Appeal from the Resolution of  the  Commissioner of Land Registration, dated February  9, 1957, in  connection with LRC  Consulta No. 142.

On November 12, 1952, certain lots in Manila covered by Transfer  Certificates of Titles Nos.  30644,  30645 and 30646  were  mortgaged  by Jose J.  Gonzales,  the  registered owner, to Ramon Eugenio, as security for an obligation of P30,000.00.  The deed of mortgage was registered on November 13, 1952.   On December 21, 1953, the Bank of the Philippine Islands, as executor of the testate estate of the late Graciana de  Jesus, filed a  notice  of adverse claim to the effect that the transfer of the properties in question in favor  of  Jose J. Gonzales  was forged and fraudulent.   This  adverse claim was duly  annotated on the same day at the back of the aforesaid  certificates of title.   As Gonzales failed  to pay the principal  obligation, the mortgage was foreclosed judicially and, in due course, the properties  mortgaged  were sold on October 10, 1956 at public  auction  to  respondent Consuelo  O. Vda.  De Eugenio, in her capacity as Administratrix of the Intestate  Estate of the deceased Ramon Eugenio, the highest bidder, for a consideration of P36,500.00 (p. 8, Records), and  the sheriff's sale  was confirmed  by the court in an order, dated October 27, 1956.  (P. 10,  Records)

When the sheriff's deed of sale  was  presented  to the Register of Deeds  for  registration, Consuelo O. Vda. de Eugenio, the vendee in the auction  sale, insisted that the adverse  claim  be not  carried into new transfer  certificates  of title to be issued in her favor in lieu of Transfer Certificates of Title  Nos.'30644,  30645 and  30646, while  the  Bank of the Philippine  Islands, on the  other hand,  took the contrary stand.  Doubtful of the step or procedure to be taken  on the matter, under the circumstance, the  Register  of  Deeds  elevated  the pertinent papers to  the Commissioner of Land  Registration,  by way of consulta, under Sec. 4 of Republic Act No. 1151, for an opinion.

After the parties, through their respective counsel, had manifested  willingness  to  submit the  consulta  without filing any memorandum (p. 19,  Records), the  respondent Commissioner, on the theory that "if the notice of adverse claim in  this case  is  to  be  carried  over  on  the new certificates of title  to be issued, it will reverse the legal effects  of priority in registration by converting a subordinate which  is admittedly  a superior lien, and the mortgage which  is  admittedly  a  superior lien into  a subordinate  lien,  which is obviously  absurd",  rendered  on February 9,  1957 an opinion  holding that  the notice  of adverse  claim may  not  be carried over to the new  transfer certificates of title to be issued to respondent Consuelo Vda. de  Eugenio.   The  dispositive portion  of  the ruling reads as follows:

"WHEREFORE, this Commission  is of the opinion, and so holds, that the petitioner Register of Deeds may give due course to the registration of the foreclosure sale in favor of Consuelo Vda. de Eugenio as Administratrix of the intestate estate of Ramon Eugenio,  deceased, for which  purpose he may cancel Transfer Certificates of Title Nos. 30644, 30645 and 30646, and issue new certificates of title in lieu thereof,  without  need of carrying  over the annotation of the notice  of adverse claim which was registered subsequent to  the mortgage that was foreclosed, without prejudice, of course, to  the right  of the adverse claimant to pursue all lawful remedies against the party  or parties who allegedly defrauded the heir or heirs of the late  Graciana  de Jesus." (p. 24, Records;  italics supplied)

Being  adversely  affected thereby,  petitioner  Bank,  in its capacity as Executor of  the Testate Estate  of the late  Graciana  de  Jesus,  together with the  testate  heirs, Angustia  Jimenez,  instituted the instant  petition  to review the  opinion  above-referred  to,  contending  that respondent Commissioner erred  in (1) not holding that he had  no jurisdiction to take  cognizance of the  consulta, (2)  ruling that the notice  of  adverse  claim in favor  of petitioner Bank may  be cancelled and removed from the new  certificates of  title  to  be issued to respondent  Consuelo Vda. de Eugenio,  and  (3) presuming the judicial foreclosure of the mortgage to be valid and binding upon petitioner Bank, notwithstanding that it was not  a party thereto.

