REAL MORTGAGE CASES

G.R. No. 94247 September 11, 1991 DIONISIO MOJICA, in behalf of Spouses LEONARDO MOJICA (now deceased) and MARINA RUFIDO,petitioner, vs. HON. COURT OF APPEALS, and RURAL BANK OF YAWIT, INC., respondents. Lorenzo F. Miravite for petitioner. Esteban C. Manuel for private respondent.

PARAS, J.:p This is a petition for review on certiorari which seeks to reverse and set aside: the decision * of the Court of Appeals dated February 15, 1990 in AC-G.R. CV No. 05987 entitled "Dionisio Mojica, in behalf of spouses Leonardo Mojica (now deceased) and Marina Rufido v. Rural Bank of Kawit, Inc.", which affirmed in toto the decision of the trial court and (2) the resolution dated June 4, 1990 denying the motion for reconsideration. The facts of the case as gathered from the records are as follows: On February 1, 1971, plaintiff Leonardo Mojica (now deceased) contracted a loan of P20,000.00 from defendant Rural Bank of Kawit, Inc. (now respondent). This loan was secured by a real estate mortgage executed on the same date by the plaintiffs spouses Leonardo Mojica and Marina Rufido (Rollo, Annex "C" p. 40). The real estate mortgage contract states among others: ... agreement for the payment of the loan of P20,000.00 and such other loans or other advances already obtained or still to be obtained by the mortgagors ... 2. ... but if the mortgagors shall well and truly fulfill the obligation above stated according to the terms thereof then this mortgage shall become null and void. (Rollo Petitioner's Memorandum, pp. 86-87) The spouses mortgaged to the Rural Bank of Kawit, a parcel of land consisting of 218,794 square meters, located in Naic, Cavite, covered by Transfer Certificate of Title No. RT-155 (Rollo, Annex "A", p. 31). The real estate mortgage was duly registered under Entry No. 74661 of the Registry of Deeds of Cavite (Rollo, Annex "C", p. 41). The loan of P20,000.00 by the plaintiffs spouses was fully and completely paid (Ibid.).

On March 5, 1974, a new loan in the amount of P18,000.00 was obtained by plaintiffs spouses from the defendant Rural Bank which loan matured on March 5, 1975 (Rollo, pp. 32; 41). No formal deed of real mortgage was constituted over any property of the borrowers, although the top of the promissory note dated March 5, 1974, contained the following notation. This promissory note is secured by a Real Estate Mortgage executed before the Notary Public of the Municipality of Kawit, Mrs. Felisa Senti under Doc. No. 62, Page No. 86, Book No.__, Series of 1971. The Real Estate Mortgage mentioned above is the registered mortgage which guaranteed the already paid loan of P20,000.00 granted on February 1, 1971 (Rollo, p. 8,7). The spouses Leonardo Mojica and Marina Rufido failed to pay their obligation after its maturity on March 5, 1975. Respondent rural bank extrajudicially foreclosed the real estate mortgage on the justification that it was adopted as a mortgage for the new loan of P18,000.00 (Rollo, pp. 32; 41). The subject property was set for auction sale by the Provincial Sheriff of Cavite for June 27, 1979. In that auction sale, defendant rural bank was the highest bidder, and its bid corresponded to the total outstanding obligation of plaintiffs spouses Mojica and Rufido (Reno, p. 32). The proceeds from the sale of the piece of land of plaintiffs spouses were applied to their outstanding obligation with defendant bank (Ibid.) The corresponding certificate of sale in favor of defendant bank was executed by the Provincial Sheriff also on June 27, 1979, and the instrument was recorded in the Office of the Register of Deeds of Cavite on June 29, 1979. The one year period for redemption elapses after June 1980 without plaintiffs spouses having redeemed the foreclosure property (Ibid.) Meanwhile, on July 19, 1980, Dionisio Mojica, the son of petitioners-spouses, in an apparent attempt to pay the debt of P18,000.00 made a partial payment in the amount of P24,658.00 (P19,958.00 of this amount in check bounced) which the defendant rural bank received and accepted with the issuance of the defendant's official receipt No. 101 269, ackowledging the payment as partial payment of 'past due loan', together with the "interest on past due lose (Rollo, p. 33). On August 11, 1980, another partial payment was made by Dionisio Mojica in the amount of P9,958.00 in payment also of 64 past due loan' plus "interest on past due loan 7 which payment was received by the defendant rural bank and acknowledged with the issuance of official receipt No. 101844. These payments were, however, considered by the bank as deposit for the repurchase of the foreclosed property (Ibid., p. 33). On August 14, 1981, upon inquiry by Dionisio Mojica on the unpaid balance of the loan, the respondent rural bank issued a 'Computation Slip" indicating therein, that as of August 14, 1981, the outstanding balance plus interest computed from March 5, 1975 was P21,272.50 (Ibid.). On November 10, 1981, said bank executed an affidavit of consolidation of ownership, which it subsequently filed with the Register of Deeds of Cavite. As a result, Transfer Certificate of Title

No. T-123964, covering the foreclosed piece of land, was issued in its favor by the Register of Deeds on January 19, 1982. After having consolidated its ownership over the foreclosed property, defendant bank scheduled the parcel of land to be sold at public auction on February 26, 1982, pursuant to the requirement of the law regarding the disposal by a bank of its acquired assets. Dionisio Mojica and one Teodorico Rufido, brother-in-law of plaintiff Leonardo Mojica, were notified of such auction sale However, no sale was consummated during that scheduled sale and the property concerned up to now still remains in the possession of respondent bank (Ibid.). The refusal of the same bank to allow Dionisio Mojica to pay the unpaid balance of the loan as per the "Computation Slip" amounting to P21,272.50, resulted in the filing of a complaint (Rollo, p. 42). On September 3, 1984, the trial court rendered judgment dismissing the complaint. On November 5, 1984, petitioner filed a motion for reconsideration of the decision, which motion was denied in the order dated November 17, 1984. On January 2, 1985, a notice of appeal was filed in the Intermediate Appellate Court (Rollo, p. 42). On February 15, 1990, the Appellate Court, rendered its decision, aiming in toto the decision of the trial court. The dispositive portion of the decision of the appellate court reads: WHEREFORE, finding no reversible error in the decision appealed from, the game is hereby AFFIRMED in toto. With costs against plaintiffs-appellants. The motion for reconsideration of said decision was denied in a resolution dated June 4, 1990 (Rollo, Annex "B", p. 39). Hence, this petition. This Court in its resolution dated September 3, 1990 dismissed the petition for non-compliance with certain requisites but later in its resolution dated November 5, 1990, it reinstated the petition (Rollo, Petition pp. 9-28); Resolutions, pp. 52-53; 61). The petition is devoid of merit. The pivotal issue in this case is whether or not the foreclosure sale by the Sheriff on June 27, 1979, had for its basis, a valid and subsisting mortgage contract. Otherwise stated, there is a need to ascertain the intention of the parties as to the coverage of the mortgage in question with respect to future advancements. Contracts which are not ambiguous are to be interpreted according to their literal meaning and should not be interpreted beyond their obvious intendment (Plastic Town Center Corp. v. NLRC, 172 SCRA 580 [1989]). Thus, where the intent of the parties has been shown unmistakably with clarity by the language used, the literal meaning shall control (Paramount Surety & Ins. Co., Inc. v. Ago, 171 SCRA 481 [1989]). Correspondingly, stipulations in the mortgage document constitute the law between the parties, which must be complied with faithfully (Community and Loan Assn., Inc. v. Court of Appeals, 153 SCRA 564 [1987]). As earlier stated, the Real Estate Mortgage in the case at bar expressly stipulates that it serves as guaranty

... for the payment of the loan ... of P20,000.00 and such other loans or other advances already obtained or still to be obtained by the mortgagors as makers ... (Rollo, p. 14). It has long been settled by a long line of decisions that mortgages given to secure future advancements are valid and legal contracts; that the amounts named as consideration in said contract do not limit the amount for which the mortgage may stand as security if from the four corners of the instrument the intent to secure future and other indebtedness can be gathered. A mortgage given to secure advancements is a continuing security and is not discharged by repayment of the amount named in the mortgage, until the full amount of the advancements are paid (Lim Julian v. Lutero, 49 Phil. 704-705 [1926]). In fact, it has also been held that where the annotation on the back of a certificate of title about a first mortgage states "that the mortgage secured the payment of a certain amount of money plus interest plus other obligations arising there under' there was no necessity for any notation of the later loans on the mortgagors' title. It was incumbent upon any subsequent mortgagee or encumbrances of the property in question to e e the books and records of the bank, as first mortgagee, regarding the credit standing of the debtors Tady-Y v. PNB, 12 SCRA 19-20 [1964]). The evidence on record shows that the amounts of P4,700.00 and P9,958.00 were accepted by the bank on July 19 and August 11, 1980 as deposits for conventional redemption after the property covered by real estate mortgage became the acquired asset of the bank and priced at P85,000.00 and after petitioner had lost all rights of legal redemption because more than one year had already elapsed from June 29, 1979, the date the certificate of sale was registered in the office of the Registry of Deeds of Cavite. Indeed, the conventional redemption was subject to be exercised up to March 3, 1982 and was extended up to April 19, 1982 for a fixed amount of P85,000.00. The respondent bank even favored the petitioner by giving them the first preference to repurchase the property but they failed to avail of this opportunity, although the bank "is certainly disposed to release at anytime" the deposits. Further, the evidence on record also shows that the mortgage property was auctioned on June 27, 1979. The only bidder was the respondent bank which bid for P26,387.04. As the highest bidder, the respondent bank can rightfully consolidate its title over the property. As aptly stated by respondent Court: It would then be unfair to impute that the trial court allowed defendant bank to appropriate the mortgage property, because after the plaintiff-appellants failed to repurchase the property and filed this action with 'lis pendens', the actions prevented the bank from negotiating for the sale of the property to other buyers. (p. 36, Rollo) PREMISES CONSIDERED, the petition is DISMISSED and the assailed decision and resolution of the Intermediate Appellate Court (Court of Appeals) are AFFIRMED. SO ORDERED. Melencio-Herrera (Chairperson), Padilla and Regalado, JJ., concur. Sarmiento, J., is on leave.

G.R. No. L-50008 August 31, 1987 PRUDENTIAL BANK, petitioner, vs. HONORABLE DOMINGO D. PANIS, Presiding Judge of Branch III, Court of First Instance of Zambales and Olongapo City; FERNANDO MAGCALE & TEODULA BALUYUTMAGCALE, respondents.

PARAS, J.: This is a petition for review on certiorari of the November 13, 1978 Decision * of the then Court of First Instance of Zambales and Olongapo City in Civil Case No. 2443-0 entitled "Spouses Fernando A. Magcale and Teodula Baluyut-Magcale vs. Hon. Ramon Y. Pardo and Prudential Bank" declaring that the deeds of real estate mortgage executed by respondent spouses in favor of petitioner bank are null and void. The undisputed facts of this case by stipulation of the parties are as follows: ... on November 19, 1971, plaintiffs-spouses Fernando A. Magcale and Teodula Baluyut Magcale secured a loan in the sum of P70,000.00 from the defendant Prudential Bank. To secure payment of this loan, plaintiffs executed in favor of defendant on the aforesaid date a deed of Real Estate Mortgage over the following described properties: l. A 2-STOREY, SEMI-CONCRETE, residential building with warehouse spaces containing a total floor area of 263 sq. meters, more or less, generally constructed of mixed hard wood and concrete materials, under a roofing of cor. g. i. sheets; declared and assessed in the name of FERNANDO MAGCALE under Tax Declaration No. 21109, issued by the Assessor of Olongapo City with an assessed value of P35,290.00. This building is the only improvement of the lot. 2. THE PROPERTY hereby conveyed by way of MORTGAGE includes the right of occupancy on the lot where the above property is erected, and more particularly described and bounded, as follows: A first class residential land Identffied as Lot No. 720, (Ts-308, Olongapo Townsite Subdivision) Ardoin Street, East Bajac-Bajac, Olongapo City, containing an area of 465 sq. m. more or less, declared and assessed in the name of FERNANDO MAGCALE under Tax Duration No. 19595 issued by the Assessor of Olongapo City with an assessed value of P1,860.00; bounded on the NORTH: By No. 6, Ardoin Street SOUTH: By No. 2, Ardoin Street

EAST: By 37 Canda Street, and WEST: By Ardoin Street. All corners of the lot marked by conc. cylindrical monuments of the Bureau of Lands as visible limits. ( Exhibit "A, " also Exhibit "1" for defendant). Apart from the stipulations in the printed portion of the aforestated deed of mortgage, there appears a rider typed at the bottom of the reverse side of the document under the lists of the properties mortgaged which reads, as follows: AND IT IS FURTHER AGREED that in the event the Sales Patent on the lot applied for by the Mortgagors as herein stated is released or issued by the Bureau of Lands, the Mortgagors hereby authorize the Register of Deeds to hold the Registration of same until this Mortgage is cancelled, or to annotate this encumbrance on the Title upon authority from the Secretary of Agriculture and Natural Resources, which title with annotation, shall be released in favor of the herein Mortgage. From the aforequoted stipulation, it is obvious that the mortgagee (defendant Prudential Bank) was at the outset aware of the fact that the mortgagors (plaintiffs) have already filed a Miscellaneous Sales Application over the lot, possessory rights over which, were mortgaged to it. Exhibit "A" (Real Estate Mortgage) was registered under the Provisions of Act 3344 with the Registry of Deeds of Zambales on November 23, 1971. On May 2, 1973, plaintiffs secured an additional loan from defendant Prudential Bank in the sum of P20,000.00. To secure payment of this additional loan, plaintiffs executed in favor of the said defendant another deed of Real Estate Mortgage over the same properties previously mortgaged in Exhibit "A." (Exhibit "B;" also Exhibit "2" for defendant). This second deed of Real Estate Mortgage was likewise registered with the Registry of Deeds, this time in Olongapo City, on May 2,1973. On April 24, 1973, the Secretary of Agriculture issued Miscellaneous Sales Patent No. 4776 over the parcel of land, possessory rights over which were mortgaged to defendant Prudential Bank, in favor of plaintiffs. On the basis of the aforesaid Patent, and upon its transcription in the Registration Book of the Province of Zambales, Original Certificate of Title No. P-2554 was issued in the

name of Plaintiff Fernando Magcale, by the Ex-Oficio Register of Deeds of Zambales, on May 15, 1972. For failure of plaintiffs to pay their obligation to defendant Bank after it became due, and upon application of said defendant, the deeds of Real Estate Mortgage (Exhibits "A" and "B") were extrajudicially foreclosed. Consequent to the foreclosure was the sale of the properties therein mortgaged to defendant as the highest bidder in a public auction sale conducted by the defendant City Sheriff on April 12, 1978 (Exhibit "E"). The auction sale aforesaid was held despite written request from plaintiffs through counsel dated March 29, 1978, for the defendant City Sheriff to desist from going with the scheduled public auction sale (Exhibit "D")." (Decision, Civil Case No. 2443-0, Rollo, pp. 29-31). Respondent Court, in a Decision dated November 3, 1978 declared the deeds of Real Estate Mortgage as null and void (Ibid., p. 35). On December 14, 1978, petitioner filed a Motion for Reconsideration (Ibid., pp. 41-53), opposed by private respondents on January 5, 1979 (Ibid., pp. 54-62), and in an Order dated January 10, 1979 (Ibid., p. 63), the Motion for Reconsideration was denied for lack of merit. Hence, the instant petition (Ibid., pp. 5-28). The first Division of this Court, in a Resolution dated March 9, 1979, resolved to require the respondents to comment (Ibid., p. 65), which order was complied with the Resolution dated May 18,1979, (Ibid., p. 100), petitioner filed its Reply on June 2,1979 (Ibid., pp. 101-112). Thereafter, in the Resolution dated June 13, 1979, the petition was given due course and the parties were required to submit simultaneously their respective memoranda. (Ibid., p. 114). On July 18, 1979, petitioner filed its Memorandum (Ibid., pp. 116-144), while private respondents filed their Memorandum on August 1, 1979 (Ibid., pp. 146-155). In a Resolution dated August 10, 1979, this case was considered submitted for decision ( Ibid., P. 158). In its Memorandum, petitioner raised the following issues: 1. WHETHER OR NOT THE DEEDS OF REAL ESTATE MORTGAGE ARE VALID; AND 2. WHETHER OR NOT THE SUPERVENING ISSUANCE IN FAVOR OF PRIVATE RESPONDENTS OF MISCELLANEOUS SALES PATENT NO. 4776 ON APRIL 24, 1972 UNDER ACT NO. 730 AND THE COVERING ORIGINAL CERTIFICATE OF TITLE NO. P-2554 ON MAY 15,1972 HAVE THE EFFECT OF INVALIDATING THE DEEDS OF REAL ESTATE MORTGAGE. (Memorandum for Petitioner, Rollo, p. 122). This petition is impressed with merit. The pivotal issue in this case is whether or not a valid real estate mortgage can be constituted on the building erected on the land belonging to another.

