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FORTUNE MOTORS vs. METRO BANK
Fortune Motors obtained loans in different
dates from the Metropolitan Bank and Trust
company
Metrobank consolidated the loans of P8 Million
and P3 Million into one promissory note, which
amounted toP12,650,000.00. This included the
interest that had accrued thereon.
To secure the obligation in the total amount
of P34,150,000.00, petitioner mortgaged certain real
estate in favor of respondent bank.
Due to financial constraints, petitioner failed to
pay the loan upon maturity. Consequently on May
25, 1984, respondent bank initiated extrajudicial
foreclosure proceedings and in effect, foreclosed
the real estate mortgage.
The extrajudicial foreclosure was actually
conducted by Senior Deputy Sheriff Pablo Y. Sy
who had sent copies of the Notice of Extrajudicial
Sale to the opposing parties by registered mail.
In accordance with law, he posted copies of the
Notice of Sheriff’s Sale at three conspicuous
public places in Makati –
1. the office of the Sheriff,
Read books, audiobooks, and more
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2. theScribd
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3. and the Register of Deeds in Makati.
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He thereafter executed the Certificates of
Posting on May 20, 1984. The said notice was in fact
published on June 2, 9 and 16, 1984 in three
issues of “The New Record.” An affidavit of
publication, dated June 19, 1984,[2] was executed by
Teddy F. Borres, publisher of the said newspaper.
Subsequently, the mortgaged property was
sold at public auction for P47,899,264.91 to the
mortgagee bank, the highest bidder.
Petitioner failed to redeem the mortgaged
property within the one-year redemption period and
so, the titles thereto were consolidated in the name of
respondent bank by which token the latter was
entitled to the possession of the property mortgaged by the Court of Appeals: For what is important is that
and, in fact possessed the same.
Caire Claim Casethen filed
Petitioner Cairea Claim Administrative
complaint for the
annulment of the extrajudicial foreclosure.
Law which it was intended.
RTC DECISION: the trial court rendered
judgment annulling the extrajudicial foreclosure
of the mortgage.
CA DECISION: reversed the decision rendered
by the lower court. Subsequently, the motion for
Reconsideration filed by petitioner was denied
on April 26, 1994.
RULING
1. YES. Publication in a newspaper of general
circulation was satisfied.
a. Whether it is a NEWSPAPER OF GENERAL
CIRCULATION. To be a newspaper of general
circulation, it is enough that ‘it is published for the
dissemination of local news and general information;
that it has a bona fide subscription list of paying
subscribers; that it is published at regular intervals.’
(Basa v. Mercado, 61 Phil. 632). The newspaper need
not have the largest circulation so long as it is of
general circulation. (Banta v. Pacheco, 74 Phil. 67).”
In the case at bench, there was sufficient
compliance with the requirements of the law
regarding publication of the notice in a newspaper of
general circulation. This is evidenced by the
affidavit of publication executed by the New
Record’s publisher, Teddy F. Borres, which stated
that it is a newspaper edited in Manila and Quezon
City and of general circulation in the cities
of Manila, Quezon City et al., and in the Provinces of
Rizal xxx, published every Saturday by the Daily
Record, Inc. This was affirmed by Pedro Deyto, who
was the executive editor of the said newspaper and
who was a witness for petitioner.
b. whether or not it is valid to plublish the notice
in QC and not in Makati. YES! In 1984, when the
publisher’s affidavit relied upon by petitioner was
executed, Makati, Mandaluyong, San Juan,
Parañaque et. al., were still part of
the province of Rizal. Apparently, this is the reason
why in the New Record’s affidavit of publication
executed by its publisher, the enumeration of the
places where it was being circulated, only the cities
of Manila, Quezon, Caloocan, Pasay, Tagaytay, et.
al., were named. Furthermore, as aptly ratiocinated
a paper should be in general circulation in the place
where the properties to be foreclosed are located in
Florendo v. Smith v Sote
order that publication may serve the purpose for
Philam
[10] Plans

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Petitioner also claims that the New Record is not requires only the posting of the notice of sale in
a daily newspaper because it is published only once a three public places and the publication of that
week. notice in a newspaper of general circulation. It is
pristine clear from the above provision that the lack
A perusal of Presidential Decree (P.D.) No. 1079
of personal notice to the mortgagor, herein
and Act 3135 shows that the said laws do not
petitioner, is not a ground to set aside the foreclosure
require that the newspaper which publishes
sale.[12]
judicial notices should be a daily
newspaper. Under P.D. 1079, for a newspaper to 4. LOCATION Petitioner also claims that it had
qualify, it is enough that it be a “newspaper or transferred to a different location but the notice was
periodical which is authorized by law to publish sent to its old address. Petitioner failed to notify
and which is regularly published for at least one respondent of its supposed change of
(1) year before the date of publication” which address. Needless to say, it can be surmised that
requirement was satisfied by New Record. Nor is respondent had sent the notice to petitioner’s official
there a requirement, as stated in the said law, that address.
the newspaper should have the largest circulation in
5. NOT LESS THAN THREE PUBLIC PLACES:
the place of publication.
