A.M. No. 2005-25-SC - Re: Employees Incurring Habitual Tardiness in the 1st Semester of 2005

On April 28, 1965, Island Savings Bank approved Sulpicio M. Tolentino’s application for an ₱80,000 loan, secured by a real estate mortgage over his 100-hectare land in Cubo, Las Nieves, Agusan (TCT No. T-305).
Loan terms: lump-sum ₱80,000, 12% annual interest, repayable in semi-annual installments over three years; proceeds to be used for subdivision development.

On May 22, 1965, the Bank released only ₱17,000 and deducted ₱4,800 advance interest; the interest was refunded on July 23, 1965, due to lack of funds for the remaining ₱63,000.
On August 13, 1965, the Monetary Board issued Resolution No. 1049 prohibiting new loans (except government securities) but allowing extensions of approved loans.
On June 14, 1968, Resolution No. 967 prohibited Island Savings Bank from doing business and placed it under statutory receivership for capital deficiency.

On August 1, 1968, the Bank sought extrajudicial foreclosure for nonpayment of the ₱17,000 note; sale scheduled January 22, 1969.
On January 20, 1969, Tolentino filed in CFI Agusan for injunction, specific performance or rescission of the mortgage, and damages; a ₱5,000 surety bond secured a temporary restraining order against foreclosure.
On February 15, 1972, the trial court dismissed Tolentino’s petition, ordered him to pay ₱17,000 plus interest, and lifted the injunction.
On February 11, 1977, the Court of Appeals affirmed dismissal of the specific‐performance claim but held the Bank could neither foreclose the mortgage nor collect the ₱17,000 debt.
The Central Bank petitioned the Supreme Court for review.

Whether Tolentino’s action for specific performance can prosper.
Whether Tolentino is liable to pay the ₱17,000 debt under the promissory note.
If liability for ₱17,000 subsists, whether his real estate mortgage may be foreclosed to satisfy it.