JOSE F. APARRI, PETITIONER, VS. THE COURT OF APPEALS, SALVACION E. VDA. DE FERRO AND LINO BAJAR, SHERIFF OF MASBATE, RESPONDENTS.

The record shows that on
June 9,
1947,
Jose F. Aparri mortgaged a piece of land to the
Philippine National Bank to secure the payment of F600.00. The mortgage was
registered in the Office of the Register of Deeds of Masbate on June 21,
1947.

On July 1,
1953, a
criminal case for malversation of public funds
amounting to P5,467.24 was filed against Aparri in the Justice of the Peace Court of Masbate, Masbate, VOL. 121, APRIL 30,1965, 591
Aparri vs. Court of Appeals, et al. which, on
July 9,
1953,
issued a writ of preliminary attachment against Aparri’s properties, including the one he had mortgaged to
the Philippine National Bank.^[1]

In the meantime, Aparri failed to pay his indebtedness and so the Philippine
National Bank extrajudicially foreclosed the mortgage.
Subsequently, the property was sold at public auction for P1,500 to Salvacion E. Vda. de Ferro, to whom a
certificate of sale was given on January 28,
1955.

Of the amount of P1.500, Pl,400
was paid to the Philippine National Bank; P18.60 was paid to the sheriff for his
fees and P477.40 was retained by the sheriff on the strength pf an opinion of
the Auditor Genera], in view of Aparri’s pending
criminal case, and the writ of preliminary attachment issued therein.

There is no question that within
the one-year period of redemption, Aparri tendered to
Ferro the sum of P1,265.32 and that when the latter
refused to receive the same, Aparri paid the amount to
the provincial sheriff. The sheriff refused to execute the corresponding
certificate of redemption in favor of Aparri even as
he refused to place Ferro in possession of the property and to execute in her
favor a final deed of sale.

Ferro brought the matter on
mandamus to the Court of First Instance of Masbate.
After trial, the lower court rendered judgment in favor of the petitioner and
against the respondent—

“1. Ordering the respondent
Provincial Sheriff or anybody acting his place to execute the absolute and final
deed of sale of the land described in paragraph 3 of the
petition;

“2. Ordering the respondent
Provincial Sheriff or anybody acting ‘n his place to place the petitioner in
possession of the above described property;

“3. Ordering the respondent Aparri to pay the petitioner the sum of P450.00 as actual
damages, representing attorney’s fees and expenses of
litigation;

“4. Dismissing
the counterclaim and the cross-claim of the respondent Aparri for lack of merit.”

On appeal to the Court of
Appeals, said decision was affirmed. Hence, Aparri’s petition to review. Section 464—466 of the
Code of Civil Procedure, however, 4148, provides:

“In all cases in which an
extrajudicial sale is made under the special power hereinbefore referred to, the
debtor, his successors in interest or any judicial creditor or judgment creditor
of said debtor, or any person having a lien on the property subsequent to the
mortgage or deed of trust under which the property is sold, may redeem the same
at any time within the term of one year from and after the sale, and such
redemption shall he governed by the provisions of sections four hundred, and
sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil
Procedure, in so far as these are not Inconsistent with the provisions of this
Act”

Sections 464-466 of the Code of
Civil Procedure, however, have been superseded by Sections 29 to 31 of Rule 39
of the Revised Rules of Court.

Under Section 30 of Rule 39f in
order to effect redemption, the judgment debtor must pay the purchaser within
twelve months after the sale, “the amount of his purchase, with one per centum
per month interest thereon in addition, up to the time of redemption, together
with the amount of any assessments or taxes which the purchaser may have paid
thereon after the purchase, and interest on such last-named amount at the same
rate,” otherwise, the purchaser may justly refuse the tender if it is for less
than this amount (See Ordonez vs. Villaroman, Phil.,
116; 44 Off. Gas., No. 6, 2226) Indeed, the payment
mentioned in the rule must be made by tendering and delivering to the purchaser
the sum of money required for the purpose. Obviously, he cannot be compelled to
accept a promissory note; much less may he be compelled to accept an amount in
the possession of a third person, which amount, to make things worst, is the
subject of an adverse claim by another party.

This is exactly the situation
obtaining in the present case. Aparri tendered to Mrs.
Ferro only the sum of P1,265.32, an amount admitted to
be P 177.40 less than what he was under obligation to pay as redemption money.
In effect, he told the purchaser: Here, take this sum of Pl,265.32, and get the remaining P477.40 from the office of the
Sheriff of Masbate who, as stated heretofore, was not
willing to part away with the amount because it was claimed by the Government by
reason of the preliminary attachment levied upon the parcel of land subject of
redemption.

