FLORENCIO GONZALEZ DIEZ, PLAINTIFF AND APPELLEE, VS. ROMARICO AGCAOILE ET AL., DEFENDANTS. ANGEL A. ANSALDO, APPELLANT.

To secure a loan of P16,000, Romarico Agcaoili executed a first
and special mortgage in favor of the plaintiff on an urban property belonging to
him, evidenced in a public instrument which was registered in the registry of
deeds under the provisions of Act No. 496.

Said debtor having defaulted, paying on account only P500 on
May 22, 1925, the plaintiff brought this action for the collection of the
balance of the credit and the fulfillment of the other obligations stipulated,
with due and unpaid interest at 12 per cent, plus the corresponding legal
interest, and the sum of P1,600 as penalty.

Teodoro R. Yangco and Angel A. Ansaldo were made parties
defendants, the first for having subsequently acquired at public auction the
interest and participation of the defendant Agcaoili in the mortgaged property;
and the second, that is, Angel A. Ansaldo, for Jiaving, in turn, acquired from
the defendant Yangco such interest and participation in said property.

The case having been heard, the Court of First Instance of
Manila rendered the following judgment:

“In view of the premises, the court believes it just and proper
to sentence, as it hereby does sentences the defendant Romarico Agcaoili or
Angel A. Ansaldo, who has acquired his rights, to pay plaintiff the sum of
P15,500 with interest at 12 per cent per annum from February 1, 1927; plus the
sum of P775 with interest at 6 per cent per annum from January 29, 1927; plus
the sum of P1,600 as penalty, with the costs of the action.

“Should these payments not be made within the period of three
months from the date of the notification of this judgment to said two
defendants, let the mortgaged property be sold in accordance with law, the
proceeds thereof to be applied to the payment of such sums.

“So
ordered.”

Defendant Ansaldo impugns such judgment as erroneous.

“1. Because, contrary to law, the trial court by such judgment
granted the plaintiff a remedy against the appellant which is not in accord with
the action brought herein, nor supported by the evidence.

“2. Because, in granting said remedy against the appellant and
according to the terms of the judgment, the plaintiff is permitted, against all
reason and justice, to require the appellant to comply with the obligation which
Agcaoili personally contracted, without the appellant’s taking any part therein,
notwithstanding the fact that the plaintiff himself alleged in his complaint
(paragraph IX) that, with respect to the property mortgaged by Agcaoili, the
appellant acquired only those rights by the sheriff of Manila to defendant
Yangco. And,

“3. Because said judgment fails to take into account the fact
that the registration of the conditions and dates of payment of the credit had
the effect of proper notification to those who, being third persons with respect
thereto, as the appellant was, might acquire a right in the property securing
said credit.

Counsel for the plaintiff-appellee admits the existence of the
first two errors, stating on pages 1 and 2 of his brief:

“Since the action instituted by the plaintiff-appellee is an
action in rem, for the collection of a mortgage credit, we admit that the lower
court erred in sentencing the appellant to pay said credit, and in this sense
find the first two assignments of error in appellant’s brief to have been well
taken.”

The question being simmered down to the third assignment of
error, we note that the appellant insists that the mortgaged property only
answered for P14,500 inasmuch as, considering the periods stipulated for the
payment of the credit, by January 29, 1927, two payments of P500 each should
have been made, the defendant-appellant being warranted in so presuming by the
scope and effect which, under section 51 of Act No. 496, are given to the
notification of the terms and stipulations of the mortgage in question
registered under the provisions of said Act.

The notification referred to in said section 51 of Act No. 496
has no such scope. The fulfillment or non-fulfillment of obligations contracted,
does not depend on the degree of diligence on the part of the creditor, but
rather on the will and resources of the debtor. The fact that an obligation was
registered in the registry does not justify the presumption of its fulfillment
to the point of precluding, by the mere lapse of the periods, the collection of
the unpaid debts, because, the very existence of the mortgage shows that there
was not an absolute certainty of the fulfillment of the agreement, and hence the
security. And the registration of the latter gave notice to all the world that
the parties considering the violation of the obligation as a possibility, and
therefore that its fulfillment was not wholly certain, deemed it necessary to
execute the mortgage in order to be able to lay hands on it upon the
nonfulfillment by either party, foreseen as a contingency which might occur.

The judgment appealed from is hereby modified, absolving
appellant Angel A. Ansaldo from all personal liability for the sums of money
claimed by the plaintiff, or for part thereof, limiting such liability to
defendant Romarico Agcaoili, and affirmed in all other respects, without express
pronouncement as to costs in this instance. So ordered.

Avanceña, C. J., Johnson, Street, Malcolm, Ostrand, and
Villa-Real, JJ., concur.