SPOUSES UY TONG vs.

CA

FACTS :

Petitioners Uy Tong and Kho Po Giok (SPOUSES) used to be the owners of Apartment together with the leasehold right
over the land on which the building stands. The land is registered in the name of Ligaya Investments, Inc.. It appears that
Ligaya Investments, Inc. owned the building which houses the apartment units but sold said apartment and leased a
portion of the land in which the building stands to the SPOUSES.

Spouses purchased from private respondent Bayanihan Automotive, Inc. (BAYANIHAN) 7 units of motor vehicles. The
transaction was evidenced by a written "Agreement" wherein stated that if the vendee fails to pay, the vendor shall
become automatically the owner of the apartment.

Spouses failed to pay the balance of the purchased, due to this Bayanihan filed an action for specific performance.

The trial court rendered a judgment in favor of Bayanihan ordering the defendant to pay the balance to the plaintiff and in
the event of failure to do so , they are hereby to execute the deed of absolute sale and or the assignment of the leasehold
right.

An order for execution pending appeal was issued by the trial court and a deed of assignment was executed by the
Spouses over the apartment together with the leasehold right over the land on which the building stands.

Notwithstanding the execution of the deed of assignment the SPOUSES remained in possession of the premises. Despite
the expiration of the said period, the SPOUSES failed to surrender possession of the premises in favor of BAYANIHAN.
This prompted BAYANIHAN to file an ejectment case against them. This action was however dismissed on the ground
that BAYANIHAN was not the real party in interest, not being the owner of the building.

After demands to vacate the subject apartment made by BAYANIHAN's counsel was again ignored by the SPOUSES, an
action for recovery of possession with damages was filed. The case was decided in favor of bayanihan.

Not satisfied with this decision, the SPOUSES appealed to the Court of Appeals. The respondent Court of Appeals
affirmed in toto the decision appealed from. A motion for reconsideration of the said decision was denied by the
respondent Court.

ISSUE : WON the deed of assignment is null and void because it is in the nature of a pactum commissorium and/or was
borne out of the same.

HELD : The prohibition on pactum commissorium stipulations is provided for by Article 2088 of the Civil Code:

Art. 2088. The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose of
the same. Any stipulation to the contrary is null and void.

The aforequoted provision furnishes the two elements for pactum commissorium to exist: (1) that there should be a pledge
or mortgage wherein a property is pledged or mortgaged by way of security for the payment of the principal obligation;
and (2) that there should be a stipulation for an automatic appropriation by the creditor of the thing pledged or mortgaged
in the event of non-payment of the principal obligation within the stipulated period.

A perusal of the terms of the questioned agreement evinces no basis for the application of the pactum
commissorium provision. First, there is no indication of 'any contract of mortgage entered into by the parties. It is a fact
that the parties agreed on the sale and purchase of trucks.

Second, there is no case of automatic appropriation of the property by BAYANIHAN. When the SPOUSES defaulted in
their payments of the second and third installments of the trucks they purchased, BAYANIHAN filed an action in court for
specific performance. The trial court rendered favorable judgment for BAYANIHAN and ordered the SPOUSES to pay the
balance of their obligation and in case of failure to do so, to execute a deed of assignment over the property involved in
this case. The SPOUSES elected to execute the deed of assignment pursuant to said judgment.

Clearly, there was no automatic vesting of title on BAYANIHAN because it took the intervention of the trial court to exact
fulfillment of the obligation, which, by its very nature is ". . anathema to the concept of pacto commissorio" [Northern
Motors, Inc. v. Herrera, G.R. No. L-32674, February 22, 1973, 49 SCRA 392]. And even granting that the original
agreement between the parties had the badges of pactum commissorium, the deed of assignment does not suffer the
same fate as this was executed pursuant to a valid judgment.

This being the case, there is no reason to impugn the validity of the said deed of assignment.
 A. Francisco Realty and Development Corporation v. Court of Appeals and Spouses Javillonar (JAG)

FACTS:

A. Francisco Realty and Development Corporation granted a loan of P7.5 Million to the spouses Romulo and Erlinda
Javillonar, in consideration of which the latter executed the following documents:

(a) a promissory note stating an interest charge of 4% per month for six months

(b) a deed of mortgage over realt

(c) an undated DEED OF SALE of the mortgaged property in favor of the mortgagee A. Francisco Realty.

