Case Digest (G.R. No. 181672)
Facts:
Sps. Antonio & Leticia Vega v. Social Security System (SSS) & Pilar Development Corporation, G.R. No. 181672, September 20, 2010, Supreme Court Second Division, Abad, J., writing for the Court.The dispute concerns ownership and the validity of execution on a titled lot in Pilar Village, Las Piñas City. Magdalena V. Reyes originally obtained an SSS housing loan on August 17, 1979 and mortgaged the parcel to SSS. In late 1979 she told the petitioner spouses Antonio and Leticia Vega that she wished to emigrate and asked them to assume the loan and buy the house and lot; an SSS employee allegedly told the Vegas that while the SSS did not approve transfers of mortgaged homes, private arrangements of that nature were common so long as amortizations were paid. Relying on that information, the Vegas agreed and Reyes undertook to execute a deed of assignment with assumption of mortgage; the Vegas paid Reyes P20,000 and took possession in January 1981.
Reyes left the country and empowered her sister Julieta Reyes Ofilada by special power of attorney to convey the property. Ofilada executed the deed of assignment sometime between 1983 and 1984 and furnished the Vegas two copies; one was later lost in a 1984 flood. From 1981 onward the Vegas paid SSS amortizations (documented by SSS receipts, including a large payment on January 6, 1992), negotiated additional remittances, and when SSS threatened foreclosure the Vegas attempted to pay the balance and obtain subrogation and release.
Separately, Pilar Development Corporation (PDC) sued Reyes for a money loan (assigned from Apex Mortgage and Loans Corp.), obtained judgment from the Regional Trial Court (RTC) of Manila on August 26, 1993, and secured a writ of execution issued January 5, 1994. The RTC sheriff levied the Pilar Village property; notices of public auction were published and the Vegas were served notice in March 1994. The Vegas filed an affidavit of third-party claimant and attempted intervention to quash the levy, but the Manila RTC ordered the sheriff to proceed. While the Vegas filed a separate action for consignation, damages and injunction in RTC Las Piñas (Civil Case No. 94-2943) on November 8, 1994, the SSS released the mortgage to PDC on December 27, 1994 and the Register of Deeds issued TCT No. T-56657 in PDC’s name on August 22, 1996; a writ of possession later evicted the Vegas.
The RTC of Las Piñas decided Civil Case No. 94-2943 on May 8, 2002 in favor of the Vegas, holding that SSS was barred from rejecting the Vegas’ final payment and that the Vegas were subrogated to Reyes’ rights; the court ordered PDC to deliver the title and awarded moral, exemplary damages and attorney’s fees against SSS and PDC jointly. SSS appealed to the Court of Appeals (CA) in CA-G.R. CV No. 77582. On August 30, 2007 the CA reversed the RTC, finding that the Vegas failed to produce the original dee...(Subscriber-Only)
Issues:
- Did the Vegas present adequate proof that Reyes sold the subject property to them?
- If so, was Reyes’ sale of the mortgaged property to the Vegas valid against the SSS and did the Vegas obtain subrogation of Reyes’ rights?
- If so, was the sheriff’s sale and subsequent acquisition by PDC v...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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