Art. 85. Donations by reason of marriage of property subject to encumbrances
Art. 85. Donations by reason of marriage of property subject to encumbrances shall be valid. In case of foreclosure of the encumbrance and the property is sold for less than the total amount of the obligation secured, the donee shall not be liable for the deficiency. If the property is sold for more than the total amount of said obligation, the donee shall be entitled to the excess. (131a)
Encumbrance is a mortgage or other charge on property assets. If the object of the donation is subject to an encumbrance, it is valid. The reason for this is that the donor is still the owner, even if it is encumbered.
There are rules if the property is encumbered. These are as follows:
1. If the object of the donation has been foreclosed to answer for the unpaid debt of the donor and the amount obtained as a result of the foreclosure is less than the amount of the debt of the donor which was supposed to be satisfied by the foreclosure then the donee, the person received the gift, shall not be liable for any deficiency in the event.
2. On the other hand, if the property is sold and the resulting money obtained is more than the amount of the liability of the donor then the excess shall properly proceed to the donee.
Illustration:
Marlou, the future spouse of Evi, donated a parcel of land worth Php100, 000.00 to the latter. Before the donation, however, the same was mortgaged with the PNB. That donation is considered valid by the law even if there is an existing lien or encumbrance because Marlou, the donor, is still the owner even if it is encumbered.
If the mortgage is foreclosed and is sold for Php 70, 000.00, then Evi, the donee, is not under an obligation to pay the deficiency.
However, if the property is sold for Php 120, 000.00, then Evi, the donee, is entitled to the Php 20, 000.00 which is the excess of the total amount of the obligation.
This is because being the owner of the property, the donee is entitled to whatever value of the property which can be obtained. The donation is a conveyance of pure liberality of the donor, and thus the donee cannot seek reimbursement from the donor for the amount which was taken away by creditors as a result of the foreclosure sale.
Encumbrance is a mortgage or other charge on property assets. If the object of the donation is subject to an encumbrance, it is valid. The reason for this is that the donor is still the owner, even if it is encumbered.
There are rules if the property is encumbered. These are as follows:
1. If the object of the donation has been foreclosed to answer for the unpaid debt of the donor and the amount obtained as a result of the foreclosure is less than the amount of the debt of the donor which was supposed to be satisfied by the foreclosure then the donee, the person received the gift, shall not be liable for any deficiency in the event.
2. On the other hand, if the property is sold and the resulting money obtained is more than the amount of the liability of the donor then the excess shall properly proceed to the donee.
Illustration:
Marlou, the future spouse of Evi, donated a parcel of land worth Php100, 000.00 to the latter. Before the donation, however, the same was mortgaged with the PNB. That donation is considered valid by the law even if there is an existing lien or encumbrance because Marlou, the donor, is still the owner even if it is encumbered.
If the mortgage is foreclosed and is sold for Php 70, 000.00, then Evi, the donee, is not under an obligation to pay the deficiency.
However, if the property is sold for Php 120, 000.00, then Evi, the donee, is entitled to the Php 20, 000.00 which is the excess of the total amount of the obligation.
This is because being the owner of the property, the donee is entitled to whatever value of the property which can be obtained. The donation is a conveyance of pure liberality of the donor, and thus the donee cannot seek reimbursement from the donor for the amount which was taken away by creditors as a result of the foreclosure sale.
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