Emia is the owner of the land and all the improvements therein and thus, can exercise right of

ownership over the aforesaid properties.

The subsequent valid auction sale by the bank to Emia constitutes automatic acquisition of
absolute ownership by the latter to all the properties covered by the real estate mortgage. As
confirmed in Leung Yee v Strong Machinery Co.1, while it is true that a mortgage of land
necessarily includes, in the absence of stipulation of the improvements thereon, buildings
(emphasis ours) still a building by itself may be mortgaged apart from the land on which it has
been built. It is undisputed that the real estate mortgages executed by Leoncia Dela Pena clearly
provided for the description of the mortgaged property to be a parcel of land with an area of 998
square meters, more or less, and all the improvements thereon (emphasis supplied). As the court
correctly declared in its decision, there is nothing that specifically excludes any house or houses
built on the property from the mortgage contract. It is therefore without question that the foreclosed
property sold, as properly identified by the court, subjects the property and all the improvements
thereon to full disposition and ownership by the buyer.

Moreover, it cannot be countered the fact that the houses built should be included in the
property sold to Emia, as such houses are not owned by the plaintiff- appellants. [Article 2127 of
the Civil Code] extends the effects of the real estate mortgage to accessions and accessories found
on the hypothecated property when the secured obligation becomes due. The law is predicated on
an assumption that the ownership of such accessions and accessories also belongs to the mortgagor
as the owner of the principal. The provision has thus been seen by the Court, x x x, to mean that
all improvements subsequently introduced or owned by the mortgagor on the encumbered property
are deemed to form part of the mortgage.2 The court has emphasized that the demolished houses
do not belong to the plaintiff- defendants as the houses were part and parcel of the entire property
brought by Emia to its previous owner- defendant appellee Banko Luzon. The court fittingly
established in this case that the separate tax declarations of the houses they offered as evidence do
not constitute as proofs of ownership. The court even observed that their long silence and inaction,
let alone their non- contention to the mortgage of the said land with their houses by their mother,
amount to a wasted opportunity to claim ownership of the same, after such ownership was
judicially awarded to Emia. Corollary to such, the Dela Pena brothers cannot exercise ownership
over the disputed properties. There can be no right attributable to the ownership that can be vested
to them, all the more that there is no encroachment to their rights as owners, as the court has
completely established by law and jurisprudence that they are not the owners of the disputed
houses.

1
37 Phil. 644
2
Midway Maritime and Technological Foundation v Castro, et. Al, G.R. No. 189061, citing Castro v CA, 321 Phil 262
(1995)