82 Pasno V Ravina

[82] PASNO v RAVINA1 ● Since Act No.
31352 failed to make provision regarding the sale of mortgaged property

G.R. No. L-31581 | February 3, 1930 which is in custodia legis, it would be logical to suppose that the general provisions of
Philippine law would govern this latter contingency.
SUMMARY: Labitoria mortgaged 3 parcels of land during her lifetime. She died and her estate ● Section 708 of the Code of Civil Procedure provides:
having failed to comply with the conditions of the mortgage, the Philippine National Bank,
pursuant to the stipulations contained in the same, asked the sheriff of Tayabas to proceed with "A creditor holding a claim against the deceased, secured by mortgage or other
the sale of the parcels of land. Court held that PNB can foreclose the mortgage. collateral security, may abandon the security and prosecute his claim before the
committee, and share in the general distribution of the assets of the estate; or he may
DOCTRINE: The power of sale given in a real estate mortgage is a power coupled with an foreclose his mortgage or realize upon his security, by ordinary action in court, making
interest which survives the death of the grantor. The mortgagee with a power of sale should, on the executor or administrator a party defendant;…but nothing herein contained shall
the death of the mortgagor, foreclose the mortgage in accordance with the procedure pointed prohibit the executor or administrator from redeeming the property mortgaged or
out in section 708 of the Code of Civil Procedure. Her attorney for the special administrator filed pledged, by paying the debt for which it is held as security, under the direction of the
a motion in court in which an order was asked requiring the sheriff to vacate the attachment over court, if the court shall adjudge it to be for the best interest of the estate that such
the mortgaged properties and to abstain from selling the said land. redemption shall be made."
FACTS ● The creditor here avails of the second remedy invoked but until now unsuccessfully
● Gabina Labitoria during her lifetime mortgaged three parcels of land to the Philippine since the mortgagee has not begun an ordinary action in court to foreclose the
National Bank to secure an indebtedness of P1,600. mortgage making the special administrator a party defendant.
● It was stipulated in the mortgage, among other things, that the mortgagee "may ● The power of sale given in a mortgage is a power coupled with an interest which
remove, sell or dispose of the mortgaged property or any buildings, improvements or survives the death of the grantor.
other property in, on or attached to it and belonging to the mortgagor in accordance ● In view of the silence of Act No. 3135 and in view of what is found in section 708 of
with the provisions of Act No. 3135 or take other legal action that it may deem the Code of Civil Procedure, it would be preferable to reach the conclusion that the
necessary." mortgagee with a power of sale should be made to foreclose the mortgage in
● The mortgagor died, and a petition was presented in court for the probate of her last conformity with the procedure pointed out in section 708 of the Code of Civil
will and testament. Procedure.
● During the pendency of these proceedings, a special administrator was appointed by ● That would safeguard the interests of the estate by putting the estate on notice while
the lower court who took possession of the estate of the deceased, including the three it would not jeopardize any rights of the mortgagee.
parcels of land mortgaged to the Philippine National Bank. ● The only result is to temporarily suspend the power to sell so as not to interfere with
● The estate having failed to comply with the conditions of the mortgage, the Philippine the orderly administration of the estate of a decedent. A contrary holding would be
National Bank, pursuant to the stipulations contained in the same, asked the sheriff of inconsistent with the portion of our law governing the settlement of estates of
Tayabas to proceed with the sale of the parcels of land. deceased persons
● When the attorney for the special administrator received notice of the proposed action,
he filed a motion in court in which an order was asked requiring the sheriff to vacate RULING: Agreeable to the foregoing pronouncements, the judgment and orders appealed from
the attachment over the mortgaged properties and to abstain from selling the said will be affirmed, with one-half of the costs of this instance against the oppositors and appellants
land. Fortunata Ravina and Ponciano Ravina, and the other half of the costs of this instance against
the Philippine National Bank.
ISSUE: Whether or not the mortgagee PNB can foreclose the mortgage in its favor after the
mortgage property is in the hands of the administrator. SEPARATE OPINION:
STREET, VILLAMOR, and OSTRAND, JJ
HELD: Yes. ● Does not concur that after the death of the mortgagor, the mortgage can only be
foreclosed in an ordinary action in court even though it may contain a clause expressly
conferring upon the mortgagee the power to sell the property extrajudicially.
● Under such a power, the sale may be proceeded with under the provisions of Act No.
3135, which is expressly referred to in the mortgage now under consideration
1 2
Disclaimer: the whole case is super short and the facts in this digest are literally the full text. Act to regulate the sale of property under special powers inserted in or annexed to real-estate
This case is NUTS. mortgages
● The decisions of English and American courts are almost unanimous to the effect that
a power of sale contained in a mortgage is a power coupled with an interest and is
not revoked by the mortgagor's death.
● Examining Section 708 of the Code of Civil Procedure, it will be seen that the bringing
of an action to foreclose is necessary only when the mortgagee wishes to obtain a
judgment over for the deficiency remaining unpaid after foreclosure is effected.
○ This section gives to the mortgagee three distinct alternatives, which are,
■ to waive his security and prove his credit as an ordinary debt
against the estate of the deceased;
■ to foreclose the mortgage by ordinary action in court and recover
any deficiency against the estate in administration;
■ to foreclose without action at any time within the period allowed
by the statute of limitations
● Effect: creditor waives his right to recover any
deficiency from the estate
● Submit that the policy of the court in requiring foreclosure by action in case of the
death of a mortgagor, where a power of sale is inserted in the mortgage, will prove
highly prejudicial to the estates of deceased mortgagors.
● If foreclosure is effected extrajudicially under the power, in conformity with the
provisions of Act No. 3135, the mortgagor or his representative has a full year, from
the date of the sale, within which to redeem the property, this being the same period of
time that is allowed to judgment debtors for redeeming after sale under execution.
○ ON THE OTHER HAND, provisions of the Code of Civil Procedure relative to
the foreclosure of mortgages by action allows no fixed period for
redemption after sale
● When account is further taken of the fact that a creditor who elects to foreclose by
extrajudicial sale waives all right to recover against the estate of the deceased debtor
for any deficiency remaining unpaid after the sale, it will be readily seen that the
decision in this case will impose a burden upon the estates of deceased persons who
have mortgaged real property for the security of debts, without any compensatory
advantage.ch

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[82] PASNO v RAVINA1 ● Since Act No.

31352 failed to make provision regarding the sale of mortgaged property

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