Scribd Logo
Upload

Welcome to Scribd!

  • 95 views

    62) de Barreto v. Villanueva W

    Uploaded by

    Rain Hofileña
    1) Rosario Cruzado sold property to Villanueva but was only partially paid, while Villanueva secured a loan from Barretto and mortgaged the property without paying Cruzado. 2) Cruzado argued she had a vendor's lien on the property under the Civil Code, while Barretto foreclosed on their mortgage. The court initially ruled Cruzado and Barretto must be paid pro-rata from foreclosure proceeds. 3) On reconsideration, the court set aside its prior decision, finding that without insolvency proceedings, Cruzado's unrecorded vendor's lien claim could not be adjudicated equally with Barretto's registered mortgage under the Code. Cruz

    Copyright:

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

    62) de Barreto v. Villanueva W

    Uploaded by

    Rain Hofileña
    95 views2 pages
    1) Rosario Cruzado sold property to Villanueva but was only partially paid, while Villanueva secured a loan from Barretto and mortgaged the property without paying Cruzado. 2) Cruzado argued she had a vendor's lien on the property under the Civil Code, while Barretto foreclosed on their mortgage. The court initially ruled Cruzado and Barretto must be paid pro-rata from foreclosure proceeds. 3) On reconsideration, the court set aside its prior decision, finding that without insolvency proceedings, Cruzado's unrecorded vendor's lien claim could not be adjudicated equally with Barretto's registered mortgage under the Code. Cruz

    Original Title

    62) De Barreto v. Villanueva w

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1) Rosario Cruzado sold property to Villanueva but was only partially paid, while Villanueva secured a loan from Barretto and mortgaged the property without paying Cruzado. 2) Cruzado argued she had a vendor's lien on the property under the Civil Code, while Barretto foreclosed on their mortgage. The court initially ruled Cruzado and Barretto must be paid pro-rata from foreclosure proceeds. 3) On reconsideration, the court set aside its prior decision, finding that without insolvency proceedings, Cruzado's unrecorded vendor's lien claim could not be adjudicated equally with Barretto's registered mortgage under the Code. Cruz

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    95 views2 pages

    62) de Barreto v. Villanueva W

    Uploaded by

    Rain Hofileña
    1) Rosario Cruzado sold property to Villanueva but was only partially paid, while Villanueva secured a loan from Barretto and mortgaged the property without paying Cruzado. 2) Cruzado argued she had a vendor's lien on the property under the Civil Code, while Barretto foreclosed on their mortgage. The court initially ruled Cruzado and Barretto must be paid pro-rata from foreclosure proceeds. 3) On reconsideration, the court set aside its prior decision, finding that without insolvency proceedings, Cruzado's unrecorded vendor's lien claim could not be adjudicated equally with Barretto's registered mortgage under the Code. Cruz

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    DE BARRETO, ET. AL. v. VILLANUEVA, ET. AL.

    , (1961)

    Facts: 
    -Rosario Cruzado sold all her right, title, and interest and that of her children in the house and lot herein
    involved to Villanueva for P19K. The purchaser paid P1,500 in advance, and executed a promissory note for
    the balance. However, the buyer could only pay P5,500. On account of the note, for which reason the vendor
    obtained judgment for the unpaid balance. In the meantime, the buyer Villanueva was able to secure a clean
    certificate of title and mortgaged the property to appellant Barretto to secure a loan of P30K, said mortgage
    having been duly recorded.
    -Villanueva defaulted on the mortgage loan in favor of Barretto. The latter foreclosed the mortgage in her
    favor, obtained judgment, and upon its becoming final asked for execution. Cruzado filed a motion for
    recognition for her "vendor's lien" invoking Articles 2242, 2243, and 2249 of the new Civil Code. After
    hearing, the court below ordered the "lien" annotated on the back of the title, with the proviso that in case of
    sale under the foreclosure decree the vendor's lien and the mortgage credit of appellant Barretto should be
    paid pro rata from the proceeds.

    Appellants insist that:


    1.        The vendor's lien, under Articles 2242 and 2243 of the new, Civil Code of the Philippines, can only
    become effective in the event of insolvency of the vendee, which has not been proved to exist in the instant
    case; and .
    2.       That the Cruzado is not a true vendor of the foreclosed property.