The promissory note expressly provided that when the spouses fail to pay the interest on the loan, the property will be
transferred to A.Francisco and the deed of sale will be registered.

On February 1992, A.Francisco claimed that Javillonar failed to pay the interest and thus registered the land in its
favor. On March 1992, Spouses loaned an additional P2.5M from A.Francisco in exchange for another promissory note
with a provision that upon failure to pay their loans, they would immediately vacate the premises. On May 1992,
A.Francisco demanded possession of the property. The spouses refused. A.Francisco then filed an action for possession
and payment of the interest from the loan with the RTC. Spouses counterclaimed for the cancellation of the TCT of
A.Francisco.

RTC ruled in favor of A.Francisco.

CA reversed the decision of the RTC stating that

1. What was filed was actually an Action for unlawful detainer and should be filed in the MTC not RTC.
2. The deed of sale was void because it was in fact a pactum commissorium prohibited by Art.2088 of the NCC.
ISSUES:

1. W/N RTC had jurisdiction over the complaint filed. RTC HAS jurisdiction.
2. W/N the contractual documents are constitutive of pactum commissorium. YES it was a pactum
commissorium and thus the registration of A.Francisco is void.
HELD:

1. It was not an action for unlawful detainer. An action for unlawful detainer is limited only to a possession de facto. In the
case at bar, what was raised by A.Francisco was not merely the possession but also the collection of the interest. Plus,
the counterclaim of the spouses was a direct challenge on the title of A.Francisco on the property.

2. Thus, in the case at bar, the stipulations in the promissory notes providing that, upon failure of respondent spouses to
pay interest, ownership of the property would be automatically transferred to petitioner A. Francisco Realty and the deed
of sale in its favor would be registered, are in substance a pactum commissorium. They embody the two elements
of pactum commissorium as laid down in Uy Tong v. Court of Appeals, 20 to wit:

The prohibition on pactum commissorium stipulations is provided for by Article 2088 of the Civil Code:

Art. 2088. The creditor cannot appropriate the things given by way of pledge or mortgagee, or
dispose of the same. Any stipulation to the contrary is null and void.

The aforequoted provision furnishes the two elements for pactum commissorium to exist:

(1) that there should be a pledge or mortgage wherein a property is pledged or mortgaged by way of security for the
payment of the principal obligation; and

(2) that there should be a stipulation for an automatic appropriation by the creditor of the thing pledged or mortgaged in
the event of non-payment of the principal obligation within the stipulated period.
 VICENTE C. REYES APPLICANT-APPELLEE
VS.
FRANCISCO SIERRA, EMILIO SIERRA, ALEJANDRA SIERRA, FELIMON SIERRA, AURELIO SIERRA, CONSTANCIO SIERRA, CIRILO
SIERRA AND ANTONIA SANTOS OPPOSITORS-APPLICANTS
G.R. NO. L-28658 OCTOBER 18, 1979
Facts:

Reyes wanted to register property in antipolo claiming it was inherited from his father. It turns out that his father got the
land from Beltran through a mortgage contract.

1. Vicente Reyes filed an application for registration of his title to a parcel of land in Antipolo before the Bureau of
Lands. He declared that he inherited the land from his father and that the other heirs have executed a quit claim in
favor of Vicente.
2. An opposition was filed by the director of lands, Francisco Sierra and Emilio Sierra. Later a motion to set aside an
interlocutory default was filed by the rest of the sierras, said Sierras were added as oppositors to the registration
3. Lower court decided in favor of Reyes, declared him the rightful owner of the land.
4. Hence this appeal.

ISSUE/S:
1. WON the contract between the father of Reyes and Basilia Beltran a mortgage or a sale.

HELD:

Decision appealed from is set aside and another one be entered ordering the registration of the title of the land in the
name of oppositor appellants.

Reyes can’t register it under his name. Contract between father of Reyes and Beltran was that of a mortgage and not a
sale hence ownership didn’t pass to him.