Petitioner also claims that the New Record is not requires only
Whether or notthe theposting
posting of of the
the notice
notices of of sale
sale by in
a daily
2. newspaper
EXECUTIVE because it
JUDGEis published
CAUSED only once
THE a three public places and the publication
the Sheriff in the Office of the Sheriff, Office of the of that
week.
PUBLICATION. Whether or not the extrajudicial notice[12] in a
Assessor andnewspaper
the Register of general
of Deeds circulation.
are not Itthe is
foreclosure should be annulled since it was the
You're Reading a Preview
A perusal of Presidential Decree (P.D.) No. 1079
executive Judge who caused the publication of the
pristine clear from
conspicuous
of personal
law. Furthermore, notice
the above
public
it also
provision
places
to questions
the mortgagor,
that the lack
required
herein
the non-posting
by
and Act 3135 shows that the said laws do not
notice of the sale and not the sheriff. NO, because Sec. petitioner,
of the notice is not a ground
of sale on thetoproperty
set asideitself
the foreclosure
which was
require that the newspaper which publishes
sale
be. sold. NO!
2 of P.D. No. 1079 clearly p rovides that:
judicial notices should Unlock
be a full access with a free trial.
daily
to
“The executive
newspaper. Under judge of the court
P.D. 1079, for aofnewspaper
first to 4. LOCATION
Act 3135 does Petitioner
not require also claims
posting of that it had
the notice
qualify, it is shall
instance enoughdesignate be a “newspaper
that ita regular working or transferred
of sale on the to amortgaged
different location
property. butSection
the notice
3 ofwas the
periodical
day andwhich is authorized
a definite time each week by law
duringto publish sent law
said to its old address.
merely requires Petitioner
that the notice failedofto thenotify
sale
and which
which theis regularly
said judicial published Download With Free Trial
notices orfor at least one respondent
be posted for not of less its thansupposed
twenty days change
in at least of
(1) year before the
advertisements date
shall be dofistributed
publication” which address.
three Needless
public places to say,
of theit can be surmised
municipality or that
city
requirement
personallywas satisfied
by him [11] for by New Record.
publication to Nor is where the property is situated. The
therequalified
a requirement,
newspapers as stated in the said
or periodicals xxx,law, that address.
aforementioned places, to wit: the Sheriff’s Office,
which distribution
the newspaper should have shallthebe done
largestby circulation
raffle.” in respondent
the Assessor’s hadOffice
sent the andnotice
the Register
to petitioner’s
of Deeds official
are
5. NOT LESS THAN THREE PUBLIC PLACES:
the place of publication. certainly the public places contemplated by law, as
The said provision of the law is clear as to who Whether or not the posting of the notices of sale by
these are places where people interested in
2. personally
should EXECUTIVE distributeJUDGE CAUSED
the judicial noticesTHEor the Sheriff in the Office of the Sheriff, Office of the
purchasing real estate congregate.
PUBLICATION. Whether
advertisements to qualified or not newspapers
the extrajudicial for Assessor and the Register of Deeds are not the
foreclosure should be annulled since
publication. There was a substantial compliance with it was the conspicuous public places required by
executive Judge who caused the publication
the requirements when it was the Executive Judge of of the law. Furthermore, it also questions the non-posting
notice
the of the sale
Regional Trialand not the
Court sheriff. NO,
of Makati whobecause
caused Sec.
the GC DALTON
of the notice of INDUSTRIES, INC., vs. EQUITABLE
sale on the property itself which was PCI
2 of P.D. No. 1079
publication of the clearly
said pnotice
rovidesby that:
the newspaper to be sold. NO!
BANK
selected by means of raffle.