Petitioner  Bank anchors  its insistence that respondent Commissioner has no  jurisdiction  to entertain the con svXta upon the  proposition  that the  controversy is  not between  the  Register of  Deeds  and respondent Consuelo Vda. de  Eugenio,  but actually between petitioner  Bank, on  one  side, and respondent Consuelo Vda. de Eugenio, on  the other, which falls under Sec.  112 of Act  496  requiring a  controversial  issue to be  threshed  out  in  an ordinary action.  We do not  subscribe to this view.  Sec. 4, Republic Act 1151,  provides:

"when the Register of Deeds is  in doubt with regard to  the proper step to be  taken or memorandum to be made in pursuance of any deed,  mortgage, or other instrument presented to him for registration, or where any party in  interest does not agree  with the Register of Deeds with reference to any such matter, the question shall  be  submitted to the  Commissioner  of  Land  Registration either upon  the certification of the Register of Deeds, stating the question upon which he is in doubt, or upon  the  suggestion in writing by the party in interest; and thereupon the Commissioner, after consideration of the matter shown by the  records certified to him, and  in case of registered lands, after notice to the parties and hearing, shall enter an order prescribing the step to be taken or  memorandum to be made.  His decision  in such cases shall be conclusive and binding upon all  Register of Deeds: Provided, further, That when a party in interest disagrees with  the  ruling or resolution of the  Commissioner and  the issue  involves a question of law, said decision may be appealed to the Supreme Court within thirty days from  and after receipt of the notice thereof."  (Italics supplied.)

Thus Republic  Act  1151  expressly empowers  the Commissioner  of Land Registration to entertain  a  consulta either  upon  the certification  of  the Register of Deeds  or upon  the  suggestion in  writing of  a  party  in  interest (1) when  the Register of Deeds is in doubt with regard to  the  proper  step  to be  taken  or  memorandum to  be made in pursuance of any  deed,  mortgage, or other instrument presented to him for registration  and (2) where any party in  interest  does not agree  with the Register of  Deeds with reference to such matter.

In the instant case, respondent Register of Deeds brought the consulta to respondent Commissioner,  in view of the insistence  of  respondent Consuelo Vda. de  Eugenio that the notice of adverse claim be not annotated at the back  of  the new certificates  of title to be  issued to her in lieu of  the old ones, which  insistence  created a doubt in the mind of the Register of Deeds  as to the  proper step or  procedure  to  be taken therein.  The   matter does  not  therefore come under Section  112 of Act No. 496,  which authorizes a person  in  interest  to ask  the  court for any erasure, alteration, or amendment of a certificate of title upon the ground that registered interest have terminated  or  ceased  (Tangunan, et al. vs. Republic, 94 Phil.,  171),  but is clearly within the  competence of the respondent Commissioner  of Land  Registration to resolve, pursuant to Section 4 of Republic Act 1151.

Petitioners  question the legality of respondent Commissioner's ruling that the annotation of the notice of adverse claim need not be carried on the new certificates of title to  be  issued  to respondent Consuelo Vda.  de Eugenio. In  their petition, they  stressed the  fact that the  mortgagor, Jose J. Gonzales, is not the absolute  owner of the properties  mortgaged  and, therefore,  the  mortgage  in question is null and  void and  "is  as  devoid  of value and force as if it  had not been made" (Petition, p. 6).  Petitioners also contend that the notice of adverse claim  which antedated the  foreclosure and sale  at  public auction  of the property subject thereto charges all strangers with notice of the particular  litigation or claim and, therefore, any right that may be acquired thereafter on the property is subject  to the eventuality  of the third  party claim, is not  sustainable in the present controversy.  It is well to note that the mortgage in  favor of the late Ramon Eugenio was  annotated on November  13,  1952 at  the back of the  certificates of  title  in  controversy,  while the  adverse claim was  only  annotated on the same  certificates more than one  year later,  on  December 21, 1953. Hence,  the adverse claim could not affect the rights of the  mortgagee; and  the fact that  the foreclosure of the mortgage  and the  consequent public  auction sale  have been effected long  after the annotation  of the  adverse claim is of no moment,  because the foreclosure sale retroacts to  the date  of  registration  of the  mortgage  (See Cruz vs. Sandoval, 39 Phil., 736; and  Lopez vs. Vijandre, 72 Phil., 56.)

