Philippine National Bank v.

Spouses Bernard and Cresencia Maranon

G.R. No. 189316, June 1, 2013

Philippine National Bank - Petitioner

Bernard Maranon - Respondent
Cresencia Maranon - Respondent
Spouses Rodolfo and Emilie Montealegre - spouses who mortgaged the subject land
Paterio Tolete - tenant

Facts: Spouses Montealegre mortgaged the subject land to PNB as a security for a loan. The
subject lot has a building leased by various tenants. When the said spouses failed to pay the
loan, PNB initiated the foreclosure of their properties, including the subject lot. In the auction
sale, PNB emerged as the highest bidder. Consequently, they issued the corresponding
Certificate of Sale of the subject land and was registered.

Before the expiration of the redemption period, spouses Maranon filed a complaint (for
Annulment of Title, Reconveyance, and Damages). They argued that they are the true registered
owners of the subject lot. They alleged that Montealegre used a falsified Deed of Sale bearing
forged signatures of Spouses Maranon. PNB contended that it was mortgaged in good faith;
hence, the mortgage was binding and valid. 

While the trial proceedings were ongoing, one of the tenants of the building erected on the
subject land deposited his rental payments with the Clerk of Court of Bacolod. 

After the Spouses Maranon won the trial, they filed an urgent motion praying that the deposited
rental fees by Tolete be released in their favor. They added another motion praying that the
rental fees paid to PNB by Tolete be released in their favor. PNB argued that they are entitled to
the fruits of the subject lot such as rentals paid by the tenants.

Issue: Whether PNB is entitled to fruits (rents) of the disputed property.

Ruling: No.

Article 1164. The creditor has a right to the fruits of the thing from the time the obligation to
deliver it arises. However, he shall acquire no real right over it until the same has been delivered
to him.
The Court explained that rent is a civil fruit that belongs to the owner of the property producing
it by right of accession. The rightful recipient of the disputed rent, in this case, should thus be
the owner of the subject lot at the time the rent accrued. Spouses Maranon never lost ownership
over the subject lot.

PNB’s lien as mortgagee in good faith pertains to the subject lot alone because the rule that
improvements shall follow the principal in a mortgage under Article 2127 of the Civil Code does
not apply in their case. Since PNB cannot foreclose the mortgage constituted on the land, it
remains a property of Spouses Maranon and fruits should pertain to them.

NOTE: The mortgage was void on the ground that you cannot mortgage something you
are not the owner thereof. There is no obligation to deliver all accessions, accessories,
and fruits if there is no obligation to deliver the principal object of that obligation or the
subject matter of the contract