Section 739.- If any creditor refuses the offer, he must enter an action in Court within one month from the date of the offer for a judgment ordering the mortgaged property to be sold by public auction, provided that :

                (1) He advances the costs of sale ;

                (2) He binds himself to make a bid or have a bid made above the sum offered by the transferee ;

                (3) He notifies his refusal to the transferee, other registered creditors, the former owner and the principal debtor.

 

Section 740.- If the net proceeds of the auction are more than the sum offered by the transferee, the costs of the auction shall be borne by him ; otherwise, the creditor demanding the sale shall bear the costs of the auction.

 

Section 741.- When all the creditors have accepted the offer, either expressly or impliedly, the mortgages and preferential rights are removed by the transferee paying or depositing in lieu of performance the sum offered.

 

Section 742.- When, by the enforcement or the removal of the mortgage, a person who has previously acquired the mortgaged property is deprived of the property, such deprivation has no retrospective effect, and the preferential rights registered by his own creditors over the property rank after the preferential right registered by the creditors of the mortgagor or other former owner.

In such case, if any rights over the mortgaged property existing in favour of or against the person, who has so previously acquired the mortgaged property, have been extinguished by merger at the time of his acquisition, they shall revive in his favour or against him after he has been deprived of the mortgaged property.

 

Section 743.- The transferee is liable to damages if the property has been made less valuable by his act or negligence, and loss has thereby been suffered by the creditors having mortgages or preferential rights over the same property. The transferee cannot, however, claim any sum spent by him, or reimbursement of his expenses for improvements, except so far as he has increased the value of the property, and only up to the amount of the increase of value at the time of auction.

 

CHAPTER VI

EXTINCTION OF MORTGAGE

 

Section 744.- A mortgage is extinguished :

                (1) By extinction of the obligation secured, otherwise than by prescription ;

                (2) By release of the mortgage granted in writing to the mortgagor ;

                (3) By the mortgagor being discharged ;

                (4) By the mortgage being removed ;

                (5) By auction sale of the mortgaged property by order of the Court as a result of enforcement or removal of mortgage ;

                (6) By foreclosure of the mortgage.