The answer is in the affirmative. In the enumeration of properties under Article 415 of the Civil Code of the Philippines, this Court ruled that, "it is obvious that the inclusion of "building" separate and distinct from the land, in said provision of law can only mean that a building is by itself an immovable property." (Lopez vs. Orosa, Jr., et al., L-10817-18, Feb. 28, 1958; Associated Inc. and Surety Co., Inc. vs. Iya, et al., L-10837-38, May 30,1958). Thus, while it is true that a mortgage of land necessarily includes, in the absence of stipulation of the improvements thereon, buildings, still a building by itself may be mortgaged apart from the land on which it has been built. Such a mortgage would be still a real estate mortgage for the building would still be considered immovable property even if dealt with separately and apart from the land (Leung Yee vs. Strong Machinery Co., 37 Phil. 644). In the same manner, this Court has also established that possessory rights over said properties before title is vested on the grantee, may be validly transferred or conveyed as in a deed of mortgage (Vda. de Bautista vs. Marcos, 3 SCRA 438 [1961]). Coming back to the case at bar, the records show, as aforestated that the original mortgage deed on the 2-storey semi-concrete residential building with warehouse and on the right of occupancy on the lot where the building was erected, was executed on November 19, 1971 and registered under the provisions of Act 3344 with the Register of Deeds of Zambales on November 23, 1971. Miscellaneous Sales Patent No. 4776 on the land was issued on April 24, 1972, on the basis of which OCT No. 2554 was issued in the name of private respondent Fernando Magcale on May 15, 1972. It is therefore without question that the original mortgage was executed before the issuance of the final patent and before the government was divested of its title to the land, an event which takes effect only on the issuance of the sales patent and its subsequent registration in the Office of the Register of Deeds (Visayan Realty Inc. vs. Meer, 96 Phil. 515; Director of Lands vs. De Leon, 110 Phil. 28; Director of Lands vs. Jurado, L-14702, May 23, 1961; Pena "Law on Natural Resources", p. 49). Under the foregoing considerations, it is evident that the mortgage executed by private respondent on his own building which was erected on the land belonging to the government is to all intents and purposes a valid mortgage. As to restrictions expressly mentioned on the face of respondents' OCT No. P-2554, it will be noted that Sections 121, 122 and 124 of the Public Land Act, refer to land already acquired under the Public Land Act, or any improvement thereon and therefore have no application to the assailed mortgage in the case at bar which was executed before such eventuality. Likewise, Section 2 of Republic Act No. 730, also a restriction appearing on the face of private respondent's title has likewise no application in the instant case, despite its reference to encumbrance or alienation before the patent is issued because it refers specifically to encumbrance or alienation on the land itself and does not mention anything regarding the improvements existing thereon. But it is a different matter, as regards the second mortgage executed over the same properties on May 2, 1973 for an additional loan of P20,000.00 which was registered with the Registry of Deeds of Olongapo City on the same date. Relative thereto, it is evident that such mortgage executed after the issuance of the sales patent and of the Original Certificate of Title, falls squarely under the prohibitions stated in Sections 121, 122 and 124 of the Public Land Act and Section 2 of Republic Act 730, and is therefore null and void.

Petitioner points out that private respondents, after physically possessing the title for five years, voluntarily surrendered the same to the bank in 1977 in order that the mortgaged may be annotated, without requiring the bank to get the prior approval of the Ministry of Natural Resources beforehand, thereby implicitly authorizing Prudential Bank to cause the annotation of said mortgage on their title. However, the Court, in recently ruling on violations of Section 124 which refers to Sections 118, 120, 122 and 123 of Commonwealth Act 141, has held: ... Nonetheless, we apply our earlier rulings because we believe that as in pari delicto may not be invoked to defeat the policy of the State neither may the doctrine of estoppel give a validating effect to a void contract. Indeed, it is generally considered that as between parties to a contract, validity cannot be given to it by estoppel if it is prohibited by law or is against public policy (19 Am. Jur. 802). It is not within the competence of any citizen to barter away what public policy by law was to preserve (Gonzalo Puyat & Sons, Inc. vs. De los Amas and Alino supra). ... (Arsenal vs. IAC, 143 SCRA 54 [1986]). This pronouncement covers only the previous transaction already alluded to and does not pass upon any new contract between the parties (Ibid), as in the case at bar. It should not preclude new contracts that may be entered into between petitioner bank and private respondents that are in accordance with the requirements of the law. After all, private respondents themselves declare that they are not denying the legitimacy of their debts and appear to be open to new negotiations under the law (Comment; Rollo, pp. 95-96). Any new transaction, however, would be subject to whatever steps the Government may take for the reversion of the land in its favor. PREMISES CONSIDERED, the decision of the Court of First Instance of Zambales & Olongapo City is hereby MODIFIED, declaring that the Deed of Real Estate Mortgage for P70,000.00 is valid but ruling that the Deed of Real Estate Mortgage for an additional loan of P20,000.00 is null and void, without prejudice to any appropriate action the Government may take against private respondents. SO ORDERED. Teehankee, C.J., Narvasa, Cruz and Gancayco, JJ., concur.

G.R. NO. L-48276 September 30, 1987 DR. PEDRO A. DANAO (substituted by his heirs MARTIN DANAO, MINDA DANAO and copetitioner CONCEPCION S. DANAO) and CONCEPCION S. DANAO, petitioners, vs. HON. COURT OF APPEALS, BANK OF THE PHILIPPINE ISLANDS, Successor to the PEOPLES BANK & TRUST COMPANY, respondents. No. L-48980 September 30, 1987 BANK OF THE PHILIPPINE ISLANDS, Successor to the PEOPLES BANK & TRUST COMPANY, petitioner,

vs. HON. COURT OF APPEALS, DR. PEDRO A. DANAO (Substituted by his heirs MARTIN DANAO, MINDA DANAO and correspondent CONCEPCION S. DANAO) and CONCEPCION S. DANAO, respondents.

PARAS, J.: These are two petitions for review on certiorari of the decision 1 of respondent Court of Appeals in CA-G.R. No.
of the Court of First Instance of Manila with modifications. The dispositive portion of the appellate judgment reads;
59865-R promulgated on April 14, 1978 (Rollo, p. 22), affirming the decision
2

WHEREFORE, with the modifications that the actual and compensatory damages are eliminated the moral damages are reduced to P30,000.00, and the attorney's fees are likewise reduced to P5,000.00 the decision appealed from is affirmed. The facts of the cases involved are quoted from the decision of respondent Court of Appeals as follows: On February 27, 1963, spouses Pedro Danao and Concepcion S. Danao applied for a commercial credit line of P20,000.00 with the People's Bank and Trust Company. The application having been granted, the parties on March 14, 1963, executed a Commercial Credit Agreement and Mortgage in which, among others, they stipulated: WHEREFORE, the said mortgagor(s) have offered and agreed to secure the repayment of the said credits and advances with interest due or accruing thereon as well as any other liability or liabilities of the said mortgagors to the said mortgagee, now existing, due or to become due, or hereafter incurred by means of a good and valid mortgage as hereinafter stated, and the mortgagee has consented to grant the line of credit applied for a good and sufficient security; NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein set forth the parties do have agreed and do hereby agree, as follows: The said mortgagor(s) shall be and are hereby granted a line of credit not to exceed at any one time the sum total of TWENTY THOUSAND AND 00/000 (P20,000.00) at NINE (9%) per cent per annum, which credit shall be available to said Mortgagor(s) or EITHER OF THEM in the form of advances from time to time to be evidenced by promissory note or notes. ... and on the mortgage that-This mortgage shall continue as security for the payment of the indebtedness herein contracted by said Mortgagor(s) as aforesaid, and of all money expanded or abilities incurred by virtue hereof, with interest thereon, as well as security for the repayment of any other sums now or hereafter owing to the said Mortgagee in addition to or

aside from the credit facilities herein granted by the Mortgagee to the Mortgagor(s). F.--In the event that the Mortgagor(s) should fail to pay the sums of money secured by the mortgage, or any part thereof, in accordance with the terms and conditions herein set forth, ..., the Mortgagee shall have the right, at its election, to foreclose this mortgage extrajudicially. ... The proceeds of such sale of the mortgaged properties shall be applied as follows: ... 3) To the satisfaction of the principal amount of obligation herein secured; and 4) To the satisfaction of all further obligations owing by the Mortgagor(s) to the Mortgagee. Given as a security for the credit line of P20,000.00 was a parcel of land in the City of Baguio, covered by Transfer Certificate of Title No. T-223, together with the buildings and improvements thereon. The spouses availed of the credit facility granted them by the People's Bank and Trust Company not only during the original term of one year, but also during the renewals or extensions thereof. The last promisory not signed by Pedro Danao during the extensions was fully paid on July 5, 1968. It appears the October 28, 1963, Antonio Co Kit and Pedro Danao signed a promissory not for P10,000.00. The two agreed to pay the note, jointly and severally, within 179 days after date. The check for the proceeds of the note was issued in the name of Antonio Co Kit alone. The note was renewed by Antonio Co Kit and Pedro Danao for the amount of P8,650.00 on April 27, 1964, payable within 91 days. The promised to pay the amount, jointly and severally. On September 30, 1968, counsel for the People's Bank and Trust Company wrote a demand letter to Antonio Co Kit a demand letter to Antonio Co Kit and Pedro Danao for the payment of the balance of the promissory note in the amount of P5,870.09. On July 14, 1969, the manager of the People's Bank and Trust Company wrote another demand letter, this time to Pedro Danao, for the payment of the balance of P4,225.15, excluding interest. On September 19, 1969, the People's Bank and Trust Company filed a complaint in the City Court of Baguio City against Antonio Co Kit and Pedro Danao, praying that judgment be rendered, ordering defendants, jointly and severally, to pay it (plaintiff) the sum of P4,225.15, plus interest thereon at the rate of 13.5% per annum from July 8, 1969, until full payment, attorney's fees in that sum equal 10% of the total amount due, and the cost of suit. On January 5, 1971 the City Court issued an order, dismissing the complaint "for lack of interest on the part of the plaintiff". On March 1, 1971, the branch manager of the People's Bank and Trust Company, Baguio Branch, wrote a letter to Pedro Danao, informing the latter that they had filed a petition for foreclosure to the City Sheriff of Baguio City, attaching therewith a copy of the petition. Stated therein is that the parcel of land covered by Transfer Certificate

of Title No. 2033 will be sold at public auction. according to the petition, the land is security for the payment of any other sums owing to the Bank "in addition to or aside from ... credit facility." The indebtedness to be satisfied out of the proceeds of the foreclosure sales is P3,024.03, exclusive of interest. On March 4, 1971 notice of public auction sale was published in the Baguio Mid-land Courier, a weekly newspaper published and edited in the City of Baguio and which is of wide circulation in the City, province of Benguet and in the Philippines, for three consecutive weeks, once a week. Copies of the notice were also posted in three public and conspicuous places in Baguio for the information of the public. In the published notice of public auction sale, it is stated that in the petition for foreclosure it is alleged that Mortgagors' spouses PEDRO DANAO and CONCEPCION DANAO, ... failed to pay the ... loan when it fell due thereby violating the terms and conditions of the real estate mortgage above mentioned. On March 10, 1971, counsel for the People's Bank and Trust Company, Baguio Branch, wrote a letter, informing the Bank of the full payment of the obligations of Antonio Co Kit and Pedro Danao. On March 16, 1971, the branch manager of the People's Bank and Trust Company executed a cancellation of the real estate mortgage, stating therein that the mortgagors had fully paid the obligation or indebtedness secured by the mortgage. On June 16, 1972, Pedro Danao and Concepcion S. Danao filed a complaint for damages against the Bank of Philippine Islands, as successor to the People's Bank and Trust Company, in the Court of First Instance of Manila, where it was docketed as Civil Case No. 8781. The complaint alleged, inter alia, that both the petition for foreclosure and the notice of public auction sale published in the "Baguio Midland Courier" have neither legal nor factual bases, because (1) while the credit line was availed of from time to time in different amounts by promissory notes, the credits and loans obtained where duly paid in 1968 and since then no further loans were assailed of under the credit line secured by mortgage of the plaintiffs' properties; (2) the plaintiffs' alleged indebtedness mentioned in the defendant's petition for foreclosure and in the consequent notice of public auction sale was the balance due on a "clean loan" granted by the defendant to Antonio Co Kit, although admittedly the promissory note was co-signed by plaintiff Pedro Danao, and the same was a distinct and separate transaction from the plaintiffs' credit line, and was not covered nor secured by the plaintiffs' properties mortgaged to the defendant. The complaint further alleged that the publication of the notice of public auction sale in the "Baguio Midland Courier" was malicious and/or with deliberate intent, or was due to gross negligence, causing the plaintiffs, who are respected members of the community of Baguio Cities untold mental and moral anguish, serious anxiety, besmirched reputation and social humiliation; that as a result of his social humiliation, anxiety, mental and moral anguish, plaintiff Pedro Danao suffered serious heart attack and was hospitalized and confined in bed for a period of one year, causing him to incur hospitalization and medical expenses, and resulting in the loss of his income from his medical practice. The plaintiffs ask for actual or compensatory, moral and exemplars, damages, as well as attorney's fees.

