Case Digest (G.R. No. 27701)
Facts:
The case involves the Bank of the Philippine Islands as the plaintiff and appellant, and V. Concepcion e Hijos, Inc. and Venancio Concepcion as the defendants and appellants, with Henry W. Elser as the defendant and appellee. The events leading to the case began on July 6, 1921, when the defendants executed a promissory note in favor of the plaintiff for the amount of P342,372.64, which was payable on demand. To secure this debt, the defendants deposited 700 shares of the Philippine National Bank as collateral and mortgaged a parcel of land measuring 5,680 square meters located on R. Hidalgo Street in Manila. The defendants defaulted on the payment, prompting the plaintiff bank to initiate foreclosure proceedings on February 3, 1922.
Subsequently, Henry W. Elser entered negotiations with the Concepcions to take over the mortgaged property and assume the mortgage debt, provided that the Concepcions would be released from all liability. On March 23, 1922, Elser communicated ...
Case Digest (G.R. No. 27701)
Facts:
Execution of Promissory Note and Mortgage
On July 6, 1921, defendants V. Concepcion e Hijos, Inc., and Venancio Concepcion executed a promissory note in favor of the Bank of the Philippine Islands (BPI) for P342,372.64, payable on demand. As security, they deposited 700 shares of the Philippine National Bank and mortgaged a parcel of land on R. Hidalgo Street, Manila.Default and Foreclosure Proceedings
The defendants defaulted on the payment, and on February 3, 1922, BPI initiated foreclosure proceedings.Negotiations with Henry W. Elser
Henry W. Elser offered to take over the mortgaged property and assume the debt, provided the Concepcions were relieved of liability. On March 23, 1922, Elser wrote to BPI, proposing to pay the debt in installments and reduce the mortgage over three years. BPI did not respond to this letter.Further Negotiations and Agreement
On April 21, 1922, Elser wrote another letter, seeking confirmation that BPI would sell the property to him for the full amount of the judgment if it acquired the property through foreclosure. BPI did not directly reply but indicated through conversations that it would not release the Concepcions from liability.Deed of Purchase and Sale (Exhibit C)
On May 5, 1922, Elser entered into a bilateral deed of sale with the Concepcions, agreeing to assume their obligations to BPI in exchange for the mortgaged property. BPI did not formally consent to this agreement.Inclusion of Elser in Foreclosure Proceedings
BPI petitioned the court to include Elser as a defendant, alleging he had assumed the Concepcions' obligations. The Concepcions argued that Elser should be substituted as the debtor. The court included Elser as a defendant, and BPI filed multiple amended complaints.Elser’s Demurrers and Death
Elser demurred to the complaints, arguing that BPI had not accepted his substitution as debtor. The court sustained the demurrers. Elser died on June 18, 1923, and his estate was substituted as a defendant.Trial Court Decision
The trial court absolved Elser’s estate from liability, holding that BPI had not accepted Elser’s substitution as debtor. The Concepcions were ordered to pay the debt, and the mortgaged property was to be sold in case of non-payment.
Issue:
- Whether the agreement between Elser and the Concepcions (Exhibit C) constituted a valid stipulation in favor of BPI (stipulation pour autrui), allowing BPI to enforce the agreement against Elser’s estate.
- Whether BPI’s failure to present its claim to the committee on claims and appraisal in Elser’s estate proceedings barred it from pursuing a personal judgment against the estate.
- Whether Elser’s assumption of the debt and subrogation to the Concepcions’ obligations released the Concepcions from liability.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)