    Article 2242 of the new Civil Code enumerates the claims, mortgage and liens that constitute an
    encumbrance on specific immovable property, and among them are: .
    (2) For the unpaid price of real property sold, upon the immovable sold; and
    (5) Mortgage credits recorded in the Registry of Property."

    Article 2249 of the same Code provides that "if there are two or more credits with respect to the same
    specific real property or real rights, they shall be satisfied pro-rata after the payment of the taxes and
    assessment upon the immovable property or real rights.

    Held: Application of the above-quoted provisions to the case at bar would mean that the herein appellee
    Rosario Cruzado as an unpaid vendor of the property in question has the right to share pro-rata with the
    appellants the proceeds of the foreclosure sale.

    Issue: Appellant’s argument: inasmuch as the unpaid vendor's lien in this case was not registered, it should
    not prejudice the said appellants' registered rights over the property.

    Held: There is nothing to this argument. Note must be taken of the fact that article 2242 of the new Civil
    Code enumerating the preferred claims, mortgages and liens on immovables, specifically requires that.
    Unlike the unpaid price of real property sold. mortgage credits, in order to be given preference, should be
    recorded in the Registry of Property. If the legislative intent was to impose the same requirement in the case
    of the vendor's lien, or the unpaid price of real property sold, the lawmakers could have easily inserted the
    same qualification which now modifies the mortgage credits. The law, however, does not make any
    distinction between registered and unregistered vendor's lien, which only goes to show that any lien of that
    kind enjoys the preferred credit status.

    As to the point made that the articles of the Civil Code on concurrence and preference of credits are
    applicable only to the insolvent debtor, suffice it to say that nothing in the law shows any such limitation. If
    we are to interpret this portion of the Code as intended only for insolvency cases, then other creditor-debtor
    relationships where there are concurrence of credits would be left without any rules to govern them, and it
    would render purposeless the special laws on insolvency.

    Resolution on Motion to Consider (1962)


    Appellants, spouses Barretto, have filed a motion vigorously urging that our decision be reconsidered and set
    aside, and a new one entered declaring that their right as mortgagees remain superior to the unrecorded claim
    of herein appellee for the balance of the purchase price of her rights, title, and interests in the mortgaged
    property.

    We have reached the conclusion that our original decision must be reconsidered and set aside:

    Under the system of the Civil Code of the Philippines, only taxes enjoy a similar absolute preference. All the
    remaining thirteen classes of preferred creditors under Article 2242 enjoy no priority among themselves, but
    must be paid pro-rata i.e., in proportion to the amount of the respective credits. Thus, Article 2249 provides:
    If there are two or more credits with respect to the same specific real property or real rights, they, shall be
    satisfied pro-rata after the payment of the taxes and assessments upon the immovable property or real rights."

    The full application of Articles 2249 and 2242 demands that there must be first some proceedings where the
    claims of all the preferred creditors may be bindingly adjudicated, such as:
    1.         insolvency,
    2.       the settlement of decedents estate under Rule 87 of the Rules of Court, or
    3.       other liquidation proceedings of similar import.

    This explains the rule of Article 2243 of the new Civil Code that —
    The claims or credits enumerated in the two preceding articles" shall be considered as mortgages or pledges
    of real or personal property, or liens within the purview of legal provisions governing insolvency.

    And the rule is further clarified in the Report of the Code Commission, as follows:
    The question as to whether the Civil Code and the insolvency Law can be harmonized is settled by Article
    2243. The preferences named in Articles 2261 and 2262 (now 2241 and 2242) are to be enforced in
    accordance with the Insolvency Law."

    Rule
    Thus, it becomes evident that one preferred creditor's third-party claim to the proceeds of a foreclosure sale
    (as in the case now before us) is not the proceeding contemplated by law for the enforcement of preferences
    under Article 2242, unless the claimant were enforcing a credit for taxes that enjoy absolute priority. If none
    of the claims is for taxes, a dispute between two creditors will not enable the Court to ascertain the pro-
    rata dividend corresponding to each, because the rights of the other creditors likewise" enjoying preference
    under Article 2242 can not be ascertained.

    Held: There being no insolvency or liquidation, the claim of the appellee, as unpaid vendor, did not require
    the character and rank of a statutory lien co-equal to the mortgagee's recorded encumbrance, and must
    remain subordinate to the latter

    You might also like