Case Digest (G.R. No. 190144)
Facts:
A. Francisco Realty and Development Corporation v. Court of Appeals and Spouses Romulo S.A. Javillonar and Erlinda P. Javillonar, G.R. No. 125055, October 30, 1998, Supreme Court Second Division, Mendoza, J., writing for the Court.Petitioner A. Francisco Realty and Development Corporation (petitioner) granted a P7.5 million loan to respondents Spouses Romulo S.A. Javillonar and Erlinda P. Javillonar (private respondents). In connection with that loan the spouses executed (a) a promissory note dated November 27, 1991 with interest at 4% per month for six months; (b) a deed of mortgage over the subject realty (TCT No. 58748) and the improvements thereon; and (c) an undated deed of sale in favor of petitioner which the spouses delivered together with the owners' duplicate of the title as additional security.
The agreed interest was to be paid partly in advance by deducting P900,000 from the loan proceeds and the remainder by post-dated checks for March, April, and May 1992. The promissory note contained a provision that, upon the mortgagor’s failure to pay interest without prior arrangement, "full possession of the property will be transferred and the deed of sale will be registered." Petitioner asserts respondents defaulted, whereupon it had the deed of sale registered on February 21, 1992 and obtained TCT No. PT-85569 in its name.
Thereafter respondents secured an additional P2.5 million loan from petitioner (promissory note dated March 13, 1992) carrying the same 4% monthly interest and a provision that, if unpaid, respondents would vacate or allow petitioner to appropriate the property for exclusive use. Petitioner demanded physical possession and interest beginning May 1992; respondents refused and petitioner filed an action for possession (Civil Case No. 62290) before the Regional Trial Court (RTC) of Pasig City.
Respondents admitted liability on the loans but maintained the undated deed of sale was only additional security, denied being notified of the registration, and asserted they continued paying interest. They also counterclaimed for cancellation of TCT No. PT-85569 and issuance of a new title in their name. On December 19, 1992, the RTC ruled for petitioner and declared petitioner owner of the property as registered under TCT No. PT-85569, ordering respondents to cease withholding possession (claims for damages were denied).
Respondents appealed to the Court of Appeals (CA). On February 29, 1996 the CA reversed the RTC in toto, dismissed petitioner’s complaint, and held the RTC lacked jurisdiction because the action was essentially an unlawful detainer (within the exclusive jurisdiction of municipal trial courts under Rule 70 and Sec. 33, B.P. Blg. 129). The CA also concluded that, even assuming RTC jurisdiction, the deed of sale and related stipulations were void as a pactum commissorium under Article 2088 of the Civil Code. Th...(Subscriber-Only)
Issues:
- Did the Regional Trial Court of Pasig City have jurisdiction to entertain petitioner’s complaint, or was the action within the exclusive jurisdiction of the municipal trial courts as an unlawful detainer action?
- Do the contractual stipulations (promissory notes and deed of sale/registration) constitute a pactum commissorium prohibited by Article 2088 of the Civil Code, rendering the deed o...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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