FABIO CAHAYAG AND CONRADO RIVERA, VS. COMMERCIAL CREDIT CORPORATION, REPRESENTED BY ITS PRESIDENT, LEONARDO B. ALEJANDRO; TERESITA T. QUA, ASSISTED BY HER HUSBAND ALFONSO MA. QUA; AND THE REGISTER OF DEEDS OF LAS PINAS, METRO MANILA, DISTRICT IV.

Ruling

Accordingly, TCT Nos. 74531, 74532, 74533 and 74534 were cancelled; and TCT Nos. 77012, 77013, 77014 and 770015 were issued to respondent Qua on 5 January 1984. [16] Subsequently, respondent Qua filed ejectment suits individually against petitioners Dulos Realty,17 Cahayag, [18] Escalona, [19] and Rivera [20] before the Metropolitan Trial Court (MTC) of Las Pinas, Metro Manila. The MTC rendered Decisions in favor of respondent Qua. It ordered Dulos Realty, Escalona, Cahayag, and Rivera to vacate the properties. On 8 March 1988, the MTC issued a Writ of Execution to enforce its Decision dated 20 October 1986 in Civil Case No. 2257 against Dulos Realty "and all persons claiming right under defendant." [21] The subject of the writ of execution was Lot 11 Block II, [22] which was the lot sold by Dulos Realty to petitioner Baldoza. COMPLAINT FOR ANNULMENT OF SHERIFF'S SALE AND OTHER DOCUMENTS On 5 December 1988, petitioners filed a Complaint against respondents for the "Annulment of Sheriff['s] Sale and Other Documents with Preliminary Injunction and/or Temporary Restraining Order" before the RTC of Makati City, where it was docketed as Civil Case No. 88-2599. [23] The Complaint [24] alleged that petitioners Cahayag, Rivera, Escalona and Baldoza were owners of the properties in question by virtue of Contracts of Sale individually executed in their favor, and that the Real Estate Mortgage between Dulos Realty and defendant-appellant CCC did not include the houses, but merely referred to the lands themselves." [25] Thus, the inclusion of the housing units in the Deed of Sale executed by respondent CCC in favor of respondent Qua was allegedly illegal. [26] Respondents failed to file an answer within the reglementary period. Subsequently, they were declared in default. They appealed the order of default but their appeal was dismissed on 8 February 1990. [27] On 6 July 1992, the RTC rendered a Decision, [28] which ruled that the houses were not included in the Real Estate Mortgage; and that the foreclosure of the mortgage over the subject lots, as well as the housing units, was not valid. [29] The trial court held that this conclusion was established by the plaintiffs' evidence, which went unrefuted when defendants were declared in default. [30] THE CA DECISION Respondents proceeded to the CA, where they secured a favorable ruling. In its Decision rendered on 2 November 2004, [31] the appellate court held that the extrajudicial foreclosure was valid, since the Real Estate Mortgage clearly included the buildings and improvements on the lands, subject of the mortgage. After establishing the inclusion of the housing units in the Real Estate Mortgage, the CA determined the rights of the buyers in the Contracts to Sell/Contract of Sale vis-a-vis those of the mortgagee and its successor-in-interest. In the cases of petitioners Cahayag, Rivera and Escalona, the CA pointed to lack of evidence establishing full payment of the price. As supporting reason, it stated