In its answer with counterclaim, the People's Bank and Trust Company contended that in firing the petition for extra-judicial foreclosure of the mortgage with the consequent publication of notice of public auction sale, it merely exercised its legal right as creditor-mortgagee after plaintiff Pedro Danao had defaulted, despite repeated demands, in the payment of the indebtedness or obligation contracted by him jointly and severally with Antonio Co Kit; that in exercising such right, it acted lawfully, in good faith and with full justification to protect its interest; and, as affirmative defense, alleged that, contrary to plaintiffs' allegations, the Commercial Credit Agreement and Mortgagee provides that the mortgage shall continue as security for the payment of the indebtedness therein contracted by the mortgagors, as well as security for the repayment of any other sums ... (then or thereafter) owing to the said mortgagee in addition to or aside from the credit facilities therein) granted by the Mortgagee to the Mortgagors: and that plaintiff Pedro Danao's solidarity obligation upon the promissory note signed by him as co-maker jointly and severally with Antonio Co Kit constitutes a further obligation secured by the aforementioned mortgage, in addition to the indebtedness arising from the commercial credit line, which additional obligation was subsisting at tile time the extrajudicial foreclosure proceeding was commenced. After the issues had been joined upon the filing of the answer to the counterclaim and reply to answer, the case was set for pre-trial. After trial on the merits, the Court of First Instance of Manila rendered a decision the dispositive part of which read as follows: WHEREFORE, in view of all the foregoing considerations, the Court hereby renders judgment in favor of the plaintiffs and against the defendant ordering the latter to pay the former the sum of P14,290.00 as actual and compensatory damages, P100,000.00, as moral damages, and P10,000.00, as exemplary damages, in addition to P20,000.00 as and for attorney's fees, as well as the costs of suit. The counterclaim is dismissed. SO ORDERED. From this decision only the Bank of the Philippine Islands as successor of Peoples Bank and Trust Company appealed. Respondent Court affirmed the trial court's decision with some modifications as earlier quoted. Both parties moved for reconsideration. The motion for reconsideration filed by Pedro and Concepcion Danao, as plaintiff-appellees (Rollo, p. 39) was denied in respondent Court's resolution dated May 9, 1978 (Rollo, P. 48), while the motion for reconsideration filed by the Bank of the Philippines Islands, as defendant-appellant (Rollo, p. 41), was also denied in the resolution of the same Appellate Court dated September 6, 1978 (rollo, p. 53). Hence, these petitions filed by both parties. The petition in G.R. No. L-48276 was filed with the Court by the spouses Dr. Pedro A. Danao and Concepcion S. Danao on June 7, 1978 (Rollo, p. 5); while the petition in G.R. No. L-48980 was filed by the Bank of the Philippine Islands on October 7, 1978 (Rollo, p. 7). In G.R. No. L-48276 respondent be filed its comment on the petition for review on certiorari (Rollo, L48276, p. 114) in compliance with the resolution of the First Division of this Court dated June 27, 1978 (ibid, p. 107) on August 8, 1978 while the petitioners filed their reply on September 14, 1978

(ibid, p. 265) in compliance with the resolution of August 21, 1978 (ibid, p. 261). The Court gave due course to the petition in the resolution dated October 4, 1978 (ibid, p. 274). The brief for the petitioners was filed on December 5, 1978 (ibid, p. 277); while the brief for the respondent, was filed on February 3, 1979 (ibid, p. 301). Petitioner having failed to file the required reply brief within the period granted by the Court which expired on March 1, 1979, the Court resolved on April 16, 1979 (ibid, p. 305) to declare the case submitted for decision. In G.R. No. L-48980, respondents filed their comment on the petition for review on certiorari on November 15, 1978 (Rollo, L-48980, p. 62) in compliance with the resolution of the Second Division of this Court dated October 18, 1978 (ibid, p. 61) while petitioner filed its Reply on January 18, 1979 (ibid, p. 76) in compliance with the resolution of December 4, 1978 (Rollo, p. 73). The Court resolved to give due course to the petition in the resolution of March 21, 1979 respondent was filed on July 8, 1979 (ibid, P. 101). On September 14, 1979 the Court resolved to consider the case submitted for decision (ibid, p. 105), petitioner having failed to file its reply brief within the period granted by the Court which expired on August 7, 1979. On April 29, 1980, the spouses Pedro and Concepcion Danao, petitioners in L-8276 and private respondents in L-48980 moved for the consolidation of the two cases (Rollo, L-48276, p. 308) which was granted by the First Division of the Court in its resolution dated May 7, 1980 (ibid, p. 311). On July 2, 1980 the Second Division of the Court also ordered the consolidation of L-48980 with L48276 and the transfer of the case to the First Division of the Court (Rollo, L-48980, p. 110). On August 16, 1985, counsel for the spouses Pedro and Concepcion Danao manifested to the Court the death of his client Pedro Danao and moved for the substitution of the heirs Martin Danao and Minda Danao as co-petitioners and co-respondents of Concepcion Danao in the instant cases (Rollo, L-48276, p. 327). On September 4, 1985 the heirs submitted to the Court a copy of the death certificate of Pedro A. Danao (ibid, p. 341), hence the effecting of the substitution. In L-48276, petitioners raised the following assignment of errors: FIRST THE COURT OF APPEALS ERRED IN FINDING THAT THE REAL ESTATE MORTGAGED UNDER THE COMMERCIAL CREDIT AGREEMENT & MORTGAGE BY AND BETWEEN THE PARTIES ALSO SECURED THE CLEAN LOAN EXTENDED TO MR. ANTONIO CO KIT, THE PROMISSORY NOTE FOR WHICH WAS CO-SIGNED BY PETITIONER DR. PEDRO A. DANAO. SECOND THE COURT OF APPEALS ERRED IN FINDING THAT THE ILLNESS AND HEART ATTACKS SUFFERED BY PETITIONER DR. PEDRO A. DANAO HAD NO CASUAL RELATIONSHIP TO THE FORECLOSURE OF MORTGAGE AND PUBLICATION OF THE NOTICE OF AUCTION SALE. THIRD THE COURT OF APPEALS ERRED IN REDUCING THE MORAL DAMAGES AND ATTORNEY'S FEES AWARDED BY THE TRIAL COURT. In L-48980, petitioner bank raised the following assignment of errors: I. The Court of Appeals erred in holding that petitioner's predecessor Peoples Bank and Trust Company, by filing a civil complaint against Antonio Co Kit and Pedro A. Danao in the Baguio City Court for the collection of the unpaid balance of the latter's promissory note "had waived" the remedy of extra-judicial foreclosure of mortgage, and "such complaint barred the subsequent petition for foreclosure of mortgage."

II. The Court of Appeals erred in concluding that the extrajudicial foreclosure of mortgage ultimately resorted to as a last recourse to enforce payment of the outstanding balance long past due on Co Kit and Danao's promissory note "was unwarranted", and in not holding that said bank as creditor-mortgagee acted lawfully and was fully justified in exercising such remedy. III. The Court of Appeals erred in awarding moral damages, exemplary damages and attorney's fees to the plaintiffs-appellees, private respondents herein. IV. The Court of Appeals erred in not awarding at least temperate damages and reasonable attorney's fees upon defendant-appellant bank's counterclaim against the plaintiffs-appellees, private respondents herein. Plaintiffs' (Petitioners in L-48276 and respondents in L-48980) claim for damages is predicated on the theory that the real estate mortgage executed by them on March 14, 1963 in favor of defendant did not secure the solidarity obligation of Dr. Danao upon the promissory note signed by him jointly and severally with Antonio C. Kit on October 28, 1963 and therefore, defendant's act in foreclosing said mortgagee extra-judicially was unwarranted. (Respondent's brief in L-48276, Rollo, p. 301). Placed in proper perspective, the deed of mortgage otherwise called "Commercial Credit Agreement and Mortgage" is under scrutiny not for the purposes of the loan itself because the same has been fully paid but for the determination of the legality or illegality of the foreclosure proceedings instituted by the bank, which is now the subject of the action for damages. The creditor bank insists that the promissory note co-signed by Dr. Danao with Antonio C. Kit as accommodation party for the latter, is secured by the deed of mortgage in favor of the bank so that in the foreclosure proceedings so instituted, it was merely exercising its rights as stipulated in the contract and was acting with justification. (L-48980, Petition, Rollo, p. 19). Be that as it may, such distinction is in fact immaterial for even assuming that the promissory note of Antonio C. Kit was indeed included among the obligations secured by the deed of mortgage of Dr. Danao, still the creditor bank in opting to file a civil action (Civil Case No. 4281) in the Baguio City Court for the collection of the unpaid balanced of P4,225.15 plus interest has abandoned its mortgage lien on the property in question. Thus the Court has invariably held that: ... The rule is now settled that a mortgage creditor may elect to waive his security and bring, instead, an ordinary action to recover the indebtedness with the right to execute a judgment thereon on all the properties of the debtor, including the subject matter of the mortgage . . ., subject to the qualification that if he fails in the remedy by him elected, he cannot pursue further the remedy he has waived. (Manila Trading and Supply Co. vs. Co Kim, et al. 71 Phil. 448 [1941]; Movido v. RFC et al., 105 Phil. 886 [1959]). Anent real properties in particular, the Court has laid down the rule that a mortgage creditor may institute against the mortgage debtor either a personal action for debt or a real action to foreclose the mortgage. In other words, he may pursue either of the two remedies, but not both. As explained by the Court, the rule is as follows: For non-payment of a note secured by mortgage, the creditor has a single cause of action against the debtor. This single cause of action consists in the recovery of the

credit with execution of the security. In other words, the creditor in his action may make two demands, the payment of the debt and the foreclosure of the mortgage. But both demands arise from the same cause, the non-payment of the debt, and, for that reason, they constitute a single cause of action. Though the debt and the mortgage constitute separate agreements, the latter is subsidiary to the former, and both refer to one and the same obligation. Consequently there exists only once cause of action for a single breach of that obligation. Plaintiff, then, by applying the rule above stated cannot split up his single cause of action by filing a complaint for payment of the debt, and thereafter another complaint for foreclosure of the mortgage. If he does so, the fishing of the first complaint will bar the subsequent complaint. By allowing the creditor to file two separate complaints simultaneously or successively, one to recover his credit and another to foreclose his mortgage, we will, in effect, be authorizing him plural redress for a single breach of contract at much cost to the courts and with so much vexation and oppression to the debtor. ... a rule that would authorize the plaintiff to bring a personal action against the debtor and simultaneously or successively another action against the mortgaged property, would result not only in multiplicity of suits so offensive to justice (Soriano v. Enriquez, 24 Phil. 584) and obnoxious to law and equity (Osorio v. San Agustin, 25 Phil. 404), but also in subjecting the defendant to the vexation of being sued in the place of his residence or of the residence of the Icarangal et al., 38 Off. Gaz. 389 [1939]). Evidently, the prior recourse of the creditor bank in filing a civil action against the Danao spouses and subsequently resorting to the complaint of foreclosure proceedings, are not only a demonstration of the prohibited splitting up of a cause of action but also of the resulting vexation and oppression to the debtor. Both the lower court and the Court of Appeals found that the People's Bank and Trust Co. (succeeded by the Bank of the Philippine Islands) acted unlawfully and without justification in extrajudicially foreclosing the disputed mortgage and hence the Danao spouses are entitled to damages. As basis for actual damages, the lower court relied on the testimonies of Mrs. Danao and Dr. Rodolfo Perez and the medical certificates of the various doctors and came out with the award of actual and compensatory damages in the total amount of P14,290.00 in favor of the same spouses, computed as follows: (1) P1,290.00 representing medical and hospitalization expenses of Pedro Danao while confined at the Manila Medical Center from October 1 to October 12, 1972; (2) P7,000.00 as costs for various examinations; and (3) P6,000.00 supposed to be the amount of income lost by Pedro Danao from his medical practice because of thing incident. But the evidence as correctly appreciated by the Court of Appeals shows that the first mild heart attack suffered by Pedro Danao occurred in October 1977 or more than seven months after the initial publication of the notice of foreclosure sale and the second heart attack occurred in October 1978 or more than 19 months after said publication. No less important is the fact that Dr. Rodolfo Perez, the regular attending physician of Pedro Danao and the latter's own witness, testified to the effect that aforesaid heart attacks were the natural result or outgrowth of a chronic rheumatic heart disease of long standing which developed over a period of years, possibly even before 1966. (Decision D.A., G.R. No. 59865-R; Rollo, pp. 36-37). The second item was found to be unsupported by evidence while as to the third item, Pedro Danao did not testify to prove the alleged lost income. (Ibid, p. 37). In the case of Sy vs. Court of Appeals

(131 SCRA 127 [1984]) the Court ruled that an alleged loss of income is not recoverable for being speculative if no receipt or any kind of evidence on the matter is presented to prove it. The Court has ruled that actual or compensatory damages are "those recoverable because of pecuniary loss in business, trade, property, profession, job or occupation and the same must be proved, otherwise if the proof is flimsy and non-substantial, no damages will be given." (Perfecto vs. Gonzales, 128 SCRA 640 [1984]). More specifically in point to the case at bar, the Court has said: ... Well settled is the rule that even if the complaint filed by one against the other is clearly unfounded this does not necessarily mean, in the absence of specific facts proving damages, that said defendant really suffered actual damages over and above attorney's fees and costs. The Court cannot rely on its speculations as to the fact and amount of damages. It must depend on actual proof of the damages alleged to have been suffered. (Ibid, p. 640). On the other hand, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission. The assessment of such damages, except liquidated ones, is left to the discretion of the court, according to the circumstances of the case. (People v. Baylon, 129 SCRA 63 [984]). As a general rule, the filing alone of the foreclosure application should not be a ground for an award of moral damages. In the case at bar, however, the main bone of contention is not only the filing of the petition for foreclosure proceedings but the manner in which the same was carried out, such as the publication of the notice of extrajudicial foreclosure and sale at public auction in a Sunday edition of the Baguio Midland Courier in the society page, instead of in the "legal notices" or "classified ads" sections as usual in these types of notices, in extra-ordinarily large and boxed advertisements, which allegedly bespoke the bank's malicious intent to embarrass and harass the Danao spouses which actuations are contrary to the canons of conduct provided for in Articles 19, 20 and 21 of the Civil Code. (Comment, Rollo, p. 67) Both the lower court and the Court of Appeals took cognizance of the spouses' mental anguish, serious anxiety and besmirched reputation traceable to the unfortunate publication (Record on Appeal, p. 79; Rollo, p. 38). For moral damages, the lower court awarded P100,000.00 but the Court of Appeals reduced said amount to P30,000.00 and attorney's fees from P20,000.00 to P5,000.00. We have laid down the rule that the fairness of the award of damages by the trial court also calls for appellate determination (Luzon Concrete Products Inc. vs Court of Appeals, 135 SCRA 456 [1985]), such that where the award of moral damages is far too excessive compared to the actual losses sustained by the claimants the former may be reduced. (Siguenza vsCourt of Appeals, 137 SCRA 577-579). In fact, We have held that reduction of moral damages is justified where the negligence of petitioner bank and its employees is not wanton and reckless. (Bank of the Philippine Islands vs Court of Appeals, 117 SCRA 628). After a careful review of the records, no plausible reason can be found to justify the reversal of the findings of the Court of Appeals, however in view of the embarrassing circumstances attendant to the foreclosure notice, as already explained herein above, We hereby MODIFY the judgment of the

respondent Court of Appeals by increasing the award of moral damages to P60,000.00 and the attorney's fees to P1,000.00 and by imposing exemplary damages in the amount of P20,000.00. SO ORDERED. Teehankee, C.J., Narvasa, and Cruz, JJ., concur.

G.R. No. L-49101 October 24, 1983 RAOUL S.V. BONNEVIE and HONESTO V. BONNEVIE, petitioners, vs. THE HONORABLE COURT OF APPEALS and THE PHILIPPINE BANK OF COMMERCE, respondents. Edgardo I. De Leon for petitioners. Siguion Reyna, Montecillo & Associates for private respondent.

