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    Prudential Bank v. Panis

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    Lau Nunez
    Spouses Magcale secured a loan from Prudential Bank and used their residential building as collateral through a real estate mortgage. When the spouses failed to repay the loan, the bank foreclosed on the property and sold it at a public auction. The spouses challenged the validity of the mortgage on the building. The court held that a building can be mortgaged separately from the land it sits on and the original mortgage on the building was valid. However, a second mortgage executed after a land patent was issued violated the Public Land Act.

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    Prudential Bank v. Panis

    Uploaded by

    Lau Nunez
    46 views1 page
    Spouses Magcale secured a loan from Prudential Bank and used their residential building as collateral through a real estate mortgage. When the spouses failed to repay the loan, the bank foreclosed on the property and sold it at a public auction. The spouses challenged the validity of the mortgage on the building. The court held that a building can be mortgaged separately from the land it sits on and the original mortgage on the building was valid. However, a second mortgage executed after a land patent was issued violated the Public Land Act.

    Original Description:

    CASE DIGEST

    Original Title

    PRUDENTIAL BANK V. PANIS

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    Spouses Magcale secured a loan from Prudential Bank and used their residential building as collateral through a real estate mortgage. When the spouses failed to repay the loan, the bank foreclosed on the property and sold it at a public auction. The spouses challenged the validity of the mortgage on the building. The court held that a building can be mortgaged separately from the land it sits on and the original mortgage on the building was valid. However, a second mortgage executed after a land patent was issued violated the Public Land Act.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    46 views1 page

    Prudential Bank v. Panis

    Uploaded by

    Lau Nunez
    Spouses Magcale secured a loan from Prudential Bank and used their residential building as collateral through a real estate mortgage. When the spouses failed to repay the loan, the bank foreclosed on the property and sold it at a public auction. The spouses challenged the validity of the mortgage on the building. The court held that a building can be mortgaged separately from the land it sits on and the original mortgage on the building was valid. However, a second mortgage executed after a land patent was issued violated the Public Land Act.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    PRUDENTIAL BANK, petitioner, vs. HONORABLE DOMINGO D.

    PANIS, Presiding Judge of


    Branch III, Court of First Instance of Zambales and Olongapo City; FERNANDO
    MAGCALE & TEODULA BALUYUT-MAGCALE, respondents.
    G.R. No. L-50008 August 31, 1987

    Facts:
    Spouses Magcale secured a loan from Prudential Bank. As security, respondent’s spouses
    executed a real estate mortgage, their residential building as security. Since the respondents
    was not able to fulfil their obligation, the security was extrajudiciaily foreclosed and was
    eventually sold in a public auction. Hence this case, to assail the validity of the mortgage and to
    recover the foreclosed land.

    Issue:
    Whether or not a real estate mortgage can be instituted on the building of a land belonging to
    another

    Held:
    While it is true that a mortgage of land necessarily includes in the absence of  stipulation  of 
    the  improvements  thereon,  buildings,  still  a  building  in itself may be mortgaged by itself
    apart from the land on which it is built.  Such a mortgage would still be considered as a REM for
    the building would still be considered as immovable property even if dealt with separately and
    apart from the land.  The original mortgage on the building and right to occupancy of the land
    was  executed  before  the  issuance  of  the  sales  patent  and  before  the government  was 
    divested  of  title  to  the  land.    Under  the  foregoing,  it  is evident  that  the  mortgage 
    executed  by  private  respondent  on  his  own building was a valid mortgage.
    As to the second mortgage, it was done after the sales patent was issued and thus prohibits
    pertinent provisions of the Public Land Act.   

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