Mortgage
- The land was originally owned by Basilia Beltran’s parents, from whom she inherited the property. She
borrowed money from Vicente Reyes, Sr. the amount of P100.00 and secured the loan with the piece of
land.
- Since then, the older Reyes began paying the realty taxes up to the time of his death after which his
children continued to pay the taxes.
- Beltran died before the loan was paid.
- In registering the property, Vicente jr. relied on his belief that the property belonged to his father who
bought the same from Beltran and that there is a document to prove sale (contract of mortgage between
Beltran and Reyes sr.)
- Court held that the contract was a mortgage contract. The intention of the parties at the time was the
lending of money with security.
 The use of the word debt(“utang” )1 helps to point out that the transaction was intended to be a
loan with mortgage
 Intention of the parties must govern and not the form of the transaction.
 Macapinlac v. Gutierrez Rapide; if the instrument is in its essence a mortgage, the parties cannot
by any stipulations, however express and positive, render it anything but a mortgage or deprive it
of the essential attributes belonging to a mortgage in equality
- Failure of mortgagor to redeem the property does not automatically vest ownership of the property to the
mortgagee. This violates Art. 2088 of the Civil code (the creditor cannot appropriate the thigns given by
way of pledge or mortgage, or dispose by them. Any stipulation to the contrary is null and void.
 Otherwise it would amount to a pactum commissorium which is against good morals and public
policy
- The property hasn’t been acquired through prescription either since Reyes didn’t possess it as owner,
Reyes did not have adverse nor continuous possession.
- Mortgage does not constitute just title on the part of the mortgagee, since ownership is retained by
mortgagor. Payment of realty taxes does not amount to adverse possession or title. Mere failure of the
owner (mortgagor) to pay taxes doesn’t amount to abandonment.
- Doctrine of “once a mortgage always a mortgage” has been firmly established whatever be its form.
 Olea vs. CA

Facts:
On 27 January 1947 spouses Filoteo Pacardo and Severa de Pacardo executed a deed of Sale Con Pacto de Retro over
Lot No. 767 of the Passi Cadastre covered by Transfer Certificate of Title No. 26424 in their name for a consideration of
P950.00 in favor of Maura Palabrica, predecessor in interest of petitioner, subject to the condition that —

. . . if we, the said spouses, Filoteo Pacardo and Severa de Pacardo, our heirs, assigns, successors-in-interest, executors
and administrators shall and will truly repurchase the above-described parcel of land from the said Maura Palabrica, her
heirs, assigns, successors-in-interest after THREE YEARS counting from the date of the execution of this instrument, to
wit, on January 27, 1950 in cash payment in the sum of Five Hundred Pesos, Philippine currency, plus Four Hundred and
Fifty Pesos (P450), also lawful currency, in cash or eighteen (18) cavans of palay (Provincial Measurement) at our option,
then this sale shall become null and void and of no force and effect whatsoever. On the contrary, the same will become
irrevocable,
definite and final.

The contract of sale with right to repurchase was acknowledged by the vendors before Notary Public Victorio Tagamolila
on the same day the contract was executed in the Municipality of Passi, Province of Iloilo.

After the execution of the sale, the Pacardo spouses as vendors remained in possession of the land and continued the
cultivation thereof. Since the sale on 27 January 1947 up to August 1987, or for a period of about 40 years, the spouses
delivered annually one-third (1/3) of the produce of the land to Maura Palabrica and kept for themselves the remaining
two-thirds (2/3).
Despite the lapse of 3 years, the Sps. Pacardo failed to repurchase the property but still gave the 1/3 share of the produce
to Maura Palabrica. Filoteo Sr. died and Filoteo Jr. continued to give the 1/3 share to Maura and eventually to Thelma
Olea, daughter of Maura, to whom she eventually sold the land. Maura caused the registration of the sale con pacto de
retro on 22 Sept 1969.

Filoteo Jr. died and Sps. Jesus and Elizabeth Palencia took over but they gave the 1/3 share not to Thelma but to Elena
Pacardo, wife of Filoteo Jr.

Thelma filed a case against sps. Palencia and Elena for recovery of possession with damages.
Private respondents Elena Vda. de Pacardo and Jesus and Elizabeth Palencia filed their answer alleging that their
parents intended the disputed transaction to be an equitable mortgage and not a sale with right to repurchase.
Respondent Monserrat Paciente, another daughter of the vendor-spouses Filoteo and Severa Pacardo, filed an answer in
intervention raising likewise as defense that the Sale Con Pacto de Retro was indeed an equitable mortgage.

Issue: W/N the sale was a Sale Con Pacto de Retro?

Held: No, Sale was an Equitable Mortgage.

