GRIMALT v VELASQUEZ and SY QUIO

FACTS: Grimalt obtained a favorable judgment against Velasquez in an action to foreclose a

mortgage upon latters property. Not having paid within the mortgage debt on the time fixed, the
mortgaged property was offered for sale by which the highest bidder was Sy Quio, who paid the
Sheriff the full amount of his bid.
The court, without notice to the mortgagor, affirmed the sale upon the motion of the Sy Quio.
Shortly after Grimalt moved to set aside the order of affirmance of sale upon the ground that it
was void for lack of notice, he at the same time deposited the full amount due under the
judgment of foreclosure, with interest and costs.
The court granted the motion to set aside the affirmance of the foreclosure sale on the ground
that Velasquez has not been given notice thereof, but imposed upon him the condition of paying
Sy Quio the amount which he had theretofore paid to the sheriff, together with 10 per cent
interest from the date of such payment, until returned to the bidder.
Sy Quio appealed as to the setting aside of the affirmance of sale in his favour and Velasquez
appealed the decision as to the part of requiring Velasquez to her to pay the interest.
ISSUES: 1.) Whether or not the debtor, in proceedings for the foreclosure of a mortgage, must
be given notice of a motion made to have the sale of the mortgaged premises confirmed
2.) Whether or not it was proper for the trial court to require the mortgagor to pay interest on the
sum deposited by the bidder in a judicial foreclosure.
HELD: The first issue was ruled in the affirmative. Section 257 of Act No. 190, Code of Civil
Procedure in effect at this time, provides that the title to premises sold under foreclosure
proceedings does not pass until the sale of the same has been confirmed by the court and that, in
order that a foreclosure sale may be validly confirmed by the court, it is necessary that a hearing
be given the interested parties at which they may have an opportunity to show cause why the sale
should not be confirmed; that a failure to give notice is good cause for setting aside the sale.
The second issue is answered in the negative. It is error to require the mortgagor to pay the
bidder interest upon sum deposited by him.
The owner of the mortgaged property is in no sense a debtor of any person who voluntarily takes
part in the bidding. The mortgagor by paying to the plaintiff the amount of her debt, for the
purpose of freeing her property from the lien of the mortgage, makes use of a right which in no
sense violates any right of the bidder. The latter, by making his bid and depositing the money,
does not acquire a right but a mere expectancy, subject to the contingency of a valid approval of
the sale by the court before the mortgage on the property is discharged by payment.

If the debtor discharges the obligation at any time before a valid order is entered, confirming the
sale, the right of the bidder is limited to the return of the money paid by him to cover his bid.