Case Digest (G.R. No. 45569)
Facts:
Pedro de Jesus, Bank Commissioner in his capacity as Liquidator and Receiver of the Mercantile Bank of China v. Gonzalo C. Go Quiolay, G.R. No. 45569, March 31, 1938, the Supreme Court En Banc, Imperial, J., writing for the Court. The plaintiff-appellee was the Bank Commissioner as liquidator and receiver of the Mercantile Bank of China; the defendant-appellant was Gonzalo C. Go Quiolay.The Bank Commissioner sued to foreclose a real estate mortgage given by Go Quiolay to secure his indebtedness, which as of October 31, 1933 (date of liquidation), was alleged to be P174,212.22 (annexed as Exhibit D). Go Quiolay filed an amended answer denying the complaint and filed a cross-complaint seeking (a) declaration that a deed executed in July 1934 (marked Exhibit A) was valid and operated in payment of all indebtedness, and (b) that a later deed dated March 7, 1935 (marked Exhibit B) be declared null because it did not reflect the true intention of the parties.
While the foreclosure suit (Civil Case No. 45482) was pending, Go Quiolay proposed to settle by conveying his mortgaged properties in full payment of his indebtedness; a draft conveyance (Exhibit A) was prepared but was not signed by the Bank Commissioner and was not signed by the defendant at that time. After the Bank Commissioner rejected Exhibit A as reflecting only a partial settlement (P60,000 plus P2,000 attorney’s fees), the parties executed Exhibit B on March 7, 1935. Exhibit B recited an agreement that (1) the defendant transferred certain properties to the Bank as partial settlement, (2) the defendant would pay P2,000 as attorney’s fees, (3) the conveyance would operate to release the defendant from liability only up to an aggregate amount of P60,000, (4) the dismissal of the foreclosure suit would follow registration and payment, and (5) the agreement would not become effective until approved by the Court of First Instance in the liquidation case (citing Section 175, Code of Civil Procedure).
At trial the Court of First Instance rendered conflicting orders: an order of November 22, 1936 dismissed the complaint and cross-complaint; a decision of November 27, 1936 (restored by a February 24, 1937 disposition) sentenced the defendant to pay P114,211.92 with interest and attorney’s fees. ...(Subscriber-Only)
Issues:
- Is Exhibit A a valid and binding conveyance between the parties?
- Is Exhibit B valid and does it represent the true intention of the parties?
- What is the legal effect of Exhibit B on the pending foreclosure action and on the parti...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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