Section 728: Notice before enforcing a mortgage, and the 60 day period

Supreme Court decisions interpreting this section

1. Supreme Court Judgment No. 7151/2544 (2001) ★ Landmark

   Section 728 lays down no required contents for a notice of foreclosure; it says only that before enforcing, the mortgagee must send the debtor a letter requiring payment within a reasonable time fixed in the notice. A notice is therefore effective in law if its wording lets the mortgagor understand that foreclosure has been noticed. Here it gave the wrong title-deed numbers for seven of the eight mortgaged plots but identified the loan contract correctly, and the mortgagor own defence showed she understood which mortgages were being enforced, so it was good for all eight.

   A bank sued on a loan secured by mortgages over eight title deeds in Phuket. The notice of foreclosure attached to the plaint gave the correct deed number for only one of the eight plots, but referred correctly to the loan contract. The first court allowed enforcement against that one plot alone. The Supreme Court held that section 728 prescribes no particular contents for the notice, requiring only a letter calling on the debtor to pay within a reasonable time, so a notice is effective if its wording lets the mortgagor understand that foreclosure has been noticed. The mortgagor had never pleaded that the other seven plots were not covered; her defence was that the signatory had no written authority, which showed she understood every mortgaged plot was being enforced. The notice was therefore effective for all eight, and enforcement was allowed against the remaining seven.

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2. Supreme Court Judgment No. 5553/2542 (1999)

   A notice of foreclosure under section 728 is a declaration of intention that must reach its addressee, and the addressee the law designates is the mortgagor. Where the mortgagor had already died when the notice was sent, it is bad even though someone else took delivery of it. On death the estate, including the deceased rights, duties and liabilities, passes to the heirs under sections 1599 and 1600: if the mortgaged property has been transferred, the mortgagee must give the transferee one month written notice under section 735; and if no transferee has yet appeared but there are heirs or an administrator, they stand in the position of a transferee and must be given at least one month written notice before enforcement. Filing the action is not itself a notice of foreclosure.

   A bank sued the borrower, a guarantor and two heirs of the mortgagor for just over one million baht and to enforce the mortgage. The mortgagor had died before the bank sent its notice of foreclosure, although another person took delivery of it. The Supreme Court held the notice to be a declaration of intention which must reach the mortgagor, so delivery to someone else did not make it good; that on her death her rights, duties and liabilities passed to her heirs under sections 1599 and 1600; that a transferee of mortgaged property must be given one month written notice under section 735 and, where no transferee has appeared, heirs or an administrator stand in the same position and are entitled to the same month notice; and that suing the heirs is not itself a notice of foreclosure. Having given the heirs no notice before suing, the bank had no standing to enforce the mortgage, although the money judgment stood with the heirs liable only to the extent of the estate that came to them.

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3. Supreme Court Judgment No. 938/2542 (1999)

   A notice of foreclosure under section 728 sent by registered post with return receipt both to the address the mortgagor gave in the mortgage contract and to his actual domicile is taken to have been received and known of by him, so the mortgagee may sue to enforce. Separately, once the lender terminates the loan and gives the notice of foreclosure, its contractual right to raise the interest rate comes to an end on that date; it cannot rely on a later rate announcement of its own to claim a higher rate than it was entitled to charge when that right expired.

   A bank sued to recover a loan and enforce a mortgage over land held under an n.s.3 kor certificate, claiming interest at 25 percent a year. The rider to the mortgage provided that any notice sent to the address the mortgagor had given, by hand or by post, registered or not and whether or not anyone received it, was to be treated as duly delivered. The bank sent the notice of foreclosure both to that address and to the mortgagor home, in each case by registered post with return receipt. The Supreme Court held he was therefore to be treated as having received and known of the notice, that a reasonable period to pay had been allowed, and that the bank could sue to enforce under section 728. On interest it held the bank right to raise the rate ended when it terminated the loan and gave the notice of foreclosure on 2 September 1996; under its own announcement then in force it could charge at most 19 percent, and it could not rely on its 1998 announcement to claim 25 percent. The 25 percent was not a penalty the court could reduce under sections 379 and 383, but a contractual rate whose foundation had already lapsed.

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Curated decisions with case numbers verified against the Supreme Court database. English renderings are the firm's editorial translation for study.