G.R. No. 37206. September 22, 1933.
CU UNJIENG E HIJOS, plaintiffs-appellees, vs. THE MABALACAT SUGAR COMPANY, ET AL., defendants. THE MABALACAT SUGAR COMPANY, appellant.

FACTS

Plaintiffs-appellees, Cu Unjieng e Hijos, obtained a judgment for the foreclosure of a mortgage on the properties of defendant-appellant, The Mabalacat Sugar Company. The mortgaged properties, which included a sugar central, were placed under receivership during the pendency of the foreclosure suit. The sheriff sold the properties at public auction pursuant to a writ of execution. The Mabalacat Sugar Company appealed the trial court’s order confirming the sale, alleging irregularities, including: (1) the sale was improper while the properties were under receivership and before the receiver’s accounts were finally approved; (2) the sheriff included machinery and accessories not covered by the mortgage or the notice of sale; (3) the sale price was grossly inadequate; and (4) the sheriff sold the properties as a whole instead of piecemeal.

ISSUE

1. Whether a court can order the sale of mortgaged properties at public auction while they are under receivership and before final approval of the receiver’s accounts.
2. Whether machinery and accessories installed in the sugar central after the mortgage was constituted are included in the mortgage and the notice of sale.
3. Whether an inadequate sale price alone justifies the annulment of the sale.
4. Whether the sheriff committed an irregularity by selling the sugar central as an entirety instead of by lots.

RULING

1. Yes. The court that ordered the receivership has jurisdiction to order the sale of the same mortgaged properties even before the termination of the receivership. The purpose of the receivership is to preserve the properties and secure their income. There is no conflict of jurisdiction as the same court issued both orders.
2. Yes. The mortgage, constituted on the sugar central, included all buildings, improvements, and machinery, whether existing at the time of the mortgage or installed later, as stipulated. Under Article 1877 of the Civil Code, a mortgage includes all natural accessions and improvements. Following Bischoff vs. Pomar, machinery permanently attached to a mortgaged estate is included in the mortgage unless expressly excluded. The notice of sale, stating the sale of all properties of the sugar central, also encompassed the machinery under the principle that the accessory follows the principal.
3. No. The mere inadequacy of the sale price is not, by itself, sufficient to annul the sale, especially where no higher bidder was ready to offer a greater amount at the time or after the sale.
4. No. Selling a sugar central as an entirety is the most advantageous method, as selling it piecemeal would cause its components to lose their intrinsic value and fetch only second-hand prices.

The order confirming the sheriff’s sale is affirmed.

AI Generated by Armztrong.