Act 3135 does not require posting of the notice
FACTS: Equitable PCI Bank extended a P30-million
instance
3. shall designate
PUBLICATION [11]
IS a ENOUGH
regular workingAND NOT of sale on the mortgaged property. Section 3 of the
credit line to Camden Industries,
that theInc. (CII)
ofallowing
“The
day and
PERSONAL executive
a definite
NOTICE: judge
timeofeach
Whether the or
court
notof
week firstpetitioner
during
the said law merely requires notice the sale
which
did not the saidreceive
personally judicialthenotices
noticesor of extrajudicial the latter to avail of several loans
be posted for not less than twenty days in at least (covered by
advertisements
foreclosure and sale shallsupposedly
be d istributed sent to it by promissory
three public notes)
placesand of to purchase trust receipts.
the municipality or city
personally
Metrobank. NO! by him for publication to where the property is situated. The
qualified newspapers or periodicals xxx, To facilitate collection,
aforementioned places, to CIIwit:
executed a “hold -out”
Settled is the rule that personal notice to the
agreement in favor of respondent authorizing it to
mortgagor in extrajudicial foreclosure certainly
deduct from theits public
savings places theamounts
contemplated
account any Sheriff’s
bydue.Office,
law, as
The said provision
proceedings of the law
is not necessary is clear
. Section 3 ofas Act
to who
No.
which distribution shall be done by raffle.” the
theseAssessor’s
are places Office where
and thepeople
Registerinterested
of Deeds are in
shouldgoverning
3135 personally extrajudicial
distribute theforeclosure
judicial notices or
of real purchasing real estate congregate.
advertisements
estate mortgages,toas qualified
amended by newspapers
Act No. 4118, for
publication. There was a substantial compliance with
the requirements when it was the Executive Judge of
the Regional Trial Court of Makati who caused the GC DALTON INDUSTRIES, INC., vs. EQUITABLE PCI
publication of the said notice by the newspaper BANK
selected by means of raffle.
FACTS: Equitable PCI Bank extended a P30-million
3. PUBLICATION IS ENOUGH AND NOT
credit line to Camden Industries, Inc. (CII) allowing
PERSONAL NOTICE: Whether or not the petitioner
did not personally receive the notices of extrajudicial the latter to avail of several loans (covered by
foreclosure and sale supposedly sent to it by promissory notes) and to purchase trust receipts.
Metrobank. NO!
-
Settled is the rule that personal notice to the
To guarantee inpayment, petitioner foreclosure
GC Dalton agreement
Pasig RTCin DECISION:favor of respondent dismissed authorizing
respondent’sit to
mortgagor extrajudicial To facilitate collection, CII executed a “hold out”
Industries, Inc.isexecuted a third-party mortgage deduct from its savings account any amounts due.
proceedings not necessary . Section 3 of ActofNo.its notice of appeal due to its failure to pay the appellate
real
3135properties
governing in Quezon City and
extrajudicial Malolos, Bulacan]
foreclosure of real docket fees. It likewise found respondent guilty of
as security
estate for CII’s loans.
mortgages, as amended by Act No. 4118, forum-shopping for filing the petition for the
issuance of a writ of possession in the Bulacan RTC.
CII did not pay its obligations despite respondent’s Thus, the Pasig RTC ordered the immediate entry of
demands. Consequently, respondent filed a petition its March 30, 2005 decision.
for extrajudicial foreclosure of petitioner’s Bulacan
properties in RTC of Bulacan. Meanwhile, in view of the pending case in the Pasig
RTC, petitioner opposed respondent’s ex parte
On August 3, 2004, the mortgaged properties were motion for the issuance of a writ of possession in the
sold at a public auction where respondent was Bulacan RTC. It claimed that respondent was guilty of
declared the highest bidder. Consequently, a fraud and forum-shopping, and that it was not
certificate of sale[6] was issued i n respondent’s favor informed of the foreclosure.
on August 3, 2004.
To guarantee payment, petitioner GC Dalton Pasig RTC DECISION: dismissed respon
Furthermore, respondent fraudulently foreclosed on
Industries, respondent
Thereafter Inc. executed a third-party
filed mortgage
the certificate of saleofand
its notice of appeal due to its failure to pay the appellate
the properties since the Pasig RTC had not yet
real properties in Quezon City and Malolos,
an affidavit of consolidation of ownership in theBulacan] docket fees. It likewise found respondent guilty dent’s
of
determined whether CII indeed failed to pay its
You're Reading a Preview
Register of Deeds of Bulacan pursuant to Section 47 forum-shopping for filing the petition for the
obligations.
of the General Banking Law.[Hence, petitioner’s TCTs issuance of a writ of possession in the Bulacan RTC.
as security for CII’s loans.
covering the Bulacan properties were cancelled and Thus, the Pasig
Thereafter RTC ordered
Bulacan the immediate
RTC granted the motioentry
n andofa
demands. Consequently, respondent Unlock
filed a full
new ones were issued in the name of respondent.
access
petition with
writ a free trial.
of possession
its March was issued in respondent’s favor
30, 2005 decision.
