FORECLOSURE

PATRICIA CABRIETO DELA TORRE, VS. PRIMETOWN PROPERTY GROUP, INC.,

G.R. NO. 221932. FEBRUARY 14, 2018, PERALTA, J.

FACTS:
Petitioner Patricia Cabrieto dela Torre filed a Motion for Leave to Intervene seeking judicial
order for specific performance, i.e., for respondent to execute in her favor a deed of sale covering
Unit 3306, Makati Prime Citadel Condominium which she bought from the former as she had
allegedly fully paid the purchase price. Respondent opposed the motion arguing that it was filed
out of time considering that the Stay Order was issued on August 15, 2003 and under the Interim
Rules of Procedure on Corporate Rehabilitation, any claimants and creditors shall file their claim
before the rehabilitation court not later than ten (10) days before the date of the initial hearing;
and that since the Stay Order was issued on August 15, 2003 and the publication thereof was
done in September 2003 with the initial hearing on the petition set on September 24 2003, the
motion for intervention should have been filed on or before September 14, 2003.

ISSUE:
Whether or not petitioner's claim against respondent is suspended by the issuance of the Stay
Order.

RULING:
The RTC had issued a Stay Order on August 15, 2003 providing, among others, that by virtue of
the authority of the Court under Section 6 of the Interim Rules of Procedure on Corporate
Rehabilitation, it is ordered that enforcement of all claims against the petitioner, whether for
money or otherwise, and whether such enforcement is by court action or otherwise, its guarantors
or sureties not solidarity, liable with the petitioner, be stayed.

Petitioner is prohibited (a) from selling, encumbering, transferring or disposing in any manner of
any of its properties, except in the ordinary course of business and (b) from making any payment
of its liabilities, outstanding as of July 2, 2003, the date of the filing of the petition.

Clearly, while respondent is undergoing rehabilitation, the enforcement of all claims against it is
stayed. Rule 2, Section 1 of the Interim Rules defines a claim as referring to all claims or
demands of whatever nature or character against a debtor or its property, whether for money or
otherwise. The definition is all-encompassing as it refers to all actions whether for money or
otherwise. There are no distinctions or exemptions.

Petitioner's prayer in intervention for respondent to execute the deed of sale in her favor for the
condominium unit is a claim as defined under the Interim Rules which is already stayed as early
as August 15, 2003. The RTC's Order granting petitioner's intervention and directing respondent
to execute a deed of sale in her favor and to deliver the copy of the owner's duplicate copy of the
condominium certificate, with all the pertinent documents needed to effect registration of the
deed of sale and issuance of a new title in petitioner's name, is a violation of the law.
Furthermore, petitioner's ownership of the condominium unit alleging that she had fully paid the
purchase price was disputed by respondent based on their Memorandum of Agreement dated
January 20, 1997 where petitioner acknowledged that she had paid the principal obligation on the
condominium unit but had yet to pay respondent for penalty charges and interest by reason of the
delay in the payment of the monthly amortizations. Consequently, when the RTC issued the Stay
Order which suspended all claims against respondent, without distinction, petitioner's prayer for
the execution of a deed of sale is a claim covered by the Stay Order issued by the RTC. In fact,
the parties' contentions already require a full-blown trial on the merits which must be decided in
a separate action and not by the rehabilitation court.
 MA. LUISA A. PINEDA, VS. VIRGINIA ZUÑIGA VDA. DE VEGA, G.R. NO. 233774.
APRIL 10, 2019, CAGUIOA, J.

FACTS:
In her complaint, petitioner alleged that, respondent borrowed from her P500,000.00 payable
within one year with an interest rate of 8% per month. To secure the loan, respondent executed a
real estate mortgage (2003 Agreement) over a parcel of land covered by Transfer Certificate of
Title, together with all the buildings and improvements existing thereon (Property), in
petitioner's favor. On the loan's maturity, respondent failed to pay her loan despite demand. As of
May 2005, the unpaid accumulated interest amounted to P232,000.00.

In her answer, respondent denied receiving P500,000.00 from petitioner and claimed that the said
amount was the accumulated amount of another obligation she earlier secured from petitioner.

In her reply, petitioner admitted that the original loan which respondent obtained in 2000 was
only P200,000.00 with an undertaking to pay 3% interest per month.

