Case Digest (G.R. No. 210542)
Facts:
Rosalina Carodan v. China Banking Corporation, G.R. No. 210542, February 24, 2016, Supreme Court First Division, Sereno, C.J., writing for the Court.On 6 June 2000, China Banking Corporation filed a Complaint in the Regional Trial Court (RTC), Tuguegarao City, Branch 2 (Civil Case No. 5692), against Barbara Perez, Rebecca Perez‑Viloria, Rosalina Carodan (petitioner) and Madeline Carodan, seeking recovery of an outstanding loan evidenced by Promissory Note No. TLS‑98/007 (P2.8 million) and secured by a Real Estate Mortgage over property registered in petitioner Rosalina’s name (TCT No. T‑10216), plus a Surety Agreement naming Barbara and Rebecca as principals and Rosalina and Madeline as sureties. China Bank alleged extrajudicial foreclosure on 26 November 1999 that yielded P1.5 million, leaving a deficiency of P365,345.77; it prayed for judgment on the deficiency, interest, attorney’s fees and costs.
Barbara and Rebecca answered, averring an oral agreement among the four parties to split loan proceeds and obligations equally, claiming they paid P1.5 million and that some securities were released; they cross‑claimed against Rosalina and Madeline for their share of interest and deficiency and counterclaimed against China Bank for damages. China Bank denied the oral arrangement and maintained Barbara and Rebecca were principal debtors and Rosalina and Madeline were sureties; it also disputed that the bank had released the mortgage covering the principal borrowers’ properties.
Rosalina answered, admitting execution of a mortgage and surety agreement but contending she received no monetary benefit and that the bank’s alleged release of the principal borrowers’ encumbrances wrongfully left her property to bear the foreclosure risk; she invoked the indivisibility of mortgage (Art. 2089, New Civil Code) and sought annulment of the foreclosure sale and damages. The RTC dismissed Madeline for lack of jurisdiction, conducted trial on the narrowed issues (liability for deficiency, continuing liability of surety after release of principal collateral, existence of any prior sharing agreement), and on 23 June 2010 rendered judgment holding Rebecca, Barbara and Rosalina jointly and severally liable for the deficiency (interest at 12% per annum from 13 January 2000) and ordering Rebecca and Barbara to reimburse Rosalina for amounts charged against her.
Rosalina appealed to the Court of Appeals (CA), Ninth Division (CA‑G.R. CV No. 95835). In a Decision dated 9 July 2013 (pen. Justice Socorro B. Inting), the CA affirmed the RTC in toto, characterizing Rosalina as a surety/accommodation mortgagor and applying precedent that a mortgage is s...(Subscriber-Only)
Issues:
- Is Rosalina Carodan liable jointly and severally with Barbara Perez and Rebecca Perez‑Viloria for the deficiency resulting from the extrajudicial f...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)