GUERRERO, J: Petition for review on certiorari seeking the reversal of the decision of the defunct Court of Appeals, now Intermediate Appellate Court, in CA-G.R. No. 61193-R, entitled "Honesto Bonnevie vs. Philippine Bank of Commerce, et al.," promulgated August 11, 1978 1 as well as the Resolution denying the motion for reconsideration. The complaint filed on January 26, 1971 by petitioner Honesto Bonnevie with the Court of First Instance of Rizal against respondent Philippine Bank of Commerce sought the annulment of the Deed of Mortgage dated December 6, 1966 executed in favor of the Philippine Bank of Commerce by the spouses Jose M. Lozano and Josefa P. Lozano as well as the extrajudicial foreclosure made on September 4, 1968. It alleged among others that (a) the Deed of Mortgage lacks consideration and (b) the mortgage was executed by one who was not the owner of the mortgaged property. It further alleged that the property in question was foreclosed pursuant to Act No. 3135 as amended, without, however, complying with the condition imposed for a valid foreclosure. Granting the validity of the mortgage and the extrajudicial foreclosure, it finally alleged that respondent Bank should have accepted petitioner's offer to redeem the property under the principle of equity said justice. On the other hand, the answer of defendant Bank, now private respondent herein, specifically denied most of the allegations in the complaint and raised the following affirmative defenses: (a) that the defendant has not given its consent, much less the requisite written consent, to the sale of the mortgaged property to plaintiff and the assumption by the latter of the loan secured thereby; (b) that the demand letters and notice of foreclosure were sent to Jose Lozano at his address; (c) that it was notified for the first time about the alleged sale after it had foreclosed the Lozano mortgage; (d) that the law on contracts requires defendant's consent before Jose

Lozano can be released from his bilateral agreement with the former and doubly so, before plaintiff may be substituted for Jose Lozano and Alfonso Lim; (e) that the loan of P75,000.00 which was secured by mortgage, after two renewals remain unpaid despite countless reminders and demands; of that the property in question remained registered in the name of Jose M. Lozano in the land records of Rizal and there was no entry, notation or indication of the alleged sale to plaintiff; (g) that it is an established banking practice that payments against accounts need not be personally made by the debtor himself; and (h) that it is not true that the mortgage, at the time of its execution and registration, was without consideration as alleged because the execution and registration of the securing mortgage, the signing and delivery of the promissory note and the disbursement of the proceeds of the loan are mere implementation of the basic consensual contract of loan. After petitioner Honesto V. Bonnevie had rested his case, petitioner Raoul SV Bonnevie filed a motion for intervention. The intervention was premised on the Deed of Assignment executed by petitioner Honesto Bonnevie in favor of petitioner Raoul SV Bonnevie covering the rights and interests of petitioner Honesto Bonnevie over the subject property. The intervention was ultimately granted in order that all issues be resolved in one proceeding to avoid multiplicity of suits. On March 29, 1976, the lower court rendered its decision, the dispositive portion of which reads as follows: WHEREFORE, all the foregoing premises considered, judgment is hereby rendered dismissing the complaint with costs against the plaintiff and the intervenor. After the motion for reconsideration of the lower court's decision was denied, petitioners appealed to respondent Court of Appeals assigning the following errors: 1. The lower court erred in not finding that the real estate mortgage executed by Jose Lozano was null and void; 2. The lower court erred in not finding that the auction sale decide on August 19, 1968 was null and void; 3. The lower court erred in not allowing the plaintiff and the intervenor to redeem the property; 4. The lower court erred in not finding that the defendant acted in bad faith; and 5. The lower court erred in dismissing the complaint. On August 11, 1978, the respondent court promulgated its decision affirming the decision of the lower court, and on October 3. 1978 denied the motion for reconsideration. Hence, the present petition for review. The factual findings of respondent Court of Appeals being conclusive upon this Court, We hereby adopt the facts found the trial court and found by the Court of Appeals to be consistent with the evidence adduced during trial, to wit:

It is not disputed that spouses Jose M. Lozano and Josefa P. Lozano were the owners of the property which they mortgaged on December 6, 1966, to secure the payment of the loan in the principal amount of P75,000.00 they were about to obtain from defendant-appellee Philippine Bank of Commerce; that on December 8, 1966, executed in favor of plaintiff-appellant the Deed of Sale with Mortgage ,, for and in consideration of the sum of P100,000.00, P25,000.00 of which amount being payable to the Lozano spouses upon the execution of the document, and the balance of P75,000.00 being payable to defendant- appellee; that on December 6, 1966, when the mortgage was executed by the Lozano spouses in favor of defendant-appellee, the loan of P75,000.00 was not yet received them, as it was on December 12, 1966 when they and their co-maker Alfonso Lim signed the promissory note for that amount; that from April 28, 1967 to July 12, 1968, plaintiff-appellant made payments to defendant-appellee on the mortgage in the total amount of P18,944.22; that on May 4, 1968, plaintiff-appellant assigned all his rights under the Deed of Sale with Assumption of Mortgage to his brother, intervenor Raoul Bonnevie; that on June 10, 1968, defendant-appellee applied for the foreclosure of the mortgage, and notice of sale was published in the Luzon Weekly Courier on June 30, July 7, and July 14, 1968; that auction sale was conducted on August 19, 1968, and the property was sold to defendantappellee for P84,387.00; and that offers from plaintiff-appellant to repurchase the property failed, and on October 9, 1969, he caused an adverse claim to be annotated on the title of the property. (Decision of the Court of Appeals, p. 5). Presented for resolution in this review are the following issues: I Whether the real estate mortgage executed by the spouses Lozano in favor of respondent bank was validly and legally executed. II Whether the extrajudicial foreclosure of the said mortgage was validly and legally effected. III Whether petitioners had a right to redeem the foreclosed property. IV Granting that petitioners had such a right, whether respondent was justified in refusing their offers to repurchase the property. As clearly seen from the foregoing issues raised, petitioners' course of action is three-fold. They primarily attack the validity of the mortgage executed by the Lozano spouses in favor of respondent Bank. Next, they attack the validity of the extrajudicial foreclosure and finally, appeal to justice and equity. In attacking the validity of the deed of mortgage, they contended that when it was executed on December 6, 1966, there was yet no principal obligation to secure as the loan of P75,000.00 was not received by the Lozano spouses "So much so that in the absence of

a principal obligation, there is want of consideration in the accessory contract, which consequently impairs its validity and fatally affects its very existence." (Petitioners' Brief, par. 1, p. 7). This contention is patently devoid of merit. From the recitals of the mortgage deed itself, it is clearly seen that the mortgage deed was executed for and on condition of the loan granted to the Lozano spouses. The fact that the latter did not collect from the respondent Bank the consideration of the mortgage on the date it was executed is immaterial. A contract of loan being a consensual contract, the herein contract of loan was perfected at the same time the contract of mortgage was executed. The promissory note executed on December 12, 1966 is only an evidence of indebtedness and does not indicate lack of consideration of the mortgage at the time of its execution. Petitioners also argued that granting the validity of the mortgage, the subsequent renewals of the original loan, using as security the same property which the Lozano spouses had already sold to petitioners, rendered the mortgage null and void, This argument failed to consider the provision 2 of the contract of mortgage which prohibits the sale, disposition of, mortgage and encumbrance of the mortgaged properties, without the written consent of the mortgagee, as well as the additional proviso that if in spite of said stipulation, the mortgaged property is sold, the vendee shall assume the mortgage in the terms and conditions under which it is constituted. These provisions are expressly made part and parcel of the Deed of Sale with Assumption of Mortgage. Petitioners admit that they did not secure the consent of respondent Bank to the sale with assumption of mortgage. Coupled with the fact that the sale/assignment was not registered so that the title remained in the name of the Lozano spouses, insofar as respondent Bank was concerned, the Lozano spouses could rightfully and validly mortgage the property. Respondent Bank had every right to rely on the certificate of title. It was not bound to go behind the same to look for flaws in the mortgagor's title, the doctrine of innocent purchaser for value being applicable to an innocent mortgagee for value. (Roxas vs. Dinglasan, 28 SCRA 430; Mallorca vs. De Ocampo, 32 SCRA 48). Another argument for the respondent Bank is that a mortgage follows the property whoever the possessor may be and subjects the fulfillment of the obligation for whose security it was constituted. Finally, it can also be said that petitioners voluntarily assumed the mortgage when they entered into the Deed of Sale with Assumption of Mortgage. They are, therefore, estopped from impugning its validity whether on the original loan or renewals thereof. Petitioners next assail the validity and legality of the extrajudicial foreclosure on the following grounds: a) petitioners were never notified of the foreclosure sale. b) The notice of auction sale was not posted for the period required by law. c) publication of the notice of auction sale in the Luzon Weekly Courier was not in accordance with law. The lack of notice of the foreclosure sale on petitioners is a flimsy ground. Respondent Bank not being a party to the Deed of Sale with Assumption of Mortgage, it can validly claim that it was

not aware of the same and hence, it may not be obliged to notify petitioners. Secondly, petitioner Honesto Bonnevie was not entitled to any notice because as of May 14, 1968, he had transferred and assigned all his rights and interests over the property in favor of intervenor Raoul Bonnevie and respondent Bank not likewise informed of the same. For the same reason, Raoul Bonnevie is not entitled to notice. Most importantly, Act No. 3135 does not require personal notice on the mortgagor. The requirement on notice is that: Section 3. Notice shall be given by posting notices of the sale for not less than twenty days in at least three public places of the municipality or city where the property is situated, and if such property is worth more than four hundred pesos, such notice shall also be published once a week for at least three consecutive weeks in a newspaper of general circulation in the municipality or city In the case at bar, the notice of sale was published in the Luzon Courier on June 30, July 7 and July 14, 1968 and notices of the sale were posted for not less than twenty days in at least three (3) public places in the Municipality where the property is located. Petitioners were thus placed on constructive notice. The case of Santiago vs. Dionisio, 92 Phil. 495, cited by petitioners is inapplicable because said case involved a judicial foreclosure and the sale to the vendee of the mortgaged property was duly registered making the mortgaged privy to the sale. As regards the claim that the period of publication of the notice of auction sale was not in accordance with law, namely: once a week for at least three consecutive weeks, the Court of Appeals ruled that the publication of notice on June 30, July 7 and July 14, 1968 satisfies the publication requirement under Act No. 3135 notwithstanding the fact that June 30 to July 14 is only 14 days. We agree. Act No. 3135 merely requires that such notice shall be published once a week for at least three consecutive weeks." Such phrase, as interpreted by this Court in Basa vs. Mercado, 61 Phil. 632, does not mean that notice should be published for three full weeks. The argument that the publication of the notice in the "Luzon Weekly Courier" was not in accordance with law as said newspaper is not of general circulation must likewise be disregarded. The affidavit of publication, executed by the Publisher, business/advertising manager of the Luzon Weekly Courier, stares that it is "a newspaper of general circulation in ... Rizal, and that the Notice of Sheriff's sale was published in said paper on June 30, July 7 and July 14, 1968. This constitutes prima facie evidence of compliance with the requisite publication. Sadang vs. GSIS, 18 SCRA 491). To be a newspaper of general circulation, it is enough that "it is published for the dissemination of local news and general information; that it has a bona fide subscription list of paying subscribers; that it is published at regular intervals." (Basa vs. Mercado, 61 Phil. 632). The newspaper need not have the largest circulation so long as it is of general circulation. Banta vs. Pacheco, 74 Phil. 67). The testimony of three witnesses that they do read the Luzon Weekly Courier is no proof that said newspaper is not a newspaper of general circulation in the province of Rizal. Whether or not the notice of auction sale was posted for the period required by law is a question of fact. It can no longer be entertained by this Court. (see Reyes, et al. vs. CA, et al., 107 SCRA 126). Nevertheless, the records show that copies of said notice were posted in three conspicuous places in the municipality of Pasig, Rizal namely: the Hall of Justice, the Pasig

Municipal Market and Pasig Municipal Hall. In the same manner, copies of said notice were also posted in the place where the property was located, namely: the Municipal Building of San Juan, Rizal; the Municipal Market and on Benitez Street. The following statement of Atty. Santiago Pastor, head of the legal department of respondent bank, namely: Q How many days were the notices posted in these two places, if you know? A We posted them only once in one day. (TSN, p. 45, July 25, 1973) is not a sufficient countervailing evidence to prove that there was no compliance with the posting requirement in the absence of proof or even of allegation that the notices were removed before the expiration of the twenty- day period. A single act of posting (which may even extend beyond the period required by law) satisfies the requirement of law. The burden of proving that the posting requirement was not complied with is now shifted to the one who alleges noncompliance. On the question of whether or not the petitioners had a right to redeem the property, We hold that the Court of Appeals did not err in ruling that they had no right to redeem. No consent having been secured from respondent Bank to the sale with assumption of mortgage by petitioners, the latter were not validly substituted as debtors. In fact, their rights were never recorded and hence, respondent Bank is charged with the obligation to recognize the right of redemption only of the Lozano spouses. But even granting that as purchaser or assignee of the property, as the case may be, the petitioners had acquired a right to redeem the property, petitioners failed to exercise said right within the period granted by law. Thru certificate of sale in favor of appellee was registered on September 2, 1968 and the one year redemption period expired on September 3, 1969. It was not until September 29, 1969 that petitioner Honesto Bonnevie first wrote respondent and offered to redeem the property. Moreover, on September 29, 1969, Honesto had at that time already transferred his rights to intervenor Raoul Bonnevie. On the question of whether or not respondent Court of Appeals erred in holding that respondent Bank did not act in bad faith, petitioners rely on Exhibit "B" which is the letter of lose Lozano to respondent Bank dated December 8, 1966 advising the latter that Honesto Bonnevie was authorized to make payments for the amount secured by the mortgage on the subject property, to receive acknowledgment of payments, obtain the Release of the Mortgage after full payment of the obligation and to take delivery of the title of said property. On the assumption that the letter was received by respondent Bank, a careful reading of the same shows that the plaintiff was merely authorized to do acts mentioned therein and does not mention that petitioner is the new owner of the property nor request that all correspondence and notice should be sent to him. The claim of appellants that the collection of interests on the loan up to July 12, 1968 extends the maturity of said loan up to said date and accordingly on June 10, 1968 when defendant applied for the foreclosure of the mortgage, the loan was not yet due and demandable, is totally incorrect and misleading. The undeniable fact is that the loan matured on December 26, 1967. On June 10, 1968, when respondent Bank applied for foreclosure, the loan was already six months overdue. Petitioners' payment of interest on July 12, 1968 does not thereby make the earlier act of respondent Bank inequitous nor does it ipso facto result in the renewal of the loan. In order that a renewal of a loan may be effected, not only the payment of the accrued interest is necessary but also the payment of interest for the proposed period of renewal as well. Besides,

whether or not a loan may be renewed does not solely depend on the debtor but more so on the discretion of the bank. Respondent Bank may not be, therefore, charged of bad faith. WHEREFORE, the appeal being devoid of merit, the decision of the Court of Appeals is hereby AFFIRMED. Costs against petitioners. SO ORDERED. Aquino, J., concur. Makasiar (Chairman), Abad Santos and Escolin, JJ., concurs in the result. Concepcion J J., took no part. De Castro, J., is on leave.

G.R. No. L-42282 February 28, 1983 HERMENEGILDO R. ROSALES, plaintiff-appellant, vs. PEREGRIN YBOA, Provincial Deputy Sheriff of Samar and the REGISTER OF DEEDS for the Province of Samar, defendants-appellees.