In the written interrogatories addressed to petitioner, she admitted that the P500,000.00 indicated
in the 2003 Agreement referred to a previously executed undated real estate mortgage (undated
Agreement) between the parties which secured respondent's loan of P200,000.00 from her.

ISSUE:
Whether or not the petitioner can foreclose the mortgage.

RULING:
The RTC erred in granting petitioner's remedies or demands of collection and foreclosure of
mortgage successively. The settled rule is that these remedies of collection and foreclosure are
mutually exclusive. The invocation or grant of one remedy precludes the other.

A mortgage creditor may institute against the mortgage debtor either a personal action for debt or
a real action to foreclose the mortgage. In other words, he may pursue either of the two remedies,
but not both. By such election, his cause of action can by no means be impaired, for each of the
two remedies is complete in itself. Thus, an election to bring a personal action will leave open to
him all the properties of the debtor for attachment and execution, even including the mortgaged
property itself. And, if he waives such personal action and pursues his remedy against the
mortgaged property, an unsatisfied judgment thereon would still give him the right to sue for a
deficiency judgment, in which case, all the properties of the defendant, other than the mortgaged
property, are again open to him for the satisfaction of the deficiency. In either case, his remedy is
complete, his cause of action undiminished, and any advantages attendant to the pursuit of one or
the other remedy are purely accidental and are all under his right of election. On the other hand, a
rule that would authorize the plaintiff to bring a personal action against the debtor and
simultaneously or successively another action against the mortgaged property, would result not
only in multiplicity of suits so offensive to justice and obnoxious to law and equity, but also in
subjecting the defendant to the vexation of being sued in the place of his residence or of the
residence of the plaintiff, and then again in the place where the property lies.
For non-payment of a note secured by mortgage, the creditor has a single cause of action against
the debtor. This single cause of action consists in the recovery of the credit with execution of the
security. In other words, the creditor in his action may make two demands, the payment of the
debt and the foreclosure of the mortgage. But both demands arise from the same cause, the non-
payment of the debt, and, for that reason, they constitute a single cause of action. Though the
debt and the mortgage constitute separate agreements, the latter is subsidiary to the former, and
both refer to one and the same obligation. Consequently, there exists only one cause of action for
a single breach of that obligation. Plaintiff, then, by applying the rule above stated, cannot split
up his single cause of action by filing a complaint for payment of the debt, and thereafter another
complaint for foreclosure of the mortgage. If he does so, the filing of the first complaint will bar
the subsequent complaint. By allowing the creditor to file two separate complaints
simultaneously or successively, one to recover his credit and another to foreclose his mortgage,
we will, in effect, be authorizing him plural redress for a single breach of contract at so much
cost to the courts and with so much vexation and oppression to the debtor.

The creditor's cause of action is not only single but indivisible, although the agreements of the
parties, evidenced by the note and the deed of mortgage, may give rise to different remedies. The
cause of action should not be confused with the remedy created for its enforcement. And
considering, as we have shown, that one of the two remedies available to the creditor is as
complete as the other, he cannot be allowed to pursue both in violation of those principles of
procedure intended to secure simple, speedy and unexpensive administration of justice.

Given the foregoing, the Court sustains the RTC's ruling which orders respondent to pay
petitioner the loaned amount of P200,000.00. However, the RTC's ruling that in default of
respondent's payment, petitioner can foreclose on the mortgage is erroneous.
HEIRS OF JOSEFINA GABRIEL, VS. SECUNDINA CEBRERO, CELSO LAVIÑA, AND
MANUEL C. CHUA, G.R. NO. 222737. NOVEMBER 12, 2018, PERALTA, J.

FACTS:
Segundina Cebrero, through her attorney-in-fact Remedios Muyot, executed a real estate
mortgage over the subject property located in Sampaloc, Manila with an area of 2,281 sq. m.
covered by TCT registered under the name of Cebrero's late husband Virgilio Cebrero as security
for the payment of the amount of P8,000,000.00, pursuant to an amicable settlement entered into
by the parties in the case of annulment of revocation of donation in Civil Case. In the said
settlement, Josefina Gabriel recognized Cebrero's absolute ownership of the subject property and
relinquished all her claims over the property in consideration of the payment of the said
P8,000,000.00.