CII ex
for did not pay its obligations despite respondent’s
on December 19, 2005.
properties infiled
Respondent RTCan of Bulacan.
ex parte motion for the issuance Meanwhile, in view of the pending case in the Pasig
trajudicial foreclosure of petitioner’s
Bulacan. Bulacan
of a writ of possession] in the RTC
Download WithBulacan
On August 3, 2004, the mortgaged properties were FreeRT.Trial
Petitioner immediately assailed the order of the
motion for the issuancethat
It claimed of athe
writ of possession
order in the
violated Section
sold at a public
Previously, however,auction where
CII had respondent
filed an action was
for RTC,
Bulacanpetitioner
RTC. opposed respondent’s
wasex parte
14, Article VIIIItof
claimed
the that respondent
Constitution[17] which guilty of
requires
declaredperformance
specific the highest andbidder.
damagesConsequently,
in the RTC oaf fraudevery
and decision
forum-shopping, andand
that it wasstate
not
that must clearly distinctly
certificate
Pasig, of sale[6]
asserting was itissued
that had i allegedly paid its informed of the foreclosure.
its factual and legal bases.
on August 3,
obligation in 2004.
full to respondent.
n respondent’s favor Furthermore,
CA dismissedrespondent
the petition fraudulently
for lack of foreclosed on
merit on the
Thereafter
CII soughtrespondent
to compelfiled the certificate
respondent of sale and
to render an the properties since involving
the Pasig
ground that an order theRTC had of
issuance not yet
a writ
an affidavit in
accounting of consolidation
order to proveof ownersh
that ipthe inbank
the determined whether CII indeed failed to pay its
of possession is not a judgment on the merits, hence,
fraudulently foreclosed
Register of Deeds on petitioner’s
of Bulacan pursuant to mortgag
Section 47ed obligations.
not covered by the requirement of Section 14, Article
properties. VIII of the Constitution.
covering the Bulacan properties were cancelled and Thereafter Bulacan RTC granted the motio n and a
of
newtheones
BecauseGeneral
wereBanking
respondent inLaw.[Hence,
issuedallegedly ofpetitioner’s
failed
the name to TCTs
appear during
respondent. ISSUES: 1. Petitioner likewise cites the conflict
the trial, the Pasig RTC rendered a decision based on on December
between 19, 2005.
the order of the Bulacan RTC and order the
Respondent
the evidencefiled an ex parte motion for the issuance writ of possession was issued
presented by CII. It found that, while Pasig RTC. Petitioner claims thain respondent’s
t, since the Pasigfavor
RTC
CII’s past
of a writ due obligation
of possession] in the RTCamounted
Bulacan. only to Petitioner immediately assailed the order of the
already ordered the entry of its March 30, 2005
P14,426,485.66 as of November 30, 2002, Bulacan RT. It claimed that the order violated Section
Previously, however, CII had filed an action for decision (in turn ordering respondent to return TCT
respondent had deducted a total of P108,563,388.06 14, Article VIII of the Constitution[17] which requires
specific performance and damages in the RTC of No. 351231 and all such other owner’s documents of
from CII’s savings account. that every decision must clearly and distinctly state
title as may have been placed in its possession by
Pasig, asserting that it had allegedly paid its its factual and legal bases.
obligation in filed
full toa respondent. virtue of the subject trust receipt and loan
Respondent notice of appeal. CII, on the other
transactions),
CA dismissed the the petition
same wasfor lackalready finalon and
of merit the
hand, moved for the immediate entry and execution
CII sought to compel respondent to render an executory. Thus, inasmuch as CII had supposedly
ground that an order involving the issuance of a writ
of the abovementioned decision.
accounting in order to prove that the bank paid respondent
of possession inafull,
is not it wasonerroneous
judgment the merits,for the
hence,
ed not covered by the requirement of Section 14, Article
properties. VIII of the Constitution.
fraudulently foreclosed on petitioner’s mortgag
Because respondent allegedly failed to appear during ISSUES: 1. Petitioner likewise cites the conflict
the trial, the Pasig RTC rendered a decision based on between the order of the Bulacan RTC and order the
the evidence presented by CII. It found that, while Pasig RTC. Petitioner claims that, since the Pasig RTC
already ordered the entry of its March 30, 2005
P14,426,485.66 as of November 30, 2002, decision (in turn ordering respondent to return TCT
CII’s past had
respondent duededucted
obligation
a totalamounted only to
of P108,563,388.06
title as may have been placed in its possession by
Bulacan RTC to order the issuance of a writ of No.
owner351231
virtue of andforeclosed
of the
the all such other
subject owner’s documents
properties.[24]Therefore,
trust receipt and loan of
Respondent
from filed aaccount.
