Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=49756:gr-119716-2007&amp;catid=1494&amp;Itemid=566
Timestamp: 2019-04-24 22:40:20+00:00

Document:
G.R. No. 119716 - Antonia J. Gutang v. the Deputy Sheriff, et al.
Meanwhile, on March 4, 1986, the Manila RTC decided Civil Case No. R-82-5792 in favor of private respondents. A writ of execution was then issued in their favor. To satisfy the Mendozas' judgment obligation, the Mandaluyong property was again levied upon and sold to private respondents as winning bidders in a public auction held on May 8, 1986.16 The corresponding certificate of sale was issued to them on December 20, 199017 and annotated on TCT No. 242.
1 The Court of Appeals and Judge Mariano N. de la Cruz, in his capacity as presiding judge of the Regional Trial Court of Manila, Branch 22, were impleaded as respondents. They were excluded here pursuant to Rule 45, Section 4 of the Rules of Court.
2 Under Rule 56 in relation to Rule 46 of the Rules of Court (1964); dated May 15, 1995.
3 Penned by Associate Justice Eduardo G. Montenegro (retired) and concurred in by Associate Justices Minerva P. Gonzaga-Reyes (retired Associate Justice of this Court) and Jose C. de la Rama (retired) of the Eleventh Division of the Court of Appeals; dated April 10, 1995. Rollo, pp. 146-168.
4 Id., pp. 29, 203.
5 Id., pp. 31, 147, 205, 580. This was originally docketed as Civil Case No. 107877 but later changed to Civil Case No. (R)-82-5792. To avoid confusion, the case shall be referred to as Civil Case No. R-82-5792.
6 Id., pp. 30, 204, 580.
7 Id., pp. 30, 204. The writ of attachment was again annotated on April 25, 1985 when Civil Case No. R-82-5792 was adjudged in favor of private respondents.
8 Id., pp. 28, 202, 579.
9 Id., pp. 28, 202.
10 Id., pp. 29, 203.
13 Id., pp. 29, 203, 580.
On December 2, 1976, the spouses Tomas and Linda Mendoza executed a mortgage over the Mandaluyong property in favor of FGU Insurance Corporation. The mortgage was annotated on TCT No. (450666)-1702 on December 3, 1976. Due to the spouses' failure to satisfy their obligation, FGU instituted foreclosure proceedings in Manila, RTC docketed as Civil Case No. 82-9760, on June 1, 1982. On January 22, 1988, the case was decided FGU's favor.
The trial court subsequently issued a writ of execution over the Mandaluyong property. It was sold in public auction to FGU as the highest bidder on November 24, 1988 and the certificate of sale was issued on March 2, 1989. On August 23, 1989, the trial court ordered the cancellation of TCT No. 242 and the issuance of a new one in FGU's name.
15 Gutang v. Hon. Dela Cruz, CA-G.R. SP No. 351213, April 10, 1995, citing Gutang v. Hon. Pelayo, CA-G.R. SP No. 16655, April 12, 1989, id., p. 150.
16 Id., pp. 30, 204.
20 TCT No. 242/T-2 was issued to FGU pursuant to the August 23, 1989 order in Civil Case No. 82-9760. This TCT cancelled petitioner's TCT No. 242. See note 14.
24 Amended on July 3, 1995.
26 Supra note 14. The consolidated petition includes Looyuko et al. v. Court of Appeals, G.R. No. 102696, FGU Insurance Corporation v. Court of Appeals, G.R. No. 102716, Tanunliong v. Court of Appeals, G.R. No. 108257 and Tanunliong v. Court of Appeals, G.R. No. 1200954. Counsels for Schubert Tanunliong twice moved (on December 18, 1995 and on September 8, 1999) for the consolidation of this petition with the others; however, it was left behind when the other petitions were consolidated and transferred to the ponente pursuant to A.M. No. 00-9-03-SC dated February 27, 2001.
Section 1. Complaint in an action for foreclosure. - In an action for the foreclosure of a mortgage or other encumbrance upon real estate, the complaint shall set forth x x x and the names and residences of all persons having or claiming an interest in the property subordinate in right to that of the holder of mortgage, all of whom shall be made defendants in the action.
According to petitioner, the above quoted provision requires that all persons having or claiming an interest over the property subordinate to that of the mortgagor shall be made defendants in the action for foreclosure.
28 Supra note 14, at 452.
29 See Kruenzle and Streiff v. Villanueva, 41 Phil. 611(1916).
30 TCT No. 10107 cancelled FGU's TCT No. 242/T-2 which in turn cancelled petitioner's TCT No. 242. See notes 14 and 20.
[A]n execution creditor who levies his execution upon property that the judgment debtor has mortgaged to another can sell at most only the equity of redemption belonging to the mortgagor. As it is the equity of redemption that the subordinate lien holders had acquired by levy on execution and that was sold in the public auction, this equity, not the property itself, was what the purchasers, who incidentally are the subordinate lien holders themselves bought at the execution sale.
The Registry of Deeds of is ordered to cancel TCT No. 10107 in the names of Jose Looyuko and John Uy and to issue a new one in the name of FGU Insurance Corporation, subject to the equity of redemption of Jose Looyuko and Jose Uy and Antonia Gutang, respectively. The equity of redemption of Jose Looyuko and John Uy should be exercised within ninety days (90) days from the date this decision becomes final.

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