"A person who takes a mortgage in good faith and for a valuable consideration, the record showing a  clear title  in the mortgagor, will  be protected against any equitable titles to the  premises, or equitable claims on the title, in  favor  of third persons,  of which he had no  notice, actual or constructive and  that protection extends to  a purchaser at a  Sheriff's sale under proceedings on the mortgage although such purchaser had notice of the alleged equity." (59  C.J.S.,  Sec. 233, pp. 303-304)

Any  subsequent lien  or encumbrance annotated at the back of the certificates of title  can not  in any way  prejudice the mortgage  previously registered, and  the  lots subject  thereto pass to the purchaser  at the public  auction  sale  free  from any lien  or  encumbrance.   Otherwise, the value of the mortgage could be  easily destroyed by  a subsequent record of  an adverse claim, for no one would purchase  at a foreclosure  sale  if bound  by the posterior claim.

".  . . Consequently, the lots passed to  the purchaser free from the mortgage  (second)  in  favor  of  the bank.  The bank's  claim that  the second mortgage stands to the prejudice of the  purchaser is untenable, particularly because, as the purchaser in this case is the first  mortgagee  itself,  the  result,  inverting the  legal effects of the  two  mortgages, would practically  be to convert the second mortgage, constituted in favor of the  Philippine National Bank, into  a first mortgage and  the first mortgage, constituted in  favor of El  Hogar Filipino,  into a  second mortgage. . ."  (El Hogar Filipino  vs. Philippine National Bank,  64  Phil.,  582;  italics supplied.)

It  is  therefore clear  that the  adverse  claim  of the petitioners did not  affect  respondent  Consuelo Vda. de Eugenio's  right  as  purchaser  in  the foreclosure  sale. This  alone is sufficient justification  for the dropping of the adverse claim from the new certificates of title to be issued to her, as directed by respondent Commissioner in his opinion subject of this appeal.

Finally, it is argued  for  petitioners that they are indispensable  parties  and  that the  foreclosure  proceeding does  not  bind them since  they were   not  made  parties thereto.   We can not  sustain this  view.   Not only  was their claim recorded after  the  mortgage was  registered but the  settled rule  is that adverse claimants are neither necessary nor proper parties to a foreclosure suit (Diaz, et al. vs. Reynolds, et al., 96 U. S.  430; 24  L.  Ed. 644), unless they are asserting a right or interest acquired by them prior to the registration of the mortgage sought to be  foreclosed in which case  they may  be  considered necessary (but not  indispensable)  parties.  (Hampshire vs.  Greeves, 143 S. W.  147.)

"A person, setting up  a claim of title to the mortgaged premises adverse and paramount to  that of the mortgagor, and  not derived from him, is not a  proper  party to the foreclosure suit, as he has no interest in the subject  matter of the action  and his rights or title could not  properly  be litigated therein;   (42 C. J., Sec. 1577, p. 55.)

But where, as in  the instant case, such persons are merely asserting  titles antagonistic  to  the  mortgagor,  they are not  necessary  parties  in   the   foreclosure  proceedings. (See  Orient  Bldg. &  Loan  Ass'n  vs.  Gould,   et  al., 86 Atl. 863)

Wherefore,  the  Resolution  appealed from  is  affirmed in toto.   Costs shall  be charged against petitioners.  So ordered.

Paras,  C.  J., Bengzon,  Padilla,  Montemayor, Reyes, A., Bautista Angelo, Labrador, Concepcion, and Endencia, JJ., concur.