BPI FAMILY SAVINGS BANK v. VDA.

DE COSCOLLUELA
FACTS: Respondent and her late husband Oscar obtained an agricultural sugar crop loan from
Far East Bank & Trust Co. (later merged with BPI) for crop years 1997 and 1998. In the book of
Far East, the loan account was treated as a single account, and evidenced by 67 promissory
notes. Sps. Coscolluela executed a real estate mortgage in favor of FEBTC over their parcel of
land as security of loans on credit accommodation obtained and those that may be obtained.
Under the terms and conditions of the real estate mortgage, in the event of failure to pay the
mortgage obligation or any portion thereof, the entire principal, interest, penalties, and other
charges shall be immediately due; and Far East mat foreclose the same extra judicially. For
failure to settle outstanding obligation on the maturity dates, Far East sent a final demand letter
to respondent demanding payment. Since respondent failed to settle her obligation, Far East
filed a petition for the extrajudicial foreclosure of the mortgaged property, but only only for 31
of the promissory notes. During pendency of said case, Far East filed a complaint for collection
of money representing the amounts for the 36 other promissory notes. In respondent’s answer,
she alleged that the complaint was barred by litis pendentia for the pending petition for the
extrajudicial foreclosure of the REM. Petitioner presented a loan officer as sole witness, who
testified that respondent were granted a loan, which was a “single loan account.” Respondent
filed a Demurrer to Evidence contending that the loan officer’s admission, that there is only one
loan account secured by the REM thus barred the personal action for collection. She insisted
that the filing of said complaint should be dismissed. Petitioner opposed the demurrer, stating
that each promissory note constituted a separate contract. The trial court denied the demurrer
on the ground that each note covered a loan distinct from the others. Respondent filed MR but
denied, prompting her to file a certiorari petition under Rule 65 with CA. CA granted the
petitioner, stating that the remedies sought are alternative and not cumulative. Thus, in denying
the demurrer, RTC committed grave abuse of discretion. Petitioner filed MR but it was denied.
Hence, this petition.
ISSUES & RATIO: WON collection suit should be dismissed – YES
Section 3, Rule 2 of the 1997 Rules of Civil Procedure provides that a party may not institute one
suit for a single cause of action, and, if two or more suits are instituted on the basis of the same
cause of action, the filing of one on a judgment upon the merits in any one is available as a
ground for the dismissal of others. The law does not permit the owner of a single of entire
cause of action or an entire or indivisible demand to divide and split the cause to make it the
subject of several actions. The true rule which determined whether a party has only a single
and entire cause of action is whether the entire amount arises from one and the same act or
contract or the several parts arise from distinct and different acts. As gleaned from the plain
terms of the REM, the real estate of respondent served as a continuing security liable for
obligations already obtainer and obligations obtained thereafter. In this case, the action of
petitioner is anchored on one and the same cause: the nonpayment of respondent. Though the
debt may be covered by several promissory notes and is covered by a real estate mortgage, the
latter is subsidiary to the former and both refer to one and the same obligation. A mortgage
creditor may institute two alternative remedies against the debtor, either to collect debt or to
foreclose mortgage, but not both.