Case Digest (G.R. No. L-16217)
Facts:
Alfonso de los Reyes et al. v. Luis de Leon, G.R. No. L-16217, May 25, 1964, the Supreme Court En Banc, Makalintal, J., writing for the Court.
The appellees (plaintiffs below), owners of land covered by Transfer Certificate of Title No. 66955 in Malate, Manila, executed two mortgages in favor of the appellant (mortgagee). The first, a "Real Estate Mortgage" dated July 4, 1944, secured a loan of P40,000 and contained among other provisions a covenant that the mortgagor would "pay in time the taxes and assessments" and a power to foreclose judicially or extrajudicially under Act No. 3135 if the mortgagor failed to pay any obligations. Paragraph (1) of that mortgage made "time the paramount condition," fixing payment "within the first three years after the Greater East Asia War, to be computed from the signing of the Treaty of Peace."
On July 11, 1944 the parties executed a "Real Estate Additional Mortgage" for an added P20,000 which incorporated the terms of the first mortgage except where repugnant to the additional stipulations. The additional mortgage reiterated the three‑years‑after‑peace time formula and expressly provided that if, prior to the termination of the war and the signing and proclamation of the Treaty of Peace, the mortgagor failed to redeem the original loan, the additional loan and a portion of the original loan would be "automatically condoned, cancelled and annulled" — effectively reducing the indebtedness to P30,000 in the event the post‑war term was later enjoyed.
On August 5, 1953 appellant's counsel informed appellees that, because taxes for 1951–1953 on the mortgaged property had not been paid, the entire indebtedness of P60,000 with interest had become due and extrajudicial foreclosure steps would be taken. The appellees paid the back taxes on September 3, 1953 and presented tax receipts to appellant before the scheduled sale. The sheriff's sale was deferred but ultimately held; appellant was the sole bidder and obtained the property for P30,000, receiving a Sheriff's Certificate of Sale.
On August 21, 1954 the appellees sued to annul the foreclosure sale alleging (1) misrepresentation as to the amount actually due, (2) absence of demand prior to foreclosure, and (3) prematurity because foreclosure occurred before the mortgage indebtedness had matured under the contract. The t...(Subscriber-Only)
Issues:
- Whether appellees incurred default in their obligation to pay the taxes (and thus the mortgage indebtedness became due) in the absence of a prior demand.
- Whether the extrajudicial foreclosure and sale were premature because the mortgage debt had not yet matured under the contract's time provisions tied to the Treaty of Peace.
- Whether the foreclosure conducted to collect P60,000 (instead of P30,000 as would obtain after the pact conditions) rendered ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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