G.R. No. 31588 , January 31, 1930
TAN DE JUA, plaintiff-appellant, vs. J. M. PO PAOCO, ET AL., defendants-appellees.

FACTS

Tan De Jua lent money to Tan Jongco, secured by a registered mortgage on Jongco’s property. Later, Po Paoco obtained a judgment against Jongco and, pending appeal, levied execution on the same mortgaged property. Tan De Jua intervened to assert his mortgage rights. Po Paoco posted an indemnity bond, and the sheriff proceeded to sell the property at public auction, with Po Paoco and Montelibano as purchasers. Tan De Jua then sued Po Paoco, Jongco, the sureties, and the sheriff, claiming they destroyed his security by selling the mortgaged property, making them jointly liable for his debt. Subsequently, the judgment in favor of Po Paoco was reversed by the Supreme Court, nullifying any title acquired from the execution sale.

ISSUE

Whether Tan De Jua can recover damages from the defendants for the alleged impairment of his mortgage security due to the execution sale.

RULING

No. The Court affirmed the trial court’s dismissal of the complaint. An execution creditor who levies on mortgaged property sells only the mortgagor’s equity of redemption; it does not affect the mortgagee’s prior lien. The plaintiff’s mortgage rights remained intact and superior to any claims from the execution sale. The proper remedy for Tan De Jua is to foreclose his mortgage against Tan Jongco, not to seek damages from the execution creditor, sureties, or sheriff. The reversal of Po Paoco’s judgment further weakened any claim of injury. The decision is without prejudice to Tan De Jua’s right to foreclose his mortgage.