Upon Cebrero's failure to pay the amount within the period of extension, Gabriel filed in an
action for foreclosure of the real estate mortgage. In a Decision, the RTC of Manila ruled in
Gabriel's favor and ordered Cebrero to pay the P8,000,000.00 and interest, or the subject
property shall be sold at public auction in default of payment.

The sheriff initiated the necessary proceedings for the public auction sale when no appeal was
filed and the decision became final. Gabriel, being the sole bidder, purchased Cebrero's
undivided share of one-half (1/2) conjugal share, plus her inheritance consisting of one-ninth
(1/9) of the subject property in the amount of P13,690,574.00. The sheriff issued the Final Deed
of Sale when Cebrero failed to redeem the property.

However, Gabriel had not registered the Final Deed of Sale since she disputed the Bureau of
Internal Revenue's estate tax assessment on the subject property considering that she claimed
only a portion thereof. It was also during this time that she discovered the registration of a Deed
of Absolute Sale executed by respondent Celso Laviña, Cebrero's attorney-in-fact, purportedly
conveying the entire property in favor of Progressive Trade & Services Enterprises for and in
consideration of P27,000,000.00.

Eduardo Cañiza (Cañiza), allegedly in behalf of Gabriel, instituted Complaint for declaration of
nullity of sale and of the Transfer Certificate of Title of the subject property registered under
Progressive, a single proprietorship represented by its President and Chairman, respondent
Manuel C. Chua.

In their Answer, respondents alleged that Gabriel has no legal capacity to sue as she was
bedridden and confined at the Makati Medical Center since 1993. The complaint should be
dismissed because Cañiza signed the verification and certification of. the complaint without
proper authority. The December 15, 1993 RTC decision in the foreclosure proceedings was void
due to improper service of summons. The Sheriffs Final Deed of Sale was not registered and
recorded. Moreover, the bid price was higher than the amount in the compromise agreement. As
a mere creditor, Gabriel cannot annul the sale of the subject property to Progressive, especially
when there was a judicial consignment of the payment of lien.

ISSUE:
Whether or not Chua cannot be considered the true and lawful owner of the subject property as
he was not a purchaser in good faith.

RULING:
The real estate mortgage over a portion of the property was annotated on the transfer certificate
of titles. A mortgage is a real right, which follows the property, even after subsequent transfers
by the mortgagor. "A registered mortgage lien is considered inseparable from the property
inasmuch as it is a right in rem." The sale or transfer of the mortgaged property cannot affect or
release the mortgage; thus, the purchaser or transferee is necessarily bound to acknowledge and
respect the encumbrance. The implication in buying the property, with notice that it was
mortgaged, was that Progressive necessarily undertook to allow the subject property to be sold
upon failure of Gabriel to obtain payment from Cebrero once the indebtedness matured. Thus, it
cannot invoke being a buyer in good faith to exclude the property from being claimed by virtue
of foreclosure of the mortgage over the said property. This, however, does not mean that the
Court rules in favor of the petitioners. Considering that the complaint was filed by Cañiza, who
has failed to prove that he was validly authorized to do so, the complaint does not produce any
legal effect.
TOP RATE INTERNATIONAL SERVICES, INC., VS. INTERMEDIATE APPELLATE
COURT AND RODRIGO TAN, DOING BUSINESS UNDER THE NAME AND STYLE
"ASTRO AUTOMOTIVE SUPPLY", G.R. NO. L-67496. JULY 07, 1986, GUTIERREZ,
JR., J.

FACTS:

G. R. No. 67496:

Petitioner filed a complaint against Consolidated Mines Inc. and Jose Marino Olondriz,
the president of said corporation, for the payment of the purchase price of certain heavy
equipment, parts and accessories sold to Consolidated Mines, Inc. In said complaint,
plaintiff asked that a writ of preliminary attachment be issued against defendants on the
ground that said defendants were guilty of fraud in securing said equipment.

