GR 45046; (November, 1938) (Digest)
G.R. No. 45046 ; November 23, 1938
PEOPLES BANK AND TRUST CO., plaintiff-appellee, vs. MANUEL OLONDRIZ ET AL., defendants-appellants.
FACTS
Carlos M. Olondriz, during his lifetime, mortgaged a parcel of abaca land (conjugal property) to Juan B. Alegre to secure a debt of P14,000. After the mortgage was constituted, the land was registered under Original Certificate of Title No. 679, with one-half in the name of Carlos M. Olondriz and the other half in the names of his children (the appellants). The title noted the existing mortgage in favor of Alegre. Juan B. Alegre later assigned the mortgage credit to Peoples Bank and Trust Co. Carlos M. Olondriz died, and his debt increased to P15,400. The bank demanded payment and, upon failure, filed for foreclosure. The trial court ordered the foreclosure of the entire property and held the children, as co-heirs, jointly liable with the estate for the debt.
ISSUE
1. Whether the appellants (children) were entitled to notification of the assignment of the mortgage credit.
2. Whether the entire mortgaged property, including the half adjudicated to the children, may be foreclosed to satisfy the mortgage debt.
RULING
1. No. The mortgage was executed solely by Carlos M. Olondriz as administrator of the conjugal partnership. He was the only mortgage debtor. The subsequent adjudication of half of the property to his children did not make them parties to the mortgage contract. Therefore, only Carlos M. Olondriz (or his estate) was entitled to notification of the assignment under section 152 of the Mortgage Law.
2. Yes. The husband, as legal administrator of the conjugal property, had the power to mortgage it. The obligation constituted a lien on the entire property. The later acquisition of ownership by the children of an undivided half did not extinguish the mortgage lien on that portion. The entire property remains liable for the mortgage debt. However, the court modified the amount recoverable under the mortgage to the original secured sum of P14,000 (plus stipulated interest and attorney’s fees), not the increased balance of P15,400. The appealed judgment was affirmed with this modification.
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