G.R. No. 32260 , December 29, 1930
THE PHILIPPINE NATIONAL BANK vs. PABLO ROCHA, et al.

FACTS

The Philippine National Bank (PNB) filed an action to foreclose a mortgage executed by Pablo Rocha over certain parcels of land. Magin Riosa and Consolacion Riosa intervened as third-party claimants, asserting a reservable right (reserva troncal) over the property. The land originally belonged to Mariano Riosa, who willed it to his son Jose Riosa. Upon Jose’s death, his mother Maria Corral inherited it. However, under the doctrine of reserva troncal, the property was reservable in favor of relatives within the third degree from the line of originhere, Magin and Consolacion Riosa (grandchildren of Mariano Riosa). Before the property was adjudicated to Maria Corral, she sold it to Marcelina Casas, who then sold it to Pablo Rocha. Rocha mortgaged the land to PNB. After Maria Corral’s death, the reservable right vested absolutely in Magin and Consolacion Riosa. The trial court ordered the property sold subject to the reservable right, but all parties appealed.

ISSUE

1. Whether the mortgage executed by Pablo Rocha in favor of PNB is valid despite the reserva troncal encumbrance.
2. Whether the property can be sold to satisfy Rocha’s debt to PNB after Maria Corral’s death.
3. Whether Consolacion Riosa is estopped from claiming the reservable right.
4. Whether Magin and Consolacion Riosa must reimburse PNB for land taxes paid on the property.

RULING

1. The mortgage is not valid as an absolute encumbrance. When Rocha mortgaged the property, he was not yet the owner, as Maria Corral’s title was still subject to the pending reserva troncal. Although subsequent adjudication to Maria Corral ratified the prior transactions, the property remained reservable. Thus, the mortgage could only be subject to the reservable right in favor of Magin and Consolacion Riosa.
2. The property cannot be sold to satisfy Rocha’s debt. Upon Maria Corral’s death, the reservable property passed in full and absolute ownership to Magin and Consolacion Riosa. Consequently, it is no longer liable for Rocha’s personal debt to PNB.
3. Consolacion Riosa is not estopped. Her alleged opposition in a prior case (Riosa vs. Rocha) was unauthorized and uncontradicted. Moreover, she was included in that case precisely to have the reservable right recognized in her favor. The claim that she shared in the loan proceeds was disproved by evidence showing she received the amount as a deposit and returned it to Maria Corral.
4. Magin and Consolacion Riosa must reimburse PNB for land taxes. PNB paid P2,698.22 in land taxes to prevent forfeiture, which benefited the property. The intervenors are liable to reimburse this sum, which constitutes a lien on the property.

The appealed judgment was modified: The mortgaged property cannot be sold to satisfy Rocha’s debt. Magin and Consolacion Riosa are ordered to reimburse PNB for the land taxes paid, with such obligation as a lien on the property. No costs awarded.