Republic of the Philippines

REGIONAL TRIAL COURT

National Judicial Capital Region
Makati City
BEN HOGAN,
Plaintiff,
- versus CIVIL CASE NO. 05-032
For: Judicial Foreclosure
of Real Estate Mortgage
with Application for
Receivership

ARNOLD PALMER,
Defendant.
x-----------------x

COMPLAINT
PLAINTIFF JACK NICHLAUS, through its counsel,
most respectfully states:
I.
PARTIES
1.
PLAINTIFF BEN HOGAN (hereinafter referred to as
Plaintiff) is of legal age, Filipino, married and a resident of 87 St.
Joseph Avenue, San Antonio Village, Makati City. It may be served
with subpoena, orders, and other processes of this Honorable Court at
undersigned counsels address as indicated below.
2.
DEFENDANT ARNOLD PALMER (hereinafter
referred to as Defendant) is of legal age, Filipino, married and a
resident of 22, Bonifacio Street, Poblacion, Makati City, where he
may be served with summons and other processes of this Honorable
Court.

II.
THE FACTS
3.
On May 25, 2010, Defendant approached the Plaintiff at
the Manila Polo Club and invited the latter to invest in the apartment
business which the former wanted to put up in his empty lot located at
J.P. Rizal St., Makati City. Plaintiff respectfully declined but told the
Defendant that he was willing to loan him money to jumpstart the
business provided that the land to be used as well as the future
improvements therein would be given as collateral.
4.
Thus, on June 1, 2010, Defendant executed a promissory
note in the sum of FIVE MILLION PESOS (PhP 5,000,000) in favor
of Plaintiff, in the terms and conditions as follows:
FOR VALUE RECEIVED, the undersigned Maker,
promises to pay to the order of Ben Hogan, (hereinafter
referred to as "Payee"; Payee together with any
subsequent holder hereof or any interest herein being
hereinafter referred to as "Holder") at 87 St. Joseph
Avenue, San Antonio Village, Makati City, or at such
other place as the Holder may from time to time
designate in writing, without grace, except as may be
otherwise expressly provided for herein, the principal
sum of FIVE MILLION PESOS (Php 5,000,000),
together with interest from the date hereof at a rate of
twelve percent (12 %) per annum, on or before June 1,
2013.
xxx
A copy of the said Promissory Note is attached hereto, marked
annex A and made an integral part of this complaint.
5.
To secure payment of the said promissory note, the
Defendant executed a Deed of Mortgage in favor of Plaintiff over the
subject parcel of land of which Defendant is the absolute owner,
located at J.P. Rizal St., Makati City, covered by Transfer Certificate
of Title No. 12345, containing an area of about FIVE HUNDRED

FIFTY SQUARE METERS (550 sqm), more or less, including all the
present and future improvements therein.
A copy of the Deed of Mortgage and the Transfer Certificate of
Title is attached hereto, marked annex B and C, respectively, and
are made as integral parts of this complaint.
The Deed of Mortgage was recorded in the Registry of Deeds
of Baguio City on the 3rd day of June, 2010.
6.
Using the loan as capital, Defendant built a five-door
apartment within the 550 square meter property. By the end of 2010,
the apartments were fully functional and ready to be rented out.
III.
CAUSE OF ACTION
7.
Under the Deed of Mortgage and Promissory Note,
Defendant was obligated to pay the plaintiff the amount of 5,000,000
pesos on or before June 1, 2013. However, Defendant failed to pay the
same because of alleged business reverses. Defendants failure to pay
constitutes default of the terms of payment under the Deed of
Mortgage and the Promissory Note.
8.
Notwithstanding the Plaintiffs subsequent oral and
written demands, the Defendant still failed to pay the loan, or any part
thereof.
9.
Hence, because of Defendantss failure to pay, this action
for Foreclosure of Real Estate Mortgage is in order. Article 2137 of
the New Civil Code provides:
The creditor does not acquire the ownership of the real
estate for non-payment of the debt within the period
agreed upon.
Every stipulation to the contrary shall be void.