We cannot sustain petitioner. Art. 1602 of the New Civil Code provides that the contract of sale with right to repurchase
shall be presumed to be an equitable mortgage in any of the following cases: (a) when the price of the sale is unusually
inadequate; (b) when the vendor remains in possession as
lessee or otherwise; (c) when upon or after the expiration of the right to repurchase another instrument extending the
period of redemption or granting a new period is executed; (d) when the purchaser retains for himself a part of the
purchase price; (e) when the vendor binds himself to pay the taxes on the thing sold; and, (f) in any other case where it
may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the
performance of any other obligation. Being remedial in nature, Art. 1602 may be applied retroactively to cases prior to the
effectivity of the New Civil Code 3 Hence it may apply to the instant case where the deed of sale with right to repurchase
was executed on 27 January 1947.
It has been held that a contract should be construed as a mortgage or a loan instead of a pacto de retro sale when its
terms are ambiguous or the circumstances surrounding its execution or its performance are incompatible or inconsistent
with the theory that it is a sale

Even when a document appears on its face to be a sale with pacto de retro the owner of the property may prove that the
contract is really a loan with mortgage by raising as an issue the fact that the document does not express the true intent
and agreement of the parties. In this case, parol evidence then becomes competent and admissible to prove that the
instrument was in truth and in fact given merely as a security for the repayment of a loan.

In pacto de retro sale the payment of the repurchase price does not merely render the document null and void but there is
the obligation on the part of the vendee to sell back the property.
This is so because pacto de retro sales with the stringent and onerous effects that accompany them are not favored. In
case of doubt, a contract purporting to be a sale with right to repurchase shall be construed as an equitable mortgage.

Such stipulation that the ownership of the property would automatically pass to the vendee in case no redemption was
effected within the stipulated period is void for being a pactum commissorium which enables the mortgagee to acquire
ownership of the mortgaged property without need of foreclosure. Its insertion in the contract is an avowal of the intention
to mortgage rather than to sell the property.

Consequently, there was no valid sale to Maura Palabrica. Ownership over the property was not transferred to her for she
was merely a mortgagee. There being no title to the land that Palabrica acquired from the spouses Filoteo and Severa
Pacardo, it follows that Palabrica had no title to the same land which could be conveyed to petitioner. 15 Hence there is
no legal basis for petitioner to recover possession of the property.

Sps. Pacardo still gave the 1/3 of the produce until 1987 which is equal to the interest on the rent. Case for recovery was
filed 39 years after, hence barred by estoppel by laches.
 DAYRIT v. COURT OF APPEALS
(1970, Ruiz Castro, J.)

PETITIONER: Vincent P. Dayrit

RESPONDENTS: Court of Appeals, Hon. Francisco Arca, judge of CFI of Manila, Mobil Oil Philippines, Inc., and Eladio
Ylagan, special sheriff

