law says
A stipulation forbidding the owner from alienating the immovable mortgaged shall be void.
Civil Code, Article 2130 — Void Prohibition on Alienation. Read the full provision →
The clause you describe is exactly what Article 2130 voids
The Civil Code addresses this precise kind of clause directly. Article 2130 states plainly: "a stipulation forbidding the owner from alienating the immovable mortgaged shall be void." A clause in your mortgage contract that says you cannot sell the property while the loan remains unpaid is precisely the kind of prohibition this article targets, and the law treats it as void — meaning it does not bind you, regardless of the words used in the contract.
Why the law does not let a mortgage freeze the owner's ownership
A mortgage secures the lender's right to be paid, typically by allowing the lender to foreclose on the property if the debt is not satisfied — it is not meant to strip the owner of the basic right to deal with property that remains, in the meantime, still theirs. Ownership includes the right to sell, and Article 2130 protects that right from being contracted away entirely, even by a lender holding a security interest over the same property.
What happens to the mortgage if you do sell
A mortgage attaches to the property itself, not merely to the person who signed the mortgage contract, so selling the property does not make the mortgage disappear. Your buyer would generally take the property still encumbered by the existing mortgage, meaning the lender retains its rights against the property even after the sale, including the ability to foreclose if the loan later goes unpaid. Selling the property does not, by itself, remove your own obligation to the lender either, unless your agreement with the lender or the buyer specifically addresses that.
Practical considerations before you act
Even though the no-sale clause itself is void, a prospective buyer will want to understand that the property remains mortgaged, and lenders often have their own internal requirements — such as being informed of a sale or having the loan settled from the proceeds — built into the loan relationship generally, separate from the void alienation clause. Being upfront with both your lender and any buyer about the existing mortgage will avoid complications even though the clause forbidding the sale itself cannot legally stop you from selling.
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.
- Reynaldo K. Litonjua, et al. vs. L & R Corporation, et al, G.R. No. 130722, December 9, 1999 — read the decision on LawPhil →
- Philippine Charity Sweepstakes Office (PCSO) vs. New Dagupan Metro Gas Corporation, et al, G.R. No. 173171, July 11, 2012 — read the decision on LawPhil →
- Spouses Nestor Cabasal and Ma. Belen Cabasal vs. BPI Family Savings Bank, Inc., G.R. No. 233846, November 18, 2020 — read the decision on LawPhil →
- Pablo P. Garcia vs. Yolanda Valdez Villar, G.R. No. 158891, June 27, 2012 — read the decision on LawPhil →