7 So though the spouses had the right to sell the property mortgaged they had

7 so though the spouses had the right to sell the

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7. So, though the spouses had the right to sell the property mortgaged, they had the obligation to notify L&R of their intention to sell and give them the first priority to buy it. It is only when L&R fails to exercise their right of first refusal that the spouses can validly sell to another. 8. Thus, spouses’ failure to comply with par. 9 makes the status of the sale is rescissible a. Spouses Litonjua claims that since the original status quo has been restores as if there was no sale, then they should be given the right to redeem the properties, since the redemption period was suspended during litigation. In essence, the spouses wanted to retain ownership of the land b. But SC held that allowing this would give the spouses undue advantage when they were the ones who violated the right of first refusal stipulation. The purpose of rescinding the sale is to give L&R the right of first refusal, not to give the spouses the right to redeem the properties. [Art. 2131] Lucena v CA 1. Lucena is the registered owners of the parcel of land in Oriental Mindoro. Lucena obtained a loan from Rural Bank for P3k secured by a REM. When the loan matured, Lucena paid Rural Bank P2k in partial satisfaction of the debt, leaving P1k as balance. 2. Lucena failed to pay the balance so Rural Bank extrajudicially foreclosed the property and acquired it as the highest bidder. 3. Before the foreclosure, notices of foreclosure was posted in at least 3 conspicuous places in the municipality but nothing was posted in the 17
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barrio where the property was located, it wasn’t also published in a newspaper of general circulation. Despite this, a certificate of sale was issued to Rural Bank by the sheriff and this was registered afterwards. 4. Rural Bank executed an affidavit to consolidate their ownership over the land, this was registrered, and the TCT of Lucena was cancelled, while a new one was issued in favor of Rural Bank. 5. Rural Bank then sold it to spouses Baja, which cancelled the TCT of Rural Bank and another was issued in the name of the spouses. This was registered also afterwards 6. Lucena filed a complaint for reconveyance and damages against spouses Baja. The court held that there was no valid foreclosure sale and thus ordered the spouses to reconvey the land to Lucena. (Lucena wanted more money, I think) 7. Both parties weren’t satisfied thus they elevated the case to CA which held that: a. No need to post notices in barrio where property is, only in the municipality or city b. No need to public in a newspaper since the balance of the loan was 1k only c. Personal notice to the petitioners is not required d. The date of the registration of the sheriff’s certificate of title is the reckoning point for the 1-year redemption period, not the date of the sale e. Petitioners didn’t redeem the property within 1 year ISSUE: 1. WON the foreclosure sale was valid. NO 2. WON the reconveyance and damages is the proper remedy available to Lucena. YES.
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