But the creditor may petition the court for the

payment of the debt or the sale of the real property.
In this case, the Rules of Court on the foreclosure of
mortgages shall apply.
Moving on to the provisions of the Rules of Court, Rule
68 provides for the formalities and procedure for the
foreclosure of real estate mortgages. More particularly, Section
2 of Rule 68 states that:
Judgment on foreclosure for payment or sale. If
upon trial in such action the court shall find the
facts set forth in the complaint to be true, it shall
ascertain the amount due to the plaintiff upon the
mortgage debt or obligation, including interests
and other charges as approved by the court, and
costs, and shall render judgment for the sum so
found due and order that the same be paid to the
court or to the judgment obligee within a period
not less than ninety (90) days nor more than one
hundred twenty (120) days from the entry of
judgment, and that in default of such payment
the property shall be sold at public auction to
satisfy the judgment.
(Emphasis supplied)
10. Due to the Defendants default, Plaintiff was deprived of
the productive use of his money. Plaintiff is thus entitled to the
payment of the principal sum of 5,000,000 pesos subject to an interest
rate of 12 % per annum. In addition, the whole amount due is also
subject to 6 % interest per annum as penalty. Furthermore, Plaintiff is
entitled to Attorneys fees equal to TWO HUNDRED THOUSAND
PESOS (Php 200,000) as well as the costs associated with this suit.
The foregoing amounts are based on the agreement of both parties as
evidenced by the pertinent provisions of the Promissory Note as
follows:
xxx

(b) In case the Maker defaults in the payment of the

amount due, the unpaid amount shall be subject to an
additional 6 % interest per annum as penalty.
xxx
(d) Should suit be brought to recover on this Note, or
should the same be placed in the hands of an attorney for
collection, Maker promises to pay Holder attorney fees
equal to TWO HUNDRED THOUSAND PESOS (Php
200,000) and costs incurred in connection therewith. This
Note shall be governed and construed in accordance with
the laws of the Philippines, and suit hereon may only be
brought before the Regional Trial Court of Baguio City,
to the exclusion of all other venues.
xxx
IV.
ALLEGATIONS OF FACT IN SUPPORT OF THE
APPLICATION FOR RECEIVERSHIP
11. Plaintiff hereby repleads and incorporates, by way of
reference, all the foregoing allegations in support hereof.
12. After the Defendants failure to pay the amount due, the
Plaintiff conducted an ocular survey of the mortgaged property on
July 1, 2013. It was then that he personally saw that the Defendant
had miserably neglected to take care of the parcel of land and
improvements therein, so much so that some of the walls were already
ruined by the infestation of termites.
A copy of the photograph of the damaged wall which was taken
last July 1, 2003 is attached hereto, marked Annex D and is made
an integral part of this Complaint;
13. Upon consultation with the Mines and Geosciences
Bureau (MGB) last July 6, 2013, results of the Landslide Assessment
and Mapping revealed that the subject parcel of land is in an area
which is highly susceptible to landslide. The MGB recommended that

for areas with high susceptibility ratings, the construction of a rip-rap

structure is needed in order to prevent further collapse and the highly
probable occurrence of landslides.
A copy of the MGBs Landslide Assessment and Mapping of
the City of Baguio is attached hereto, marked Annex E and is made
an integral part of this Complaint;
14. On July 7, 2013, the Plaintiff talked again to the
Defendant at the latters home with regard to the recommendations of
the MGB and the termite infestation. The Defendant categorically
stated that he will no longer waste any more of his money for the
construction of the rip-rap structure on the property and the
eradication of the termite infestation because it will eventually be
foreclosed by the Plaintiff. Because of this, the Plaintiff became
concerned that further damage to the property might result to its
insufficiency to satisfy the mortgage debt.
15. Due to these circumstances, the Plaintiff was prompted to
seek for remedies which can adequately protect his rights under the
Mortgage agreement and under the Rules of Court. Rule 59 of the
Rules of Court provides:
SECTION 1. Appointment of receiver. Upon a verified
application, one or more receivers of the property
subject of the action or proceeding may be appointed
by the court where the action is pending, or by the
Court of Appeals or by the Supreme Court, or a member
thereof, in the following cases:
xxx
(b) When it appears in an action by the mortgagee for
the foreclosure of a mortgage that the property is in
danger of being wasted or dissipated or materially
injured, and that its value is probably insufficient to
discharge the mortgage debt, or that the parties have so
stipulated in the contract of mortgage;
xxx
(Emphasis supplied)

