Isaguirre-v-de-Lara.docx | Mortgage Law

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ISAGUIRRE V. DE LARA G.R. No. 138053 Gonzaga-Reyes, J. FACTS: Alejandro de Lara was the original applicant-claimant for a Miscellaneous Sales Application over a parcel of land identified as a portion of Lot 502, Guianga Cadastre, with an area of 2,342 square meters filed with the Bureau of Lands. Felicitas, his wife, succeeded Alejandro as claimant after the latter’s death. By virtue of a subdivision survey, the area was reduced to 1,000 square meters on which a two-story residential-commercial
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  ISAGUIRRE V. DE LARA G.R. No. 138053 Gonzaga-Reyes, J. FACTS:  Alejandro de Lara was the original applicant-claimant for a iscellaneo!s alesApplication o#er a parcel of land identified as a portion of Lot 50$% G!ianga &adastre% with anarea of $%3'$ s(!are meters filed with the )!rea! of Lands. *elicitas% his wife% s!cceededAlejandro as claimant after the latter+s death. ), #irt!e of a s!di#ision s!r#e,% the area wasred!ced to 1%000 s(!are meters on which a two-stor, residential-commercial apartment stands% inthe name of *elicitas+ sons% Apolonio and Rodolfo de Lara. hile enco!ntering financialdiffic!lties in 1/53% *elicitas approached &ornelio . sag!irre who was married to her niece2and eec!ted a doc!ment denominated as 4eed of ale and pecial &ession of Rights andnterests4 where she sold a $50 meter portion of Lot 50$ with the two-stor, commercial-residential str!ct!re standing thereon% for and in consideration of the s!m of 65%000.00. 7nA!g!st $1% 1//% &ornelio filed a sales application o#er the propert, ased on the deed of sale%res!lting in the iss!ance of an 7riginal &ertificate of 9itle 7&92% in his name. eanwhile% thesales application of *elicitas o#er the entire 1%000 s(!are meter propert, incl!ding the $50meter portion claimed , &ornelio2 was also appro#ed% and an 7&9 was iss!ed in her name aswell. )eca!se of the o#erlap% &ornelio filed an action for (!ieting of title in R9& a#ao against*elicitas on a, 1//0. 9he trial co!rt decided in fa#or of &ornelio% which declared him as thelawf!l owner of the propert,. :owe#er% the &o!rt of Appeals re#ersed the decision holding thatthe transaction entered into , the parties was an e(!itale mortgage% not a sale% d!e to theinade(!ac, of the consideration and eca!se the pa,ment thereof was made in se#eralinstallments of minimal amo!nts. 9he 7&9 in &ornelio+s name was there, declared n!ll and#oid. !ch decision was affirmed , the !preme &o!rt in GR. No. 1$08$3. *elicitas% then%so!ght for a writ of possession from the trial co!rt. 9his was opposed , &ornelio stating that hehad the right of retention o#er the propert, !ntil pa,ment of the loan and the #al!e of theimpro#ements he had introd!ced on the propert,. R9& a#ao granted the motion for writ of  possession in fa#or of *elicitas. ;pon appeal% the &o!rt of Appeals held that petitioner was notentitled to retain possession of the s!ject propert,% eca!se the agreement entered into , the parties was an e(!itale mortgage< as s!ch% there is no necessit, for &ornelio to act!all, possessthe propert, eca!se% as the mortgagee% he onl, has to annotate his claim at the ac= of thecertificate of title in order to protect his rights against third persons and sec!re the det.*!rthermore% the &o!rt of Appeals remanded the case to R9& a#ao for its fail!re to specif, the period within which the mortgagor *elicitas2 m!st pa, the indetedness and the total amo!ntthereof with interest% pl!s necessar, epenses inc!rred , &ornelio o#er the propert,. &ornelioappeals to the !preme &o!rt. ISSUE:  hether or not petitioner is entitled to retain possession of the propert, !ntil the pa,ment of the loan and the #al!e of necessar, and !sef!l impro#ements he made !pon the propert, HELD:  No. As a r!le% mortgagor retains possession of the mortgaged propert, since a mortgageis merel, a lien and title to the propert, does not pass to the mortgagee. >#en if a mortgagee doesnot ha#e the possession o#er the propert,% there is no impairment of his sec!rit, since themortgage directl, and immediatel, s!jects the propert, !pon which it is imposed% whoe#er the   possessor ma, e% to the f!lfillment of the oligation for whose sec!rit, it was constit!ted. 9hemortgage creditor ma, instit!te an action to foreclose the mortgage% if the detor is !nale to pa,% whether j!diciall, or etraj!diciall,% thro!gh which the mortgaged propert, will e sold at a p!lic a!ction and the proceeds therefrom gi#en to the creditor to the etent necessar, todischarge the mortgage loan. *!rthermore% the !preme &o!rt cited  Alvano v. Batoon % where itwas held that ?@a simple mortgage does not gi#e the mortgagee a right to the possession of the propert, !nless the mortgage sho!ld contain some special pro#ision to that effect.B &ornelio hadnot presented an, e#idence to that effect. Also% the &o!rt held that &ornelio was a possessor in ad faith< there,% he ma, onl, claim reim!rsement for necessar, epenses eca!se he =newfrom the #er, eginning that he held *elicitas+ propert, as mere sec!rit, for the loan oligation.
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