NATALIO A. ENRIQUEZ, SUSANA GALA, MOISES A. GALA AND AVELINA ELEAZAR, PLAINTIFFS AND APPELLANTS, VS. COSME RA£OLA, ADMINISTRATOR OF THE ESTATE OF THE DECEASED FRUCTUOSA CADIZ, D…

The appellants as plaintiffs on September
29, 1932, filed suit in the Court of First Instance of Tayabas against
Cosme Ranola as administrator of the estate of Fructuosa Cadiz praying
for a personal judgment for P30,000 with interest and the foreclosure
of a mortgage securing said debt. This mortgage was a first lien on a
parcel of land with improvements described in certificate of title No.
878 of Tayabas and containing an area of 809,609 square meters assessed
at P28,150. It is alleged that neither Fructuosa Cadiz in her life time
nor her representative since her death has paid the said past due loan
or the interest thereon since June 27,1930, although due demand was
made.

The answer of the defendant administrator of the late Fructuosa
Cadiz admits all of the allegations of the petitioner but prays to be
relieved of the payment of attorneys’ fees and costs.

On January 18, 1933, by permission of the court, Pedro Herrera and
Martin Mendoza filed a petition of intervention in which it is alleged
that the intervenor Herrera has an interest in said land under and by
virtue of his purchase thereof at a sheriff’s sale which is noted on
the back of the said certificate of title No. 878. The intervenor
Mendoza claims an interest in said land alleging that the said
Fructuosa Cadiz in her life time on January 20, 1930, transferred to
the said Mendoza by sale with pacto de retro a portion of said land containing 400 coconut trees for the sum of P3,500.

The intervenors further allege that in 1931 the defendant
administrator delivered possession of the said mortgaged property to
the plaintiffs by way of antichresis for the remaining portion of the
five-year period stated in the original contract of mortgage with the
understanding that the plaintiffs should apply the products of the land
to the payment of the mortgage debt and interest; that by virtue of
said agreement of antichresis there has been a novation of the
obligation and the plaintiffs cannot foreclose the mortgage executed by
Fructuosa Cadiz before the expiration of five years from the date of
the said mortgage, that is to say, June 27, 1935, and hence the action
of the plaintiffs is premature. They pray that the contract of mortgage
be declared novated by the subsequent contract of antichresis; that the
plaintiffs be required to render an account; that the petition of the
plaintiffs be dismissed with costs.

On March 7, 1933, the plaintiffs filed their answer to the petition
of intervention in which they allege that the plaintiffs are the owners
of the land described in said certificate of title No. 878 by virtue of
the fact that they purchased the same from Francisco Paulino who in his
turn purchased the same at a sheriff’s sale under an execution upon a
judgment against said Fructuosa Cadiz in case No. 2807 which sale and
purchase is registered in the office of the register of deeds and noted
on the back of said certificate No. 878. The answer denies that the
intervenors acquired any right under their alleged purchases.

As stated, the defendant administrator of the estate of Fructuosa
Cadiz makes no defense to the plaintiffs’ demand. Only the intervenors
and the plaintiffs have appealed.

The plaintiffs except to that portion of the decision of the trial
court which denied the prayer of the plaintiffs for a personal judgment
for P30,000 with interest on the debt secured by the mortgage
aforesaid. The trial court held that when the plaintiffs acquired
through Francisco Paulino the equity of Fructuosa Cadiz in the very
same lands conveyed to them as mortgagees, a merger of rights (confusion de derechos)
took place which had the effect of extinguishing the debt of Fructuosa
Cadiz in favor of the plaintiffs, under the provisions of articles 1156
and 1159 of the Civil Code. If that were not true, the plaintiffs would
acquire the legal and equitable title to lands assessed at P28,150 for
the sum of P857.31 paid by them to Francisco Paulino without giving
Fructuosa Cadiz or her estate credit for anything, leaving the said
estate still owing the plaintiffs the P30,000, plus interest, for which
the lands stood security. This extinction of the obligation and merger
of rights by which the plaintiffs became owners of the land, occurred
when they acquired the rights of Francisco Paulino, that is to say, on
February 24, 1931.

Subsequent thereto, that is to say, on August 31,1931, the
intervenor Herrera at a sheriff’s sale purchased all the rights, title
and interest that remained in Fructuosa Cadiz in the said land, which,
as correctly held by the trial court, were in fact exhausted by the
prior conveyances.

As to the intervenor Martin Mendoza, it appears from his Exhibit 1
that Fructuosa Cadiz, on January 20, 1930, executed in his favor a
document entitled venta con pacto de retro affecting a
portion of the land embraced in said certificate of title No. 878; but
said document was never registered or noted on the certificate of title
in conformity with section 50 of Act No. 496. Hence it could not affect
these plaintiffs. Although he appealed, we do not find in the brief for
the intervenors any argument challenging the conclusion of the court in
this respect.

The intervenors’ appeal rests essentially upon the proposition that
novation of the contract of mortgage occurred when the plaintiffs
agreed that they should take possession of the land before the maturity
of the mortgage, and credit the products thereof to the payment of the
principal and interest of the debt, thus converting the mortgage to a
contract of antichresis. The evidence fails entirely to establish said
alleged agreement. The defendant administrator, the widower of the
deceased Fructuosa Cadiz, makes no such claim. The plaintiffs contend
that they did not take possession until after they became owners by
virtue of the conveyance from Francisco Paulino, that is to say, toward
the end of the month of February, 1932, which was after the year for
redemption of Francisco Paulino’s purchase by the judgment debtor had
expired.

The intervenors in their brief take grave exception to the orders
of the trial court suspending the final effect of the judgment in this
case in favor of the appellants until they obtained a certificate of
title. On October 30, 1933, the plaintiffs notified the court that they
had obtained certificate of title No. 7465 upon cancellation of
certificate of title No. 878, thus complying with the order of the
court of August 21, 1933. Whatever apparent irregularities of procedure
there may have been in this connection, we are convinced that the
intervenors have not been deprived of any substantial rights by the
final decision of the court. The judgment is affirmed with costs to be
divided equally between the plaintiffs-appellants and the
intervenors-appellants.

Malcolm, Villa-Real, Imperial, and Goddard, JJ., concur.