PEOPLES BANK & TRUST CO., PLAINTIFF AND APPELLEE, VS. MANUEL OLONDRIZ ET AL., DEFENDANTS AND APPELLANTS.

This
is an appeal taken by Manuel Olondriz et al. from the judgment rendered
by the Court of First Instance of Sorsogon, the dispositive part of
which reads as follows:

“Wherefore,
judgment is rendered sentencing the defendant Manuel Olondriz, as
judicial administrator of the estate of the deceased Carlos M.
Olondriz, and individually and jointly with his coheirs, the defendants
Socorro, Salud and Puy surnamed Olondriz, to pay to the plaintiff the
sum of P15,400, with interest thereon at the rate of 10 per cent per
annum from January 1, 1931, until fully paid, plus the sum of P500 as
attorney’s fees, and ordering said defendants to pay the total amount
of this judgment in the office of the clerk of this court within the
period of three (3) months from the date of this decision, upon failure
to do which, the land described in the instrument of mortgage, Exhibit
A, shall be sold at public auction to pay said debt, it being
understood that, should the proceeds of the sale be insufficient to
cover the amount of the indebtedness declared in this judgment, the
defendant Manuel Olondriz, individually, and the other defendants
Socorro, Salud and Puy Olondriz shall not answer for the unpaid balance
of the debt, with the costs to the defendant Manuel Olondriz, as
administrator of the estate of Carlos M. Olondriz. It is so ordered.”

In support of their appeal, the appellants assign the following alleged errors as committed by the court a quo in its judgment in question, to wit:

“1.
The lower court erred in holding that the defendants herein, Manuel
Olondriz, in his individual capacity, and Socorro Olondriz, Salud
Olondriz, and Puy Olondriz, have been duly notified of the assignment
made by Juan B. Alegre to the People’s Bank and Trust Co.

“2.
The lower court erred in ordering the foreclosure of the entire
property described in the complaint and in not exempting therefrom the
undivided half of said property as pertaining to the heirs, Manuel
Olondriz, Socorro Olondriz, Salud Olondriz, and Puy Olondriz.”

To decide the questions of law raised in the present appeal, this court
can consider only the facts found by the trial judge as having been
proven in his judgment, which are as follows:

“According
to the verification of the balance, Exhibit D, signed by Carlos M.
Olondriz, the latter, on January 1, 1931, had a debit balance of
P15,400 in favor of the deceased Juan B. Alegre. Prior to the
above-stated date, or to be more exact, on July 15, 1929, Carlos M.
Olondriz executed a mortgage instrument (Exhibit A) in favor of the
deceased Juan B. Alegre, over the parcel of abaca land described in
paragraph 2 of the complaint, to secure the payment to said Juan B.
Alegre of a debt of P14,000, with interest thereon at the rate of 10
per cent per annum, for the period of two years from the date of the
instrument, with the express stipulation that Juan B. Alegre could
sell, convey and assign his rights to the mortgage. It has likewise
been stipulated in said instrument that, should a judicial action be
necessary for the collection of the amount secured by the mortgage in
question, the mortgage debtor Carlos M. Olondriz bound himself to pay
the sum of P500 as attorney’s fees. It seems that after the
constitution of the mortgage Carlos M. Olondriz had been taking various
sums from Juan B. Alegre, thereby resulting in a balance against him in
the sum of P15,400 on January 1, 1931.

“On May 2, 1931,
original certificate of title No. 679 of the mortgaged land was issued
in the name of Carlos M. Olondriz as to one-half thereof, and in the
name of his children Manuel Olondriz y Gutierrez, Socorro Olondriz y
Gutierrez, Salud Olondriz y Gutierrez and Puy Olondriz y Gutierrez as
to the other half, it appearing in said original certificate of title
that the property is subject to a first, mortgage in favor of Juan B.
Alegre, for the sum of P14,000, with interest thereon at the rate of 10
per cent per annum from the date of the instrument, according to an
instrument dated July 15, 1929.