FACTS:
 On July 21, 1965, defendants Vincent Dayrit, Leonila T. Sumbillo and Reynaldo Angeles entered into a contract with
Mobil Oil Philippines, Inc., entitled "LOAN & MORTGAGE AGREEMENT":
 For and in consideration of Sales Agreement dated July 21,1965, among the parties herein, Mobil grants a loan of
P150,000 to borrowers.
 Defendants-Borrowers shall repay Mobil the whole amount of P150,000 plus 10% interest per annum on the
diminishing balance for 48 months.
 To secure the prompt repayment of such loan by defendants borrowers to Mobil and the faithful performance by
Borrowers of that Sales Agreement, Defendants-Borrowers hereby transfer in favor of Mobil by way of first
mortgage lands covered by TCT No.45169 and TCT No. 45170, together with the improvements existing in said
two (2) parcels of land.
 In case of default of Defendants-Borrowers in payment of any of the installments and/or their failure to purchase
the quantity of products stated therein Mobil shall have the right to foreclose this mortgage.
 Mobil, in case of default and foreclosure shall be entitled to attorney's fees and cost of collection equivalent to not
less than 25%of total indebtedness remaining unpaid.
 All expenses in connection with the preparation and registration of this mortgage as well as cancellation of same
shall the for the account of Defendants-Borrowers.
 If Defendants-Borrowers shall perform the full obligation above stated according to the terms thereof, then this
obligation shall be null and void, otherwise, it shall remain in full force and effect.
 The defendants violated the Loan & Mortgage Agreement, they having paid but one installment in the amount of
P3,816, of which P1,250 was applied to interest, and the remaining P2,566 to the principal obligation. The defendants
likewise failed to buy the quantities of products as required in the Sales Agreement. The plaintiff made due demand,
which Dayrit answered, acknowledging his liability in his letter.
 TC: in favor of the plaintiff
 No appeal having been interposed by the defendants, the above decision became final and executory.
 An undated Mobil's motion for execution of the decision and for the appointment of Eladio Ylagan as special sheriff
was received by the petitioner Dayrit on February 8, 1968. Whereupon, he filed his opposition and motion to stay
execution ,alleging that before the finality of the aforesaid judgment, he and the plaintiff had agreed not to appeal
and/or file any motion for reconsideration, the petitioner offering to pay his one-third share with a reasonable discount,
if possible, in so far as the interests and the award for attorney's fees were concerned, with the corresponding release
of the mortgage on all his properties, and praying, inview thereof, for a 30-day grace period within which to pay the
plaintiff. The 30-day grace period was granted by the court in its orderof February 24, 1968.
 On March 25, 1968, petitioner filed another motion for 20 days' extension within which to pay his one-third share of
the judgment obligation and to submit the corresponding compromise agreement for the satisfaction of the judgment.
The said motion was granted.
 Thereafter, the respondent Mobil filed all "Urgent Reply to Opposition and Motion to Stay Execution dated February
21, 1968 and Motion dated March 25, 1968," alleging therein that the respondent agreed to release the mortgage or
collateral for the entire judgment obligation only if "the whole principal mortgaged debt plus the whole accrued
interest" were fully paid. Mobil further prayed for a writ of execution to be issued against the petitioner after the lapse
of 20 days from March 25, 1968, if by then the parties shall not have submitted a compromise agreement for the
satisfaction of the judgment; Mobil also reiterated its prayer for the appointment of respondent Eladio Ylagan as
special sheriff.
 On April 3, 1968 the petitioner filed a manifestation and motion, praying that he be allowed to deposit with the Clerk of
Court the amount corresponding to his one-third share of the obligation under the decision of November 17, 1967, and
that thereupon the collateral or mortgage over petitioner's properties or lands be ordered released or cancelled.
 Court a quo ordered all pending incidents set for hearing on April 19, 1968, "so that the Court may have the
opportunity to confer with the parties to thresh out the settlement of this case." At this hearing Mobil did not appear;
the court reset the hearing for May 23, 1968.
 Under date of May 8, 1968, Mobil filed an addendum to its reply dated April 1, 1968 and opposition to petitioner's
motion dated April3, 1968, playing that the motion of petitioner Dayrit that the entire mortgaged collateral be released
upon his payment of mere 1/3 of the loan obligation, be denied and instead a writ of execution against him in
accordance with the dispositive portion of the decision and Sections 2 and 3 of Rule 68 of the Revised Rules of Court
be issued.
 On May 18, 1968 the petitioner filed his rejoinder to respondent Mobil's aforesaid addendum and opposition.
 On May 23, 1968, after hearing oral argument, the court denied the manifestation and motion of Dayrit filed thru
counsel and dated April 3, 1968; the court further ruled that "There is no further need to issue an order for the
issuance of a writ of execution and appointment of special, sheriff ... considering that the Court, in its order of
February 24, 1968, has already ordered the issuance of a writ of execution for the satisfaction of the judgment."
 CA: dismissed the petition for certiorari, there being no abuse of discretion in ordering the execution of a final
judgment. Details of execution for satisfaction of Vincent Dayrit's liability will be worked out in connection with the safe
of the collateral for mortgaged debt, and the judgment in Civil Case No. 64138 of the CFI-Manila a will control the
disposition and application of the collateral.

ISSUE: W/N the CFI and the CA erred in refusing to allow the alleged proposed deposit of a sum equivalent to 1/3 of the
loan agreed upon and in refusing to release forever the collaterals owned by Dayrit, although the other 2/3 portion of the
loan obligation had not been satisfied due to insolvency of the other two co-defendants.

HELD/RATIO: NO.
1. PROCEDURAL ISSUE: The present petition was filed with this Court six days late, contrary to and in violation of
Section 1, Rule 45, which specifically provides that a petition for certiorari under such Rule should be filed within 15 days
from notice of judgment or denial of motion for reconsideration. Hence, the present petition may be dismissed on the
aforestated ground. But we opt, nevertheless, to consider the merits of this case, if only to demonstrate to the petitioner
his error.

