Escolar Documentos
Profissional Documentos
Cultura Documentos
of
the
Philippines
SUPREME COURT
SECOND DIVISION
G.R. No. 150197 July 28, 2005
PRUDENTIAL
BANK, Petitioner,
vs.
DON A. ALVIAR and GEORGIA B.
ALVIAR, Respondents.
DECISION
Tinga, J.:
Before us is a petition for review on certiorari under
Rule 45 of the Rules of Court. Petitioner Prudential
Bank seeks the reversal of the Decision1 of the
Court of Appeals dated 27 September 2001 in CAG.R. CV No. 59543 affirming the Decision of the
Regional Trial Court (RTC) of Pasig City, Branch
160, in favor of respondents.
Respondents, spouses Don A. Alviar and Georgia B.
Alviar, are the registered owners of a parcel of land
in San Juan, Metro Manila, covered by Transfer
Certificate of Title (TCT) No. 438157 of the
Register of Deeds of Rizal. On 10 July 1975, they
executed a deed of real estate mortgage in favor of
petitioner Prudential Bank to secure the payment of
a loan worth P250,000.00.2 This mortgage was
annotated at the back of TCT No. 438157. On 4
August
1975,
respondents
executed
the
corresponding promissory note, PN BD#75/C-252,
covering the said loan, which provides that the loan
matured on 4 August 1976 at an interest rate of 12%
per annum with a 2% service charge, and that the
note is secured by a real estate mortgage as
aforementioned.3 Significantly, the real estate
mortgage contained the following clause:
That for and in consideration of certain loans,
overdraft and other credit accommodations obtained
from the Mortgagee by the Mortgagor and/or
________________ hereinafter
referred to,
irrespective of number, as DEBTOR, and to secure
the payment of the same and those that may
hereafter be obtained, the principal or all of which is
hereby fixed at Two Hundred Fifty Thousand
(P250,000.00) Pesos, Philippine Currency, as well
as those that the Mortgagee may extend to the
Mortgagor and/or DEBTOR, including interest and
expenses or any other obligation owing to the
Mortgagee, whether direct or indirect, principal or
secondary as appears in the accounts, books and
records of the Mortgagee, the Mortgagor does
hereby transfer and convey by way of mortgage
unto the Mortgagee, its successors or assigns, the
parcels of land which are described in the list
for P250,000.00,
PN
BD#76/C-345
for P382,680.83,
and
PN
BD#76/C-340
for P545,000.00, plus assessed past due interests
and penalty charges. The public auction sale of the
mortgaged property was set on 15 January 1980.10
Respondents filed a complaint for damages with a
prayer for the issuance of a writ of preliminary
injunction with the RTC of Pasig,11 claiming that
they have paid their principal loan secured by the
mortgaged property, and thus the mortgage should
not be foreclosed. For its part, petitioner averred
that the payment of P2,000,000.00 made on 6
March 1979 was not a payment made by
respondents, but by G.B. Alviar Realty and
Development Inc., which has a separate loan with
the bank secured by a separate mortgage.12
On 15 March 1994, the trial court dismissed the
complaint and ordered the Sheriff to proceed with
the extra-judicial foreclosure.13 Respondents sought
reconsideration of the decision.14 On 24 August
1994, the trial court issued an Order setting aside its
earlier decision and awarded attorneys fees to
respondents.15 It found that only the P250,000.00
loan is secured by the mortgage on the land covered
by TCT No. 438157. On the other hand,
the P382,680.83 loan is secured by the foreign
currency deposit account of Don A. Alviar, while
the P545,000.00 obligation was an unsecured loan,
being a mere conversion of the temporary overdraft
of Donalco Trading, Inc. in compliance with a
Central Bank circular. According to the trial court,
the "blanket mortgage clause" relied upon by
petitioner applies only to future loans obtained by
the mortgagors, and not by parties other than the
said mortgagors, such as Donalco Trading, Inc., for
which respondents merely signed as officers
thereof.
On appeal to the Court of Appeals, petitioner made
the following assignment of errors:
I. The trial court erred in holding that the real estate
mortgage covers only the promissory note
BD#75/C-252 for the sum of P250,000.00.
II. The trial court erred in holding that the
promissory note BD#76/C-345 for P2,640,000.00
(P382,680.83 outstanding principal balance) is not
covered by the real estate mortgage by expressed
agreement.
III. The trial court erred in holding that Promissory
Note BD#76/C-430 for P545,000.00 is not covered
by the real estate mortgage.
