Under: Confusion or merger
Issue: Whether or not confusion (or merger of rights) took place when a creditor bought the mortgaged land of his debtor, in effect extinguishing the debt.
Facts of the case: Enriquez, Gala and Eleazar filed an action for the collection of a P30,000 debt and the foreclosure of the mortgage that secured the debt, against the estate of Fructuosa Cadiz.
The trial court however denied the prayer for judgment, noting that the plaintiffs had bought the estate after it was sold for P857 at a sheriff’s auction.
The court said: “A merger of rights took place which had the effect of extinguishing the debt of Fructuosa Cadiz in favor of the plaintiffs. If that were not true, the plaintiffs would acquire the legal and equitable title to lands assessed at P28,150 for the sum of P857 paid by them to Francisco Paulino without giving Fructuosa Cadiz or her estate credit for anything, leaving the said estate still owing the plaintiffs the P30,000 plus interest, for which the lands stood security.”
“This extinction of the obligation and merger of rights by which the plaintiffs became owners of the land, occurred when they acquired the rights of Francisco Paulino, that is to say, on February 24, 1931.”
Held: Judgment affirmed.