Regulation of Property Sale Under Special Mortgage Powers

Section 1 applies when a sale is made under a special power inserted in or attached to any real-estate mortgage as security for payment of money or fulfillment of any other obligation.
The Act controls the manner by which the sale and redemption are effected (Section 1).
Section 1 applies regardless of whether the special power itself contains sale-and-redemption provisions.
Section 6 specifically governs redemption when the sale is extrajudicial under the special power referred to in Section 1.

Section 2 prohibits legally making the sale outside the province where the property sold is situated.
If the sale place within the province is stipulated, Section 2 requires the sale to be made in the stipulated place.
If the stipulated place is not followed, Section 2 requires the sale to be made in the municipal building of the municipality where the property (or part thereof) is situated.
The province and municipality rules apply to determine lawful location for the sale (Section 2).

Section 3 requires notice of the sale by posting notices of the sale for not less than twenty days.
Section 3 requires posting in at least three public places in the municipality or city where the property is situated.
Section 3 requires publication once a week for at least three consecutive weeks in a newspaper of general circulation in the municipality or city if the property is worth more than four hundred pesos.
The notice requirements apply to the sale process under special powers (Section 3).

Section 4 requires the sale to be conducted at public auction.
Section 4 sets the sale hours as between nine in the morning and four in the afternoon.
Section 4 places the sale under the direction of the sheriff, the presiding justice/justice or auxiliary justice of the peace, or a notary public of the municipality where the sale is made.
Section 4 allows the notary public (where directed) to collect a fee of five pesos for each day of actual work performed, in addition to expenses.

Section 5 authorizes the creditor, trustee, or other person authorized to act for the creditor to participate in the bidding.
Section 5 permits the creditor or authorized person to purchase under the same conditions as other bidders.
Section 5 allows participation and purchase by these persons unless the mortgage or trust deed expressly provides the contrary.

Section 6 grants a right of redemption after an extrajudicial sale made under the special power.
Section 6 limits redemption to the following persons: the debtor, the debtor’s successors in interest, any judicial creditor or judgment creditor, and any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold.
Section 6 provides that redemption must be made at any time within one year from and after the date of the sale.
Section 6 provides that redemption is governed by Sections 464 to 466, inclusive, of the Code of Civil Procedure, to the extent those provisions are not inconsistent with Act No. 3135.