IV. The trial court erred in holding that the real
estate mortgage is a contract of adhesion.
V. The trial court erred in holding defendantappellant liable to pay plaintiffs-appellees attorneys
fees forP20,000.00.16
The Court of Appeals affirmed the Order of the trial
court but deleted the award of attorneys fees.17 It
ruled that while a continuing loan or credit
accommodation based on only one security or
mortgage is a common practice in financial and
commercial institutions, such agreement must be
clear and unequivocal. In the instant case, the
parties executed different promissory notes agreeing
to a particular security for each loan. Thus, the
appellate court ruled that the extrajudicial
foreclosure sale of the property for the three loans is
improper.18
The Court of Appeals, however, found that
respondents have not yet paid the P250,000.00
covered by PN BD#75/C-252 since the payment
of P2,000,000.00 adverted to by respondents was
issued for the obligations of G.B. Alviar Realty and
Development, Inc.19
Aggrieved, petitioner filed the instant petition,
reiterating the assignment of errors raised in the
Court of Appeals as grounds herein.
Petitioner maintains that the "blanket mortgage
clause" or the "dragnet clause" in the real estate
mortgage expressly covers not only the P250,000.00
under PN BD#75/C-252, but also the two other
promissory notes included in the application for
extrajudicial
foreclosure
of
real
estate
20
mortgage. Thus, it claims that it acted within the
terms of the mortgage contract when it filed its
petition for extrajudicial foreclosure of real estate
mortgage. Petitioner relies on the cases of Lim
Julian v. Lutero,21 Tad-Y v. Philippine National
Bank,22 Quimson v. Philippine National Bank,23 C &
C
Commercial
v.
Philippine
National
Bank,24 Mojica v. Court of Appeals,25 andChina
Banking Corporation v. Court of Appeals,26 all of
which upheld the validity of mortgage contracts
securing future advancements.
Anent the Court of Appeals conclusion that the
parties did not intend to include PN BD#76/C-345
in the real estate mortgage because the same was
specifically secured by a foreign currency deposit
account, petitioner states that there is no law or rule
which prohibits an obligation from being covered
by more than one security.27Besides, respondents
even continued to withdraw from the same foreign
currency account even while the promissory note
was still outstanding, strengthening the belief that it
was the real estate mortgage that principally secured
after D/A SFDX#129, security for PN BD#76/C345, has been exhausted, subject of course to
defenses which are available to respondents.
WHEREFORE, the petition is DENIED. The
Decision of the Court of Appeals in CA-G.R. CV
No. 59543 is AFFIRMED.
Costs against petitioner.
SO ORDERED.
Republic
of
the
Philippines
SUPREME
COURT
Manila
EN BANC
G.R. No. L-17500
May 16, 1967
PEOPLE'S BANK AND TRUST CO. and
ATLANTIC GULF AND PACIFIC CO. OF
MANILA, plaintiffs-appellants,
vs.
DAHICAN LUMBER COMPANY, DAHICAN
AMERICAN LUMBER CORPORATION and
CONNELL BROS. CO. (PHIL.), defendantsappellants.
Angel S. Gamboa for defendants-appellants.
Laurel Law Offices for plaintiffs-appellants.
DIZON, J.:
On September 8, 1948, Atlantic Gulf & Pacific
Company of Manila, a West Virginia corporation
licensed to do business in the Philippines
hereinafter referred to as ATLANTIC sold and
assigned all its rights in the Dahican Lumber
concession to Dahican Lumber Company
hereinafter referred to as DALCO for the total
sum of $500,000.00, of which only the amount of
$50,000.00 was paid. Thereafter, to develop the
concession, DALCO obtained various loans from
the People's Bank & Trust Company hereinafter
referred to as the BANK amounting, as of July
13, 1950, to P200,000.00. In addition, DALCO
obtained, through the BANK, a loan of $250,000.00
from the Export-Import Bank of Washington D.C.,
evidenced by five promissory notes of $50,000.00
each, maturing on different dates, executed by both
DALCO and the Dahican America Lumber
Corporation, a foreign corporation and a
stockholder of DALCO, hereinafter referred to
as DAMCO, all payable to the BANK or its order.
