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G.R. No. 94247 September 11, 1991 Mojica vs CA DIONISIO MO ICA, i! be"a#$ o$ Spo%ses &'ONARDO MO ICA (!o) *ecease*+ a!* MARINA R,-IDO, petitioner, vs. .ON. CO,R/ O- A00'A&S, a!* R,RA& 1AN2 O- 3A4I/, INC., respondents. This is a petition for review on certiorari which seeks to reverse and set aside: the decision 5 of the Court of Appeals dated February 15, 199 in AC!".#. C$ %o. 59&' entitled ()ionisio *o+ica, in behalf of spouses ,eonardo *o+ica -now deceased. and *arina #ufido v. #ural /ank of 0awit, 1nc.(, which affir2ed in toto the decision of the trial court and -3. the resolution dated 4une 5, 199 denyin6 the 2otion for reconsideration. The facts of the case as 6athered fro2 the records are as follows: 7n February 1, 19'1, plaintiff ,eonardo *o+ica -now deceased. contracted a loan of 83 , . fro2 defendant #ural /ank of 0awit, 1nc. -now respondent.. This loan was secured by a real estate 2ort6a6e e9ecuted on the sa2e date by the plaintiffs spouses ,eonardo *o+ica and *arina #ufido -#ollo, Anne9 (C( p. 5 .. The real estate 2ort6a6e contract states a2on6 others: ... a6ree2ent for the pay2ent of the loan of 83 , . and such other loans or other advances already obtained or still to be obtained by the 2ort6a6ors ... 3. ... but if the 2ort6a6ors shall well and truly fulfill the obli6ation above stated accordin6 to the ter2s thereof then this 2ort6a6e shall beco2e null and void. -#ollo 8etitioner:s *e2orandu2, pp. &;!&'. The spouses 2ort6a6ed to the #ural /ank of 0awit, a parcel of land consistin6 of 31&,'95 s<uare 2eters, located in %aic, Cavite, covered by Transfer Certificate of Title %o. #T!155 -#ollo, Anne9 (A(, p. =1.. The real estate 2ort6a6e was duly re6istered under >ntry %o. '5;;1 of the #e6istry of )eeds of Cavite -#ollo, Anne9 (C(, p. 51..

The loan of 83 , -Ibid...

by the plaintiffs spouses was fully and co2pletely paid

7n *arch 5, 19'5, a new loan in the a2ount of 81&, . was obtained by plaintiffs spouses fro2 the defendant #ural /ank which loan 2atured on *arch 5, 19'5 -#ollo, pp. =3? 51.. %o for2al deed of real 2ort6a6e was constituted over any property of the borrowers, althou6h the top of the pro2issory note dated *arch 5, 19'5, contained the followin6 notation. This pro2issory note is secured by a #eal >state *ort6a6e e9ecuted before the %otary 8ublic of the *unicipality of 0awit, *rs. Felisa @enti under )oc. %o. ;3, 8a6e %o. &;, /ook %o.AA, @eries of 19'1. The #eal >state *ort6a6e 2entioned above is the re6istered 2ort6a6e which 6uaranteed the already paid loan of 83 , . 6ranted on February 1, 19'1 -#ollo, p. &,'.. The spouses ,eonardo *o+ica and *arina #ufido failed to pay their obli6ation after its 2aturity on *arch 5, 19'5. #espondent rural bank e9tra+udicially foreclosed the real estate 2ort6a6e on the +ustification that it was adopted as a 2ort6a6e for the new loan of 81&, . -#ollo, pp. =3? 51.. The sub+ect property was set for auction sale by the 8rovincial @heriff of Cavite for 4une 3', 19'9. 1n that auction sale, defendant rural bank was the hi6hest bidder, and its bid corresponded to the total outstandin6 obli6ation of plaintiffs spouses *o+ica and #ufido -#eno, p. =3.. The proceeds fro2 the sale of the piece of land of plaintiffs spouses were applied to their outstandin6 obli6ation with defendant bank -Ibid.. The correspondin6 certificate of sale in favor of defendant bank was e9ecuted by the 8rovincial @heriff also on 4une 3', 19'9, and the instru2ent was recorded in the 7ffice of the #e6ister of )eeds of Cavite on 4une 39, 19'9. The one year period for rede2ption elapses after 4une 19& without plaintiffs spouses havin6 redee2ed the foreclosure property -Ibid..

