JOSEFINA B. CENAS and THE PROVINCIAL SHERIFF OF RIZAL, petitioners, vs. SPS. ANTONIO P. SANTOS and RA.

ROSARIO !. SANTOS and HON. PE RO C. NAVARRO, Presidin" J#d"e, CFI$Ri%a&, Br. III, respondents. '.R. No. L$()*+, Nove-.er /0, 0))0 !a1 2, 0)+, 3 Sps. Jose Pulido and Iluminada M. Pulido mortgaged to Pasay City Savings and Loan Association, Inc. their land covered by TCT o. !"#$%!, sub&ect o' this case, to secure a loan o' P#(,(((.((. The said mortgage )as registered )ith the *egistry o' +eeds on the same date and )as duly annotated in the title o' the property. !a1 04, 0)+, 3 the mortgaged land )as upon by the City Sheri'' o' ,ue-on City pursuant to a )rit o' e.ecution issued by the C/I o' ,ue-on City, and the same )as sold to petitioner Jose'ina Cenas as the highest bidder in the e.ecution sale Pasay City Savings 0 Loans Assoc assigned to Jose'ina Cenas all the rights, interests and participation o' the mortgaged land amounting to P1, ##(.((. Petitioner became the purchaser at the public auction sale o' the sub&ect property as )ell as the assignee o' the mortgage constituted. J#&1 0), 0)++ 2 *espondent +ra. *osario M. Santos redeemed the said property, paying the total sum o' P#3,"#1.((, and )as accordingly issued by the City Sheri'' o' ,ue-on City a Certi'icate o' *edemption Pet. Cenas as the assignee o' the mortgage loan 'iled )4 the o''ice o' the Provincial Sheri'' o' *i-al a veri'ied petition 'or e.tra5&udicial 'oreclosure o' the mortgage constituted over the sub&ect property. *espondents spouses Antonio P. Santos and +ra. *osario M. Santos6 apprised o' the impending auction sale o' the said property, 'iled an a''idavit o' adverse claim )ith the Provincial Sheri'' o' *i-al, claiming that they had become the absolute o)ners o' the property by virtue o' Certi'icate o' *edemption issued by the City Sheri'' o' ,ue-on City 'iled )ith the respondent court a veri'ied Petition 'or Prohibition )ith Preliminary In&unction to en&oin the Provincial Sheri'' o' *i-al 'rom proceeding )ith the public auction sale o' the property in 7uestion

Section %(, *ule %A o' the *ules o' Court, provides 'or the time, manner and the amount to be paid to redeem a sold by virtue o' a )rit o' e.ecution. Pertinent portion reads6 Sec. %(. Time and manner o', and amounts payable on, successive redemptions. otice to be given and 'iled. B The &udgment debtor, or redemptioner, may redeem the property 'rom the purchaser, at any time )ithin t)elve =#C> months a'ter the sale, on paying the purchaser the amount o' his purchase, )ith one per centum per month interest thereon in addition, up to the time o' redemption, together )ith the amount o' any assessments or ta.es )hich the purchaser may have paid thereon a'ter purchase, and interest on such last5named amount at the same rateD and i' the purchaser be also a creditor having a prior lien to that o' the redemptioner, other than the &udgment under )hich such purchase )as made, the amount o' such other lien, )ith interest. 9nder the said provision, i' the purchaser is also a creditor having a prior lien to that o' the redemptioner, other than the &udgment under )hich such purchase )as made, the redemptioner has to pay, in addition to the prescribed amounts, such other prior lien o' the creditor5purchaser )ith interest. In the instant case, it )ill be recalled that the Pulidos mortgaged the sub&ect property to Pasay City Savings and Loan Association, Inc. )ho, in turn, assigned the same to petitioner Cenas. And pursuant to the )rit o' e.ecution the sub&ect property )as sold to petitioner Cenas, being the highest bidder in the e.ecution sale. Private respondent +ra. *osario M. Santos redeemed the sub&ect property. There'ore, there is no 7uestion that petitioner Cenas as assignee o' the mortgage constituted over the sub&ect property, is also a creditor having a prior =mortgage> lien to that o' +ra. *osario M. Santos. Accordingly, the acceptance o' the redemption amount by petitioner Cenas, )ithout demanding payment o' her prior lien B the mortgage obligation o' the Pulidos B cannot )ipe out and e.tinguish said mortgage obligation. The mortgage directly and immediately sub&ects the property upon )hich it is imposed, )hoever the possessor may be, to the 'ul'illment o' the obligation 'or )hose security it )as constituted =Art. C#C$, Civil Code>. <ther)ise stated, a mortgage creates a real right )hich is en'orceable against the )hole )orld. Eence, even i' the mortgaged property is sold =Art. C#C1> or its possession trans'erred to another =Art. C#CA>, the property remains sub&ect to the 'ul'illment o' the obligation 'or )hose security it )as constituted It )ill be noted that *ule %A o' the *ules o' Court is silent as to the e''ect o' the acceptance by the purchaser, )ho is also a creditor, having a prior lien to that o' the redemptioner, o' the redemption amount, )ithout demanding payment o' her prior lien. either does it provide )hether or not the redemption o' the property sold in e.ecution sale 'reed the redeemed property 'rom prior liens. Eo)ever, )here the prior lien consists o' a mortgage constituted on the property redeemed, as in the case at bar, such redemption does not e.tinguish the mortgage =Art. C#C$>. /urthermore, a mortgage previously registered, liFe in the instant case, cannot be pre&udiced by any subse7uent lien or encumbrance annotated at the bacF o' the certi'icate o' title GG evertheless, considering the lapse o' time that the parties have been in status 7uo and the 'act that private respondents erroneously believed that the 7uestioned property )as 'reed 'rom any lien a'ter the redemption, e7uity dictates that the 'oreclosure be allo)ed only a'ter the private respondents shall have been a''orded the chance to settle the mortgage obligation but 'ailed to do so. ;E:*:/<*:, &udgment o' the trial court is *eversed and Set Aside. Petitioner Jose'ina H. Cenas may proceed )ith the 'oreclosure o' the mortgaged property a'ter the private respondents shall have 'ailed to settle the mortgage debt plus interest and legal e.penses, )ithin thirty =%(> days 'rom 'inality o' this decision.

Petitioners then 'iled an ans)er and respondents 'iled a motion to amend petition. Tria& Co#rt 2 rendered &udgment in 'avor o' respondents and declared the provincial sheri'' o' be en&oined 'rom proceeding )ith the auction sale 5 *i-al

held that the redemption o' the sub&ect property e''ected by respondents, 8)ipe out and e.tinguished the mortgage e.ecuted by the Pulido spouses 'avor o' the Pasay City Savings and Loan Association, Inc.8

Petitioners 'iled M* 2 +enied by the TC ISS9:6 ;< the redemption o' the 7uestioned property by herein private respondents )iped out and e.tinguished the pre5e.isting mortgage obligation o' the &udgment debtor, Iluminada M. Pulido 'or the security o' )hich =mortgage debt> the sub&ect property had been encumbered. *9LI ?6 :?ATI@: