Top Rate V Iac Gr 67496
TOP RATE INTâ€™L. VS. IAC
FACTS: Astro and Polaris filed an action for collection against Consolidated Mines for failure to pay the purchase price of heavy equipments it bought from the two companies. The trial court levied on the properties (2 parcel of lands) of Consolidated Mines and a notice of attachment was made in the TCTs of said lands. Annotated as prior encumbrance on the said lands was a mortgage in favor of 12 consortium banks. However, the said lands were also sold to Top Rate.
The 12 banks filed a third party claim at RTC Makati alleging that they were the mortgagee of the lands. Polaris filed a motion to quash third party claim but it was denied. The court ruled that the banks as mortgagees had superior lien on the properties and that the petitioner could validly levy only on the mortgagorâ€™s equity of redemption after the sale of the mortgaged properties.
Top Rate also filed a third party claim before Sheriff of Rizal asking that the attachment made on the properties be discharged. The court ordered the lifting and setting aside of the levy on attachment. Polarsi and Astro appealled to IAC.
IAC reversed the trial courts decision and ordered the levy on the two properties maintained. Ordering that the said sale was not actually a sale or assignment by the banks of their rights as mortgagees but as a sale of said properties by mortgagor with the consent of the mortgagee; what was actually attached by petitioners was the equity of redemption of CM pursuant to the writ of attachment.
Petitioner appealled to SC stating that since private respondentsâ€™ lien is only a total of P343, 227, hey cannot be entitled to the equity of redemption because the exercise of such right would require the payment of an amount which cannot be less than 40M, the value of the properties.
ISSUE: WON private respondents are entitled to the equity of redemption.
RULING: Yes. What was actually attached by the respondents was merely Consolidated Mineâ€™s right of equity of redemption, an incorporeal and intangible right, the value of whivh can neither be quantified nor equated with the actual value of the properties upon which it may be exercised. When private respondents prayed for attachment to secure their claims against CM, the properties had already been mortgaged to the banks. Respondentsâ€™ lien on such properties became inferior to that of the banks.