In 1960, an unregistered parcel of land was

mortgaged by owner O to M, a family friend,

as collateral for a loan, O acted through his
attorney-in-fact, son S, who was duly
authorized by way of a special power of
attorney, wherein O declared that he was the
absolute owner of the land, that the tax
declarations/ receipts were all issued in his
name, and that he has been in open,
continuous and adverse posession in the
concept of owner.

As O was unable to pay back the loan plus
interest for the past five (5) years, M had to
foreclose the mortgage. At the foreclosure
sale, M was the highest bidder. Upon
issuance of the sheriffs final deed of sale and
registration in January 1966, the mortgage
property was turned over to Ms possession
and control. M has since then developed the
said property. In 1967, O died survived by the
sons S and P.
In, 1977, after the tenth (10th) death
anniversary of his father O, son P filed a suit
to annul the mortgage deed and subsequent
sale of the property, etc., on the ground of
fraud. He asserted that the property in
question was conjugal in nature actually
belonging, at the time of the mortgage, to O
and his wife, W, whose conjugal share went to
their sons (S and P) and to O.
(a) Is the suit filed by P barred by
prescription? Explain your answer.

After the issuance of the sheriffs final deed
of sale in 1966 in this case, assuming that M
applied for registration under the Torrens
system and was issued a Torrens title to the
said property in question, would that added
fact have any significant effect on your
conclusion. State your reason.
Under Art. 173 of the Civil Code, the action is barred
by prescription becasue the wife had only ten (10)
years from the transaction and during the marriage to
file a suit for the annulment of the mortgage deed.

Alternative answers to (a)
First Alternative Answer:
(a) The mortgage contract executed by O, if at all, is
only a voidable contract since it involves a conjugal
partnership property. The action to annul the same
insitituted in 1977, or eleven years after the
execution of the sheriffs final sale, has obviously
prescribed because:

An action to annul a contract on the ground of
fraud must be brought within four (4) years from
the date of discovery of the fraud. Since this is in
essence an action to recover ownership, it must
be reckoned from the date of execution of the
contract or from the registration of the alleged
fraudulent document with the assessors office
for the purpose of transferring the tax
decalaration, this being unregistered land, (Bael
v. Intermediate Appelate Court, G. R. L-74423
Jan. 30, 1989 169 SCRA 617)

2. If the action is to be treated as an action to
recover ownership of land, it would have
prescribe just the same because more than 10
years have already elapsed since the date of the
execution of the sale.

Second alternative answer:
(a) the action to recover has been barred by
acquisitive prescription in favor of M considering
that M has possessed the land under a claim of
ownership for ten (10) yeas with a just title.

(b) If M had secured a Torrens title to the
land, all the more S and P could not recover
because if at all their remedies would be:

1. A petition to review the decree of
registration. This can be availed of within one
(1) year from the entry thereof, but only upon
the basis of actual fraud. there is no
showing that M committed actual fraud in
securing his title to the land; or
An action in personam against M for the
reconveyance of the title in their favor. Again,
this remedy is available within four years
from the date of discovery of the fraud but
not later than ten (10) years from the date of
registration of the title in the name of M.
Governed by Arts. 2024-2031
A contract whereby the debtor secures to the
creditor the fulfillment of a principal obligation,
specially subjecting to such security immovable
property or reall rights over immovable property
in case the principal obligation is not complied
with at the time stipulated

An accessory contract- its consideration is the
same as that of principal contract from which it
originated
Does not involve transfer or conveyance of
property but merely constitutes a lien thereof
Real perfected upon delivery
Accesory ancillary to the main contract
Subsidiary and unilateral

Real Estate mortgage
Only covers real properties
Must appear in a public instrument
Registration in Registry of Property binds third
persons but not for validity of contract
Kinds:
Voluntary
Legal
Equitable

Distinguished from Pledge:

Mortgage Pledge

Constitute immovables movables

Delivery is not necessary delivered to the pledgee

Not valid on third persons not valid unless registered
unless appearing on public
document
Absent express stipulation to the contrary,
the mortgage includes the accessions,
improvements, growing fruits and income of
the property not yet received when the
obligation becomes due and to the amount of
the indemnity granted or owing to the
proprietor from the insurers of the property
mortgaged, or in virtue of expropriation for
public use
The mortgage credit may be alienaed or
assigned to a third person, in whole or part,
with the formalities required by law


Future property cannot be the subject of
mortgage