Government of the Philippine Islands v. Mendoza
REITERATIONFacts
The Antecedents: The Government of the Philippine Islands (plaintiff-appellee) filed an action against Arsenio Mendoza (defendant-appellant) for the foreclosure of a mortgage. The Court of First Instance of Manila ordered Mendoza to pay P25,534.32 with interest, and in case of non-compliance, the mortgaged properties were to be sold at public auction. Procedural History: The defendant-appellant perfected his appeal by filing a bill of exceptions. Subsequently, on March 26, 1927, he filed a motion praying that Ramon M. Villa-Juan, who had purchased the mortgaged properties from Mendoza on January 21, 1920, be included as a defendant. This sale was not registered in the registry of deeds. The trial court denied this motion on June 4, 1927, to which the defendant-appellant excepted and filed an amended bill of exceptions. The Petition: The defendant-appellant assigns as error the trial court's failure to order the inclusion of the purchaser of the mortgaged property as a defendant.
Issue(s)
Whether the purchaser of mortgaged property, whose purchase was not registered, is a necessary party in a mortgage foreclosure action. Whether the trial court retained jurisdiction to entertain a motion to include a party after the approval of the bill of exceptions.
Ruling
The Supreme Court affirmed the order of the trial court, holding that the purchaser was not a necessary party and that the trial court had lost jurisdiction to consider the motion. Double costs were assessed against the appellant.
Ratio Decidendi
On the issue of necessary parties: The Court held that the transfer of the mortgaged property by the defendant-appellant to Villa-Juan, not having been registered in the registry of deeds nor noted on the certificate of title, had no binding effect as against the mortgagee, the Government of the Philippine Islands. Consequently, the purchaser was not a necessary party to the action for foreclosure. Even if the transfer had been registered, the purchaser would still not be a necessary party because the transfer was made after the judgment was rendered, and a person who acquired no interest in the property in litigation at the time of the judgment cannot be considered a necessary party. The Court cited 27 Cyc., 1572 [II] and 27 Cyc., 1570 [C] and 1795 [2] in support of this conclusion. On the issue of jurisdiction: The Court found that the motion to include the purchaser as a defendant was presented after the trial court had approved the bill of exceptions. By virtue of this approval, the trial court no longer had jurisdiction to consider the motion, citing the case of Rustia vs. Judge of First Instance of Batangas, 44 Phil., 62. The Court emphasized that the notion that a person who has not acquired any interest in the thing in litigation except after the decision of the controversy cannot be a party thereto is elementary, rendering the appeal frivolous.
Main Doctrine
A purchaser of mortgaged property whose purchase is not registered in the registry of deeds is not a necessary party in an action for foreclosure, especially when the transfer occurred after judgment was rendered. Furthermore, a motion to include a party filed after the approval of the bill of exceptions is beyond the jurisdiction of the trial court.