DE CASTRO, J.: This case was certified to this Court by the former Court of Appeals per its Resolution of November 13, 1975 the appeal thereto made having raised purely legal question, which is whether or not the Court of First Instance of Samar, in Civil Case No. 5325 entitled "Hermenegildo Rosales vs. Peregrin Yboa, et al., " erred in declaring the legality and validity of the redemption made by the mortgagor Pedro Oliverio of his titled property. It appears that by virtue of the foreclosure of real estate mortgage duly executed by the mortgagor Pedro Oliverio in favor of the Development Bank of the Philippines, as security for the payment of the amount of P12,000.00, and after giving notice of the date, time and place of sale as required by law, defendant-appellee Deputy Sheriff of Samar Peregrin Yboa, sold at public auction on January 28, 1970 to plaintiff-appellant Rosales, the highest bidder, for the total amount of fourteen thousand five hundred pesos (P14,500.00), the parcel of land covered by T.C.T. No. T-646 of the Register of Deeds for the Province of Samar. The corresponding Sheriff's certificate of sale was issued in favor of plaintiff-appellant, which certificate was registered in the Office of the Register of Deeds for the Province of Samar on February 3, 1970. On January 23, 1971, after the mortgagor Pedro Oliverio had served notice in writing of the redemption and had paid on said date to defendant-appellee Deputy Sheriff the principal

amount of P14,500.00 plus P1,691.00 representing the one (1 %) per centum interest per month, the latter executed a Deed of Certificate of Redemption restoring, conveying and assigning unto the said mortgagor, his heirs and assigns all the estate, right, title and interest on said foreclosed property. On March 10, 1971, plaintiff-appellant filed the instant complaint for cancellation of certificate of redemption alleging that no valid redemption was effected because while the mortgagor had paid within the period of redemption the purchase price in the sum of P14,500.00 plus P1,691.00 representing 1 % interest per month, he, however, failed to tender payment of 1) the full interest on the purchase price, while should be P1,715.84, instead of Pl,691.00 actually paid by the mortgagor, thereby leaving a deficiency in the sum of P24.84; 2) the sum of P3.00 representing the registration fee of the certificate of sale, plus interest thereon of P0.04; 3) the delinquent real estate taxes of the subject property for the years 1960 to 1970 amounting to P745.47; and 4) the Sheriff's commission in the sum of P99.82. On March 22, 1971, defendants-appellees filed an answer alleging that while it is true that mortgagor Pedro Oliverio has tendered to defendant- appellee Deputy Sheriff the amount of P14,500.00 plus Pl,691.00 for redemption purpose, the sum tendered being the amount of the auction purchase price plus 1% interest per month thereon up to the time of redemption and the tender being timely made and in good faith, the same is a valid one according to Section 30, Rule 39 of the Rules of Court; that granting in arguendo, that the property subject of redemption is delinquent in the payment of real estate taxes for the years 1960 to 1970 in the total amount of P745,47, it will not in anyway affect the regularity and validity of the redemption for no written notice that any such assessments or taxes are paid by the plaintiff-appellant as purchaser, was given to defendant appellee Deputy Sheriff who made the sale thereof and such not have filed, the property may be redeemed even without paying such assessments or taxes. On August 16, 1971, the trial court conducted a pre-trial of the case. After such pre-trial and upon motion of -plaintiff-appellant, the trial court rendered a summary judgment, pursuant to Rule 34 of the Rules of Court, since the answer of defendants-appellees raises no genuine issue of material facts, as well as their admission of the genuineness and due execution of the Certificate of Sale executed by defendant-appellee Deputy Sheriff in favor of plaintiff-appellant; the payment of entry fee and annotation on TCT No. T-640 of the Certificate of Sale in the sum of P3.00; the Certificate of Redemption executed by defendant-appellee Deputy Sheriff in favor of mortgagor Pedro Oliverio; the Certificate of Delinquency of real estate taxes of the subject property in the amount of P745.47; and the non-payment of sheriff's commission in the sum of P99.82. In the summary judgment the trial court dismissed the plaintiff-appellant's complaint and declared that the Certificate of Redemption of the property sold at public auction is valid and legal "without prejudice to the right of the plaintiff-appellant to recover from the redemptioner the sum of P0.67 representing the deficiencies in the 1 % monthly interest 1 and the sum of P3.00 representing the entry and annotation fees of the Register of Deed of Samar for the registration of the Certificate of Sale together with the sum of P0.04 representing interest on the last stated amount from February 3, 1970 to January 23, 1971." On December 13, 1971, plaintiff-appellant, after receipt of the Summary Judgment, filed his Record on Appeal, Notice of Appeal and Appeal Bond. On May 12,1972, the trial court approved the Record on Appeal and ordered the transmittal of the records of the case to the Court of Appeals. As aforementioned, the Court of Appeals certified the case to this Court on the ground that it involves the purely legal question of whether or not a valid and legal redemption was made by the mortgagor Pedro Oliverio of his titled property.

There is no question that Pedro Oliverio has the right to redeem the subject property, in view of the provisions of section 6 of Act 3135, as amended by Act No. 4148. 2 The procedure for effecting such redemption is contained in section 30, Rule 39 of the Rules of Court, the pertinent portion of which provides: Sec. 30. Time and manner of, and amounts payable on successive redemptions. Notice to be given and filed .The judgment debtor, or redemptioner, may redeem the property from the purchaser, at anytime within twelve (12) months after the sale, on paying the purchaser the amount of his purchase, with one per centum per month interest thereon in addition, up to the time of redemption, together with the amount of any assessments or taxes which the purchaser may have paid thereon after purchase, and interest on such last roamed amount at the same rate; ... xxx xxx xxx Written notice of any redemption must be given to the Officer who made the sale and a duplicate filed with the register of deeds in the province; ... Pursuant to the above-cited provision, the requisites for a valid redemption are: 1) the redemption must be made within twelve (12) months from the time of the registration of the sale in the Office of the Register of Deeds (Gorospe vs. Santos, 69 SCRA 191; Agbulos vs. Alberto, 5 SCRA 790; Santos vs. Rehabilitation Finance Corporation, et al., 101 Phil. 980; 2) payment of the purchase price of the property involved, plus 1% interest per month thereon, if any, paid by the purchaser after the sale with the same rate of interests (Rosario vs. Tayug Rural Bank, 22 SCRA 1220 cited in Tolentino vs. Court of Appeals, 106 SCRA 513); and 3) written notice of the redemption must be served on the officer who made the sale and a duplicate filed with the Register of Deeds of the province. There is no dispute, that in the case at bar, the mortgagor Pedro Oliverio tendered payment of the purchase price on January 23, 1971, well within the redemption period of twelve (12) months after the registration of the sale on February 3,1970 and that defendants-appellees Deputy Sheriff of Samar and the Register of Deeds of Samar were duly notified in writing of the mortgagor's desire to redeem the subject property. Equally beyond question is the fact that mortgagor Pedro Oliverio tendered the sum of P14,500.00 corresponding to the purchase of the property, and the amount of P1,691.00 representing the 1% monthly interest thereon, although the trial court found a deficiency of P0.67 due and owing to the plaintiff-appellant. The mortgagor, therefor, has substantially complied with the requirements of the law to effect redemption, for which reason a Certificate of Redemption was issued in his favor by defendantappellee Deputy Sheriff. But plaintiff-appellant would insist that although mortgagor Pedro Oliverio had tendered payment of the purchase price of P14,500.00 and the interest of P1,691.00, nevertheless, no valid redemption was effected by the latter, since there are still four deficiencies which the mortgagor failed to pay. Firstly, plaintiff-appellant would contend that there is still a deficiency interest of P24.84 on the purchase price since the interest thereon should be computed from the date of the auction sale, that is, January 28, 1970, and not from the date of the registration thereof on February 3, 1970. The contention is without merit. Plaintiff-appellant has not cited any authority to support his theory that the interest on the purchase price should be computed from the date of the sale and not from the registration thereof. We rule that since the period of

redemption begins only from the date of the registration of the certificate of sale in the Office of the Register of Deeds, it being only then that the certificate takes effect as a conveyance, 3 the computation of the interest on the purchase price should also be made to commence from that date. Secondly, although the amount of P3.00 representing the registration fee incurred by plaintiffappellant may be considered as any assessments or taxes which the purchaser may have paid thereon after purchase," still the non-payment of this amount by the mortgagor Pedro Oliverio will not render invalid his redemption, since, as discussed above, he has substantially complied with the legal requirements for a valid redemption. Thirdly, as to the non-payment of real estate taxes of the subject property for the years 1960 to 1970 amounting to P745.47, the same should not affect the regularity and validity of the redemption made by the mortgagor Pedro Oliverio. The latter is not legally bound to pay such amount to plaintiff-appellant as purchaser, for Section 30, Rule 39 clearly provides that "the judgment debtor, or redemptioner, may redeem the property... on paying the purchaser ... the amount of any assessments or taxes which the purchaser may have paid thereon after purchase; and interest on such last-named amount at the same rate." Nowhere in the Records is it shown that plaintiff-appellant had paid such amount. On the contrary, defendants-appellees in their Answer 4 to plaintiff-appellant's complaint, have averred that no written notice that any assessments or taxes are paid by the latter as purchaser, was given to defendant-appellee Deputy Sheriff of Samar who made the sale thereof. In fact, the Solicitor-General, in his Brief filed in behalf of the defendants-appellees, has made the following observation. 5 We are indeed surprised how appellant was able to secure the registration of his certificate of sale without first paying the delinquent taxes as required by Section 1, Republic Act No. 456. An extra judicial foreclosure sale being in the nature of a voluntary transaction, appellant should have been required by the Register of Deeds of Samar to pay the delinquent land taxes on the subject property before registering his certificate of sale. Payment of delinquent land taxes being a condition precedent to the registration of appellant's Certificate of Sale, but which, somehow, he was able to evade, he cannot now avail of the issue of such delinquent land taxes to defeat the mortgagor's right of redemption. Finally, the non-payment of the Sheriff's Commission in the sum of P99.82 will not, likewise, affect the validity of redemption since such amount is not included in the payments required of a redemptioner as set forth in said Section 30 of Rule 39. In fine, We hold that the failure of the mortgagor Pedro Oliverio to tender the amount of P745.47 representing the delinquent real estate taxes of the subject property, the registration fee of P3.00 and the interest thereon of P0.04, the Sheriff's Commission in the sum of P99.82, and the deficiency interest on the purchase price of the subject property, will not render the redemption in question null and void, it having been established that he has substantially complied with the requirements of the law to effect a valid redemption, with his tender of payment of the purchase price and the interest thereon within twelve (12) months from the date of the registration of the sale. This ruling is in obedience of the policy of the law to aid rather than to defeat the right of redemption. 6

WHEREFORE, the decision of the court a quo is hereby affirmed, without costs. SO ORDERED. Makasiar (Chairman), Concepcion, Jr., Guerrero, Abad Santos and Escolin, JJ., concur. Aquino J., is on leave.

G.R. No. L-53620 January 31, 1985 PEDRO LONZAME, petitioner, vs. HON. AUGUSTO M. AMORES, Judge of the Court of First Instance of Manila, Branch XXIV, MELANIO FLORES and SEGUNDA MANUEL, respondents.

GUTIERREZ, JR., J.: In this petition for review on certiorari petitioner seeks to annul the order of the respondent Court of First Instance of Manila, Branch XXIV, which required him to accept the tender of payment made by the private respondents for the lot known as Lot No. 19-A, after herein petitioner had already acquired the same through a sale by public auction. The following facts are either undisputed or established. Eufemia Corporal Blones was the registered owner of a parcel of land, denominated as Lot No. 19, containing an area of 276.80 square meters more or less, situated at Tondo, Manila and covered by Transfer Certificate of Title No. 98530 of the Registry of Deeds for Manila. On February 16, 1969, Blones and the spouses Segunda Manuel and Melanio Flores entered into a "Kasunduan ng Pagbibilihan" whereby Blones sold and spouses Flores bought a portion of Lot No. 19, denominated under the subdivision plan, as Lot No. 19-A and containing an area of 131.76 square meters, in consideration of the price of P200.00 per square meter, payable as follows: P10,000.00 upon signing of the contract, P5,000.00 on February 6, 1970, and the balance on February 6, 1975. Said contract also contained stipulations which provided that upon full payment of the purchase price, the vendor would segregate the area sold to the vendees and cause to be issued another title thereon in the name of said vendees. The contract further stipulated that possession of Lot No. 19-A passes to the vendees upon the signing of the agreement. However, the "Kasunduan ng Pagbibilihan" was not registered with the Registry of Deeds for the City of Manila. The stipulated payments were duly complied with by the Floreses.

In the meantime, on August 12, 1970, for value received, Blones executed and delivered to Conchita Trinidad and Patrocinio Trinidad, a promissory note in the sum of P24,000.00, payable twelve months after date, with interest thereon at the rate of 12% per annum. Under the terms of the promissory note, if any interest is not paid when due, then the principal, together with all unpaid interests, shall at once become due and demandable. As security for the payment of the promissory note, Blones likewise executed a real estate mortgage on August 12, 1970, over Lot No. 19. The real estate mortgage was duly registered with the Registry of Deeds for Manila. Before the first week of February, 1974, the Floreses offered to pay the sum of P12,000.00 to cover the unpaid balance on the purchase price but Blones and her son refused to accept the same. Instead, the two proposed to return the spouses' but the latter rejected the proposal. At this point in time, the Flores spouses discovered that Lot No. 19 had been mortgaged to Conchita and Patrocinio, both surnamed Trinidad and married to Tito Tatoy and Fernando M. Marquez respectively. As a consequence, the spouses executed an affidavit of adverse claim and registered the same in the Register of Deeds for Manila. Thereafter, they filed an action against Blones and the mortgagees to declare null and void the mortgage executed by Blones in favor of her co-defendants-mortgagees and to compel Blones to accept P12,000.00 as purchase price for Lot No. 19-A. Blones failed to pay the principal and interest on the promissory note when they fell due. The defendants-mortgagees, therefore, filed a cross-claim against Blones in the action instituted by the spouses Flores. After hearing on November 11, 1977, the respondent court rendered a decision which partly provides the following: xxx xxx xxx (2) Ordering defendant Eufemia Corporal Blones to accept the sum of P12,000.00 from plaintiffs Melanio Flores and Segunda Manuel as full payment of the purchase price of said Lot No. 19-A; (3) Ordering defendant Eufemia Corporal Blones to register said Lot No. 19-A with the Land Registration Commission in the names of said plaintiffs spouses, subject, however to the real estate mortgage, Exhibit 2, until the obligation secured thereby shall have been extinguished; xxx xxx xxx (5) Under the cross-claim, ordering cross-defendant Eufemia Corporal Blones to pay cross-plaintiffs Conchita Trinidad and Patrocinio Trinidad the sum of P24,000.00 with interest at the rate of 12% per annum from August 6, 1974, which is the date of the demand until the same is fully paid, plus an additional sum of P2,500.00 as attorney's fees, within a period of not less than ninety (90) days from the date of the service of this decision, and in default of such payment, Lot No. 19 shall be sold to realize the aforementioned sum; ... xxx xxx xxx

On November 6, 1978, the defendants-mortgagees filed a motion for execution for failure of Blones to pay them the sum of P24,000.00 within the period fixed by the court. On November 23, 1978, the court granted the motion and ordered that a writ of execution be issued foreclosing the mortgage over Lot No. 19-A and that said property be sold according to the provisions of Sections 3 and 4 of Rule 68 of the Rules of Court. On December 12, 1978, the spouses Flores filed a motion for modification praying that the order of November 23, 1978 be modified to make it appear that the coverage of the sale should be Lot No. 19, as distinguished from Lot No. 19-A. On December 15, the court granted the motion. However, during the sale at public auction, the whole of Lot No. 19, including Lot No. 19-A, was sold since the latter had no separate title yet and under Transfer Certificate of Title No. 985, it was still part of Lot No. 19. The highest bidder was petitioner Pedro Lonzame. On the same day that the public auction was held, petitioner as the highest bidder executed an "Option to Buy" in favor of the spouses Flores which partly provided ... In fairness to Mr. Melanio Flores, as plaintiff in said case, of 1102 T. Bugallon St., Tondo, Manila, he has the option to buy a portion of the parcel of land, particularly known as Lot No. 19-A, containing an area of ONE HUNDRED THIRTY ONE & 75/100 (131.75) SQUARE METERS more or less, in the amount of (P8,000.00) Pesos (sic), Philippine Currency, within fifteen (15) days from notice hereof, after date of confirmation of the sale by the Court of First Instance of Manila, Br. XXIV. On May 28, 1979, the petitioner filed a "Motion for Confirmation of Sheriff's Sale which was granted by the court on July 26, 1979. On September 12, 1979, the "Sheriff's Final Deed " was issued. On September 27, 1979, the spouses Flores, through a letter, tendered a check dated September 25, 1979 in the amount of P8,000.00 in favor of the petitioner pursuant to the "Option to Buy" which the latter had executed in their favor. The petitioner, however, refused the payment, alleging that the option to buy was no longer effective and binding because the fifteen (15) day period had already expired. On November 19, 1979, the spouses Flores filed an "Amended Motion for Execution and/or for Contempt of Court," stating among other things that since the decision of November 11, 1977 recognized that Lot No. 19-A was sold to them although "subject, however, to the real estate mortgage Exhibit 2 until the obligation secured thereby shall have been extinguished" and since herein petitioner has apparently succeeded to the rights and interests of Blones, petitioner should now be directed to accept the amount of P8,000.00 arrived at as follows: P12,000.00 amount to 4,000.00 P2,000.00 moral 2,000.00 to be attorney's be to paid be paid to paid by Blones by as balance. Blones as damages Blones as fees.