CII’s savings notice of appeal. CII, on the other
possession to respondent. when petitioner opposed the ex parte motion
transactions), the same was already final and for the
hand, moved for the immediate entry and execution
issuance
executory.ofThus,
the writ of possession
inasmuch on January
as CII had 10,
supposedly
of the abovementioned
Respondent, on the decision.
other hand, asserts that 2005 in the Bulacan RTC, it no longer had any
paid respondent in full, it was erroneous for the legal
petitioner is raising a question of fact as it essentially interest in the Bulacan properties.
assails the propriety of the issuance of the writ of
possession. It likewise points out that petitioner did Nevertheless, even if the ownership of the Bulacan
not truthfully disclose the status of the March 30, properties had already been consolidated in the
2005 decision of the Pasig RTC because, in an order name of respondent, petitioner still had, and could
dated April 4, 2006, the Pasig RTC partially have availed of, the remedy provided in Section 8 of
reconsidered its December 7, 2005 order and gave Act 3135.
due course to respondent’s notice of appeal. (The
propriety of the said April 4, 2006 order is still It could have filed a petition to annul the auction sale
pending review in the CA.) and to cancel the writ of possession within 30 days
after respondent was given possession. But it did
Bulacan RTC to order the issuance of a writ of owner of the foreclosed properties.[24]Therefore,
RULINGS: Denied Petition not. Thus, inasmuch as the 30-day period to avail of
possession to respondent. when petitioner opposed the ex parte motion for the
the said remedy had already lapsed, petitioner could
1. The issuance of a writ of possession to a purchaser issuance of the writ of possession on January 10,
no longer assail the validity of the sale.
Respondent, on the other hand, asserts that
in an extrajudicial foreclosure is summary and You're Reading a Preview
petitioner is raising a question of fact as it essentially
2005 in the Bulacan RTC, it no longer had any legal
ministerial in nature as such proceeding is merely an interest in the Bulacan
Any question regardingproperties.
the validity of the mortgage
assails the propriety of the issuance of the writ of
incident in the transfer of title. or its foreclosure cannot be a legal ground for the
possession. It likewise points out that Unlock full access
petitioner did with a free trial.
Nevertheless, even if the ownership of the Bulacan
refusal to issue a writ of possession. Regardless of
not truthfully
The trial courtdisclose
does not theexercise
status of the March
discretion 30,
in the properties had already been consolidated in the
whether or not there is a pending suit for the
2005 decision
issuance of the
thereof. ForPasig
this RTC because,
reason, in anfor
an order order
the name of respondent, petitioner still had, and could
annulment of the mortgage or the foreclosure itself,
dated April
issuance
reconsidered
on
4, 2006,
of a writ
its December by
the merits contemplated
the Pasig
of possession
7, Section
Download With Free Trial
is notRTC
2005 order
partially
the judgment
and gave
14, Article VIII
have availed of, the remedy provided in Section 8 of
the purchaser is entitled to a writ of possession,
Act 3135.
without prejudice, of course, to the eventual outcome
of the Constitution. of
propriety of the said April 4, 2006 order is still It the pending
could annulment
have filed case[
a petition to annul the auction sale
due
2. Thecourse
pending to respondent’s
mortgagor
review loses
in the CA.) all notice of appeal. (The
legal interest over the and to cancel the writ of possession within 30 days
Needless to say, petitioner committed a misstep by
foreclosed property after the expiration of the after respondent was given possession. But it did
completely relying and pinning all its hopes for relief
RULINGS: Denied
redemption period.Petition not. Thus, inasmuch as the 30-day period to avail of
on its complaint for specific performance and
the said remedy had already lapsed, petitioner could
1. The issuance
Under Section 47 of of
a writ
the of possession
General to aLaw,
Banking purchaser
if the damages in the Pasig RTC,[29] instead of resorting to
no longer assail the validity of the sale.
in an extrajudicial foreclosure the remedy of annulment (of the auction sale and
mortgagor is a juridical person, itiscan summary
exercise andthe
ministerial in nature as such proceeding is merely an writ
Any of possession)
question underthe
regarding Section 8 ofofAct
validity the3135 in the
mortgage
right to redeem the foreclosed property until, but not
incident Bulacan RTC.
after, theinregistration
the transferofofthe
title.
certificate of foreclosure or its foreclosure cannot be a legal ground for the
sale within three months after foreclosure, whichever refusal to issue a writ of possession. Regardless of
The trial court does not exercise discretion in the whether or not BANK
there is
is earlier. Thereafter, such mortgagor loses its right of DEVELOPMENT OFa THE
pending suit for the
PHILIPPINES vs.
