LAW ON SALES | RAMOS VS. CA 279 SCRA 118, SEPTEMBER 15, 1979
RAMOS VS. CA
279 SCRA 118, SEPTEMBER 15, 1979
TOPIC/DOCTRINE
Where the “Deed of Absolute Sale with Assumption of
Mortgage” is ineffective, the seller remains the owner and mortgagor of the
property, and as such, he retains the right to redeem the foreclosed property.
FACTS
On September 8, 1967, Eduardo Yuseco (now deceased)
obtained a loan of P35,000.00 from the Government Service Insurance System. To
guarantee payment of the loan, Yuseco constituted a mortgage over his property
covered by TCT No. 123161 of the Register of Deeds of Quezon City in favor of
GSIS. Under the mortgage contract, Yuseco was prohibited from selling,
disposing of, mortgaging, or in any manner encumbering the mortgaged property
without the prior written consent of the GSIS.
On November 17, 1969, Yuseco executed a “Contract to Sell”
(Exh. A) of the mortgaged property in favor of petitioner Felipe Belmonte, by
virtue of which Belmonte agreed to assume Yuseco’s obligation to the GSIS.
Belmonte was, however, unable to comply with his obligation. Hence Yuseco
redeemed the property from the GSIS and sold the same to Dionisio Palla.
Petitioners filed an action before the Regional Trial Court
for Annulment of Foreclosure Proceedings, Redemption and Sale, and
Reconveyance. They assailed the validity of the foreclosure proceedings,
alleging that the GSIS had acted in bad faith by withholding information on the
reconstitution of TCT No. 123161 and the foreclosure of the mortgage. They
charged that Yuseco had acted in bad faith in selling the foreclosed property to
Palla even if the same had already been sold to them. Petitioners alleged that
Palla was not a purchaser in good faith because he had knowledge of
petitioners’ adverse claim on the property. They also charged the GSIS with bad
faith, alleging that it took part in the sale of the property to Palla despite
its knowledge that the property had previously been sold to petitioners. The
RTC ruled infavor of petitioner.
The Court of Appeals reversed. It held that the “Deed of
Absolute Sale with Assumption of Mortgage” which Yuseco had made with
petitioners was unenforceable because of lack of approval by the GSIS; that the
GSIS legally foreclosed the mortgage for failure of Eduardo Yuseco to pay.
ISSUE
Whether the absolute sale with assumption of mortgage was
perfected.
RULING
No.
The court held that Art. 1181 of the Civil Code provides
that “In conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the
happening of the event which constitutes the condition.” Accordingly, in sales
with assumption of mortgage, the assumption of mortgage is a condition to the
seller’s consent so that without approval by the mortgagee, no sale is
perfected. Where the “Deed of Absolute Sale with Assumption of Mortgage” is
ineffective, the seller remains the owner and mortgagor of the property, and as
such, he retains the right to redeem the foreclosed property.
