2 However it turns out that prior to the sale between Santigao and San Digeo

2 however it turns out that prior to the sale between

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2. However, it turns out that prior to the sale between Santigao and San Digeo, the land was already mortgaged in favor of Resurreccion. This was also recorded thus this has precedence over the sale. a. San Digeo failed to pay the debt, so Resurreccion foreclosed (Civil Case) and sold to Dionisio as the highest bidder. 3. Through all this, Santiago was not made party to the foreclosure proceedings. Thus, Santiago filed a case to annul the judgment on the foreclosure and to render the sale to Dionisio as null. She also intervened in the proceeding for the confirmance of the sale and filed an opposition to it. 4. Judge Endencia held that since the Santiago’s (oppositor) claim might be determined in the action for annulment (of the sale) which she already filed, he confirmed the sale but without prejudice to whatever Santiago can file. This was not appealed. 5. The action for annulement of the sale was tried by Judge Roldan who held that the foreclosure proceedings can’t affect the rights of Santiago who was not a party to it. Thus, the sale where she is not a party to is null and void, and thus the sale to Dionisio is null and void. No appeals here. 6. Judge Pecson, who subsequently heard the present case for registration, confirmed the above decision of Judge Roldan. 7. This is the decision being appealed to before the SC—Santiago was not impleaded in the foreclosure suit. And while it’s true that Santiago’s interest in the land is subordinate to the mortgagee REsurreccion, the rule is that in an action for foreclosure, all persons having interest in the property subordinate to the right of the holder of the mortgage be impleaded. This is not only applied to lienholders but also to buyers of a property already mortgaged to another (Santiago). The failure to implead them makes the foreclosure ineffective as against the lienholder or subsequent purchaser or both. They have the “unforeclosed equity of redemption” BUT the foreclosure is still valid between the parties to the suit (Resurreccion and Dionisio) ISSUE: WON the land should be registered in the name of Dionisio and not Santiago. YES, should be under Dionisio’s name. 1. SC held that the correct interpretation of the Judge Roldan’s decision is that he didn’t make a pronouncement of declaring the foreclosure sale entirely void. It was only a way of saying that the foreclosure sale was ineffective as against Santiago but valid as to the parties in the suit. Thus, given this interpretation, the decision of Judge Roldan doesn’t completely nullify the foreclosure sale in favor of Dionisio. That sale is valid between the parties, though subject to Santiago’s unforeclosed equity redemption. 2. According to SC, this unenforced equity redemption, can be recognized in two ways: a. (1) Allow the land to be registered in the name of Santiago but subject to the mortgage in favor of Resurreccion 10
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b. (2) Register the land in the name of Dionisio subject to redemption by Santiago 3. SC prefers the 2 nd way because it has already
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