This case has been cited 1 times or more.
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2015-03-18 |
LEONEN, J. |
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| Such was to be expected because when the foreclosure proceeding was initiated, respondent was already declared insolvent. Indeed, upon the adjudication of insolvency, the insolvent ceased to exist and was in effect judicially declared dead as of the filing of the insolvency petition and by the nature of things had no further interest in the property covered by the mortgage.[102] Under Section 32 of Act No. 1956, title to the insolvent's estate relates back to the filing of the insolvency petition upon the election of the assignee who shall thereafter act on behalf of all the creditors. Under Section 36, the assignee has the power to redeem all valid mortgages or sell property subject to mortgage. Thus, the extrajudicial foreclosure of the mortgaged property initiated by petitioner without leave of insolvency court would effectively exclude the assignee's right to participate in the public auction sale of the property and to redeem the foreclosed property[103] to the prejudice of all the other creditors of the insolvent. | |||||