2. The decision of the lower court has admittedly become final and executory. The controverted judgment ordered the
defendants (Dayrit, Sumbillo and Angeles) "to pay to the plaintiff one-third each of the sum of P147,434.00 with interest of
10% per annum from the time it fell due according to agreement, and in default of such payment, the properties put up in
collateral shall be sold in foreclosure sale in accordance with law, the proceeds to be applied in payment of the amount
due to the plaintiff from the defendants as claimed in the complaint, provided that, as to Dayrit, his liability shall in no case
exceed 113 of the total obligation."
 The prayer of the complaint filed with the CFI recites as follows:
 WHEREFORE, it is respectfully prayed that judgment be rendered
(a) Ordering the defendants to pay the sum of P147,434 with 10%interest per annum from the time it fell due as
agreed upon and that in default of such payment, the above described properties be sold and the proceeds of
sale be applied to the payment of the amount due to the plaintiff from the defendants under this complaint.
 The complaint, in effect, is a collection suit with damages and foreclosure of mortgage against the three defendants,
Leonila Sumbillo, Reynaldo Angeles and Vincent Dayrit. Although the Loan and Mortgage Agreement was signed by
the three defendants as mortgagors, the properties being foreclosed belong solely to, and are registered solely in the
name of the petitioner Vincent Dayrit.
 Petitioner: the judgment by the lower court is a simple money judgment and not a foreclosure judgment, and that
because Mobil resorted to the remedy of enforcing his right by a complaint against the defendant-petitioner for
collection of a sum of money, with the consequent simple money judgment, the satisfaction of his 1/3 share of the joint
obligation would release all the mortgaged properties put up as collateral to secure the payment of the whole
obligation. The reason advanced by the petitioner is that the decision rendered being a simple money judgment and
not a mortgage foreclosure judgment, the distinction in its execution is decisive. that is, whereas in mortgage
foreclosure the judgment should conform to the requirement, embodied in Section 2, Rule 68of the Rules of Court,
that the order of payment be made into the court "within a period not less than ninety (90) days, x x x and in default of
such payment, the property mortgaged be sold to realize" the indebtedness, in a simple money judgment, upon
satisfaction of part (in the instant case his 1/3 share) of the joint obligation, the mortgaged properties should be
released from such mortgage contract.
 The decision which the petitioner describes as a simple money judgment orders the defendants Vincent Dayrit,
Leonila T. Sumbilloand Reynaldo Angeles to pay the plaintiff the sum of P147,434, and in default of such payment,
the properties put up in collateralshall be sold. In foreclosure sale in accordance with law, the proceeds to be applied
in payment of the amount due to the plaintiff from the defendants as claimed in the complaint. While it is true that the
obligation is merely joint and each of the defendants is obliged to pay only his/her 1/3 share of the joint obligation, the
undisputed fact remains that the intent and purpose of the Loan and Mortgage Agreement was to secure, inter alia,
die entire loan of P150,000 that the respondent Mobil extended to die defendants. The court below found that the
defendants had violated the Loan and Mortgage Agreement, they having paid but one installment. The undisputed
fact also remains that the petitioner alone benefited from the proceeds of the loan of P150,000, the said amount
havingbeen paid directly to the Bank of the Philippines to bail out the same properties from a mortgage that was about
to be foreclosed. In effect, Mobil merely stepped into the shoes of the Bank of the Philippines.
 Petitioner: the dispositive portion of the judgment declaring the obligation merely joint with the proviso that "as to
Dayrit, his liability shall in no case exceed 1/3 of the total obligation," should be construed in the light of the opinion of
the lower court that "said collateral must answer in full but only to the extent of Dayrit's liability which as above
determined, is 1/3 of the obligation," thereby entitling him to pay or deposit in court his correspondent share of the
joint obligation in satisfaction thereof, with the automatic release of all the mortgaged properties.
  A judgment must be distinguished from an opinion. The latter is the informal expression of the views of the court
and cannot prevail against its final order or decision. "While the two may be combined in one instrument, the
opinion forms no part of the judgment. There is a distinction between the findings and conclusion of a court and its
judgment. While they may constitute its decision and amount to a rendition of a judgment they are not the
judgment itself. They amount to nothing more than an order for judgment which must be distinguished from the
judgment. Only the dispositive portion may be executed.”
 A mortgage directly and immediately subjects the property upon which it is imposed, the same being indivisible even
though the debt may be divided, and such indivisibility likewise being unaffected by the fact that 'the debtors are not
solidarity liable. As Tolentino, in his Commentaries and Jurisprudence on the Civil Code of the Philippines, puts it:
 "When several things are pledged or mortgaged, each thing for a determinate portion of the debt, the pledges or
mortgage, are considered separate from each other. But when the several things are given to secure the same
debt in its entirety, all of themare liable for the debt, and the creditor does not have to divide his action by
distributing the debt among the various things pledgedor mortgaged. Even when only a part of the debt remains
unpaid, all the things are still liable for such balance." Hence, a mortgage voluntarily constituted by the debtor on
two or more parcels of land is one and indivisible, and the mortgagee has the right to have either or both parcels,
jointly or singly, sold to satisfy his claim. In case the mortgaged properties are a house and lot, it cannot be
claimed that the lot and the house should be sold separately and not together."
 But then there is this other seeming posture of the petitioner: that the judgment which has become final and executory
either modified or superseded the Loan and Mortgage Agreement between the parties, and since the obligation is
merely joint, upon payment thereof, as in attachment, the properties mortgaged are released from liability. The
decision under consideration, however, did nothing of the sort. The petitioner conveniently refuses to recognize the
true import of the dispositive portion of the judgment. The said portion unequivocally states that "in default of such
payment, the properties put up in collateral shall be sold in foreclosuresale in accordance with law, the proceeds to be
applied in payment of the amount due to the plaintiff as claimed in the complaint."And the claim in the complaint was
the full satisfaction of the total indebtedness of P147,434; therefore, the release of all themortgaged properties may
be authorized only upon the full payment of the above-stated amount secured by the said mortgage.
 With respect to the provisions of Section 2 of Rule 68 of the Rules of Court giving the petitioner a period of 90 days
within which liemight voluntarily pay the debt before the sale of the collateral at public auction was ordered, we agree
that the trial court failed toprovide such period. However, this failure can be regarded as having resulted in mere
dammum absque injuria.From November 17, 1967 when the decision was rendered to May 23, 1968 when the final
order to sell the mortgaged properties wasissued, a period of more than six months had passed, which is considerably
much more than the 90-day period of grace allowed thepetitioner to validly tender the proper payment.

