G.R. No. L-45597; April 29, 1939
MACARIA PASCUAL, RAFAEL PASCUAL and TIMOTEA PASCUAL, plaintiffs-appellees, vs. LORENZA RAMIREZ, ET AL., defendants. LUNETA MOTOR CO., INC., appellant.

FACTS

Plaintiffs, heirs of Esteban Pascual, filed an action to foreclose a mortgage on a parcel of land executed by Lorenza Ramirez in favor of Esteban Pascual on March 22, 1926. This mortgage was never registered in the Register of Deeds. The land was later adjudicated to Ramirez in a cadastral case on July 5, 1928, subject to the mortgage in favor of Pascual, and the decree issued on June 17, 1930, explicitly annotated that the lot was subject to that mortgage. Meanwhile, Ramirez also mortgaged the same lot to Luneta Motor Company on August 30, 1926, which later foreclosed and purchased the property. The lot was also sold at an execution sale to E. G. Turner. Neither Luneta Motor Company nor Turner filed their claims in the cadastral proceedings prior to the issuance of the decree. The trial court ruled in favor of the Pascual heirs, holding their right superior.

ISSUE

Whether the unregistered mortgage in favor of Esteban Pascual, as annotated in the cadastral decree, has priority over the subsequent mortgage and claims of Luneta Motor Company.

RULING

Yes. The Supreme Court affirmed the trial court’s judgment. The cadastral decree issued in favor of Lorenza Ramirez, which annotated the mortgage in favor of Esteban Pascual as an encumbrance, quieted title to the land and is binding against all parties, including those with interests who did not appear in the proceedings. The declaration in the decree that the lot was subject to Pascual’s mortgage constitutes res judicata and fixes the character of that lien as a mortgage, regardless of its non-registration in the Register of Deeds. Consequently, the mortgage lien of the Pascual heirs is superior to that of Luneta Motor Company.

AI Generated by Armztrong.