W. S. PRICE, PLAINTIFF AND APPELLEE, VS. CEFERINO YBAÑES ET AL., DEFENDANTS. ALEIDA SAAVEDRA, APPELLANT.

Defendants Ceferino Ybañes and Aleida Saavedra are husband and wife,
with children. They lived separately. Aleida Saavedra brought an action
in the Court of First Instance of Cebu against her husband for alimony
for herself and their children. Judgment having been rendered in her
favor on her complaint, Aleida Saavedra, nevertheless, appealed from
the decision of the court by reason of the inadequacy of the alimony
granted. While the appeal was pending, her husband sold to defendant
Rafael Martinez a big parcel of land belonging to the marriage,
situated in the barrio of Tibayla, municipality of San Isidro, Leyte,
with other personal and real property, for the sum of P45,000, of which
P30,000 was paid immediately by the vendee, who executed a mortgage on
the land so sold for the balance of P15,000 in favor of the vendor
Ceferino Ybañes. Some days later, Rafael Martinez obtained a loan in
the amount of P15,000 from plaintiff W. S. Price with which he paid
Ceferino Ybañes the balance of the price payment of which was deferred.
The land was mortgaged to the plaintiff for the said sum of P15,000. On
learning of the sale made in favor of Rafael Martinez by Ceferino
Ybañes and of the mortgage of the land executed by the former to the
herein plaintiff for the sum of P15,000, Aleida Saavedra and her
children filed a complaint against the vendor Ceferino Ybañes, the
vendee Rafael Martinez and the mortgage creditor, the herein plaintiff
W. S. Price, for the annulment of the aforesaid sale and mortgage as
being illegal and fraudulent. The court rendered judgment against
defendants, who appealed to this court which, in deciding the appeal,
held in the dispositive part of its decision (G. R. No. 37854, November
17, 1933, 58 Phil., 767), the following:

“Wherefore,
the judgment appealed from is hereby modified to the effect that the
deed of sale, Exhibit C, executed by Ceferino Ibañes in favor of Rafael
Martinez is declared rescinded and without force and effect, and the
register of deeds of Leyte is hereby ordered to cancel transfer
certificate of title No. 294 issued in favor of the said Martinez, and
to issue, in lieu thereof, another transfer certificate of title in
favor of Ceferino Ibañes and his wife, Aleida Saavedra, with a notation
thereon of (1) the mortgage constituted in favor of W. S. Price to
secure the payment of the sum of P15,000 and (2) the judgment rendered
by this court in case G. R. No. 33795 (56 Phil., 33), civil case No.
7957 of the Court of First Instance of Cebu; without prejudice to any
right of action which Rafael Martinez may have against Ceferino Ibañes
in accordance with the law. As thus modified, the judgment appealed
from is hereby affirmed in all other respects, with the costs of both
instances against Ceferino Ibañes and Rafael Martinez.”

By virtue of the foregoing decision, the register of deeds of the
Province of Leyte cancelled transfer certificate of title No. 294
issued in favor of Rafael Martinez, and in its stead, issued another on
December 27, 1933 bearing No. 395 in the name of the spouses Ceferino
Ybañes and Aleida Saavedra, noting in the new transfer certificate of
title as preferred encumbrance the mortgage of P15,000 in favor of
plaintiff and, thereafter the judgment by this court in favor of Aleida
Saavedra in her capacity as wife and creditor of her husband Ceferino
Ybañes for alimony for herself and their children. On February 23, 1935
by virtue of the writ of execution issued in the action for alimony
against Ceferino Ybañes, all the latter’s right, title and interest
which said Ceferino Ybañes might have in the land in question was sold
at public auction, and his wife Aleida Saavedra bought the same,
becoming thereby the sole owner of the land.

The obligation
having become due, plaintiff, herein appellee, foreclosed his mortgage
credit of P15,000 against the spouses Ceferino Ybañes and Aleida
Saavedra and against Rafael Martinez. Judgment was rendered in favor of
plaintiff and against defendants for the sum of P15,000 with six per
cent legal interest from January 16, 1934, the date of the filing of
the complaint, until complete payment which must be made within the
period of three months from the date of the judgment, the mortgaged
land to be sold to satisfy the judgment in case of nonpayment. From
said judgment, Aleida Saavedra appealed.

Ceferino Ybañes and
Rafael Martinez not having appealed, as to them the judgment has become
final and executory. In her brief Aleida Saavedra contends: First, that
the court erred in sentencing all the defendants to pay the sum of
P15,000 secured by the mortgaged land in question; and second, that the
court likewise erred in ordering payment of legal interest of six per
cent per annum on said principal sum from the filing of the complaint.

As to the first error, we believe that the contention of the appellant
should be sustained for the reason that she has not received a single
centavo of the aforesaid sum of P15,000. Defendant Rafael Martinez
alone contracted the debt with plaintiff and should be the only one
responsible for its payment.