DISPOSITIVE: Petition is denied, at petitioner's cost.

 Sps BELO VS PNB & Sps ESLABON

Facts:
 Eduarda Belo owned an agricultural land which she leased a portion to Sps Eslabon in connection with the said
spouses’ sugar plantation business.
 To finance their business venture, respondents spouses Eslabon obtained a loan from PNB secured by a real estate
mortgage on their own four (4) residential houses located in Roxas City, as well as on the land owned by Eduarda
Belo. SPA was issued by Eduarda Belo as to the mortgage of her property
 Sps Eslabon failed to pay mortgages and thereafter extrajudicial foreclosure proceedings against the mortgaged
properties were instituted by PNB. PNB was the highest bidder at the auction sale (P447,632.00).
 PNB appraised Eduarda Belo of the sale at public auction of her agricultural land. She had one-year period to redeem
the land.
 Eduarda Belo sold her right of redemption to petitioner Sps Belo under a deed of absolute sale of proprietary and
redemption rights.
 Sps Belo tendered payment for the redemption of the agricultural land for (P484,482.96), which includes the bid
price of respondent PNB, plus interest and expenses as provided under Act No. 3135.
 PNB rejected payment contending that redemption price should be the total claim of the bank on the date of the
auction sale and custody of property plus charges accrued and interests (P2,779,978.72).
 Sps Belo filed action to annul the mortgage, with an alternative cause of action to compel PNB to accept offer of
spouses Belo which is based on the winning bid price of PNB (P447,632.00) plus interest and expenses.
 RTC: Granted alternative cause of action of Sps Belo P447,632.00, plus interest and other charges
 CA: Modified TC ruling that the petitioners should pay the entire amount due to PNB under the mortgage deed at
the time of the foreclosure sale plus interest, costs and expenses. As assignees of Eduarda Belo’s right of
redemption, the appellees succeed to the precise right of Eduarda including all conditions attendant to such right.
Moreover, the indivisible character of a contract of mortgage (Article 2089, Civil Code) will extend to apply in the
redemption stage of the mortgage.

