THE PHILIPPINE NATIONAL BANK, PLAINTIFF AND APPELLANT, VS. PABLO ROCHA, DEFENDANT. MAGIN RIOSA, INTERVENOR AND APPELLANT, AND CONSOLACION RIOSA, DEFENDANT IN INTERVENTION AND AP…

The plaintiff has brought this action to foreclose a mortgage against the
defendant Pablo Rocha. Magin Riosa and Consolacion Riosa intervened as
third-party claimants. The lower court sentenced the defendant to pay the
plaintiff the sum due, and in default thereof, the mortgaged property described
in the first cause of action should be sold at public auction and the proceeds
applied to the amount of the judgment; provided, that said mortgaged property
shall be subject to the reserved right of Magin Riosa and Consolacion Riosa, and
any person who may acquire said property shall do so subject to this lien. Both
the plaintiff and the intervenors Magin Riosa and Consolacion Riosa appealed
from this judgment.

The present case is related to that of Riosa vs. Rocha, decided by this court
on February 18, 1926 (48 Phil., 737).

Maria Corral was married only once, and her husband was the late Mariano
Riosa, by whom she had three children, named Santiago, Jose, and Severina. The
last named died during infancy, while the other two survived their father
Mariano Riosa. .Santiago Riosa, now deceased, married Francisca Villanueva, who
bore him two children, named Magin Riosa and Consolacion Riosa. Jose Riosa, also
deceased, married Marcelina Casas, who bore him a son who died before him
without leaving any heir.

The lands mortgaged to the plaintiff originally belonged to Mariano Riosa and
upon his death, they were inherited by will by his son Jose Riosa. When the
latter died, his mother, Maria Corral, inherited the lands, and the court
adjudicated them to her by the resolution of November 12, 1920, in the probate
proceedings of Jose Riosa’s will.

In the case of Riosa vs. Rocha mentioned above, this court held that the
lands in question having been inherited by Maria Corral from her son Jose Riosa,
who had received them gratuitously from his father Mariano Riosa, were
reservable in favor of Magin Riosa and Consolacion Riosa, being the relatives
within the third degree belonging to the line from which such property came.

On the 26th of October, 1920, Maria Corral sold that property to Marcelina
Casas, who, on November 3d, of the same year, transferred it to Pablo Rocha.
Therefore, when Maria Corral sold this property to Marcelina Casas, and when the
latter transferred it to Pablo Rocha, it had not yet been adjudicated to Maria
Corral and she was not yet the owner thereof.

On November 6, 1920, the defendant Pablo Rocha mortgaged this property to the
plaintiff, and the mortgage was registered, under Act No. 2837, on the 10th of
the same month and this mortgage constitutes the cause of the present action.
According to this, the mortgage of said property was executed by Pablo Rocha in
favor of the plaintiff before the property passed to the ownership of Maria
Corral, and when the latter had no right as yet to dispose of it to Marcelina
Casas, nor the latter to transfer it to Pablo Rocha. Wherefore, the mortgage of
the property to the bank was executed by one who was not the owner thereof at
the time, and the mortgage is, for that reason, without legal existence.

It is true that Maria Corral having afterwards acquired the property, her
sale thereof to Marcelina Casas, and the latter’s transfer to Pablo Rocha, as
well as the mortgage executed by Rocha in favor of the plaintiff, were all
ratified; nevertheless, this should be understood, in connection With the extent
and condition in which the acquisition was effected. Since Maria Corral acquired
the property subject to the reservation in favor of Magin Riosa and Consolacion
Riosa, said property passed first to Marcelina Casas and later to Pablo Rocha,
as reservable property, and, consequently, the mortgage thereof to the bank must
also be subject to the same reservation. In this sense we find the judgment
appealed from to be correct, in so far as it is ordered that should Pablo Rocha
be unable to pay his debt to the plaintiff, this property was to be sold subject
to this reservation.

But since Maria Corral has died, the property has, in consequence of this
reservation, passed to the full and absolute ownership of Magin Riosa and
Consolacion Riosa, and can no longer be sold to satisfy the judgment rendered
against Pablo Rocha in favor of the plaintiff.

We find no merit in the plaintiff’s contention that Consolation Riosa is
under estoppel in this case, on account of having opposed, as defendant, in the
case of Riosa vs. Rocha, the holding that this property was subject to
reservation ; for, if it is true that such an answer was indeed filed in that
case, Consolacion Riosa denied that she had authorized it, and her statement has
not been contradicted. Furthermore, while she was included as defendant in that
case, it was precisely for the purpose of having the holding of reservation
extend to her in the proper proportion.

Neither do we find any merit in the contention that said Consolacion Riosa
shared in P7,000 of the P20,000 received by Pablo Rocha from the plaintiff, for
we find that while she received this amount, she did so not as a share, but as a
deposit, having returned it to Maria Corral, according to receipts signed by the
latter, which we consider genuine.

It has been proved that the plaintiff paid the land tax upon the property in
question in the amount of P2,698.22. This amount was paid for the benefit of the
property, which otherwise would have been forfeited. The intervenors Magin Riosa
and Consolacion Riosa must reimburse the plaintiff for this sum.

In view of the stand we have taken in deciding this case, we deem it
unnecessary to pass upon the other questions raised by both parties on
appeal.

For the foregoing, the judgment appealed from is modified, and it is held
that in case of failure to satisfy the amount of the judgment rendered against
Pablo Rocha in favor of the plaintiff, the mortgaged property cannot be sold.
The intervenors Magin Riosa and Consolacion Riosa are hereby ordered to
reimburse the plaintiff in the amount of P2,698.22, and it is held that this
obligation is a lien upon the property in question. We make no special
pronouncement as to costs. So ordered.

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