Respondent Court granted plaintiff's motion for the issuance of a writ of preliminary
attachment upon plaintiff's posting of a bond. Pursuant to said order, a writ of attachment
was issued. The sheriff served notices of garnishment on the tenants of the building
owned by defendant Consolidated Mines, Inc. garnishing the rentals due from said
tenants, but since there were earlier notices of garnishment served upon said tenants
issued in two (2) other cases, the sheriff was not able to garnish any amount from said
tenants. The sheriff levied on the properties of defendant Consolidated Mines, Inc. and
the notice of levy was duly annotated on Transfer Certificate of Title No. S-68501
(143900) and Transfer Certificate of Title No. S-68500 (14329). The notice of levy was
not annotated on the transfer certificate of title of a third property covered by Transfer
Certificate of Title No. 79776, although notice of said levy was duly entered in the
primary book of the Registry of Deeds of Rizal.

"Annotated as prior encumbrances on the first two properties on December 20, 1978 was
a mortgage in favor of twelve (12) consortium banks and a notice of levy issued in Civil
Case No. 136406 entitled 'Warmco Trading Company versus Consolidated Mines, Inc.
and Jose Marino Olondriz' on May 15, 1981."

G. R. No. 68257:

The petitioner brought suit in the Court of First Instance of Manila against the res-
pondents Consolidated Mines, Inc. (CMI) and its president Jose Marino Olondriz for the
collection of P71,855.20. The amount represents the price of the heavy equipment and
accessories which the respondent CMI had purchased from the petitioner. The
respondent judge ordered the attachment of CMI's properties. Notice of the attachment
of real properties of the CMI was served on the Register of Deeds of Makati who
annotated the levy on Transfer Certificate of Titles Nos. S-68500 (143929), S-68501
(143900) and 79711.

Several banks, constituting the Consortium Banks, filed a third-party claim with the sheriff,
alleging that they were the mortgagees of the real and personal properties of the CMI. They
claimed that their mortgage was evidenced by a deed executed on November 10, 1978. They,
therefore, asked that the properties be released from attachment.

The court ruled that the Consortium Banks, as mortgagees of the real and personal properties of
the CMI had a superior lien on the properties and that the petitioner could validly levy only on
the mortgagor's (CMI's) equity of redemption after the sale of the mortgaged properties.

In the meantime, the Court of First Instance of Rizal, acting as an insolvency court, authorized
the sale of the properties of the CMI. Accordingly, the properties covered by TCT Nos. S-68500
(143929) and S-68501 (143900) were sold to the private respondent Top Rate International as
assignee of the El Grande Development Corp. The sale is evidenced by a 'Deed of Confirmation
of Sale with Assumption of Mortgage.' On the basis of the sale to it, Top Rate International filed
a third party claim with the sheriff. It asked that the properties covered by TCT No. S-68500
(143929) and S-68501 (143900) be discharged from attachment."

On the basis of the same "Deed of Confirmation of Sale with Assumption of Mortgage", Top
Rate International, Inc. also filed a third-party claim alleging that the properties involved therein
had been sold to it for P40,000,000.00 with the approval of the Court of First Instance of Rizal in
Special Proceeding in the course of the involuntary insolvency proceedings filed against
Consolidated Mines. Petitioner, therefore, asked that the attachment made on these properties be
discharged.

ISSUE:
Whether or not there is an over-levy is obvious because the properties levied upon are worth
more than P40,000,000.00.

RULING:
Equity of redemption is the right of the mortgagor to redeem the mortgaged property after his
default in the performance of the conditions of the mortgage but before the sale of the property
or the confirmation of the sale, whereas the right of redemption means the right of the mortgagor
to repurchase the property even after confirmation of the sale, in cases of foreclosure by banks,
within one year from the registration of the sale.

To levy upon the mortgagor's incorporeal right or equity of redemption, it was not necessary for
the sheriff to have taken physical possession of the mortgaged taxicabs. Levying upon the
property itself is distinguishable from levying on the judgment debtor's interest in it.

It is, therefore, error on the part of the petitioner to say that since private respondents' lien is only
a total of P343,227.40, they cannot be entitled to the equity of redemption because the exercise
of such right would require the payment of an amount which cannot be less than P40,000,000.00.

Therefore, the appellate court did not commit any error in ruling that there was no over-levy on
the disputed properties. What was actually attached by respondents was Consolidated Mines'
right or equity of redemption, an incorporeal and intangible right, the value of which can neither
be quantified nor equated with the actual value of the properties upon which it may be exercised.