Facts:

The case involves Lucio M. Cayaba as the petitioner and the spouses Rodolfo and Rosario Rapadas as the respondents. The events leading to the case began when the Rapadas executed a Deed of Real Estate Mortgage over their property located in Barrio Barretto, Olongapo City, in favor of the Rural Bank of Olongapo, Inc. for the amount of P15,000.00. The property was not covered by any sales or free patent at that time. The Rural Bank subsequently extrajudicially foreclosed the property and emerged as the highest bidder with a bid of P17,557.15, leading to the issuance of a Certificate of Sale. On March 19, 1979, Lucio Cayaba purchased the property from the bank under a conditional sale. Before the expiration of the one-year redemption period, the Rapadas attempted to redeem the property but were refused by Cayaba, prompting them to file a motion to consign the amount in court.

On June 15, 1988, the Regional Trial Court ruled in favor of the Rapadas, declaring the Real Estate M...

Facts:

1. Mortgage and Foreclosure:

   • The respondents, Spouses Rodolfo and Rosario Rapadas, executed a Deed of Real Estate Mortgage over their parcel of land in Barrio Barretto, Olongapo City, in favor of the Rural Bank of Olongapo, Inc., for a loan of P15,000.00.
   • The property was not yet covered by any sales or free patent.
   • The bank extrajudicially foreclosed the property and became the highest bidder at P17,557.15, receiving a Certificate of Sale.

2. Sale to Petitioner:

   • Petitioner Lucio Cayaba bought the property from the bank under a conditional sale on March 19, 1979.
   • Before the expiration of the one-year redemption period, the Rapadas spouses attempted to repurchase or redeem the property but were refused. They then filed a motion to consignate the amount in court.

3. Trial Court Decision:

   • On June 15, 1988, the trial court declared the Real Estate Mortgage null and void.
   • The sale made by the bank to Cayaba was also declared null and void.
   • The court allowed the Rapadas spouses to repurchase the property for P17,557.15 plus legal interest.

4. Appeals and Execution:

   • The Rural Bank of Olongapo timely appealed the decision to the Court of Appeals.
   • Cayaba’s appeal was dismissed for being filed out of time, and his motion for reconsideration was also denied.
   • The trial court issued a writ of execution, which Cayaba challenged via certiorari to the Court of Appeals, but his petition was dismissed.

Issue:

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Ruling:

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Ratio:

1. Interwoven Rights and Liabilities:

   • The general rule is that a reversal of a judgment on appeal binds only the parties who appealed. However, an exception exists when the rights and liabilities of the parties are so interwoven and dependent that a reversal as to one operates as a reversal to all.
   • In this case, Cayaba’s ownership of the property is derived from the Rural Bank of Olongapo. Therefore, the bank’s appeal directly affects Cayaba’s rights.

2. Benefit of Appeal:

   • Citing Petilla v. Court of Appeals, the Court reiterated that a defendant may benefit from the judgment in favor of a co-defendant who appealed, especially when their liabilities are inseparable.
   • If the bank wins its appeal, Cayaba’s ownership of the property will be upheld.

3. Restraint on Execution:

   • The trial court was restrained from enforcing the writ of execution pending the outcome of the bank’s appeal to ensure that Cayaba’s rights are not prejudiced prematurely.