_________ P8,000.00 The spouses also prayed that the petitioner be directed to execute a final deed of sale over Lot No. 19-A and/or that petitioner and the Register of Deeds and the Sheriff of Manila and Rufino Mallorca be directed to show cause why the new title issued to petitioner does not carry the adverse claim of the spouses and the dispositive part of the judgment in the case. After both parties submitted their respective pleadings, the court, on January 10, 1980, issued an order directing the petitioner to accept the payment in the amount of P8,000.00 tendered by the spouses Flores after which he must execute a deed of sale over Lot No. 19-A in favor of said spouses and register the same with the Land Registration Commission. On January 28, 1980, petitioner filed a motion for reconsideration but the same was denied. Hence this petition. Petitioner contends that as the purchaser at a sale by public auction, he is not bound by the decision of the lower court in Civil Case No. 95042, nor can be considered as a successor-in interest of defendant Blones. Therefore, he cannot be compelled to accept the sum of P8,000.00 from the spouses Flores as payment for Lot No. 19-A. He further contends that the respondent court lost the jurisdiction to modify or amend its decision after the same had become final and executory so as to affect the petitioner as highest bidder. Lastly, with regard to the "Option to Buy" he executed in favor of the spouses, petitioner maintains that the period within which to exercise said option had already expired since the 15-day period should be counted from the date of the confirmation of the sale. We find the petition impressed with merit. In the case of Villar v. Javier de Paderanga (97 Phil. 604, 608), we held that in foreclosure of mortgages under Rule 70 (now Rule 68 of the Rules of Court), there is no right of redemption after the judicial sale is confirmed; and when the foreclosure sale is validly confirmed by the court, title vests upon the purchaser in the foreclosure sale and the confirmation retroacts to the date of the sale. Thus, the rights of the mortgagee and persons holding under him are cut off by the sale upon confirmation, and with them the equity of redemption. (See also Benedicto v. Yulo, 26 Phil. 160, 166). The above ruling is expressly sanctioned by Section 3, Rule 68 of the Rules of Court which provides: Sec. 3. Sale of mortgaged property; effect; When the defendant, after being directed to do so as provided in the last preceding section, fails to pay the principal interest, and costs at the time directed in the order, the court shall order the property to be sold in the manner and under the regulations that govern sales of real estate under execution. Such sale shall not affect the rights of persons holding prior incumbrances upon the property or a part thereof, and when confirmed by an order of the court, it shall operate to divest the rights of all the parties to the action and to vest their rights in the purchaser, subject to such rights of redemption as may be allowed by law. The disputed property in this case was purchased in a judicially ordered sale of mortgaged property. Clearly, under the aforequoted provision. the confirmation by the lower court of the Sheriff's sale had divested the parties including the spouses of whatever rights they had to the property and vested said rights on the purchaser, herein petitioner.

Moreover, Mr. Flores appears to have been aware of the tenuous nature of his claim to the property because he was offered the option and he tried to exercise it but the offeror refused on the ground that it was too late. It was error, therefore, for the respondent court to compel herein petitioner to accept the tender of payment made by the spouses Flores on the basis of the latter's computation in their amended motion of November 19, 1979 and on their premise that the petitioner had apparently succeeded to the rights and interests of the original vendor, Blones, when said petitioner was not a party to the civil case between Blones and the spouses and also especially since the deed of sale executed between the aforementioned parties was never registered nor annotated in the certificate of title of Lot No. 19 which also covered Lot No. 19-A. Herein petitioner, therefore, can in no way be considered a successor-in-interest of Blones nor can he be bound by the deed of sale which was not annotated in the title of the lot he purchased at the sale by public auction by virtue of a judicial foreclosure of mortgage. It was likewise a grave error to issue the questioned order, amending or modifying the decision in said civil case for the latter had long become final and executory. The decision did not require the acceptance of any P8,000.00 from the respondent spouses because the option to buy was a separate transaction or offer made after the rendition of the decision. The court had no more jurisdiction to amend its decision to incorporate a later agreement of the Flores spouses and the petitioner. In the case of Nieva v. Manila Banking Corporation (124 SCRA 453) we had the occasion to reiterate this doctrine when we ruled: It is hornbook doctrine that 'a decision which has become final and executory can no longer be amended or corrected by the court except for clerical errors or mistakes and however erroneous it may be, cannot be disobeyed, otherwise litigations would be endless and no questions could be considered settled. (Maramba v. Lozano, 20 SCRA 474). In the instant case, the clarification granted by the lower court clearly altered substantially the terms of the decision. The clarificatory order introduced new matters which were never touched upon in the decision, in short, the challenged order modified the original decision and in so doing, the respondent court exceeded its jurisdiction. (Vda. de Alcantara v. Somera, 106 SCRA 200). The third contention, therefore, regarding the interpretation of the "Option to Buy" executed by herein petitioner in favor of the private respondents has no merit. The rights of the parties under the option to buy cannot be litigated and passed upon by the court a quo in a decision already long final. If the private respondents intended to enforce the "Option to Buy" against the petitioner, they should have filed a separate action for that purpose. WHEREFORE, the petition is GRANTED and the orders of the respondent court dated January 10, 1980 and March 19, 1980 are hereby ANNULLED and SET ASIDE. No pronouncement as to costs. SO ORDERED. Melencio-Herrera, Plana, Relova and De la Fuente, JJ., concur. Teehankee, (Actg. CJ.), took no part.

G.R. No. L-26575

February 27, 1969

PEDRO DIMASACAT and ERNESTO ROBLES petitioners, vs. THE COURT OF APPEALS, PHILIPPINE NATIONAL BANK and RAFAEL O. LAGDAMEO, Respondents. Alfredo I. Raya and Jose P. Salazar for petitioners. Medina Coruna and Nosce for respondent Phil. National Bank. Job. M. Cabangon for respondent Rafael O. Lagdameo. CONCEPCION, C.J.:chanrobles virtual law library Petition for review of a decision of the Court of Appeals reversing that of the Court of First Instance of Quezon.chanroblesvirtualawlibrarychanrobles virtual law library Rafael O. Lagdameo was the registered owner of four (4) contiguous parcels of land, with an aggregate area of about 7,236 sq.m., situated in the poblacion of Tagkawayan, Quezon, and covered by TCT No. 17011 of the Office of the Register of Deeds of said province. On June 24, 1946, he mortgaged said land, for P3,500, to the Philippine National Bank, subject to the latter's right of extrajudicial foreclosure should he default in the payment of said amount. The corresponding deed of mortgage was duly registered and anotated on said TCT No. 17011. A little over a year later, or on September 12, 1947, Lagdameo sold to petitioner Ernesto Robles, a portion of about 260 sq.m. of the aforementioned land, for the sum of P1,040. Still later, or on March 6, 1948, Lagmadameo sold to Pedro Dimasacat the other petitioner herein, another portion, of about 381.44 sq.m., of the same land, for the sum of P1,100. The notarial deeds attesting to these sales were not registered. Owing to non-payment of the debt to the Bank, the mortgage was, on April 1, 1955, foreclosed extra-judicially and sold at public auction, by the Provincial Sheriff of Quezon, to the Bank for the amount of said indebtedness. On June 11, 1956, or after the lapse of the statutory period of one-year for the redemption of the property, the Sheriff executed the corresponding deed of absolute sale to the Bank, in favor of which TCT No. 24761 was issued upon registration of said deed of absolute sale and the cancellation of TCT No. 17011.chanroblesvirtualawlibrarychanrobles virtual law library Prior to the expiration of said period of redemption, or sometime before November, 1955, Robles and Dimasacat urged Lagdameo to repurchase the land to prevent it, particularly the portions sold to them, from becoming property of the Bank, but Lagdameo told them that he would effect the redemption at any time he had money therefor. Thereupon, Robles and Dimasacat offered to repurchase the property from the Bank, which rejected the offer. Thereupon, or on December 5, 1955, Dimasacat and Robles - hereinafter referred to as the plaintiffs - commenced

Civil Case No, 33-G of the Court of First Instance of Quezon, against Lagdameo and the Bank, for the purpose of enforcing their alleged right to repurchase said property. On December 7, 1955, plaintiffs, likewise, caused a notice of lis pendens to be registered and annotated on the back of TCT No. 17011. Lagdameo and the Bank were summoned on March 23 and 27, 1956, respectively, or before the expiration of the aforementioned period of redemption. TCT No. 24761, subsequently issued in the name of the Bank, carried the notice of lis pendens annotated on TCT No. 17011.chanroblesvirtualawlibrarychanrobles virtual law library After appropriate proceedings, said Court of First Instance rendered a decision, dated April 1, 1960, dismissing plaintiffs' complaint and declaring them "without right to repurchase the properties they allegedly acquired from ... Lagdameo, ... but reserving to them ... the right to file suit against" him "to compel performance of their agreement," should he eventually reacquire said properties.chanroblesvirtualawlibrarychanrobles virtual law library On appeal, taken by plaintiffs, this decision was "reversed" by the Court of Appeals, which held them "to have the right to redeem their respective portions from the Bank," although "the question as to who should be entitled to repurchase the totality of the lots from the Bank" was "reserved for future litigation, if need be, between all the parties." Plaintiffs now seek a review by certiorari of this decision of the Court of Appeals, and pray that said decision be "reversed ... by allowing" them "to redeem ... all the parcels of land" covered by the certificates of title aforementioned, "for the sum of P3,500 ... plus interest of 1% a month from April 1, 1965 to the filing of the present complaint on December 5, 1955."chanrobles virtual law library Plaintiffs maintain that, having been held by the Court of Appeals to be "successors in interest of the mortgage debtor, in part of the property and ... therefore qualified to redeem," said Court should have declared them entitled to repurchase the entirety of said property, in line with Magno v. Viola, 1 instead of limiting their right of redemption to the portions sold by Lagdameo to each of them.chanroblesvirtualawlibrarychanrobles virtual law library Such was not, however, the issue decided in the Magno case, although it was declared therein that a lawyer who, by reason of his contract of retainer with a former client, had an interest in a land belonging to the latter, may be considered his successor in interest in said land, within the purview of Section 464 of our former Code of Civil Procedure, 2 which is substantially identical to Section 29 of Rule 39 of the Rules of Court. 3 chanrobles virtual law library It is true that our decision in said case made reference to some American cases in which it was held that "one who owns a separate part of the land sold" at public auction "or has some interest therein," or "successors in part" of said land "could not redeem at all, except redeeming the whole," but this was not the question adjudicated in that case. On the contrary, it was held therein that said lawyer or his assignee, "had no right to redeem the shares of his former clients" in

the land in question, the buyer of said shares being "a part owner" of said land.chanroblesvirtualawlibrarychanrobles virtual law library Moreover, the decision in the Magno case, likewise, pointed out that, although a "co-tenant may redeem the entire joint estate ... in so doing he will be deemed to have acted for the benefit of all the co-tenants." This point is particularly relevant to the case at bar, for plaintiffs had bought merely small portions of the land of Lagdameo and had, at best, a personal right to demand from him a status of co-ownership over said property, because the deeds of sale in their favor had not been registered, and the portions covered by said deeds had not been surveyed, so that the precise boundaries thereof had not been delimited by metes and bounds, much less segregated from the mass of Lagdameo's property covered by TCT No. 17011 and then by TCT No. 24761. Hence, even if plaintiffs had succeeded in redeeming the whole land, Lagdameo could have, under said dictum in the Magno case, asserted the right to repurchase from them so much of the land as was not included in said deeds of sale in their favor. Indeed, this was reckoned in plaintiffs' complaint, for they prayed therein that, should they be able to repurchase the parcels of land covered by TCT No. 17011," judgment be rendered "declaring them co-owners of the portions that remain, after deducting the portions" covered by said deeds of sale "subject to the right of defendant Rafael O. Lagdameo or his successor in interest as redemptioner."chanrobles virtual law library In this connection, it appears that, by virtue of another deed of sale, dated July 22, 1962 - or while this case was pending in the Court of Appeals - Lagdameo had repurchased the land from the Bank, for P7,044.74, subject to the conditions set forth in said instrument, particularly the notice of lis pendens annotated on the back, first of TCT No. 17011, and later of TCT No. 24761. Inasmuch as, even if plaintiffs had managed to redeem the whole property, so much thereof as exceeded the portions sold to them by Lagdameo could have been repurchased from them by Lagdameo and the title to said property has meanwhile reverted fully to the latter, it follows that petitioners are now entitled to no more than the consummation of the sales made by him in their favor.chanroblesvirtualawlibrarychanrobles virtual law library WHEREFORE, the decision of the Court of Appeals should be, as it is hereby modified, in the sense that plaintiffs herein are hereby declared co-owners of the land in question to the extent of the interest conveyed to them by defendant Rafael O. Lagdameo, subject to their right to partition said property and determine the precise boundaries of the share or portion belonging to each, without pronouncement as to costs. It is so ordered.chanroblesvirtualawlibrarychanrobles virtual law library Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano, Teehankee and Barredo, JJ., concur.

G.R. No. L-30079 January 30, 1976

MATILDA GOROSPE and MARIANO GOROSPE, plaintiffs-appellees, vs. DOLORES M. SANTOS, Defendant-Appellant.