“Juan B. Alegre, by means
of the instrument of assignment, Exhibit B, transferred to the
plaintiff, among other accounts, the debt of Carlos M. Olondriz, which
on the date of said assignment was P14,000. On May 20, 1931, Juan B.
Alegre turned over to the plaintiff Exhibit C, which is a list of
accounts substituting and amplifying the list of account of Carlos M.
Olondriz increased to P15,400. This assignment has been confirmed and
approved by the Court of First Instance of Manila, and notice thereof
was likewise served upon the debtors whose accounts have been
transferred to the plaintiff. In spite of the various demands made by
the plaintiff, the defendant administrator has to this date failed to
pay the debt of Carlos M. Olondriz.”

The
first question to be decided in the present appeal is that raised in
the first assignment of alleged error, consisting in whether or not the
court a quo erred in holding that the defendants herein,
Manuel Olondriz in his individual capacity, and Socorro Olondriz, Salud
Olondriz, and Puy Olondriz, have been duly notified of the assignment
made by Juan B. Alegre to the Peoples Bank and Trust Co. of the
mortgage constituted in his favor by the deceased Carlos M. Olondriz,
father of said defendants.

It is inferred from the above-stated facts, which were found by the court a quo
as proven during the trial, that the land under consideration herein
belonged to the conjugal partnership of Carlos M. Olondriz and his
wife, when the former mortgaged it to Juan B. Alegre to secure the
payment of a debt in the sum of P14,000 with interest thereon at the
rate of 10 per cent per annum for a period of two years from the date
of the instrument, that is, June 15, 1929. The fact that upon the
issuance of original certificate of title No. 679 of the mortgaged land
on May 2, 1935, one-half thereof was placed in the name of Carlos M.
Olondriz and the other half in the name of his children Manuel Olondriz
y Gutierrez, Socorro Olondriz y Gutierrez, Salud Olondriz y Gutierrez,
and Puy Olondriz y Gutierrez, did not alter the juridical relation
established between Carlos M. Olondriz and Juan B. Alegre by virtue of
said instrument of mortgage executed by the former in favor of the
latter, with Carlos M. Olondriz as the only debtor, as stated in the
decree for the issuance of certificate of title No. 679, and did not
make his said children mortgage debtors of Juan B. Alegre by virtue of
the above-stated instrument of mortgage, because, since Carlos M.
Olondriz, as the legal administrator of the conjugal property (art.
1412, Civil Code), has the power to mortgage the same (art. 1413, Civil
Code), the obligation contracted by the husband constituted a lien on
the entire property, although said defendants had later acquired title
of ownership over an undivided half thereof. Therefore, as Carlos M.
Olondriz is the only mortgage debtor by virtue of the instrument of
mortgage, he alone was entitled to be notified of the assignment of the
mortgage credit in favor of the herein plaintiff Peoples Bank &
Trust Co., and the court a quo did not commit the first error alleged to have been committed by it in its judgment.

With respect to the second assignment of alleged error, the same, being
a consequence of the first one, has been decided with the resolution of
the former.

The appealed judgment, however, orders the
defendant Manuel Olondriz, as judicial administrator of the estate of
the deceased Carlos M. Olondriz, to pay individually and jointly with
his coheirs the sum of P15,400 with interest thereon at the rate of 10
per cent per annum from January 1, 1931, until fully paid, although the
amount secured by the mortgage is merely P14,000 with interest thereon
at the rate of 10 per cent per annum, payable within two years from the
date of the instrument, plus the sum of P500 as attorney’s fees.

In view of the foregoing considerations, this court is of the opinion
and so holds that when a husband puts up as security a real property
belonging to the conjugal partnership, and one-half of said property is
later adjudicated to said husband and the other half to his children,
the entire property in question answers for the payment of the mortgage
debt, and the said husband, as the sole mortgage debtor, is alone
entitled to be notified of the assignment of the mortgage, in
accordance with the provisions of section 152 of the Mortgage Law.

Wherefore, and with the sole modification that it be understood that
the amount of the mortgage debt, which the defendants-appellants should
pay by virtue of the appealed judgment, is P14,000, said judgment is
affirmed in all other respects, with the costs to the defendants. So
ordered.

Avanceña, C. J., Imperial, Diaz, Laurel, and Concepcion, JJ., concur.