Scribd Logo
Upload

Welcome to Scribd!

  • 543 views

    103 Rodriguez V Reyes

    Uploaded by

    luigimanzanares
    The Benipayo heirs filed a complaint to partition properties they held in common, agreeing to sell them at a public auction. Two properties were sold to Alberto Benipayo and Jose Dualan, who were aware the properties were mortgaged but believed the original owners would pay the debt. The lower court doubted mutual understanding between parties and ordered a new bidding. On appeal, the Supreme Court held that buyers of mortgaged property are not automatically liable for the debt without stipulation. It reversed the lower court order requiring the original owners to clear title, as the buyers knew of the encumbrance and did not specify their bid was conditional on a clear title.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    103 Rodriguez V Reyes

    Uploaded by

    luigimanzanares
    543 views1 page
    The Benipayo heirs filed a complaint to partition properties they held in common, agreeing to sell them at a public auction. Two properties were sold to Alberto Benipayo and Jose Dualan, who were aware the properties were mortgaged but believed the original owners would pay the debt. The lower court doubted mutual understanding between parties and ordered a new bidding. On appeal, the Supreme Court held that buyers of mortgaged property are not automatically liable for the debt without stipulation. It reversed the lower court order requiring the original owners to clear title, as the buyers knew of the encumbrance and did not specify their bid was conditional on a clear title.

    Original Description:

    Rodriguez v Reyes

    Original Title

    103 Rodriguez v Reyes

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The Benipayo heirs filed a complaint to partition properties they held in common, agreeing to sell them at a public auction. Two properties were sold to Alberto Benipayo and Jose Dualan, who were aware the properties were mortgaged but believed the original owners would pay the debt. The lower court doubted mutual understanding between parties and ordered a new bidding. On appeal, the Supreme Court held that buyers of mortgaged property are not automatically liable for the debt without stipulation. It reversed the lower court order requiring the original owners to clear title, as the buyers knew of the encumbrance and did not specify their bid was conditional on a clear title.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    543 views1 page

    103 Rodriguez V Reyes

    Uploaded by

    luigimanzanares
    The Benipayo heirs filed a complaint to partition properties they held in common, agreeing to sell them at a public auction. Two properties were sold to Alberto Benipayo and Jose Dualan, who were aware the properties were mortgaged but believed the original owners would pay the debt. The lower court doubted mutual understanding between parties and ordered a new bidding. On appeal, the Supreme Court held that buyers of mortgaged property are not automatically liable for the debt without stipulation. It reversed the lower court order requiring the original owners to clear title, as the buyers knew of the encumbrance and did not specify their bid was conditional on a clear title.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    ESTRELLA BENIPAYO RODRIGUEZ, MANUEL BENIPAYO, DONATO BENIPAYO, JR., JAIME D.

    BENIPAYO,
    MAXIMA BENIPAYO MORALES,AURORA BENIPAYO DE LEON, FRANCISCO BENIPAYO,ALEJANDRO
    BENIPAYO,TERESITA BENIPAYO DE LOS SANTOS, LYDIA BENIPAYO CLEMENTE, and JULIA MERCADO
    v
    Judge Reyes of Manila CFI, ALBERTO BENIPAYO,DR.JOSE DUALAN and VICENTE SAYSON, JR
    Rodriguez vs Reyes
    Jan. 30, 1971| REYES, J.B.L., J .:
    Modes of Extinguishment of Obligations
    mjrs

    FACTS:
     Petitioners (Benipayos) filed a complaint against their brother Benipayo (Respondent) for the partition of the properties
    held by them in common as heirs of the late spouses They agreed to sell the properties in a bidding
     A notice of the bidding was published along with a warning that the properties were mortgaged with the DBP for P37,121.76
     The properties were sold
     Benipayo and Dulalan (one of the ones who won in the bidding) prayed that the respondent judge order
    o the payment of the mortgage debt in favor of the Development Bank of the Philippines in the amount of P37,121.96 from the
    proceeds of the auction sale
    o he issuance by the sheriff of Manila of a certificate of sale in favor of Dualan of the property sold to him free from all liens and
    encumbrances;
    o the payment to respondent Benipayo of 1/12 of the proceeds of the sale after deducting therefrom the payment to the
    Development Bank of the Philippines.
     The lower court judge doubted whether there was actually a meeting of the minds between the parties (it seemed that the winning
    bidders believed that the original owners would be the ones who would pay for the mortgage and not them.), so he suggested a re-
    bidding with a clear-cut understanding that the 12 heirs shall assume all obligations and that they should not be paid by the buyers 
    Not accepted by the buyers  The lower court then ordered thatits is the vendors (or the original owners) of the properties who will
    pay for the mortgage  Hence this petition for certiorari

    ISSUE 1 : Whether the purchasers should be the ones to pay for the mortgage given that they purchased the property at their
    own peril with knowledge of the incumbrance (caveat emptor) –NO
     The maxim “caveat emptor”applies only to execution sales, and this was not one such
     The mere fact that the purchaser of an immovable has notice that the required realty is encumbered with a mortgage does not
    render him liable for the payment of the debt guaranteed by the mortgage, in the absence of stipulation or condition that he is to
    assume payment of the mortgage debt.
    o The reason is plain: the mortgage is merely an encumbrance on the property, entitling the mortgagee to have the
    property foreclosed, i.e., sold, in case the principal obligor does not pay the mortgage debt, and apply the proceeds of
    the sale to the satisfaction of his credit. Mortgage is merely an accessory undertaking for the convenience and security of
    the mortgage creditor, and exists independently of the obligation to pay the debt secured by it.
     Certainly the buyer did not obligate himself to replace the debtor in the principal obligation, and he could not do so in law
    without the creditor’s consent (Art 1293)
    o “ART. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made even
    without the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new
    debtor him the rights mentioned in articles 1236 and 1237.”
    ISSUE 2: Whether the order of the lower court requiring the vendors-heirs to clear the title to the land sold was valid –NO
     In submitting their bid, the purchasers are presumed to know, and in fact did know, that the property was subject to a mortgage
    lien; that such encumbrance would make them, as purchasers, eventually liable to discharge mortgage by paying or settling with
    the mortgage creditor, should the original mortgagors fail to satisfy the debt. Normally, therefore, they would have taken this
    eventuality into account in making his bid, and offer a lower amount for the lot than if it were not encumbered. If they intended
    their bid to be understood as conditioned upon the property being conveyed to him free from encumbrance, it was their duty to
    have so stated in their bid, or at least before depositing the purchase price

    FOR THE FOREGOING REASONS, the petition for certiorari is hereby granted and the orders complained of are reversed
    and set aside in so far as they require petitioners to clear the property sold from the mortgage in favor of the Development
    Bank. The writ of preliminary injunction heretofore issued is made permanent. No costs.

    NOTES:
    So basically, purchasing a mortgaged property does not ipso facto transfer the mortgage debt to you. But, practically speaking, it is you who
    will eventually pay for it because it is you who will suffer the foreclosure of the property.

    You might also like