*eanwhile, on 4uly 19, 19& , )ionisio *o+ica, the son of petitioners!spouses, in an apparent atte2pt to pay the debt of 81&, . 2ade a partial pay2ent in the a2ount of 835,;5&. -819,95&. of this a2ount in check bounced. which the defendant rural bank received and accepted with the issuance of the defendant:s official receipt %o. 1 1 3;9, ackowled6in6 the pay2ent as partial pay2ent of :past due loan:, to6ether with the (interest on past due lose -#ollo, p. ==.. 7n Au6ust 11, 19& , another partial pay2ent was 2ade by )ionisio *o+ica in the a2ount of 89,95&. in pay2ent also of ;5 past due loan: plus (interest on past due loan ' which pay2ent was received by the defendant rural bank and acknowled6ed with the issuance of official receipt %o. 1 1&55. These pay2ents were, however, considered by the bank as deposit for the repurchase of the foreclosed property -Ibid., p. ==.. 7n Au6ust 15, 19&1, upon in<uiry by )ionisio *o+ica on the unpaid balance of the loan, the respondent rural bank issued a :Co2putation @lip( indicatin6 therein, that as of Au6ust 15, 19&1, the outstandin6 balance plus interest co2puted fro2 *arch 5, 19'5 was 831,3'3.5 -Ibid... 7n %ove2ber 1 , 19&1, said bank e9ecuted an affidavit of consolidation of ownership, which it subse<uently filed with the #e6ister of )eeds of Cavite. As a result, Transfer Certificate of Title %o. T!13=9;5, coverin6 the foreclosed piece of land, was issued in its favor by the #e6ister of )eeds on 4anuary 19, 19&3. After havin6 consolidated its ownership over the foreclosed property, defendant bank scheduled the parcel of land to be sold at public auction on February 3;, 19&3, pursuant to the re<uire2ent of the law re6ardin6 the disposal by a bank of its ac<uired assets. )ionisio *o+ica and one Teodorico #ufido, brother!in!law of plaintiff ,eonardo *o+ica, were notified of such auction sale Bowever, no sale was consu22ated durin6 that scheduled sale and the property concerned up to now still re2ains in the possession of respondent bank -Ibid... The refusal of the sa2e bank to allow )ionisio *o+ica to pay the unpaid balance of the loan as per the (Co2putation @lip( a2ountin6 to 831,3'3.5 , resulted in the filin6 of a co2plaint -#ollo, p. 53.. 7n @epte2ber =, 19&5, the trial court rendered +ud62ent dis2issin6 the co2plaint. 7n %ove2ber 5, 19&5, petitioner filed a 2otion for reconsideration of the decision, which 2otion was denied in the order dated %ove2ber 1', 19&5. 7n 4anuary 3, 19&5, a notice of appeal was filed in the 1nter2ediate Appellate Court -#ollo, p. 53..

