Parties to a real estate transaction set in the agreement that the first payment is to be paid to the seller and the second payment will be used for mortgage repayment. After executing the agreement and recording of a cautionary note in favor of the purchaser the bank requested foreclosure of the second installment for repayment of another debt of the seller.
The Court held that a property purchase contract clause, which stipulates certain amounts of the proceeds earmarked for debt repayment to the authorities or used to settle a mortgage or liens registered on the property, and that they will be paid by the purchased directly to the authorities or the creditor, is a clause designed to protect the purchaser and ensure the purchaser's rights in the acquired property, so that such rights will not remain abstract. An interpretation according to which the proceeds remaining with the purchaser in order to cover the mortgage is a "normal" amount to be paid to the seller and thus may be foreclosed, endangers the rights of the purchaser. For this reason, the Court refused to allow the foreclosure of the funds earmarked for repayment of the mortgage.