UBP vs CA (CREDIT TRANSACTIONS-mortgage)

 

Union Bank of the Philippines vs CA 

GR No. 134068

June 25, 2001

DOCTRINE: The one-year period is actually to be reckoned from the date of the registration of the sale. The one-year period to redeem the property foreclosed is not suspended by the institution of an action to annul the foreclosure sale 

FACTS: 

On March 2, 1990, respondents-spouses Gonzalo and Trinidad Vincoy mortgaged their residence in favor of petitioner to secure the payment of a loan to Delco Industries (Phils.), Incorporated in the amount of Two Million Pesos (P2,000,000.00). For failure of the respondents to pay the loan at its date of maturity, petitioner extrajudicially foreclosured the mortgage and scheduled the foreclosure sale on April 10, 1991. The petitioner submitted the highest bid at the foreclosure sale. Prior to the expiration of the redemption period on May 8, 1992, the respondents filed a complaint for annulment of mortgage with the lower court. In their complaint, respondents alleged that the subject property mortgaged to petitioner had in fact been constituted as a family home RTC rendered judgment declaring the constitution of the family home void and the mortgage executed in favor of the petitioner valid. Court of Appeals upheld the validity of the mortgage executed over the said property in favor of the petitioner. 

ISSUE: 

Whether or not the filing of action for annulment of the mortgage tolled the running of the oneyear period of redemption 

HELD: 

No It cannot also be argued that the action for annulment of the mortgage filed by the respondents tolled the running of the one-year period of redemption. In the case of Sumerariz v. Development Bank of the Philippines, petitioners therein contended that the one-year period to redeem the property foreclosed by respondent was suspended by the institution of an action to annul the foreclosure sale filed three (3) days before the expiration of the period. To this we ruled that: "We have not found, however, any statute or decision in support of this pretense. Moreover, up to now plaintiffs have not exercised the right of redemption. Indeed, although they have intimated their wish to redeem the property in question, they have not deposited the amount necessary therefor. It may not be amiss to note that, unlike Section 30 of Rule 39 of the Rules of Court, which permits the extension of the period of redemption of mortgaged properties, Section 3 of Commonwealth Act No. 459, in relation to Section 9 of Republic Act No. 85, which governs the redemption of property mortgaged to the Bank does no contain a similar provision. Again this question has been definitely settled by the previous case declaring that plaintiff's right of redemption has already been extinguished in view of their failure to exercise it within the statutory period." Also, in the more recent case of Vaca v. Court of Appeals, we declared that the pendency of an action questioning the validity of a mortgage cannot bar the issuance of the writ of possession after title to the property has been consolidated in the mortgagee. The implication is clear: the period of redemption is not interrupted by the filing of an action assailing the validity of the mortgage, so that at the expiration thereof, the mortgagee who acquires the property at the foreclosure sale can proceed to have the title consolidated in his name and a writ of possession issued in his favor.

Samanilla vs Cajucom et.al. (CREDIT TRANSACTIONS- mortgage)

 

Paz Samanilla vs. Cenen A. Cajucom, et al., 

G.R. No. L-13683, March 28, 1960 

(107  Phil 432)

 

Facts: 

The Cajucoms had executed in Samanilla’s favor, on December 20, 1955, a real estate mortgage over their rights and participation on the parcel of land covered by Original Certificate of Title No. O-966 to secure a loan of P10,000. Sometime in February, 1956, the Cajucoms borrowed the title from her on the excuse that  they needed it to segregate from the land the portion claimed by other persons. Thereafter, Samanilla asked for the return of the title so that she could register her mortgage, but the Cajucoms refused.

Samanilla filed a petition against the Cajucoms. They opposed the petition, claiming that the mortgage in question was void ab initio for want of consideration, and that the issues should be litigated in an ordinary civil action. The court found the petition well-taken and ordered the Cajucoms to surrender their title  either  to  the Register of Deeds or to the Court. From this order, the Cajucoms appealed.

 

Issue: 

Whether a mortgage which has not been registered is valid.

 

Held: 

Yes. Affirmed.

 

Ratio: 

The appeal has no merit. Appellants' sole objection to the registration of the deed of mortgage is that the same was executed without any consideration. But there is a legal presumption of sufficient cause or consideration supporting a contract, even if such cause is not stated therein. This presumption appellants cannot overcome by a simple assertion of lack of consideration. Especially may not the presumption be so lightly set aside when the contract itself states that consideration was given, and the same has been reduced into a public instrument with all due formalities and solemnities as in this case. Appellants assert that they cannot be compelled  to surrender their title for registration of the mortgage in question until they are given an opportunity to show its invalidity in an ordinary civil action, because registration is an essential element of a real estate mortgage and the surrender of their title would complete this  requirement of registration. The argument is fallacious, for a mortgage, whether registered or not, is binding between the parties, registration being necessary  only  to  make  the  same valid against third persons (Art. 2125, New Civil Code). In other words, registration only operates as a notice of the mortgage to others, but neither adds to its validity nor convert an invalid mortgage into a valid one between the parties. Appellants still have the right to show that the mortgage in question is invalid for lack  of  consideration in an ordinary action and there ask for the  avoidance of the deed and the cancellation of its registration. But until such action is filed and decided, it would be too dangerous to the rights of the mortgagee to deny registration of her mortgage, because her rights can so easily be defeated by  a transfer or conveyance of the mortgaged property to an innocent third person.

If the purpose of registration is merely to give notice, the questions regarding the effect or invalidity of instruments are expected  to  be  decided  after,  not  before, registration. It must follow as a necessary consequence that registration must first be allowed and validity or effect litigated afterwards.