DOLORES M. SANTOS, counterclaimant- defendant, vs. CARIDAD J. TORRENTO, THE PROVINCIAL SHERIFF OF RIZAL, and THE REGISTER OF DEEDS OF QUEZON CITY,defendants-appellees.chanrobles virtual law library ANTONIO, J.: This case was certified to this Court from the Court of Appeals on the ground that the appeal raises purely legal questions.chanrobles virtual law library The legal questions posed by this appeal involve the propriety of the summary judgment rendered by the Court of First Instance of Quezon City in Civil Case No. Q-5794, 1 and the correctness of the trial court's resolution of the other substantive issues, such as on the right of plaintiffs-appellees as assignees of the mortgagor to redeem the property sold on foreclosure and the legal efficacy of the redemption thus made.chanrobles virtual law library At bottom is the action filed by plaintiffs-appellees in the aforementioned Civil Case No. Q-5794, against defendant-appellant Dolores M. Santos, wherein said plaintiffsappellees sought the confirmation of their rights of ownership over the parcel of land covered by Transfer Certificate of Title No. 43761, of the Quezon City land registry, redeemed by them as successors in interest, 2 and for the surrender to them of the afore-mentioned transfer certificate of title which is in the ion of the defendant-appellant, or in default thereof, its cancellation and the issuance to them of a new certificate of title.chanrobles virtual law library In the afore-mentioned complaint, 3 the following facts are alleged: On October 19, 1958, Caridad J. Torrento in order to secure her indebtedness in the amount of P7,000, executed a deed of first mortgage over her parcel of land, covered by Transfer Certificate of Title No. 43761, of the Registry of -Deeds of Quezon City, in favor of defendant-appellant Dolores M. Santos. The deed was duly registered and the corresponding owner's duplicate of Transfer Certificate of Title No. 43761 was delivered to defendant-appellant.chanrobles virtual law library On September 1, 1959, "with the consent of . the first mortgagee the mortgagor, Caridad J. Torrento executed a second mortgage (Annex "A") over the same property, in favor of plaintiffs-appellees, to secure a principal indebtedness in the amount of P6,000.00. This deed of second mortgage was not, however, registered. In the meantime, the first mortgage was extra-judicially foreclosure and the land sold at public auction on March 10, 1960 to Dolores M. Santos, the highest bidder, for the sum of P3,500.00. The corresponding Sheriffs Certificate of Sale was issued in her favor, which certificate was registered on October 20, 1960 and the same annotated in the original of Transfer Certificate of Title No. 43761.chanrobles virtual law library

On February 3, 1961, Dolores M. Santos filed a complaint against Caridad J. Torrento in Civil Case No. 6479, with the Court of First Instance of Rizal, for the recovery of the deficiency resulting between the price obtained in the sale of the real property at public auction and the outstanding obligation at the time of the foreclosure. On February 9, 1961, the court issued, in the aforesaid case, a writ of preliminary attachment on the properties of Caridad J. Torrento and on February 24, 1961, the Sheriff of Rizal caused the attachment of the rights and interests of Caridad J. Torrento particularly her right of redemption over the parcel of land sold at public auction. In consideration of the discharge of the second mortgage, Caridad J. Torrento assigned to the second mortgagee (Matilda Gorospe, wife of Mariano Gorospe) all her rights, interests and title over said property, particularly her statutory right of redemption "subject to the attachment in favor of the plaintiffs (second mortgagee) who took over the possession of the property as a consequence thereof." 4 The deed of assignment of Caridad J. Torrento in favor of Matilda Gorospe, which was made part of the complaint as Annex "B", contained the following stipulation: 4. That the ASSIGNEE shall, with the consent of her husband Mariano Gorospe, release the ASSIGNOR of her obligations on the Second Mortgage referred to above and that the said Second Mortgage indebtedness shall be considered paid by the execution of this instrument. On March 10, 1961, Caridad J. Torrento filed, in Civil Case No. 6479, an ex parte motion to lift the preliminary attachment on her right of redemption upon the filing of a bond, which ex parte motion was granted by the court on the same date. Likewise on the same occasion, plaintiffs-appellees, as successors-in-interest of Caridad J. Torrento paid to the Sheriff the amount of P3,920.00, which represented the amount of the purchase, with one per centum (1%) interest per month thereon in addition, to effect the redemption of the foreclosed property. Upon the filing of the requisite bond by Caridad J. Torrento on March 11, 1961 and its approval by the court in Civil Case No. 6479, the corresponding order dissolving the attachment was issued.chanrobles virtual law library On March 13, 1961, the Sheriff of Rizal, who conducted the sale of the foreclosed property, issued a Certificate of Redemption in favor of plaintiffs-appellees as successors in interest of Caridad J. Torrento over the foreclosed property. The Certificate of Redemption was registered a on March 13, 1961 with the Register of Deeds of Quezon City, and the corresponding entry and annotation made on the original of said certificate of title.chanrobles virtual law library Alleging that they became owners in fee simple of the aforementioned property by virtue of the aforesaid ..redemption, plaintiffs-appellees demanded from Dolores M. Santos the surrender to them of the owner's duplicate of Transfer Certificate of Title No. 43761, but defendant-appellant "with malice aforethought and in wanton disregard of the plaintiffs' right to the possession of the title ... refused and still continue to refuse to recognize the right and ownership of the plaintiffs over the said property ... and to, deliver to the plaintiffs the' duplicate of the said certificate-

of title." They, therefore, prayed that judgment be rendered 'confirming the rights of ownership of the plaintiffs" over said property, and ordering the defendantappellant to deliver to them the said owner's duplicate of Transfer Certificate of title No. 43761, or declaring the same null and void and directing the Register of Deeds of Quezon City to issue a new certificate of title in favor of plaintiffs.chanrobles virtual law library Defendant-appellant, in her answer, denied that Matilda J. Gorospe had validly redeemed the property because: (a) under Section 26, Rule 39, Rules of Court, if the purchaser at public auction is also a creditor having a prior lien (first mortgage and a levy on attachment) to that of the redemptioner, the redemptioner can redeem only if she pays the purchaser at public auction not only the amount of her purchase in the sum of P3,500.00 with one per centum per month interest thereon in addition, up to the time of redemption, but also the balance of the mortgage indebtedness (P5,910.00); (b) the order lifting the levy on attachment of the right of redemption of the debtor Caridad J. Torrento was issued only on March 11, 1961 one day after the expiration of the period of redemption and, therefore, the redemption made on March 13, 1961 was after the expiry of the period of redemption; (c) the so-called certificate of redemption, Annex "C" 6f the complaint, is not even acknowledged before any officer authorized to take acknowledgment of conveyances of real property, contrary to Section 27, Rule 39 of the Rules, and the same is, therefore, unregisterable; (d) the document of assignment of the debtor's right of redemption, Annex "B", does not show the amount then actually due on the lien of the supposed assignee, contrary to Section 28 (c), Rule 39 of the Rules of Court; (e) the same document, Annex "B' of the complaint, had never been registered with the Register of Deeds of Quezon City and hence the same cannot affect third persons like the herein defendant Dolores M. Santos. Besides, under the law, said document should, and ought to be subject to the prior lien of herein defendant Dolores M. Santos consisting of a levy on attachment of said right of redemption of the debtor Caridad J. Torrento. 5 As a first counterclaim, defendant Dolores M. Santos that the Deed of Assignment whereby Caridad J. Torrento transferred to Matilda Gorospe her right of redemption should be declared void and/or rescinded as in fraud of creditors, because (a) the alleged deed of assignment of Torrento's right to redeem dated March 1, 1961, was simulated and fictitious (b) the transfer was made after suit-Civil Case No. 6479CFI-Rizal, entitled "Dolores M. Santos v. Caridad J. Torrento" had been begun and while the same was pending against the said debtor; and (e) the plaintiffs consented to the said assignment knowing that Caridad J. Torrento's right to redeem the property was already subject to the levy on attachment under Civil Case No. 6479, Court of First Instance of Rizal. 6 As a second counterclaim, defendant-appellant alleged that plaintiffs- appellees' action is "clearly unfounded. and malicious as even previous to the present action, plaintiff Matilda J. Gorospe had already filed against the defendant a petition entitled "Caridad J. Torrento and Matilda J. Gorospe, petitioners, v. Dolores M. Santos, oppositor, G.L.R.O. Rec. No. 5975" before Branch IV wherein said Matilda J. Gorospe and the mortgage debtor Caridad J. Torrento sought-the surrender of the

Owner's Duplicate of TCT No. 43761-Quezon City from the defendant, which case, as a result of defendant's opposition, was dismissed . 7 And in support of her third counterclaim, she averred that the defendant Provincial Sheriff of Rizal notwithstanding that his attention was called to the fact that no valid redemption was made, failed to issue the officer's Deed of Absolute Sale contrary to Section 31, Rule 39 of the Rules of Court and Section 78 of Act 496, as amended, and since no valid redemption was made before March 10, 1961, the Register of Deeds of Quezon City should be ordered to cancel the present TCT NO. 43761Quezon City and a new certificate of title issued in her name. 8 On the same day that she filed her answer to the complaint, defendant-appellant filed a "Motion to Bring in New Parties", praying that Caridad J. Torrento the Provincial Sheriff of Rizal, in his official capacity as Sheriff -of Quezon City, and the Register of Deeds of Quezon City be brought in as parties defendants, 'in order that she may be granted complete and final determination" of her counterclaims.chanrobles virtual law library On May 26, 1961, plaintiffs-appellees filed la "Manifestation and Countermotion" wherein they alleged that defendant's answer does not specify which of the paragraphs of the complaint "are specifically denied because of defendants claim of lack of knowledge" and which paragraphs are denied "because some of the allegations therein made are completely false and knowingly made false by the plaintiffs to suit their unlawful purpose." Plaintiffs-appellees, therefore, prayed that defendant-appellant be ordered to make the necessary specifications.chanrobles virtual law library On May 27, 1961, defendant-appellant filed an opposition to the Manifestation and Countermotion of the plaintiffs-appellees. On May 31, 1961, plaintiffs-appellees filed their Answer to the counterclaims, 9 contending that the deed of assignment (Annex "B") may not be rescinded as in fraud of creditors, considering: b) That defendant as alleged creditor could not have been defrauded nor could it have been possible to defraud said defendant because at the date the said deed of assignment, Annex 'B' of the complaint, was made and executed, the preliminary attachment, in defendant's favor was already effected on the right of redemption over the property herein in question early as February 24, 1961, particularly on the original of TCT No. 43761 in the office of the Register of Deeds of Quezon City; c) That defendant should know or ought to know that whoever acquires the right of redemption of the said mortgagor-debtor-assignor Caridad J. Torrento subsiquent to the preliminary attachment is subject to the right of defendant as attaching creditor; d) That, as clearly appearing in the deed of assignment of the right of redemption, Annex 'B' of the complaint the assignment is subject to the rights of defendant (Dolores M. Santos, ...chanrobles virtual law library

e) That the said preliminary attachment having been ordered lifted upon the filing of a bond which was approved by the court to guaranty the payment of defendant's claim Civil Case No. 6479- CFI, Rizal and that defendant is, in fact, secured from her claim against the mortgagor-debtor-assignor Caridad J. Torrento by virtue of the bond, defendant's right as attaching creditor over the subject property covered by T.C.T. No. 48761 is thereby extinguished; and denying the averments contained in defendant-appellant's second counterclaim because their petition in G.L.R.O. Rec. No. 5795 was dismissed by the court on the ground "that there are. issues raised in the pleadings which are outside of the jurisdiction of this court, acting as a Land Registration Court, to resolve." 10 On June 9, 1961, the court. a quo issued an order granting defendant-appellant's Motion to Bring in New Parties and ordering that summons be issued to Caridad J. Torrento the Provincial Sheriff of Rizal and the Register of Deeds of Quezon City, who were made parties defendants in the case.chanrobles virtual law library On June 11, 1961, plaintiffs filed a "Motion for Summary Judgment", alleging: I. That, from the complaint, the answer with counterclaims and the answer to counterclaims filed herein, including the exhibits attached hereto, there appears no genuine issue as to any 'material fact in this ease; II. II That, other than the amounts of damages, attorney's fees, and costs, which are within the discretion of the court to fix, the determination of whether the plaintiffs are entitled to the relief sought in the complaint and, particularly, the questions of law raised by defendant's answer, can be made on the basis of those facts, together with supporting documents, alleged in pars. 1 to 14, inclusive, of the complaint; and that the said facts will likewise be the ultimate basis of this court in determining whether the defendant has a valid counterclaim against the plaintiffs and against the counterclaim-defendants Caridad J. Torrento the Register of Deeds of Quezon City, and the Provincial Sheriff of Rizal; V. That, therefore, actually the only issues raised in the answer remaining are issues of law, which should be resolved in favor of the plaintiffs. more particularly as follows: 1. Has the period of redemption expired? If so, when? If the last day for redemption was on March 10, 1961, what was the effect of the attachment of the right of redemption? xxx xxx xxx 2. Is the payment of the amount of P3,920 made by the plaintiffs to the Sheriff on March 10,. 1961 covering the purchase price and interest, without including in the redemption price the payment of the amount of the lien by virtue of the preliminary attachment effected on the right of redemption in favor of the mortgagor purchaser

and attaching creditor (herein defendant), in compliance with the requirements of Sec. 26, Rule 39, with respect to the amount to be paid as redemption price? xxx xxx xxx 3. Is it required under the provisions of Sec. 27, Rule 39 of the Rules of Court that the certificate of redemption issued by the sheriff be acknowledged or approved before a notary public or other officer authorized to take acknowledgment of conveyance of real property? xxx xxx xxx 4. Whether the certificate of redemption, Annex "C" of the complaint is registerable? xxx xxx xxx 5. Does the deed of assignment, of the mortgagor-debtor/s right of redemption, Annex '3' hereof, comply with the requirements of Section 28 (c), Rule 39? xxx xxx xxx 6. is the deed of assignment of the right of redemption of the mortgagor in favor of the plaintiffs, Annex '3' hereof, void and/or rescissible as in fraud of creditors, particularly with respect to the defendant herein as mortgagor-purchaser of the property and as attaching creditor of the right of redemption of the mortgagordebtor-assignor?" 11 On June 16, 1961, defendant Dolores M. Santos filed an opposition to the Motion for Summary Judgment, 12 on the following grounds: (1) the issues as to all the parties in the case at bar have not as yet been joined, as plaintiffs' motion for a bill of particulars"(or specifications) directed against defendant's answer and dated May 25, 1961, is still pending resolution by the court, and the persons ordered by the court to be brought in as parties-defendants, namely, Caridad J. Torrento the Provincial Sheriff of Rizal and the Register of Deeds of Quezon City, have not yet filed their answers; and (2) a reading of the various allegations in the Complaint, Answer with Counterclaims and Answer to Counterclaims will show that there are numerous issues raised which should be tried and on which evidence should be taken, being incapable of proof by mere affidavits.chanrobles virtual law library On June 30, 1961, the court a quo rendered a "Summary Judgment", that:
13

stating

... the Court finds no genuine issue as to any material fact and that the issues raised in defendants answer are purely questions of law which may be the property subject of a summary judgment, and this conclusion of the Court, becomes more

patent by defendants failure to contest the truth and genuineness of the documents attached to the motion. xxx xxx xxx In her answer with counterclaims, defendant Santos practically admits all the allegations of first in the complaint, and her allegations in her special and affirmative defenses are mere conclusions of law and are not material to the issues involved. The main issue in this case is whether or not the plaintiffs have substantially complied with the provisions of law. relative to the redemption of the real property in question, or whether or not the redemption made by the plaintiffs was valid. xxx xxx xxx Of the issues of law raised in defendant's answer, the only material issue of law relative to the validity of the redemption is the defendant's contention that there has been no valid redemption in the sense that the amount that plaintiffs, as redemptioners, should have paid must not only consist of the purchase price and interest but also the amount due on the lien by virtue of the preliminary attachment in favor of the defendant. Under the liberal construction of the rule on redemption, however, the Court believes that the plaintiffs were not strictly bound to have included the amount of said lien in the redemption price that was to be paid, although they were bound to respect the existence of such lien, because certainly the attachment issued in the aforesaid Civil Case No. 6479 could not have been so issued to prevent or defeat the right of redemption but rather was issued merely to secure the satisfaction of a judgment that may be rendered in said case in favor of the mortgage creditor. The Court, therefore, holds that the amount of P3,920.00 paid on March 10, 1961 by the plaintiffs as redemption price of the property in question was in accordance with law, and the fact that the attachment was ordered lifted and dissolved upon the filing of a bond approved by the Court on March 11, 1961 after the right of redemption was exercised, the lien over the property was thereby extinguished.chanrobles virtual law library Defendant Santos also raised other questions of law as to the alleged defect of the certificate of redemption which was not acknowledged before a Notary Public, and the failure of the deed of assignment of right to redeem to comply with the requirements of the Rule. The requirement that the certificate of redemption be acknowledged or ratified before a Notary Public is only for the purpose of registration, but failure to comply with the same could not be a 'valid ground to invalidate the redemption. The validity of a redemption lies on the existence of the right to redeem, the amount to be paid, and the date of payment which must be made within the period provided for by law. As to the defendant's contention that the deed of assignment does not comply with the requirements of Sec. 28 (c), Rule 39, the fact remains that the plaintiffs have exercised the right of redemption as successors-in-interest by virtue of the assignment and, as such, it is enough for them to have presented the said deed as required by sub-paragraph (b), Sec. 28 of the Rule.chanrobles virtual law library

