ARSENIO REYES, PLAINTIFF AND APPELLANT, VS. SINAI C. HAMADA AND GERALDA M. HAMADA, DEFENDANTS AND APPELLEES.

This is an appeal by Arsenio Reyes from the order « the Court of First Instance
of Baguio, dismissing the complaint against the
spouses Sinai C. Hamada and Geralda in Civil Case No.
1041, by reason of the pendency of another action
(Civil Case No. 1025 of the same court) between the same parties, over the same
properties an where the cause of action in this case, if at all, properly be
brought up. In this appeal, plaintiff-appellant assails the correctness of the
aforesaid order of dismissal on the ground that there is no identity of cause of
action between Civil Case No. 1025 and Civil Case No. 1041, because the issue in
the first is the matter of ownership and possession of the properties in
dispute, whereas second is concerned with the recovery of rentals paid to the
defendants by the tenants of the properties, to which rentals
plaintiff-appellant is allegedly entitled under the Rules.

The facts of this case are not
controverted.

As a consequence of the extra
judicial foreclosure proceeding instituted by the Philippine National Bank,
certain real properties of the spouses Hamada, located in Baguio and mortgaged to the said institution, were sold at
public auction on February 11, 1960, and awarded to Arsenio Reyes, the highest bidder, for P38.000.00. At 10
o’clock in the evening of February 10, 1961 (the last day of redemption), the
mortgagors delivered to the City Sheriff of Baguio
checks covering the redemption amount, which payment was accepted by the said
official. The purchaser Reyes, however, refused to recognize the validity of
such redemption and thereafter demanded the delivery of possession of the
properties which remained with the defendant-mortgagors. Upon refusal of the
spouses Hamada to do so, Reyes died on March 9, 1961, Civil Case No. 1025 in the
Court of First Instance of Baguio for declaration of
ownership and right to possession of the said properties by reason of his
purchase thereof at the auction sale of February 11, 1960. During the pendency of said case, or on May 26, 1961, Reyes filed the
complaint in the present case (Civil Case No. 1041), for recovery of the rentals
paid by the tenants of the properties involved in the dispute to defendants
Hamada, on the ground that under Section 30 of Rule 39 of the (old) Rules of
Court, plaintiff, as purchaser of the properties, was entitled to the rentals
receivable from the tenants thereof which were paid to the mortgagors during in
f. after the period of redemption. Upon defendants «on to dismiss, the lower
court issued the order now appeal.

The question to be determined
here is whether tendency of Civil Case No. 1025, wherein the validity of the
tender of redemption price and the ownership and the right to possession of the
properties are in issue, precludes the institution of another action for the
recovery of rentals receivable from the same properties.

Appellant bases his argument on
Section 30 of Rule 89 of the old Rules of Court which
reads:

“Sec.
30. Rents and profits pending redemption. Statement
thereof and credit therefor on redemption.—The
purchaser, from the time of the sale until a redemption, and a redemptioner, from the time of his redemption until another
redemption, is entitled to receive the rents of the property sold or the value
of the use and occupation thereof when such property is in the possession of a
tenant But when any such rents and profits have been received by the judgment
creditor or purchaser, or by a redemptioner, or by the
assignee of either of them, from property thus sold preceding suck redemption,
the amounts of such rents and profits shall be a credit upon the redemption
money to be paid; * * *.’,

and concludes that, as it is not
denied that appellant was the purchaser of the properties at the public auction
held on February 11, 1960 and the said properties were being occupied by paying
tenants, the right to the rentals thereof, granted to the said purchaser by the
provision, can not be abated by any ruling in the involving the ownership and
possession of the same properties.

Construing this Section 30 of
Rule 39, which is applicable also to properties purchased in extrajudicial
closure proceeding, this Court said:

“The rule, therefore, is clear
that if during the period of redemption the judgment-debtor is in possession and
the property sold, he is entitled to retain it and to receive its fruits, the
purchaser not being entitled to its possession; but if the property is in the
possession of a tenant, it is only then that the purchaser is entitled to
receive its rents or the reasonable value of its use and occupation. In such a
case, the purchaser is accountable for the amount thus received to the
judgment—debtor he effects the redemption. * * *.” (Chan vs.
Espe, G.R. No. L-16777, April 20,
1961.)

In other words, before the
expiration of the 1-year period within which the judgment-debtor or mortgagor
may redeem the property, the purchaser thereof is not entitled, as a matter of
right, to possession of the same. Thus, while it is true that the Rules of Court
allow the purchaser to receive the rentals if the purchased property is occupied
by tenants, he is, nevertheless, accountable to the judgment-debtor or
mortgagor, as the case may be, for the amount so received and the same will be
duly credited against the redemption price when the said debtor or mortgagor
effects the redemption. Differently stated, the rentals receivable from tenants,
although they may be collected by the purchaser during the redemption period, do
not belong to the latter but still pertain to the debtor or mortgagor. The
rationale for the Rule, it seems, is to secure for the benefit of the debtor or
mortgagor, the payment of the redemption amount and the consequent return to him
of his properties sold at public auction.

In Civil Case No. 1025, the pendency of which was the reason given by the lower court
for dismissing Civil Case No. 1041, for recovery of rentals, the question
involved is whether or not there was a proper and timely redemption of the
properties sold at public auction. It is clear, therefore, that the right to the
rentals during the period of redemption and thereafter is necessarily included
in the issue of the timeliness and adequacy of the redemption made or exercised
by the mortgagors. Consequently, the pendency of Civil
Case No. 1025 is a bar to the prosecution of Civil Case No. 1041, inasmuch as
the issues in both cases can properly be resolved only in one. The lower court,
therefore, committed no error in dismissing the complaint in this
case.

Wherefore, the order appealed from is
hereby affirmed, with costs against the appellant.

So
ordered.

Bengzon, C. J., Bautiista Angelo, Reyes, J. B. L., Paredes, Makalintal, Bengzon, J. P., and Zaldivar, JJ.,
concur.