It is argued that Rafael
Martinez delivered the entire sum of P15,000 to defendant Ceferino
Ybañes. If this could alter the obligation of Rafael Martinez, then
Ceferino Ybañes is the one who should pay the debt, not the appellant,
who precisely obtained judgment declaring null and void the sale of the
land made by her husband in favor of Rafael Martinez. Appellant Aleida
Saavedra would be constrained to pay plaintiff the said sum of P15,000
only in case neither Rafael Martinez nor Ceferino Ybañes should have
paid it, and she would do so to keep her ownership over the mortgaged
land which now belongs to her. However, the payment which she might
make would be an act of her own free will and not in compliance with an
obligation as the judgment appealed from attempts to impose on her.

Concerning the payment of six per cent legal interest, we believe that
the contention of the appellant is also correct and according to law.
The obligation secured by the mortgage in favor of plaintiff is solely
and exclusively the payment of the sum of P15,000. No interest
whatsoever was stipulated when the obligation was executed. The
mortgage which this court allowed to remain as a charge on the land,
respecting thereby the right of the plaintiff creditor, cannot be
extended further than the obligation secured by said encumbrance. It is
true that according to the provisions of section 256 of the Code of
Civil Procedure, the court shall, upon trial in an action for
foreclosure of mortgage, ascertain the amount of the debt including
interest and costs; but these legal provisions of course presuppose a
case where the parties had stipulated as to the interest.

In
the brief filed by defendant Rafael Martinez, he contends that “in
accordance with the facts of this case, the juridical relation
resulting from the annulment of the sale executed by Ybañes, as vendor,
in favor of Martinez, as vendee, is, with respect to the mortgage
executed by the latter in favor of Price, more of that of principal and
agent than of surety and principal.” We believe that this contention is
not supported by the facts nor by the law.

The judgment
appealed from is modified and Rafael Martinez and Ceferino Ybañes are
ordered to pay the sum of P15,000 to plaintiff within the period of
ninety days to be counted from the date this decision becomes final,
without pronouncements to costs. So ordered.

Avanceña, C. J., Villa-Real, Imperial, and Laurel, JJ., concur.

DISSENTING IN PART

DIAZ, J.:

I dissent from the opinion of the majority in so far as it declares
Rafael Martinez liable and orders him to pay together with Ceferino
Ybañes the sum of P15,000 to plaintiff and appellee, Walter S. Price.
It is true that it was Rafael Martinez who obtained the aforesaid sum
from W. S. Price, mortgaging for that purpose the land described in
certificate of title No. 294; but it is no less true that he
immediately delivered the amount to Ceferino Ybañes in order to
complete the price of the sale (P45,000) of the land agreed upon
between them.

In the decision of this court rendered in case
G. R. No. S7854, the dispositive part of which is transcribed in the
opinion of the majority, it clearly appears that in the suit between
Aleida Saavedra on one side, and her husband Ceferino Ybañes from whom
she was and still is separated, and Rafael Martinez. W. S. Price, and
Ceferino Ybañes on the other, the real position of the first four with
respect to the land in question was determined in a manner which left
no room for doubt, to wit: the sale made by Ceferino Ybañes to Rafael
Martinez was annulled, but the mortgage executed by the latter in favor
of W. S. Price, creating an encumbrance on said land and an obligation
against Ybañes, was left subsisting, because, as was conclusively
proven in the trial, the sum of P15,000 which Martinez had obtained
from Price, and in consideration of which he executed the said
mortgage, was delivered to Ybañes. The annulment of the sale carried
with it, as it could not but do so, the annulment of the mortgage made
by Martinez, and, consequently, his release from all obligations with
W. S. Price, because after he had been deprived of his title to the
mortgaged property, he could not legally continue to be a mortgage
debtor. As a matter of fact, the court considered the mortgage to have
been executed by Ceferino Ybañes because it was he, in reality, who, as
manager of the conjugal partnership formed by him and his wife Aleida
Saavedra, received and made use of the P15,000 which were the price and
consideration of the mortgage. It is to be presumed that in so doing,
he was not ignorant of the fact that the essential condition of every
contract of mortgage is that one who executes it must not and cannot be
other than the owner of the thing mortgaged; and it is a well known
fact that a mortgage is not a mere accessory contract of guarantee, but
a real right which subjects the mortgaged immovable property to the
payment of the debt with which it has become charged.

It
cannot be stated that the reservation made in the decision of this
court in the case aforecited in favor of Rafael Martinez to exercise
any right of action which he might have against Ceferino Ybañes, refers
to his recovering from the latter what he might pay in case he would
have to pay all or part of the P15,000 to the payment of which he is
sentenced in this case because said reservation, as may be clearly
gathered from the decision, refers to the exercise of the right of
action given him to recover the P30,000 which constitutes the first
payment which he made in order to buy from Ybañes the land in question.
If it were not so, this court would not have expressly declared in its
said decision that the land in question which now appears to be
inscribed in the register of deeds in the name of said Ybañes and his
wife Aleida Saavedra, may answer precisely for the payment of the
aforesaid sum. Strictly speaking, the action brought in this case is
and cannot be more than a foreclosure of mortgage. And I firmly believe
that if it was error to include Rafael Martinez in the complaint as
primarily liable to the same extent as Ceferino Ybañes, it is a greater
error to hold him so by completely overlooking what has been finally
decided in case G. R. No. 37854, to which the interested parties in
this case were not strangers. Rafael Martinez should have been absolved
from the complaint. In this sense, I express my vote.