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    Prohibition Against Pactum Commissorium

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    Mikko Ramira
    The document discusses the pactum commissorum, which is an automatic appropriation by the creditor of a pledged or mortgaged property if the debtor fails to pay the principal obligation. It notes that a pactum commissorum stipulation is null and void as it is contrary to public policy. For there to be a pactum commissorum, there must be a pledge, mortgage, or antichresis of property as security for a principal obligation, along with an automatic appropriation of the property to the creditor if the debtor defaults. Certain agreements like power of attorney, option contracts, dacion en pago, or assigned shares would not constitute a pactum commissorum.

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    Prohibition Against Pactum Commissorium

    Uploaded by

    Mikko Ramira
    44 views1 page
    The document discusses the pactum commissorum, which is an automatic appropriation by the creditor of a pledged or mortgaged property if the debtor fails to pay the principal obligation. It notes that a pactum commissorum stipulation is null and void as it is contrary to public policy. For there to be a pactum commissorum, there must be a pledge, mortgage, or antichresis of property as security for a principal obligation, along with an automatic appropriation of the property to the creditor if the debtor defaults. Certain agreements like power of attorney, option contracts, dacion en pago, or assigned shares would not constitute a pactum commissorum.

    Original Description:

    law

    Original Title

    PACTUM COMMISSORIUM

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    The document discusses the pactum commissorum, which is an automatic appropriation by the creditor of a pledged or mortgaged property if the debtor fails to pay the principal obligation. It notes that a pactum commissorum stipulation is null and void as it is contrary to public policy. For there to be a pactum commissorum, there must be a pledge, mortgage, or antichresis of property as security for a principal obligation, along with an automatic appropriation of the property to the creditor if the debtor defaults. Certain agreements like power of attorney, option contracts, dacion en pago, or assigned shares would not constitute a pactum commissorum.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    44 views1 page

    Prohibition Against Pactum Commissorium

    Uploaded by

    Mikko Ramira
    The document discusses the pactum commissorum, which is an automatic appropriation by the creditor of a pledged or mortgaged property if the debtor fails to pay the principal obligation. It notes that a pactum commissorum stipulation is null and void as it is contrary to public policy. For there to be a pactum commissorum, there must be a pledge, mortgage, or antichresis of property as security for a principal obligation, along with an automatic appropriation of the property to the creditor if the debtor defaults. Certain agreements like power of attorney, option contracts, dacion en pago, or assigned shares would not constitute a pactum commissorum.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    PACTUM COMMISSORIUM

    > Automatic appropriation by the creditor of the thing pledged


    or mortgaged upon the failure of the debtor to pay the principal
    obligation
    > TEST IF THERE IS EXISTS PACTUM COMMISSORIUM is whether or not
    there is no need for extra step to be taken by creditor
    PROHIBITION AGAINST PACTUM COMMISSORIUM
    1. Stipulation is null and void—
    it is said to be contrary to good morals and public policy
    2. Requisites
    a. There should be a pledge, mortgage, antichresis of property by
    way of security for the payment of the
    principal obligation
    b. Stipulation for the automatic appropriation of the property
    in favor of the creditor upon default of the debtor/pledgor

    3. Effect on the security contract—doesn’t affect substantially


    the principal contract of pledge, mortgage or antichresis with
    regard to its validity and efficacy
    AGREEMENTS THAT WOULD NOT CONSTITUTE PACTUM COMMISSORIUM
    1. Attorney in fact
    2. Option contract. There would be another contract. There is a
    risk of the courts to look at it as a PC.
    3. Dacion en pago
    4. Assigned shares. Creditor would only have legal title and
    pledgor would still have beneficial ownership.

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