Issue:
1. WON SPA, real estate mortgage contract, the foreclosure proceedings and the subsequent auction sale involving
Eduarda Belo’s property are valid. YES
2. WON the petitioners are required to pay, as redemption price, the entire claim of respondent PNB (P2,779,978.72) NO

Held:
1. YES.The subject SPA, the real estate mortgage contract, the foreclosure proceedings and the subsequent auction sale
of Eduarda Belo’s property are valid and legal.
 The findings of trial courts which are factual in nature must not be disturbed.
 It is stipulated in paragraph three (3) of the SPA that Eduarda Belo appointed the Eslabon spouses as her
agents. The accommodation real estate mortgage over her property is merely an accessory contract.
 An accommodation mortgage is not necessarily void simply because the accommodation mortgagor did not benefit
from the same. The validity of an accommodation mortgage is allowed under Article 2085 of the New Civil Code
which provides that “(t)hird persons who are not parties to the principal obligation may secure the latter by pledging or
mortgaging their own property.”
 The letter of Eduarda Belo addressed to respondent PNB manifesting her intent to redeem the property is a waiver of
her right to question the validity of the SPA, etc.

2. NO. This Court finds the petitioners’ position on that issue to be meritorious.
 There is no doubt that Eduarda Belo, assignor of the petitioners, is an accommodation mortgagor. “Mortgagor” in
Section 25 of P.D. No. 694 pertains only to a debtor-mortgagor and not to an accommodation mortgagor.

Respondent PNB maintains that Section 25 of Presidential Decree No. 694 (right to redeem the property by paying all
claims of the Bank against him on the date of the sale)
Petitioners assert to follow Section 6 of Act No. 3135 & Section 28 of Rule 39 of the Rules of Court (by paying the
purchaser the amount of his purchase plus interest & other expenses)
 The interpretation accorded by respondent PNB to Section 25 of P.D. No. 694 is unfair and unjust to accommodation
mortgagors and their assignees. Forcing an accommodation mortgagor like Eduarda Belo to pay for what the principal
debtors (Eslabon spouses) owe to respondent bank is to punish her for the accommodation and generosity she
accorded to the Eslabon spouses. Also, PNB’s application for extrajudicial foreclosure and public auction sale of
Eduarda Belo’s mortgaged property[30] was filed under Act No. 3135 and none of the proceedings thereafter
mentioned P. D. No. 694 as the basis for redemption.
Similar rulings:
Sy v. Court of Appeals and other case

The General Banking Act and P.D. No. 694 shall prevail over Act No. 3135 with respect to the redemption price.
accommodation mortgagors as such are not in anyway liable for the payment of the loan or principal obligation of the
debtor/borrower. The liability of the accommodation mortgagors extends only up to the loan value of their mortgaged
property and not to the entire loan itself.
While the petitioners, as assignees of Eduarda Belo, are not required to pay the entire claim of respondent PNB
against the principal debtors, spouses Eslabon, they can only exercise their right of redemption with respect to the parcel
of land belonging to Eduarda Belo, the accommodation mortgagor. Thus, they have to pay the bid price less the
corresponding loan value of the foreclosed four (4) residential lots of the spouses Eslabon.
 PNB contends to allow petitioners to redeem only the property belonging to their assignor, Eduarda Belo, would
violate the principle of indivisibility of mortgage contracts (Art 2089). The indivisibility concept does not apply to the
right of redemption of an accommodation mortgagor and her assignees.
 Indivisibility arises only when there is a debt, that is, there is a debtor-creditor relationship. But, this relationship is
wanting in the case at bar in the sense that petitioners are assignees of an accommodation mortgagor and not of a
debtor-mortgagor. Hence, it is fair and logical to allow the petitioners to redeem only the property belonging to their
assignor, Eduarda Belo.
 Redemption only extends to the subject property of Eduarda Belo for the reason that the notice of the sale limited the
redemption to said property.

Petition is partially granted: Petitioner Sps Belo are allowed to redeem only the property of Eduarda Belo, by paying only
the bid price less the corresponding loan value of the foreclosed four (4) residential lots of the respondents Sps Eslabon,
consistent with the RTC