This is another dispute on the possession of a property. The protagonists in this case are the heirs of the owner and the assignee of the mortgagee to whom the owner mortgaged the land.
The subject property more particularly described as Lot No. 2 Block No. 29 with an area of 65 square meters was originally owned by the city of Manila. The city awarded said lot to Artemio under its land for the landless program in the nature of a "Contract to Sell" payable in monthly installments for 20 years.
Eight years later, Artemio obtained a loan of P17,000 from Benilda for which he executed a Contract of Real Estate Mortgage over the subject property in favor of the latter. He failed to pay the loan and on top of that he borrowed more from Benilda until this account reached P28,000.
After only about two years more, and before Artemio could fully pay the lot, he died intestate leaving no other property except said lot. Meanwhile, his wife Demetria on account of deteriorating health, borrowed P40,000 from Reinerio, in whose favor she executed a Deed mortgaging her one half right to the lot. On the other hand Benilda was poised to foreclose the mortgage executed by the late Artemio. To forestall such move, Demetria convinced Benilda to execute a Deed of Assignment of the Mortgage in favor of Reinerio for a certain consideration, which she did.
Demetria herself later on died. Her sister then borrowed another P65,000 from Reinerio for funeral expenses. At the same time said sister gave permission to the relatives of Reinerio to occupy and take possession of the subject property.
Upon the death of Demetria, her children with the late Artemio executed a Deed of Extrajudicial Partition adjudicating unto themselves the said lot and renouncing their rights in favor of their sister Estrella. So Estrella became the awardee of the lot as approved by the city. She subsequently paid the balance of the installments thereby obtaining title thereto from the City of Manila after the latter executed of Deed of Sale in her favor.
Estrella then filed an ejectment suit against Reinerio and his relatives to vacate the property and turn over possession of the same to her. Reinerio, however, claimed that he could not be evicted from the subject property because he had prior possession as assignee in the Deed of Assignment of Real Estate Mortgage made by Artemio in Benilda's favor. Furthermore his possession was with the consent of Demetria's sister after the demise of both Artemio and Demetria. Was Reinerio correct?
No. Reinerio's right to possess the subject property is clearly inferior to or inexistent in relation to Estrella. The Deed of Real Estate Mortgage executed by the late Artemio which was assigned to them by Benilda, is null and void, the property mortaged being then still owned by the City of Manila. For a person to validity constitute a mortgage on a real estate, he must be the absolute owner thereof as required by Art. 2085 of the Civil Code of the Philippines. Since the mortgage to Benilda of the lot is null and void, the assignment by the latter of her rights as mortgagee to Reinerio is null and void.
Even if the mortgage is valid as insisted by Reinerio it is well settled that a mere mortgagee has no right to eject the occupants of the property mortgaged. This is so because a mortgagee possess no title to the mortgage. Indeed, by mortgaging a piece of property, a debtor merely subjects it to a lien but ownership thereof is not parted with. Thus a mortgage is regarded as nothing more than a mere lien, encumbrance or security for a debt, and passes no title or estate to the mortgagee and gives him no right or claim to the possession of the property.
It cannot also be said that what was mortgaged by the late Artemio in favor of Benilda was his right as an awardee over the homelot in question and not the home lot itself. The agreement between the City of Manila and Artemio was in the nature of a contract to sell, the price for the lot being payable in installment for a period of 20 years which could yet prevent, such as by the non-fulfillment of the condition, the obligation to convey title from acquiring any obligatory force. Hence there is no right as awardee to speak of, and these is no alienable interest in the property to deal with (Lagrosa vs. Court of Appeals et. al., G.R. No. 115981-82 Aug. 12, 1999).
Atty. Sison's e-mail address is: sison@ipaglabanmo.org