VICENTE ARDOSA, PLAINTIFF AND APPELLEE, VS. ESTEBAN DE LA RAMA ET AL., DEFENDANTS. EL HOGAR FILIPINO, APPELLANT.

Although there are two lots, among other property, dealt with in the
present case of foreclosure of mortgage, nevertheless, only lot No.
212 is the subject matter of this appeal, because only in it does the
appellant show any interest, holding, that it validly acquired it, and
that it also validly transferred the same to defendant Esteban de la
Rama, who did not appeal from the judgment of the court below.

The plaintiff is the creditor of the defendant spouses Emeterio
Jarder and Aniceta Ardosa for P14,800 and to secure the payment of
said amount, it obtained a mortgage on several properties, among them
the lands later designated by Nos. 167 and 212 in cadastral proceedings
of the municipality of Manapla of the Province of Occidental Negros.

When the mortgage was executed, that is, on May 31, 1922, this
parcel of land now known as lot No. 212, was not yet registered under
the Land Registration Law, Act No. 496, and the said mortgage had to be
registered under the provisions of Act No. 2837. This registration took
place on June 16, 1922.

On June 2, 1923, the certificate of title to lot No. 212 was issued in favor of the debtor Aniceta Ardosa, under Act No. 496.

On October 8, 1924, El Hogar Filipino obtained the adjudication of
said lot 212 to itself, as the highest bidder in an extrajudicial
auction, held by said entity, believing itself entitled to do so by
virtue of the terms of the mortgage deed executed in its favor by the
said spouses Emeterio Jarder and Aniceta Ardosa, thus succeeding in
procuring the transfer of the proper certificate of title to it. This
action of El Hogar Filipino is based on the contention that lot 212 is
one of the properties mortgaged to it by the said spouses. But such is
not the case. Lot 212 was never in any way mortgaged to El Hogar
Filipino, but only to plaintiff Vicente Ardosa.

As the sale of this lot 212 in the aforesaid extrajudicial auction
was effected in the mistaken belief that said lot was one of the
parcels of land included in the mortgage authorizing the sale of the
lands therein encumbered, if the debtors violated certain conditions
agreed upon, it goes without saying that such a transfer, by reason of
said sale based on mistake, is null and void and, therefore, the
transfer of the certificate of title, made by virtue of such invalid
sale, is also null and void before the law.

The circumstance that no encumbrance appears in the original title
to the lot, does not preclude this conclusion. What caused the nullity
of such sale at the extrajudicial auction is not the mortgage of said
lot to the herein plaintiff, but the fact that it is not included in
the mortgage in favor of El Hogar Filipino. And whether the lot was
unencumbered or not, upon the face of the certificate of title to lot
212, it was not and could not have been legally affected by said sale
at the extrajudicial auction, because said lot was not the subject
matter of the contract between El Hogar Filipino and its aforementioned
debtors.

From this it follows that both the transfer of this lot No. 212 to
Esteban de la Rama, and the lien herein appearing in favor of El Hogar
Filipino are null and void, because the person who transferred it and
in whose favor the lien appears to be, could not make the transfer, and
he who received said transfer could not encumber the lot, because he
did not receive any right thereto.

We cannot and should not discuss the effect of the registration of
the mortgage in favor of the plaintiff inasmuch as this question is not
duly raised before us. The ones who could have questioned said
registration were the spouses, the mortgagors, but they did not appeal
from the lower court’s judgment. And in view of the conclusion we have
reached that El Hogar Filipino has no legal right to or interest in the
lot in question, neither can said corporation derive any benefit from
discussing the effectiveness of the registration of the mortgage
executed by the aforesaid debtor spouses in favor of the plaintiff,
because, even supposing for a moment that such registration were
ineffective and therefore that there never was a valid mortgage, such a
hypothetical conclusion would not avail El Hogar Filipino anything, the
latter not being the owner of the lot and having no right or interest
therein.

As to the first assignment of error, we find it groundless, inasmuch
as El Hogar Filipino certainly claims rights to the land under the
certificate of transfer in its favor, and the certificate of transfer
in favor of Esteban de la Rama, where such corporation appears as a
mortgagee; and under the provisions of section 1J4 of the Code of Civil
Procedure, it had to be included as a defendant in the litigation.

The appealed judgment is affirmed with the costs of this instance against the appellant. So ordered.

Johnson, Street, Malcolm, Ostrand, Johns, and Villa-Real, JJ., concur.