.This is an action brought  before the Court of First Instance of La Union to compel defendants to execute in favor  of plaintiffs  the  necessary deed of  conveyance of a parcel of land in accordance with the stipulation' agreed upon and to pay damages  in the amount of P5,000. Defendants, in  their  answer,  set up as a defense  that, the  agreement on  which  plaintiffs base  their cause of action is null and void and that the amounts claimed by the  plaintiffs represent  usurious interests and by  way of counterclaim,  they asked that plaintiffs be ordered  to pay P5,000 as damages and to return the palay and amounts unduly paid by them to said plaintiffs as partial payment of the principal  obligation.  Plaintiffs  submitted a reply traversing the special  defenses  and  counterclaim  set up by defendants in their  answer.

On December 1, 1954, plaintiffs and defendants, through their counsel, submitted to the court a stipulation of facts wherein they agreed to submit as evidence the pleadings they have respectively  filed  in the case  with their corresponding  exhibits and  prayed that judgment be rendered on the pleadings and, on the strength of this stipulation, the court  rendered decision holding, that  the agreement on Which plaintiffs predicated their right to a conveyance of the land in question is  null and void  it containing  a covenant which is known in law as pactum  commissorium and as such is contrary to  law, morals  and public policy.  As a consequence,  the court dismissed  the case with  costs against the  plaintiffs,  "without prejudice to their  right to proceed to  collect their  claim  as ordinary mortgage creditors  under the provisions of section  7, Rule 87, of the Rules of Court."  From this Decision,  plaintiffs interposed the present appeal.

The agreement on which the action of the plaintiffs is predicated contains the following covenant:

"That the conditions of  this mortgage  are that if  I Eduvigis Hernandez  or any heirs cannot redeem this mortgage in the same amount plus twelve  (12%) per cent per annum interest, th this considered  as full payment of this parcel  of land without further action in Court, within two  (2) years from that date of the contract."

Interpreting the above covenant, the  lower court  concluded that it  embodies a pactum  commissorium  for the reason that it  stipulates that in case the mortgagor  fails to redeem the mortgage within the  period  agreed upon, the consideration of the mortgage  shall be considered as payment  of the land which thereby becomes the property of the mortgagee.  To this we agree.  This is the  only interpretation that can  be given to the terms of the covenant  especially the phrase  that  the money  taken "shall be considered as full payment of this parcel of  land without "further action in court."'  This means that upon failure or redemption, the land automatically passes to the mortgagee.   This is what is  condemned by  Articles 1859 and 1884 of the  old Civil  Code, as has  been interpreted by this Court in a number of cases.  Thus, in Tan Chun Tic vs. West Coast Life Insurance Co.  and Locsin, 54 Phil. 361,  this Court said:  "The stipulation in the mortgage that  the land covered  thereby shall become  the property of the mortgagee upon failure to pay the debt within the period  agreed upon, constitutes a pactum  commissorium, and is therefore  null  and void."  And in a recent case wherein in one of the documents involved it was stipulated that upon failure of a party to exercise his right to redeem title  to  the  land "shall  pass to and become vested absolutely, in the party of the second part", this Court hinted  ; that  if  that  clause would be construed  as  giving  the mortgagee the right to own  the property  upon failure of the mortgagor to pay the  loan, it would  be a pactum commissorium which is unlawful and void (Pedro Guerrero vs. Serapion de Ynigo, 96 Phil., 37).

Appellants, however, try to differentiate the present case from the ones above cited by laying stress on the particular  circumstance  that in  said  cases  the  mortgagor authorized the mortgagee to take over' the property and dispose  of it upon  failure to pay  the debt  within  the period agreed upon, whereas in the present  case there is no such authority no implication in the terms of the covenant in question.  This  claim  is untenable for said covenant clearly stipulates that upon failure to redeem the mortgage  the transaction shall automatically become  one of sale "without  further action  in Court."  This  is  a typical case  of a pactum commissorium.

The cases  of Dalay vs. Aquiatin and Maximo, 47 Phil., 951 and Kasilag vs. Rodriguez, 69 Phil.,  217 invoked by appellants are not applicable because the  terms of the covenant therein involved were couched  in  a manner different from those  of the present covenant.  In the  first  case, the parties  stipulated  that if  the debtor  cannot pay the debt when the date agreed upon comes, "the  same shall be paid with the lands given as security" and this Court held that such  stipulation does not  violate  the law  (Article 1859  of the  old  Civil  Code) because  it  "does  not  authorize  the creditor to appropriate  the property pledged or mortgaged, nor to dispose  thereof, and constitutes only a  promise  to  assign,  said property in  payment  of  the obligation  if upon its maturity, it is not paid."  And in the second cases the agreement "was  that if  the mortgagor shall fail to redeem  the mortgage "she  would execute a deed of absolute  sale of the property"  in favor of  the mortgagee which  does not give  automatic ownership  to the latter but rather constitutes a mere promise of assignment of the,  property  for which  reason the.Court  held that the same is  valid  and  legal.   Evidently,  these two cases cannot be considered as authority for the interpretation of the covenant in question.

The decision appealed from is affirmed, with costs against appellants.

Parás, C. J., Bengzon, Padilla, Montemayor, Reyes, A , Labrador,  Concepcion, Reyes,  J. B.  L. and Endencia,, JJ, concur.