GR L 49576; (November, 1991) (Digest)
G.R. No. L-49576 November 21, 1991
JOSEFINA B. CENAS and THE PROVINCIAL SHERIFF OF RIZAL, petitioners, vs. SPS. ANTONIO P. SANTOS and DRA. ROSARIO M. SANTOS and HON. PEDRO C. NAVARRO, Presiding Judge, CFI-Rizal, Br. III, respondents.
FACTS
Spouses Pulido mortgaged their land to Pasay City Savings and Loan Association, Inc. to secure a loan. Subsequently, the same property was levied upon and sold at a public execution sale to satisfy a judgment debt of Iluminada Pulido. Petitioner Josefina B. Cenas was the highest bidder. Later, the mortgagee bank assigned its mortgage rights to Cenas, making her both the execution sale purchaser and the mortgage assignee. Private respondent Dra. Rosario M. Santos, as assignee of the judgment debtor’s right of redemption, redeemed the property from the execution sale by paying the redemption price to the sheriff, who issued a Certificate of Redemption.
ISSUE
Whether the redemption of the property from the execution sale extinguished the pre-existing real estate mortgage on the same property.
RULING
No, the redemption did not extinguish the mortgage. The Supreme Court reversed the trial court’s decision that enjoined the foreclosure. A mortgage constitutes a real right (jus in re) that follows the property regardless of subsequent transfers, enforceable against the whole world under Article 2126 of the Civil Code. The registration of the mortgage created a lien superior to any subsequent claim, including the execution sale and the redemption stemming from it. Private respondents, by redeeming the property as “successors in interest” to the judgment debtor, were subrogated to the debtor’s position and thus assumed the obligation to pay the mortgage debt. The act of redemption merely replaced the execution purchaser; it did not clear the title of prior registered encumbrances. However, for equitable reasons, the Court ordered that foreclosure may proceed only after affording private respondents a thirty-day period from the finality of the decision to settle the mortgage obligation, including interest and legal expenses.