G.R. No. 41701 ; August 9, 1935
ANTONIO DE LA RIVA, plaintiff-appellee, vs. MARCELIANO REYNOSO, defendant-appellant. LA URBANA, MUTUAL BUILDING AND LOAN ASSOCIATION, defendant-appellee.

FACTS

Plaintiff Antonio de la Riva filed an action to foreclose a second real estate mortgage executed by defendant Marceliano Reynoso. De la Riva joined La Urbana, Mutual Building and Loan Association as a co-defendant because it held a first mortgage on the same property. The trial court ordered Reynoso to pay both mortgage debts and decreed the foreclosure sale if he failed to pay. Reynoso appealed, contending that La Urbana, as the first mortgagee, was improperly joined as a defendant. Reynoso died during the proceedings, and his judicial administrator continued the appeal only against La Urbana, arguing misjoinder and questioning the validity of the first mortgage.

ISSUE

1. Whether a second mortgagee, in a foreclosure suit, can properly join the first mortgagee as a defendant.
2. Whether the first mortgage executed by Reynoso in favor of La Urbana was valid.

RULING

1. Yes. The Court held that while Section 255 of the Code of Civil Procedure only requires the joinder of parties with subordinate interests, it does not prohibit the joinder of a first mortgagee. Such joinder is permissible, especially when done with the first mortgagee’s consent, as in this case, and when the obligation secured by the first mortgage is already due and payable.
2. Yes. The Court found the first mortgage valid. The evidence showed Reynoso’s attorney-in-fact applied for the loan, and Reynoso himself signed the mortgage deed with full knowledge of its contents. His claim of ignorance was unmeritorious. Consequently, his cross-complaint seeking to recharacterize the transaction as a contract of sale on installments also failed.
The appealed judgment was affirmed.

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