issuance thereof. For this reason, an order for the annulment of the mortgage or the foreclosure itself,
redemption. ENVIRONMENTAL AQUATICS,
issuance of a writ of possession is not the judgment the purchaser
INC., LAND SERVICES
is entitled
AND to a writ of possession,
on the meritsfiled
Respondent contemplated by Section
the certificate of sale14, Article
and VIII
affidavit MANAGEMENT ENTERPRISES
without prejudice, of course, to the eventual outcome
of the Constitution.with the Register of Deeds of
consolidation of the pending annulment case[
Bulacan on September 13, 2004. This terminated the FACTS: Respondent Environmental Aquatics and
2. The mortgagor loses all legal interest over the Land
Needless Services and Management
to say, petitioner committed a Enterprises
misstep by
redemption period granted by Section 47 of the
foreclosed property after the expiration of the loaned P1,792,600 from petitioner .
completely relying and pinning all its hopes for relief
General Banking Law. Because consolidation of title
redemption period. on its complaint for specific performance and
becomes a right upon the expiration of the
As security for the loan, LSMEI mortgaged to DBP its
redemption
Under Sectionperiod,[23] respondent
47 of the General Banking became the
Law, if the damages
parcel of in thesituated
land Pasig RTC,[29]
in Newinstead
Manila,ofQuezon
resorting to
City,
the remedy of annulment (of the auction sale and
mortgagor is a juridical person, it can exercise the
writ of possession) under Section 8 of Act 3135 in the
right to redeem the foreclosed property until, but not
Bulacan RTC.
after, the registration of the certificate of foreclosure
sale within three months after foreclosure, whichever
is earlier. Thereafter, such mortgagor loses its right of DEVELOPMENT BANK OF THE PHILIPPINES vs.
redemption. ENVIRONMENTAL AQUATICS,
INC., LAND SERVICES AND
Respondent filed the certificate of sale and affidavit MANAGEMENT ENTERPRISES
of consolidation with the Register of Deeds of
Bulacan on September 13, 2004. This terminated the FACTS: Respondent Environmental Aquatics and
redemption period granted by Section 47 of the Land Services and Management Enterprises
loaned P1,792,600 from petitioner .
General Banking Law. Because consolidation of title
becomes a right upon the expiration of the
As security for the loan, LSMEI mortgaged to DBP its
redemption period,[23] respondent became the parcel of land situated in New Manila, Quezon City,
and covered by Transfer Certificate of Title. The The petition
mortgage contract stated that:
Section 16 o
If at anytime the Mortgagor shall fail or refuse to that the redemp
pay any of the amortization on the indebtedness, or to and foreclo
the interest when due, or whatever other obligation remaining balan
herein secured or to comply with any of the “Any mortgagor
conditions and stipulations herein agreed, or shall extrajudicially s
initiate insolvency proceedings or be declared the right to rede
involuntary insolvent (sic), or uses the proceeds of Bank all of th
the loan for purposes You're Reading
other a Preview
than those specified determined by t
herein then all the amortizations and other
Unlock full access
obligations of the Mortgagor with anature,
of any free trial.shall In Developm
become due, payable and defaulted and the Negros College
Mortgagee may immediately foreclose this redemption pri
mortgage judiciallyDownload With Freeunder
or extrajudicially Trial Act foreclosed by D
No.
and 3135 as amended,
covered or under
by Transfer Republic
Certificate of Act No.The
Title. 85, balance of the
The petition
as amended
mortgage and or stated
contract under that:
Act No. 1508 as amended. rate. The Court h
Section 16 o
EAI
If at and
anytime LSMEI thefailed
Mortgagor to payshall the loan.
fail orThus,
refuseDBP to It hasthe
that long been
redemp
applied
pay anyfor of extrajudicial
the amortization foreclosure of the real estate
on the indebtedness, or is mortgaged
to and foreclo
mortgage.
the interestDuring when due, the or 19whatever
December other1990 public
obligation extrajudicially
remaining balan
auction,
herein secured the ex-officioor tosheriff comply soldwith the any
propertyof the to Philippines, ther
DBP as the highest
conditions bidder for herein
and stipulations P1,507,000. agreed, or shall only by payings
extrajudicially
initiate insolvency proceedings or be declared “Anyright
the mortgago
latter toonrede
the
On 15 May insolvent
involuntary 1991, LSMEI (sic),transferred
or uses the its right to
proceeds of total
Bank indebtedne
all of th
redeem
the loanthe forproperty
purposestoother respondent than those Mariospecified
Matute obligation from
.herein
In his 27 then July all1991 theletter, Atty. Julian R.