7n February 15, 199 , the Appellate Court, rendered its decision, ai2in6 in toto the decision of the trial court. The dispositive portion of the decision of the appellate court reads: CB>#>F7#>, findin6 no reversible error in the decision appealed fro2, the 6a2e is hereby AFF1#*>) in toto. Cith costs a6ainst plaintiffs!appellants. The 2otion for reconsideration of said decision was denied in a resolution dated 4une 5, 199 -#ollo, Anne9 (/(, p. =9.. Bence, this petition. This Court in its resolution dated @epte2ber =, 199 dis2issed the petition for non! co2pliance with certain re<uisites but later in its resolution dated %ove2ber 5, 199 , it reinstated the petition -#ollo, 8etition pp. 9!3&.? #esolutions, pp. 53!5=? ;1.. The petition is devoid of 2erit. The pivotal issue in this case is whether or not the foreclosure sale by the @heriff on 4une 3', 19'9, had for its basis, a valid and subsistin6 2ort6a6e contract. 7therwise stated, there is a need to ascertain the intention of the parties as to the covera6e of the 2ort6a6e in <uestion with respect to future advance2ents. Contracts which are not a2bi6uous are to be interpreted accordin6 to their literal 2eanin6 and should not be interpreted beyond their obvious intend2ent -8lastic Town Center Corp. v. %,#C, 1'3 @C#A 5& D19&9E.. Thus, where the intent of the parties has been shown un2istakably with clarity by the lan6ua6e used, the literal 2eanin6 shall control -8ara2ount @urety F 1ns. Co., 1nc. v. A6o, 1'1 @C#A 5&1 D19&9E.. Correspondin6ly, stipulations in the 2ort6a6e docu2ent constitute the law between the parties, which 2ust be co2plied with faithfully -Co22unity and ,oan Assn., 1nc. v. Court of Appeals, 15= @C#A 5;5 D19&'E.. As earlier stated, the #eal >state *ort6a6e in the case at bar e9pressly stipulates that it serves as 6uaranty G ... for the pay2ent of the loan ... of 83 , . and such other loans or other advances already obtained or still to be obtained by the 2ort6a6ors as 2akers ... -#ollo, p. 15..

1t has lon6 been settled by a lon6 line of decisions that 2ort6a6es 6iven to secure future advance2ents are valid and le6al contracts? that the a2ounts na2ed as consideration in said contract do not li2it the a2ount for which the 2ort6a6e 2ay stand as security if fro2 the four corners of the instru2ent the intent to secure future and other indebtedness can be 6athered. A 2ort6a6e 6iven to secure advance2ents is a continuin6 security and is not dischar6ed by repay2ent of the a2ount na2ed in the 2ort6a6e, until the full a2ount of the advance2ents are paid -,i2 4ulian v. ,utero, 59 8hil. ' 5!' 5 D193;E.. 1n fact, it has also been held that where the annotation on the back of a certificate of title about a first 2ort6a6e states (that the 2ort6a6e secured the pay2ent of a certain a2ount of 2oney plus interest plus other obli6ations arisin6 there under: there was no necessity for any notation of the later loans on the 2ort6a6ors: title. 1t was incu2bent upon any subse<uent 2ort6a6ee or encu2brances of the property in <uestion to e e the books and records of the bank, as first 2ort6a6ee, re6ardin6 the credit standin6 of the debtors Tady!H v. PNB, 13 @C#A 19!3 D19;5E.. The evidence on record shows that the a2ounts of 85,' . and 89,95&. were accepted by the bank on 4uly 19 and Au6ust 11, 19& as deposits for conventional redemption after the property covered by real estate 2ort6a6e beca2e the ac<uired asset of the bank and priced at 8&5, . and after petitioner had lost all ri6hts of legal redemption because 2ore than one year had already elapsed fro2 4une 39, 19'9, the date the certificate of sale was re6istered in the office of the #e6istry of )eeds of Cavite. 1ndeed, the conventional redemption was sub+ect to be e9ercised up to *arch =, 19&3 and was e9tended up to April 19, 19&3 for a fi9ed a2ount of 8&5, . . The respondent bank even favored the petitioner by 6ivin6 the2 the first preference to repurchase the property but they failed to avail of this opportunity, althou6h the bank (is certainly disposed to release at anyti2e( the deposits. Further, the evidence on record also shows that the 2ort6a6e property was auctioned on 4une 3', 19'9. The only bidder was the respondent bank which bid for 83;,=&'. 5. As the hi6hest bidder, the respondent bank can ri6htfully consolidate its title over the property. As aptly stated by respondent Court: 1t would then be unfair to i2pute that the trial court allowed defendant bank to appropriate the 2ort6a6e property, because after the plaintiff!appellants failed to repurchase the property and filed this action with :lis pendens:, the actions prevented the bank fro2 ne6otiatin6 for the sale of the property to other buyers. -p. =;, #ollo.

8#>*1@>@ C7%@1)>#>), the petition is )1@*1@@>) and the assailed decision and resolution of the 1nter2ediate Appellate Court -Court of Appeals. are AFF1#*>).