An apartment purchaser borrowed from a bank in order to purchase the apartment and after the seller signed an undertaking to register a mortgage, the bank transferred the loan money directly to the seller. Although the deal was cancelled, the money was not repaid to the bank.
The Court held that the bank may demand repayment of the loan from the seller of the apartment. When a person takes out a mortgage backed loan for the purpose of purchasing an apartment and the seller of the apartment signs an obligation to register a mortgage, the bank that provided the mortgage and paid the consideration to the seller, subrogates the purchaser in a manners that also allows it to realize the mortgage. Here, because the ownership of the apartment did not pass to the purchaser but the funds were not repaid to the bank, the bank may demand repayment of the loan from the seller, even though the apartment was never tendered to the purchase and the rights were transferred to her name.