GR L 11932; (January, 1959) (Digest)
G.R. No. L-11932; January 30, 1959
ASSOCIATED INSURANCE & SURETY CO., INC., petitioner-appellant, vs. REGISTER OF DEEDS OF PAMPANGA, respondent-appellee.
FACTS
On May 19, 1956, the Court of First Instance of Manila issued a writ of execution to enforce a money judgment in Civil Case No. 26035 in favor of Associated Insurance & Surety Co., Inc. against Jose L. Manuel, et al. The Provincial Sheriff of Pampanga filed a notice of levy with the Register of Deeds on a property of defendant Pedro Barin, covered by Transfer Certificate of Title No. 11449. The notice stated the levy would be subordinated to a pre-existing mortgage lien in favor of the Rehabilitation Finance Corporation (RFC). The Register of Deeds refused to register the levy, citing Section 26 of Commonwealth Act No. 459 , which prohibits the attachment of property mortgaged to the defunct Agricultural and Industrial Bank (succeeded by the RFC) unless the bank’s debt is fully paid. The judgment creditor elevated the matter via consulta to the Land Registration Commission, which upheld the Register of Deeds’ ruling. The judgment creditor appealed.
ISSUE
Whether a property mortgaged to the Rehabilitation Finance Corporation (as successor to the Agricultural and Industrial Bank) can be levied upon execution pursuant to a court judgment, prior to the full payment of the mortgage debt.
RULING
The Supreme Court affirmed the resolution of the Land Registration Commission. The Court held that Section 26 of Commonwealth Act No. 459 explicitly provides that securities on loans granted by the Agricultural and Industrial Bank (succeeded by the RFC under Republic Act No. 85 ) are not subject to attachment unless all debts, interest, and charges to the bank are first paid. The term “attachment” in the law embraces levy on execution or any other encumbrance. This exemption is intended to protect the government’s investment by maintaining the property’s value unimpaired until the mortgage is released. While Section 12, Rule 39 of the Rules of Court enumerates properties exempt from execution, it contains the qualification “except as otherwise expressly provided by law.” Section 26 of Commonwealth Act No. 459 constitutes such an express legal exemption. Therefore, the Register of Deeds correctly refused to register the levy. The appealed resolution was affirmed.