As security for the payment of the abovementioned
loans, on July 13, 1950 DALCO executed in favor
of the BANK the latter acting for itself and as
trustee for the Export-Import Bank of Washington
D.C. a deed of mortgage covering five parcels of
land situated in the province of Camarines Norte
together with all the buildings and other
improvements existing thereon and all the personal
properties of the mortgagor located in its place of
business in the municipalities of Mambulao and
Capalonga, Camarines Norte (Exhibit D). On the
same date, DALCO executed a second mortgage on
the same properties in favor of ATLANTIC to
secure payment of the unpaid balance of the sale
while the aggregate price of the "afteracquired" chattels claimed by Connell under
the rescission contracts was P1,614,675.94,
Exh. 1, Exh. V, report of auditors, and as a
matter of fact, almost all the properties were
sold afterwards for only P175,000.00, page
47, Vol. IV, and the Court understanding that
when the law permits the debtor to enjoy the
benefits of the period notwithstanding that
he is insolvent by his giving a guaranty for
the debt, that must mean a new and efficient
guaranty, must concede that the causes of
action for collection of the notes were not
premature.
Very little need be added to the above. Defendants,
however, contend that the lower court had no basis
for finding that, when the action was commenced,
DALCO was insolvent for purposes related to
Article 1198, paragraph 1 of the Civil Code. We
find, however, that the finding of the trial court is
sufficiently supported by the evidence particularly
the resolution marked as Exhibit K, which shows
that on December 16, 1952 in the words of the
Chairman of the Board DALCO was "without
funds, neither does it expect to have any funds in
the foreseeable future." (p. 64, record on appeal).
The remaining issues, namely, whether or not the
proceeds obtained from the sale of the "after
acquired properties" should have been awarded
exclusively to the plaintiffs or to DAMCO and
CONNELL, and if in law they should be distributed
among said parties, whether or not the distribution
should be pro-rata or otherwise; whether or not
plaintiffs are entitled to damages; and, lastly,
whether or not the expenses incidental to the
Receivership should be borne by all the parties on a
pro-rata basis or exclusively by one or some of
them are of a secondary nature as they are already
impliedly resolved by what has been said
heretofore.
As regard the proceeds obtained from the sale of the
of after acquired properties" and the "undebated
properties", it is clear, in view of our opinion
sustaining the validity of the mortgages in relation
thereto, that said proceeds should be awarded
exclusively to the plaintiffs in payment of the
money obligations secured by the mortgages under
foreclosure.
On the question of plaintiffs' right to recover
damages from the defendants, the law (Articles
1313 and 1314 of the New Civil Code) provides
that creditors are protected in cases of contracts
Republic
of
the
Philippines
SUPREME
COURT
Manila
SECOND DIVISION
G.R. No. 169211
March 6, 2013
STAR TWO (SPV-AMC), INC.,1 Petitioner,
vs.
PAPER CITY CORPORATION OF THE
PHILIPPINES, Respondent.
DECISION
PEREZ, J.:
For review before this Court is a Petition for
Review on Certiorari filed by Rizal Commercial
Banking Corporation now substituted by Star Two
(SPV-AMC), Inc. by virtue of Republic Act No.
91822 otherwise known as the "Special Purpose
Vehicle Act of 2002," assailing the 8 March 2005
Decision and 8 August 2005 Resolution of the
Special Fourth Division of the Court of Appeals
(CA) in CA-G.R. SP No. 82022 upholding the 15
August 2003 and 1 December 2003 Orders of the
Valenzuela Regional Trial Court (RTC) ruling that
the subject machineries and equipments of Paper
City Corporation (Paper City) are movable
properties by agreement of the parties and cannot be
considered as included in the extrajudicial
foreclosure sale of the mortgaged land and building
of Paper City.3
The facts as we gathered from the records are:
Rizal Commercial Banking Corporation (RCBC),
Metropolitan Bank and Trust Co. (Metrobank) and
Union Bank of the Philippines (Union Bank) are
banking corporations duly organized and existing
under the laws of the Philippines.
On the other hand, respondent Paper City is a
domestic corporation engaged in the manufacture of
paper products particularly cartons, newsprint and
clay-coated paper.4
From 1990-1991, Paper City applied for and was
granted the following loans and credit
accommodations in peso and dollar denominations
by RCBC: P10,000,000.00 on 8 January
1990,5 P14,000,000.00
on
19
July
1990,6P10,000,000.00
on
28
June
1991,7 and P16,615,000.00 on 28 November
1991.8 The loans were secured by four (4) Deeds of
Continuing Chattel Mortgages on its machineries
and equipments found inside its paper plants.