From the pleadings and the evidence as regards the first counterclaim relative to the validity of the deed of assignment, the Court is also convinced that there is no genuine issue as to any material fact. Taking the facts presented as a whole, the Court is inclined to uphold the validity of the deed of assignment, and this is more so considering the fact that the plaintiffs, 'as assignees, are creditors by themselves. Moreover, the deficiency claim of defendant Santos in the civil case referred to in the counterclaim is now secured by a bond which was duly approved by the Court where said case is pending. Consequently, there could be no possible damage or prejudice that the defendant Santos may suffer. Our Supreme Court, in the case of Enage v. Vda. de Hijos F. Escano, 38 Phil. 657 laid down the doctrine that a 'liberal construction will be given to statutes governing the redemption of property; that when a judgment creditor permits the debtor's land to be sold for less than it is worth, he exposes himself to the risk of the loss of the surplus value by the assignment of the right of redemption or its exercise by another creditor; that redemption are looked upon with favor, and, where no injury is to follow, a liberal construction will be given our redemption laws, to the end that the property of the debtor may pay as many of debtor's liabilities as possible.' Therefore, to uphold the validity of the redemption would not cause any injury to the defendant Santos because at any rate 'the deficiency claim of the latter against counterclaim defendant Torrento was secured by a bond approved by the Court.chanrobles virtual law library IN VIEW OF ALL THE FOREGOING, summary judgment is hereby rendered in favor of the plaintiffs and against the defendant, as follows: a) Confirming the rights and ownership of the plaintiffs, as successors-in-interest of the mortgage debtor Caridad J. Torrento, over the parcel of land covered by Transfer Certificate of title No. 43761 of the Register of Deeds of Quezon City by virtue of the legal exercise of the right of redemption by the plaintiffs, which redemption is hereby declared valid; b) Ordering the defendant to deliver to the plaintiffs the ion and ownership of the duplicate of Transfer Certificate of Title No. 43761; c) Dismissing the counterclaims of defendant; and, d) Ordering the defendant to pay the costs. On July 13, 1961, defendant-appellant Dolores M. Santos, after receipt of the above Summary Judgment, filed her Record on Appeal, Notice of Appeal and Appeal Bond. On August 2, 1961, plaintiffs filed a Motion for Immediate Execution of the Summary Judgment, which motion was op by defendant-appellant on August 5, 1961.chanrobles virtual law library On August 16, 1961, defendant-appellant Dolores M. Santos filed a Motion for Reconsideration of the summary judgment, after leave of court therefor had been obtained. This was denied by the 'lower court in its order dated October 2, 1961. A second motion for reconsideration was likewise denied on October 14, 1961. On

March 24, 1962, the court a quo approved defendant-appellant's Record on Appeal and ordered the transmittal of the records of the case to the Court of Appeals. As afore-mentioned, the Court of Appeals certified the case to the Court on the ground that it involves the purely legal question of whether or not summary judgment had been properly rendered by the court of origin. I The purpose of Rule 34 of the Revised Rules is to eliminate trial in those cases where there is no genuine issue of fact, since a trial under such circumstances is unnecessary and results in delay and expense which may operate to defeat in whole or in part the recovery of a just claim. As explained by Moore, 14 'The very object of a motion for summary judgment is to separate what is formal or pretended in denial or averment from what is genuine and substantial, so that only the latter may subject a suitor to the burden of a trial. To attain this end, the rule permits a party to pierce the allegations of fact in the pleadings and to obtain relief by summary judgment where facts set forth in detail in affidavits, depositions, and admissions on file show that there are no genuine issues of facts to be tried. The court is authorized to examine evidence, not for the purpose of trying an issue but to determine whether there is a genuine issue of fact proper for trial.'" We have examined the pleadings and the affidavits as well as other documents attached thereto, and We find that there is no genuine issue of fact. It is true that appellant Dolores M. Santos asserted that the deed of assignment of the right to redeem of March 1, 1961 was simulated and fictitious, but said party was unable to serve upon the other party any affidavit or other proof to overcome the probative weight of the public documents submitted by appellees in support of the assignment. In any event, the transfer made by Caridad J. Torrento of her right of redemption could not, in any manner, legally affect appellant Dolores M. Santos, nor cause her damage. As We held in a previous case, if such transfer of the right of redemption "has not caused him any damage, it matters not to him whether same was, or was not, fraudulently executed." 15 Basically, the only issue then in the aforesaid Civil Case No. Q-5794 was whether or not plaintiff-appellee Matilda J. Gorospe had validly made the redemption of the aforesaid property on March 10, 1961. This is a question purely of law. In short, "there is no genuine issue as to any material fact and ... the moving party" was "entitled to a judgment as a matter of law," 16so that the lower court properly rendered a summary judgment.chanrobles virtual law library Appellant likewise contends that issues have not been joined in so far as Caridad J. Torrento, the Provincial Sheriff of Rizal and the Register of Deeds who were ordered to be brought in as parties defendant, are concerned, for the reason that they have not as yet filed their answers. Let it be noted that Caridad J. Torrento adopted plaintiffs-appellees' answer to defendant-appellant's counterclaim as her own. The claim against the Sheriff and Register of Deeds. of Quezon City is exclusively against them and any answer of said officials could not be relevant to the resolution of the basic issue which is the validity of the redemption. Indeed, plaintiffs-

appellees are not bound to wait for these persons to file their answer which, anyway, are not material to their claim. Under the Rules, plaintiffs-appellees may file a motion for summary judgment "at any time after the pleading in answer" to their claim had been served. II Having disposed of this procedural point, We now turn to the basic legal issuewhether or not the plaintiffs-appellees have complied with the requirements of the law relative to the redemption of the real property in question.chanrobles virtual law library There is no question that Caridad J. Torrento had a perfect right to redeem said property in view of the provisions of Section 6 of Act No. 3135, as amended by Act No. 4148, which provides as follows: Section 6. In all cases in which an extra-judicial sale is made under the special power hereinbefore referred to, the debtor, his successors-in-interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of the sale, and such redemption shall be governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent with the provisions of this Act. The right of redemption provided for by the aforequoted provision, like any other property right, may be transferred or assigned by its owner. 17The transferee of such right stands in the position of a successor-in-interest of the mortgagor within the purview of Section 29 of Rule 39 of the Rules of Court, which states: SEC. 29. Who may redeem real property so sold. - Real property sold as provided in the last preceding section, or any part thereof sold separately, may be redeemed in the manner hereinafter provided by the following persons: (a) The judgment debtor, or his successor in interest in the whole or any part of the property; xxx xxx xxx This latter provision, which ordinarily refers to redemptions of real property sold on execution of judgments, is likewise applicable to redemption of real property sold on extra-judicial foreclosure of mortgage, by virtue of the afore-mentioned Section 6 of Act No. 3135, as amended, which states that "such redemption shall be governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent with the provisions of this Act." Sections 464, 465 and 466 of the Code

of Civil Procedure are now embodied in Sections 29, 30 and 31 of Rule 39 of the Rules of Court.chanrobles virtual law library We held in Magno v. Viola 18 that the term "successor-in-interest' includes one to whom the debtor has transferred his statutory right of redemption; or one to whom the debtor has conveyed his interest in the property for the purpose of redemption; or one who succeeds to the interest of the debtor by operation of law; or one or more joint debtors who were not owners of the property sold;. or the wife as regards her husband's homestead by reason of the fact that some portion of her husband's title passes to her. There is no question, therefore, that plaintiff-appellee Matilda J. Gorospe is a "successor-in-interest" of the debtor Caridad J. Torrento and as such could exercise the right to redeem the property at any time within the period provided by law.chanrobles virtual law library Appellant, nevertheless, insists that the redemption was made "at a mere fraction of the mortgage debt, one day after the expiration of the right to redeem." Apparently, appellant is of the view that the redemption should have been made on or before March 10, 1961, or within one year from the date of the Sheriff's sale. Time and again, this Court has held that in cases of redemption of registered land, the period should be reckoned from the date the certificate of sale of the property involved was registered, since it is only from the date of its registration that a certificate of sale takes effect as a conveyance. 19 The purpose of the rule is to notify the delinquent registered owners or third parties interested in the redemption that the property had been sold, and that they have one year from the time of constructive notice by means of registration within which to redeem the property, if they wish to do so. 20 In the case at bar, registration of the certificate of sale in favor of the purchaser at public auction was e only on October 20, 1960. Appellee Matilda J. Gorospe had, therefore, a period of one year from that date within which to exercise the right of redemption assigned to her by Caridad J. Torrento. The redemption having been made on March 10, 1961, it is evident that the same had been timely made.chanrobles virtual law library Equally without merit is appellant's contention that appellees should have paid not only the amount of the purchase price, with interest, but also the amount of the deficiency which is the subject matter of Civil Case No. 6479. In redeeming the property from the purchaser, the judgment debtor must pay the amount of the purchase with one per centum per month interest thereon, up to the time of redemption and the amount of any assessments or taxes which the purchaser may have paid thereon after purchase, and interest on the- last named amount at the same rate. Appellee Matilda J. Gorospe cannot be required to pay a greater amount than that imposed upon the judgment debtor. The reason is that, this assignee of such right, the assignee is subrogated to the position of the debtor-mortgagor and is bound by exactly the same conditions that bound the assignor. If the mortgagor, Caridad J. Torrento herself, has offered to redeem the property sold on foreclosure, it would have been untenable for the purchaser at public auction to have refused to resell to her the property on the ground that the total amount of the debt had not

been completely paid by her part from the fact that the matter of deficiency is the subject of another case (Civil Case No. 6479), it should be noted that the portion of Section 30 of Rule 39 invoked by appellant is not relevant to the case at bar. Certainly, defendant-appellant cannot be considered a "purchaser who is a creditor having a prior lien to that of the redemptioner, other than the judgment under which such purchase was made ..." within the meaning and intendment of the Rule. It is not applicable to defendant-appellant because she claims a lien precisely arising from the extra-judicial foreclosure of the mortgage (which is equivalent to the judgment in case of execution of judgment) pursuant to which she purchased said properties. 21Consequently, Matilda J. Gorospe, as successor-in-interest of the debtor, was bound to pay to the appellant only the amount of the purchase price with the corresponding interest. 22 The last issue to be disposed of is whether or not the preliminary attachment on the right of redemption, effected in favor of Dolores M. Santos in Civil Case No. 6479, adversely affected the redemption me by Matilda J. Gorospe. The preliminary attachment in question was lifted on March 11, 1961, on motion of Caridad J. Torrento, defendant in Civil Case No. 6479, and upon the filing of a bond. For all intents and purposes, the bond so filed takes the place of the property released from attachment, and secures to Dolores M. Santos the payment of whatever amount may be adjudged in her favor in said case. We do not decide herein the issue of whether or not a preliminary attachment of the right to redeem may be validly effected in favor of a mortgagee at whose instance the foreclosure sale was had, in order to secure the payment of a deficiency. 23 It would be unnecessary for Us to do so, considering that the preliminary attachment has been lifted. It is sufficient to say that appellant has no more, right, if she had any to begin with, over the right of redemption exercised by Matilda J. Gorospe.chanrobles virtual law library In a last attempt to repudiate the redemption made by plaintiff-appellee Matilda J. Gorospe, appellant assails the validity of the certificate of redemption issued by the Sheriff on the ground that the same had not been acknowledged before a Notary Public or other officer authorized to take acknowledgments of conveyances of real property. On this point, We agree with the court a quo that this omission is not sufficient cause for the nullification of the redemption. This requirement is only necessary for purposes of registering the deed.chanrobles virtual law library In passing, let it be noted that, notwithstanding that in the case at bar, the parties have, in their respective memoranda, primarily discussed only the issue with respect to the propriety of the rendition of the summary judgment, this Court has deemed it necessary to dispose of the substantive legal issues as well, in order to expeditiously and finally settle the rights of the parties herein. Those questions were raised in the court a quo and are of record, having some bearing on the issue submitted. 24 There is no question that this Court is empowered the review matters which are not specifically assigned as errors on appeal, when their consideration is necessary in arriving at a just decision of the case. 25

WHEREFORE, the decision of the court a quo is hereby affirmed, and defendantappellant Dolores M. Santos is hereby ordered to deliver to plaintiffs-appellees the Owner's Duplicate of Transfer Certificate of Title No. 43761. Costs against defendant-appellant. Fernando, (Chairman), Barredo, Aquino and Concepcion, Jr., JJ., concur.

Lonzame v. Amores, 134 SCRA 386 Pedro Lonzame vs Hon. Augusto Amores, G.R. No. L-53620 January 31, 1985 Facts: Eufemia Blones, owner of Lot No. 19, sold a parcel of that lot denominated under subdivision plan as Lot 19-A to respondent spouses (Flores), with the agreement that upon full payment, Blones would cause to be issued a separate title over Lot 19-A under the name of the vendee spouses. The contract of sale, however, was not registered in the Register of Deeds. Blones then obtained a loan from Patrocinio Trinidad and as security, she mortgaged the whole Lot 19, including the lot sold to Spouses Flores. Upon learning of the mortgage, Flores filed an action against Blones and the mortgagee to declare null and void the mortgage, and to compel Blones to accept P12,000.00 as purchase price for Lot No. 19-A. Meanwhile, Blones failed to pay the loan so the mortgagee filed a cross-claim against Blones in the same case. The CFI rendered judgement ordering Blones to accept the balance of the purchase price and register Lot 19-A under the name of the Spouses Flores but subject to the real estate mortgage. The court also ordered Blones to pay the loan obligation within 90 days and in default of such payment, Lot 19 be sold to cover for the obligation. Blones defaulted, so a writ of execution was issued ordering the public auction of Lot 19, including 19-A. Petitioner Lonzame was the highest bidder in the auction sale. Flores tendered payment to Lonzame for the balance of the purchase price of Lot 19-A but Lonzame refused. Flores then filed an "Amended Motion for Execution and/or for Contempt of Court" before the same court praying that Lonzame be compelled to accept the purchase price. The court ruled favorably and ordered Lonzame to accept the payment. Lonzame filed a motion for reconsideration but was denied. Hence, this petition. Issues: Whether or not petitioner is a successor-in-interest of Blones in order to be compelled to receive payment of purchase price under the contract of sale

Ruling: Petitioner should not be compelled to receive the balance of the purchase price of Lot 19-A. Petitioner can in no way be considered a successor-in-interest of Blones since the judicial sale divested the parties their rights in the property and vested the rights in the purchaser. Likewise, petitioner can not be bound by the deed of sale which was not annotated in the title of the lot he purchased at the sale by public auction by virtue of a judicial foreclosure of mortgage. Moreover, the Court said that the lower court had no jurisdiction to order petitioner to accept payment since the decision had long become final and executory and can no longer be modified.