amortizations and Vitug, Jr.
other material possess
(Atty. Vitug, of
obligations Jr.)the
informed
Mortgagor DBP that of anyhis client
nature, Matute
shall determined
been delivered
In Developm byto t
was
become interested
due, in redeeming
payable andthedefaulted
property by and paying
the property shall co
Negros College
the P1,507,000
Mortgagee maypurchase price, plus other
immediately costs. this
foreclose redemption pri
mortgage judicially or extrajudicially under Act The foreg
foreclosed by D
In
No. its
313529 asAugust
amended, 1991 letter, DBP
or under Republic informed
Act No.Atty.85, the charters
balance of the of
Vitug, Jr. that
as amended andMatute
or under could Actredeem
No. 1508 theasproperty
amended.by agencies.
rate. The Court Sectioh
paying the remaining balance of EAI and LSMEI's Agricultural and
loan.
EAI and LSMEI failed to pay the loan. Thus, DBP redemption
It has long been pri
applied for extrajudicial foreclosure of the real estate contractual
is mortgaged inte
Thereafter,During
mortgage. EAI, LSMEI the and 19 Matute
December filed with
1990the RTC
public sale. Under RA
extrajudicially
a complaint
auction, thepraying
ex-officio thatsheriff
DBP besold ordered “to accepttox
the property duties conferred
Philippines, the
x
DBPx Matute's
as the highestbonafide bidderoffer for toP1,507,000.
redeem the foreclosed Bank by CA 459
property. contracts,
the latter on and thec
CA
On 459 has been
15 May 1991, reenacted substantially its
LSMEI transferred in Sec.
right16 to
of onlyRehabilitati
the by
indebtedness
total paying
indebtedne th
ISSUE
the
redeempresentthe charter
property of to
therespondent
DBP, i.e., EOMario 81 (1986)
Matute as held
to that amon
obligation the
from
amendedDBP27raises
. In his byJuly as
RA 8523
1991issues that Atty.
(1998).
letter, the lower
Juliancourts
R. Vitug, erred
Jr. ceded to possess
Corporation
material the.[28]
Re
in finding
(Atty. Vitug, that
Jr.)the bank chose
informed DBP that Act his
No.client
3135Matute as the RA
been85delivered
was Sec.to3
governingx x x law
was interested x for the extrajudicial
in redeeming foreclosure
the property of the
by paying properties
The shall
property lower co
property,
the P1,507,000 including
purchase theprice, determination
plus other costs. of the corporation.
price for the pro Su
redemption
The price, and in ruling
unavoidable that the redemption
conclusion is that in (1958),
purchase Thethe pow
price
foreg
price
In itsis29
redeeming equivalent
August to
the foreclosed the P1,507,000
1991 property
letter, purchase
informedprice.
DBPrespondent West
Atty. of the
the Rehabilit
governing
charters of
The
Negros
Vitug,Court's
College
Jr. thatRulingas assignee
Matute couldofredeemBacolodthe Medical
property Centerby 85 and CA
foreclosure.
agencies. 459
The
Sectio
should
paying pay the the balancebalance
remaining of the amount of EAI owed by the
and LSMEI's transferred
Agriculturaltosta
respectively, p
and
latter
loan. to petitioner DBP You're with Reading
interestathereon
Preview at the redemption pri
rate agreed upon as of the date of the public When
contractualdefendan inte
auction
Thereafter,on 24 August
EAI, LSMEI Unlock
1989and.full
[24]
access
Matute with awith
(Emphasis
filed free trial.
supplied)
the RTC issue, it choseRA
sale. Under A
a complaint exercised
duties conferred with
In Development
x x Matute's bonafide Bank offer toofredeem the Philippines
the foreclosed v. plaintiffs.
Bank by CAWe 459
[28]

Mirang
property. , the
[25]
praying Download
Court thatheldDBP thatbe With
theordered Free
redemption Trial
“to accept pricex conclusion
contracts, and thatc
for properties
CA 459 has been morgaged
reenacted to substantially
and foreclosed in by
Sec.DBP16 ofis respect
indebtedness to (sic
the Rehabilitati th
equivalent
ISSUE
the presenttocharterthe remaining
of the DBP, balance of the
i.e., EO 81 loan,
(1986) withas mortgage
held that was
to the to
amon
interest
amendedDBPatraises
bytheRAagreed
as issues
8523 rate.that
(1998). The the Court
lower held that,erred
courts “The Act
ceded No.to3135,
Corporation the. Rea
unavoidable
in finding thatconclusionthe bank chose is that ActtheNo.appellant,
3135 as the in utilize
RA 85 was said Sec.
