Case Digest (G.R. No. 225288) Core Legal Reasoning Model
Facts:
In the case of Development Bank of the Philippines vs. Jovencio A. Zaragoza and Avelina E. Zaragoza, which was decided by the Philippine Supreme Court on August 23, 1978, the Development Bank of the Philippines (plaintiff-appellee) filed a complaint against Jovencio A. Zaragoza and Avelina E. Zaragoza (defendants-appellants) for a deficiency arising from an extrajudicial foreclosure of a mortgage. The events leading to the lawsuit began when the Zaragoza couple secured a loan of ₱30,000 from the bank on July 19, 1949, which was guaranteed by a real estate mortgage. The mortgage specified that if they failed to meet their amortization obligations, the bank had the authority to foreclose the property extrajudicially, as per Republic Act No. 3135. Following a default in their payments, the bank conducted an extrajudicial foreclosure, and the mortgaged property was posted for sale on December 10, 1952. Subsequently, the property was sold at public auction on June 10, 1957, with the
Case Digest (G.R. No. 225288) Expanded Legal Reasoning Model
Facts:
In July 1949, appellants obtained a loan of P30,000 from Development Bank of the Philippines, secured by a real estate mortgage with a stipulation allowing the appellee to conduct an extrajudicial foreclosure under Republic Act No. 3135 upon default. When appellants failed to pay the required amortizations, the appellee proceeded with an extrajudicial foreclosure on December 10, 1952. The Provincial Sheriff of Pangasinan duly posted the notice of sale, and on June 10, 1957, the mortgaged property was sold at public auction for P21,035.00. The proceeds were applied to the outstanding indebtedness of P28,914.36, leaving a deficiency of P7,779.36. The appellee then filed a suit for the deficiency with preliminary attachment on June 20, 1961. In their defense, appellants argued that (a) no deficiency judgment should lie after an extrajudicial foreclosure, and (b) the mortgagor should not be liable for additional interest on the loan from the foreclosure notice until the actual sale. The trial court overruled these defenses and rendered judgment in favor of the appellee.Issues:
- Whether a mortgagee is entitled to claim the deficiency in an extrajudicial foreclosure when the proceeds are insufficient to cover the full debt.
- Whether additional interest may be charged on the balance of the indebtedness from the period starting with the notice of sale up to the actual sale, despite the extrajudicial foreclosure.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)