Aparri contends that as the prosecution
in the criminal case did not make any move to attach the surplus amount of
P477.40, the sheriff had no right to retain the same and that, added to this
amount the sum of P1,265.32, which he had paid to the
sheriff, is equal to the amount paid by Ferro for the land and its taxes,
assessments and interest. We disagree with this contention. The rule is that if
any property under attachment is sold by order of the court because it is
fungible in nature or by virtue of a writ of execution issued to satisfy the
judgment rendered, the proceeds of the sale take the place of the property and
should be used by the Sheriff to pay the judgment, and the balance, if any,
should be retained by him security for the satisfaction of the claims of other
parties with a subordinate Hen on the same property, such that of another
attaching creditor.

Petitioner further argues that
because the lien by attachment upon the property in question was junior to the
mortgage lien in favor of the Bank, the attaching creditor had nothing more than
the right to redeem the Property after the extrajudicial foreclosure sale.

Distinction should be made, in
this connection, of the three different kinds of sales tinder the law, namely:
an ordinary execution sale; a judicial foreclosure sale, and an extrajudicial
foreclosure sale. While the three are identical in most of the essential
formalities required to make the sale, they differ from one another in important
respects as far as it concerns their respective effects on the rights of the
parties and the subject matter of the sale.

There is no question that in the
case of an execution sale of real estate to satisfy a money judgment, a redemptioner, as far as the property sold is concerned, has
only the right to redeem it within the period and under the conditions provided
by law. However, the case is different when the sate is the result of judicial
foreclosure proceedings.

Section 4 of Rule 68 provides
that the money realized from the sale of the mortgaged property, after deducting
the cost of the sale, shall be paid to the mortgagee foreclosing his mortgage,
and the balance or residue, if any, shall be paid to junior encumbrancers in the order of their priority to be
ascertained by the court. Only if there be no such junior encumbrancers or there be a balance or residue after paying
their claims, is said balance or residue to be delivered to the mortgagor.

Act No. 315, as amended by Act
No. 4148, which governs extrajudicial foreclosure sales, expressly provides that
the debtor, his successors in interest or any judicial creditor of said debtor,
or any person having a lien on the property subsequent to the mortgage under
which it was sold, may redeem the same within one year from and after the date
of the sale, said redemption to be governed by the provisions of Sections
464-466 of the Code of Civil Procedure (now the pertinent sections of Rule 39).
The said provision, however, is silent on the matter of what should be done in
the event the highest bid made for the property at the extra judicial
foreclosure sale is in excess of the mortgage debt; whether the balance or
residue shall be delivered to the mortgagor or shall be used to pay the junior
encumbrancers. Neither does said statute specifically
limit the right of junior encumbrancers to the
exercise of their right of redemption.

The problem, therefore, is
whether in the event there be a balance or residue, the same should be delivered
to the mortgagor, following the rule in ordinary execution sales where the
property sold is not subject to any existing subordinate liens, or it should be
used to pay the junior encumbrancers, as is provided
in the case of judicial foreclosure sales. It is the considered opinion of this
Court that the rule and practice in judicial foreclosure sales with respect to
any balance or residue should be likewise applied to extra judicial foreclosure
sales in a similar event, considering that both are foreclosure sales.
Accordingly, the balance or residue of P 177.40 above referred to should be used
to pay junior liens on the property subject of the extrajudicial foreclosure
sale, such as the lien by attachment acquired by the Government.

Coming now to Ferro’s
counter-assignment of error that—

“Co-respondent Court of Appeals
erred in not assessing in favor of respondent Salvacion Vda. de Ferro and against the petitioner herein actual damages
representing the value of the products of the land in question from
January 28,
1955.”

the principle is that while an appellee, who is not an appellant, may assign errors in her
brief, she may do so only to maintain the judgment on other grounds, but not to
have the judgment modified or reversed, for, in such case, she must appeal.
(2 Moran, Comments on the Rules of Court, 427-428
(1963).

PREMISES
CONSIDERED,
finding no error in the decision under review, the same is hereby affirmed. No
pronouncement as to costs.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Makalintal, Bengzon, J.P. and ZaLdivar, JJ., concur.

^[1] This alleged malversation took place while Aparri was a pay-master in the Provincial Treasurer’s Office
of Masbate.