law.[3
redeeming
governing xthefor
x x x law foreclosed property,
the extrajudicial should pay
foreclosure of the properties
The lower
entire
property,amount he owed the
including to thedetermination
Bank on the date ofof the Thereunder
for the give
corporation.
price Su
pro
sale, with interest
redemption
The price, andthereon
unavoidable in ruling atthat
conclusion the therateis agreed
redemptionthat in 3135
(1958),asthe
purchase amen
pow
price
upon.
price is” equivalent
redeeming[26] to the P1,507,000
the foreclosed purchase price.
property respondent West amended,
of the governing
the or Ac
Rehabilit
The Court's
Negros College Rulingas assignee [24] of Bacolod Medical Center bank
85 and undoubted
foreclosure.CA 459 The
should As pay
earlythe as balance
1960, the of Court
the amounthas already
owed settled
by the laws as maytosta
transferred
respectively, bep
the
latterissue. In Nepomuceno,
to petitioner DBP withetinterest al. v. thereon
Rehabilitation
at the interposed in
Finance
rate agreed[25]Corporation
upon as , of
[27] thethe Court
date held of the thatpublic
the mortgage
When defendan it filed
redemption
auction on 24price August for1989properties
. morgaged
(Emphasis to and
supplied) City
issue,onitOctober
chose A
foreclosed by DBP is equivalent to the remaining exercised with
balance of the loan, Bank
In Development with interest
of the at the agreed
Philippines v. The Court
plaintiffs. We
rate.
Mirang The
, Court held that:
the Court held that the redemption price and Act No.that
conclusion 15[
for properties morgaged to and foreclosed by DBP is extrajudicial
respect to (sic
The issue
equivalent to the posed in thisbalance
remaining appealofis:the considering
loan, with mortgage.
mortgage was When to
that the at
interest loantheof P300,000.00
agreed rate. was obtained from the officio
Act No.sheriff
3135, th a
Rehabilitation
unavoidable
[26] Finance Corporation
conclusion is that the[now DBP] by
appellant, in auction
utilize said in lawacco .
spouses
redeeming Jose theNepomuceno
foreclosed property, The
andCourtIsabela heldAcuña
should that,
pay“Theand
the 3135,” it did so
Jesus
entire Nepomuceno
amount he owed merelyto theactedBank on as theaccomodation
date of the sale.
mortgagor,
sale, with for what price
interest thereonmay the at mortgagor
the rate redeem agreed 3135 as amen
his property after the[27] same has been sold at public Thereunder
In Developm give
auction? Would it be for the price at which the Zaragoza , Dev
[31]
bank undoubted
upon.As
property” early
was as sold, as contended
1960, the Courtby hasthealready
mortgagor, or
settled amended,
Mirang
laws as,[32]
may or be
and Ac
D
for
the the balance
issue. of the loan obtained
In Nepomuceno, et al. by v. the borrowers
Rehabilitation Jimenez,
interposed et al.in,[33
from
FinancetheCorporation
banking ,institution,the Court as heldcontended
that the by resorted
mortgage it tofiled
Ac
appellant?
redemption price for properties morgaged to and mortgaged
City on October prop
foreclosed by DBP is equivalent to the remaining to find a proceed
balance x x of
x x the loan, with interest at the agreed The Court
rate. The Court held that: and InActitsNo.10 15Oc
[T]he inescapable conclusion is that the mortgagor when it resorted
extrajudicial
herein Theorissue
his assignees
posed incannot this appeal redeem is:the property
considering mortgaged
mortgage. When prop
in
thatdispute
the loan without paying the
of P300,000.00 was balance
obtained of the
fromtotalthe to find asheriff
officio proceed th
Rehabilitation Finance Corporation [now DBP] by auction in acco
spouses Jose Nepomuceno and Isabela Acuña and [31]

Jesus Nepomuceno merely acted as accomodation sale. [32]

mortgagor, for what price may the mortgagor redeem 3135,” it did so
[33

his property after the same has been sold at public In Developm
auction? Would it be for the price at which the Zaragoza, Dev
property was sold, as contended by the mortgagor, or Mirang, andD
for the balance of the loan obtained by the borrowers Jimenez, et al.,
from the banking institution, as contended by resorted to Ac
appellant? mortgaged prop
to find a proceed
xxxx
In its 10 Oc
[T]he inescapable conclusion is that the mortgagor when it resorted
herein or his assignees cannot redeem the property mortgaged prop
in dispute without paying the balance of the total to find a proceed

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