16. The facts of this case clearly show that DefendantMortgagor willfully disregarded the maintenance and preservation of
the mortgaged property. Such facts necessitate the appointment of a
receiver to protect and preserve the interests of the PlaintiffMortgagee during the pendency of this case.
17. Furthermore, it is without a doubt that the appointment of
a receiver is the most convenient and feasible means of preserving and
administering the subject property before its foreclosure.
18. Unless a receiver is appointed, the property is in danger
of being wasted and might not satisfy the obligation secured by the
same.
19. Plaintiff is willing and able to post a bond in connection
with his application for receivership in such amount as may be fixed
by this Honorable Court.
20. In addition to the foregoing, Plaintiff is entitled to moral
damages in the amount of 100,000 pesos for the serious anxiety he has
suffered as a result of the Defendants refusal to safeguard the
mortgaged property from possible damage due to landslides.
Plaintiffs anxiety brought about sleepless nights as he was troubled
that the security for the loan might become useless by the time he is
allowed by the court to proceed with the foreclosure. Furthermore, the
Plaintiff is also entitled to exemplary damages in the amount of
50,000 pesos for acting in wanton disregard of the rights of the
Mortgagee, particularly because by his own willful acts, he had
permitted the impairment of the mortgaged property.
V.
PRAYER
WHEREFORE, premises considered, Plaintiff most respectfully
prays that this Honorable Court, after due notice and hearing, issue a
judgment:

1.

Appointing a receiver to take possession of the said

property during the pendency of this action, upon the
filing of a bond by the Plaintiff in such sum as this court
may deem sufficient;

2.

Ordering Defendant to pay Plaintiff the following:

a. The sum of 5,000,000 pesos as the principal amount
loaned by the defendant with interest as stipulated at
12 % per annum;
b. The total amount due subject to an additional 6 %
interest per annum as penalty;
c. Attorneys fees in the amount of 200,000 pesos as
agreed upon in the promissory note executed by the
parties;
d. Moral damages in the amount of 100,000 pesos;
e. Exemplary damages in the amount of 50,000 pesos;
and
f. Other costs in connection with this suit.

3.

Ordering that in the event payment is not made within the

period prescribed by law, the mortgaged land and the
improvements therein shall be foreclosed and sold at a
public auction and the proceeds thereof shall be applied
in accordance with the dispositions of law.

4.

Plaintiff likewise prays for such other relief and remedies

as may be deemed just and equitable by the court.

Makati City, July 15, 2013

DON VICENTE T. MATE III
Counsel for Plaintiff
5407 General Luna Street,
Poblacion, Makati City
PTR No. 1857058/ NCR/ 1-3-2013
IBP No. 886468/MNL III/1-10-2013
ROLL No. 180530
MCLE Comp. No. III-0013/ 05-01-13
Contact No.: 0915-688-0230
Email Add.: dvltmate@gmail.com

VERIFICATION AND CERTIFICATION

I, BEN HOGAN, of legal age, Filipino, married and a

resident of 87 St. Joseph Avenue, San Antonio Village, Makati City,
after having been duly sworn to in accordance with law, do hereby
depose and state, THAT:
1.
I am the Plaintiff in the above-entitled case for Judicial
Foreclosure of Mortgage and Receivership filed against Arnold
Palmer.
2.

I have caused the preparation of the foregoing Complaint.

3.

I have read the same and know the contents thereof.

4.
All the allegations contained therein are true and correct
of my personal knowledge and based on authentic records.
5.
I have not commenced any action or filed any claim
involving the same issues in any court, tribunal or quasi-judicial
agency and, to the best of my knowledge, no such other action or
claim is pending therein; if there is such other pending action or
claim, I will provide a complete statement of the present status
thereof; and, if I should thereafter learn that the same or similar action
or claim has been filed or is pending, I shall report that fact within
five (5) days therefrom to the court wherein the aforesaid complaint or
initiatory pleading has been filed.
IN WITNESS WHEREOF, I have hereunto affixed my
signature this 27th day of June 2013 at Makati City.
BEN HOGAN
Affiant

SUBSCRIBED AND SWORN to before me on the 10th

of June, 2013 at Baguio City, Philippines. Affiant appeared before me
with his Community Tax Certificate No. 643526 and presented to me
a document entitled Complaint for Judicial Foreclosure and
Receivership, issued on 23rd day of January 2013 at Makati City,
Philippines. Affiant exhibited to me his SSS ID No. 732632, issued on
March 3, 2013 at Makati City, as competent evidence of identity.
AARON JAMES T. MARTIN
Notary Public
Commission Serial No. 9473
Until December 31, 2015
Roll No: 163528
IBP No. 9483 012/26/13
PTR No. 9932 07/21/14
Doc. No. 13;
Page No. 21;
Book No. 8;
Series of 2013.