Rule on disposition of proceeds of foreclosure sale

Section 4, Rule 68 of the Rules of Court provides:

Section 4. Disposition of proceeds of sale. The money realized from the sale of the mortgaged property under the regulations herein before prescribed shall, after deducting the costs of sale, be paid to the person foreclosing the mortgage, and when there shall be any balance or residue, after paying off such mortgage or other encumbrancers, in the order of their priority, to be ascertained by the court.

Under the above rule, the disposition of the proceeds of the foreclosure sale shall be in the following order: (a) pay the costs of sale; (b) pay off the mortgage debt to the person foreclosing the mortgage; (c) pay the junior encumbrancers, if any, in the order of priority; and (d) give the balance to the mortgagor, his agent or the person entitled to it. (Spouses Suico v. PNB, 558 Phil. 265 (2007) and Sulit v. Court of Appeals, 335 Phil. 914, 931, 1997)