Case Digest (G.R. No. 74730)
Facts:
The case involves Caltex Philippines, Inc. (hereinafter referred to as "CALTEX") as the petitioner and Herbert Manzana as the private respondent. The events leading to this case began when Manzana purchased petroleum products from CALTEX on credit, accumulating a debt of P361,218.66 by August 31, 1969. To secure this debt, Manzana executed a Deed of First Mortgage on October 4, 1969, over a parcel of land in Camarines Norte. Despite CALTEX sending statements of account and demanding payment, Manzana failed to settle his debt. Consequently, CALTEX filed a complaint on August 17, 1970, in the Court of First Instance (now Regional Trial Court) of Manila to recover the full amount owed. On September 15, 1970, CALTEX extrajudicially foreclosed the mortgaged property, which was sold at auction to CALTEX for P20,000. Manzana claimed he only learned of the foreclosure on October 4, 1980, when CALTEX mentioned it in a reply to his opposition to a motion for execution pending...
Case Digest (G.R. No. 74730)
Facts:
1. Background of the Debt:
Private respondent Herbert Manzana purchased petroleum products on credit from petitioner Caltex Philippines, Inc. (CALTEX). As of August 31, 1969, his indebtedness amounted to P361,218.66.
2. Execution of the Mortgage:
On October 4, 1969, Manzana executed a Deed of First Mortgage in favor of CALTEX over a parcel of land covered by OCT No. 0-274 to secure his debts. The mortgage stipulated that the maximum amount secured was P120,000.00, but the deed also contained conflicting provisions suggesting the entire debt was secured.
3. Demand for Payment and Foreclosure:
CALTEX sent statements of account and demanded payment. Due to Manzana's failure to pay, CALTEX filed a complaint for recovery of the debt on August 17, 1970. Meanwhile, on September 15, 1970, CALTEX foreclosed the mortgaged property extrajudicially, and the property was sold at auction to CALTEX for P20,000.00 on October 30, 1970.
4. Trial Court Decision:
On July 23, 1980, the trial court ordered Manzana to pay CALTEX P353,218.66 (after deducting P8,000.00 paid by Traders Insurance and Surety Company) with 12% interest per annum from August 17, 1970, plus 20% attorney's fees.
5. Appeal to the Intermediate Appellate Court:
Manzana appealed, raising two issues:
- Whether CALTEX could simultaneously pursue a personal action for debt recovery and extrajudicial foreclosure.
- Whether CALTEX could claim a deficiency judgment after foreclosure.
6. Appellate Court's Initial Decision:
On June 29, 1984, the Intermediate Appellate Court affirmed the trial court's decision. However, upon Manzana's motion for reconsideration, the court vacated its decision on January 31, 1986, and remanded the case to determine the deficiency due to CALTEX.
7. CALTEX's Petition to the Supreme Court:
CALTEX filed a petition for review, challenging the appellate court's resolution.
Issue:
- Whether the respondent court erred in considering the issue of CALTEX's simultaneous pursuit of a personal action and extrajudicial foreclosure, which was raised for the first time on appeal.
- Whether the filing of a collection suit for a debt secured by a real estate mortgage constitutes a waiver of the remedy of foreclosure.
- Whether the filing of a complaint for debt recovery and subsequent extrajudicial foreclosure constitutes splitting of a single cause of action.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)