On 25 August 1992, a unilateral Cancellation of
Deed of Continuing Chattel Mortgage on Inventory
of Merchandise/Stocks-in-Trade was executed by
xxxx
GRANTING CLAUSE
NOW,
THEREFORE,
this
INDENTURE
witnesseth:
THAT the MORTGAGOR in consideration of the
premises and of the acceptance by the TRUSTEE of
the trust hereby created, and in order to secure the
payment of the MORTGAGE OBLIGATIONS
which shall be incurred by the MORTGAGOR
pursuant to the terms hereof xxx hereby states that
with the execution of this INDENTURE it will
assign, transfer and convey as it has hereby
ASSIGNED, TRANSFERRED and CONVEYED
by way of a registered first mortgage unto RCBC x
x x the various parcels of land covered by several
Transfer Certificates of Title issued by the Registry
of Deeds, including the buildings and existing
improvements thereon, as well as of the machinery
and equipment more particularly described and
listed that is to say, the real and personal properties
listed in Annexes "A" and "B" hereof of which the
MORTGAGOR is the lawful and registered
owner.45(Emphasis and underlining ours)
The Deed of Amendment to MTI dated 20
November 1992 expressly provides:
NOW, THEREFORE, premises considered, the
parties considered have amended and by these
presents do further amend the Mortgage Trust
Indenture dated August 26, 1992 including the Real
Estate Mortgage as follows:
xxxx
2. The Mortgage Trust Indenture and the Real
Estate Mortgage are hereby amended to include as
part of the Mortgage Properties, by way of a first
mortgage and for pari-passu and pro-rata benefit of
the existing and new creditors, various machineries
and equipment owned by the Paper City, located in
and bolted to and forming part of the following,
generally describes as x x x more particularly
described and listed in Annexes "A" and "B" which
are attached and made integral parts of this
Amendment. The machineries and equipment listed
in Annexes "A" and "B" form part of the
improvements listed above and located on the
parcels of land subject of the Mortgage Trust
Indenture
and
the
Real
Estate
Mortgage.46 (Emphasis and underlining ours)
A Second Supplemental Indenture to the 26 August
1992 MTI executed on 7 June 1994 to increase the
amount
of
loan
from P280,000,000.00
to P408,900,000.00 also contains a similar
provision in this regard:
Republic
of
the
Philippines
SUPREME
COURT
Manila
FIRST DIVISION
G.R. No. 158891
June 27, 2012
PABLO
P.
GARCIA, Petitioner,
vs.
YOLANDA VALDEZ VILLAR, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
This is a petition for review on certiorari1 of the
February 27, 2003 Decision2 and July 2, 2003
Resolution3 of the Court of Appeals in CA-G.R. SP
No. 72714, which reversed the May 27, 2002
Decision4 of the Regional Trial Court (RTC),
Branch 92 of Quezon City in Civil Case No. Q-9939139.
Lourdes V. Galas (Galas) was the original owner of
a piece of property (subject property) located at
Malindang St., Quezon City, covered by Transfer
Certificate of Title (TCT) No. RT-67970(253279).5
On July 6, 1993, Galas, with her daughter, Ophelia
G. Pingol (Pingol), as co-maker, mortgaged the
subject property to Yolanda Valdez Villar (Villar) as
security for a loan in the amount of Two Million
Two Hundred Thousand Pesos (P2,200,000.00).6
On October 10, 1994, Galas, again with Pingol as
her co-maker, mortgaged the same subject property
to Pablo P. Garcia (Garcia) to secure her loan of
One Million Eight Hundred Thousand Pesos
(P1,800,000.00).7
Both mortgages were annotated at the back of TCT
No. RT-67970 (253279), to wit:
REAL ESTATE MORTGAGE
Entry No. 6537/T-RT-67970(253279) MORTGAGE
In favor of Yolanda Valdez Villar m/to Jaime
Villar to guarantee a principal obligation in the sum
of P2,200,000- mortgagees consent necessary in
case of subsequent encumbrance or alienation of the
property; Other conditions set forth in Doc. No. 97,
Book No. VI, Page No. 20 of the Not. Pub. of Diana
P. Magpantay
Date of Instrument: 7-6-93
Date of Inscription: 7-7-93
SECOND REAL ESTATE MORTGAGE
Entry No. 821/T-RT-67970(253279) MORTGAGE
In favor of Pablo Garcia m/to Isabela Garcia to
guarantee a principal obligation in the sum
of P1,800,000.00 mortgagees consent necessary in
case of subsequent encumbrance or alienation of the
property; Other conditions set forth in Doc. No. 08,