Concepcion Hijos against Rosenstock in the capacity on the ground
Facts: that this action is for the foreclosure of a mortgage It appears from the record that on July 6, 1921, the defendants Concepcion executed a promissory RTC note in favor of the plaintiff for the sum of After a lengthy trial, the court below, on January P342,372.64, payable on demand, and as security 22, 1927, rendered its decision absolving the Elser for payment, deposited 700 shares of the estate from the complaint, ordering the Philippine National Bank as collateral with the Concepcions to pay the plaintiff the sum of plaintiff and gave it a mortgage on 5,680 square P342,372.64, with interest of 9 per cent and costs, meters of land, with improvements, situated on R. and providing for the sale of the mortgaged Hidalgo Street in Manila. The defendants property, in case of non-payment of the judgment. Concepcion defaulted in the payment of the note, and on February 3, 1922, the plaintiff bank Issue: WON the substitution of the Administrator instituted the present foreclosure proceedings. for Elser is proper
Shortly afterwards, Henry W. Elser entered into Held:
negotiations with the Concepcions and offered to NO, The mortgagee has the election of one out of take over the mortgaged property and assume the three courses: (1) He may abandon his security mortgage debt. To this the Concepcions agreed on and share in the general distribution of the assets the condition that they be relieved of all liability for of the estate, or (2) he may foreclose, secure a the debt. BPI was unwilling to release the deficiency judgment and prove his deficiency Concepcions from their liability for the mortgage judgment before the committee, or (3) he may rely debt and insisted on their confessing a judgment in upon his security alone, in which case he can the foreclosure proceedings. receive no share in the distribution of the assets of the estate. At a meeting Elser had been led to understand that the bank would bid in the land at the foreclosure In this case the bank did not abandon the security sale for the full amount of the judgment and sell it and took no steps of any sort before the committee to him for the same price. It will be readily seen within the time limit provided by the sections 689 that this proposition is entirely different from that and 690 of the Code of Civil Procedure. The contained in the letter of March 23d. Elser entered committee ceased to function long ago, and the into an agreement in the form of bilateral deed of bank has now nothing to rely on except the sale, with V. Concepcion & Hijos, Inc., and mortgage. Internationally or not, it has bought itself Venancio Concepcion. within the third course provided for in section 708; it has no alternative. Foreclosure The defendants Concepcion answered said The amount of the deficiency cannot be petition praying that instead of merely being ascertained or proven until the foreclosure included, said Elser be substituted in their place as proceedings have terminated, but the claim for the defendants, on the ground that the plaintiff had deficiency must be presented to the committee accepted the substitution of Elser in their place as within the period fixed by sections 689 and 690 of its debtor. On October 16, 1922, the defendant the Code. The committee does not then pass upon Elser demurred to the amended complaint on the validity of the claim but reports it to the court. If the court "from the report of the committee" or from the ground that it failed to alleged that the "the proofs exhibited to it" is satisfied that the plaintiff had consented to the substitution of contingent claim is valid, the executor or Elser in place of the Concepcions so as to administrator may be required to retain in his render Elser personally liable to the plaintiff. possession sufficient assets to pay the claim when This demurrer was sustained by the court and it becomes absolute, or enough to pay the creditor due exception was taken by the plaintiff. his proportionate share if the assets of the estate are insufficient to pay the debts. When the On April 2, 1923, the defendant Elser answered, contingent claim has become absolute, its amount denying generally and specifically the allegations of may be ascertained and established in the manner the plaintiff's complaint. Elser died on June 18, indicated by sections 748 and 749. As will be seen, 1923, and on January 4, 1924, the plaintiff the bank both could and should have presented its suggested the death of the defendant Elser, and claim to the committee within the time prescribed asked that the administrator of the estate, C. W. by the law. Rosenstock, be substituted in his place as defendants, and that the action be continued Other Issue: BPI cannot maintain an action against Elser because the Deed of contract was between Elser and Concepcion making BPI not a privy to the contract. The only way BPI can file a case on the basis of the contract was if the doctrine of the stipulations pour autrui applies. Neither of the parties had the desire to confer any benefit to the bank. Therefore, there is stipulations pour autrui cannot apply.
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