Case Digest (G.R. No. L-14938)
Facts:
- Plaintiffs-Appellants: Magdalena C. De Barretto and others.
- Defendants-Appellees: Jose G. Villanueva and others.
- Events:
- On May 10, 1948, Rosario Cruzado secured a loan of P11,000 from the Rehabilitation Finance Corporation (RFC) by mortgaging a piece of land in Manila.
- Due to non-payment, RFC foreclosed the mortgage and acquired the property.
- On July 26, 1951, RFC conditionally sold the property back to Cruzado for P14,269.03, payable over seven years.
- On February 13, 1953, Cruzado, with court authorization, sold the property to Pura L. Villanueva for P19,000, with Villanueva assuming the remaining debt to RFC.
- Villanueva paid part of the amount and executed a promissory note for the balance.
- Villanueva secured a Transfer Certificate of Title and mortgaged the property to Magdalena C. Barretto for a P30,000 loan.
- Villanueva defaulted on both the promissory note and the mortgage.
- Cruzado filed a complaint to recover the unpaid balance, and Barretto filed for foreclosure.
- The lower court ruled in favor of Cruzado and Barretto, leading to the foreclosure and sale of the property to Barretto.
- Cruzado's vendor's lien was annotated on the title, leading to the present appeal by the Barrettos.
Issue:
- (Unlock)
Ruling:
- The Supreme Court ruled that an unregistered vendor's lien does not have precedence over a registered mortgage credit.
- The articles on concurrence and preference of credits in the Civil Code are not limited to insolvency cases. ...(Unlock)
Ratio:
- Recording of Mortgage Credits: Under Article 2242 of the New Civil Code, mortgage credits must be recorded to be given preference.
- Unpaid Price of Real Property: The unpaid price of real property sold does not require registration to enjoy preferred credit status.
- Legislative Intent: Legislative intent did not impose the same requirement for vendor's liens, indicating that both registered and unregistered vendor's liens enjoy preferred status.
- Full Application of Articles: Full application of Articles 2249 and 2242 requires a proceeding where all preferred creditors' claims can be adjudicated, such as insolvency or liquidation proceedings.
- Purchaser in Good Faith: In the absence of such proceedings, a purchaser in good faith and for value takes registered property free from unrecorded liens.
- Subordination of Unregistered Lien: Cruzado's un...continue reading
Case Digest (G.R. No. L-14938)
Facts:
The case of "De Barretto v. Villanueva" involves plaintiffs-appellants Magdalena C. De Barretto and others against defendants-appellees Jose G. Villanueva and others. On May 10, 1948, Rosario Cruzado, acting for herself and as administratrix of her deceased husband Pedro Cruzado's estate, secured a loan of P11,000 from the Rehabilitation Finance Corporation (RFC) by mortgaging a piece of land in Manila. Due to non-payment, the RFC foreclosed the mortgage and acquired the property. On July 26, 1951, the RFC conditionally sold the property back to Cruzado for P14,269.03, payable over seven years. On February 13, 1953, Cruzado, with court authorization, sold the property to Pura L. Villanueva for P19,000, with Villanueva assuming the remaining debt to the RFC. Villanueva paid part of the amount and executed a promissory note for the balance. Subsequently, Villanueva secured a Transfer Certificate of Title and mortgaged the property to Magdalena C. Barretto for a P30,000 loan. When Villanueva defaulted on both the promissory note and the mortgage, Cruzado filed a complaint to recover the unpaid balance, and Barretto filed for foreclosure. The lower court ruled in favor of Cruzado and Barretto, leading to the foreclosure and sale of the property to Barretto. Cruzado's vendor's lien was annotated on the title, leading to the present appeal by the Barrettos.
Issue:
- Does an unregistered vendor's ...