Case Digest (G.R. No. L-29130)
Facts:
- Dionisio Mirang obtained a loan of P14,000.00 from the Rehabilitation Finance Corporation (now Development Bank of the Philippines) on September 7, 1950, for his 18.5-hectare abaca plantation.
- The loan was secured by a first mortgage on his homestead and was intended for purchasing work animals and farm implements (P1,000), constructing a farmhouse and laborers' quarters (P1,500), and developing and maintaining the abaca land (P11,500).
- The bank released P13,000.00 but stopped further releases after the plantation was attacked by mosaic disease, which destroyed the abaca plants.
- Mirang failed to pay the yearly amortizations, leading to the extrajudicial foreclosure of the mortgage under Act 3135.
- The property was sold at public auction on July 30, 1957, with the bank as the highest bidder for P2,010.00. By then, Mirang's indebtedness had reached P19,714.35.
- Mirang did not redeem the property within one year, prompting the bank to file a complaint to recover the balance of the indebtedness.
- The Court of First Instance of Davao ruled in favor of the bank, ordering Mirang to pay P16,013.13 plus 6% interest per annum from July 30, 1957, attorney's fees of P500.00, and the costs of the suit.
- Mirang appealed the decision.
Issue:
- (Unlock)
Ruling:
- The Supreme Court ruled that the Development Bank of the Philippines has the right to recover the balance of the indebtedness after the mortgaged property was sold under extrajudicial foreclosure.
- The Court ruled that Mirang is not exempted from paying the balance of the loan despite the destruction of the abaca plants by mosaic disease. ...(Unlock)
Ratio:
- The Court held that the absence of a provision in Act 3135 barring the recovery of a deficiency does not imply that the creditor loses the right to recover the unpaid balance. The Mortgage Law and the Rules of Court allow for the recovery of any unpaid balance on the principal obligation after foreclosure. The Court cited the case of Philippine Bank of Commerce v. Tomas de Vera, which established that the mortgagee has the right to claim the deficiency resulting from the sale of the mor...continue reading
Case Digest (G.R. No. L-29130)
Facts:
In the case of Development Bank of the Philippines v. Mirang, Dionisio Mirang, the defendant-appellant, obtained a loan of P14,000.00 from the Rehabilitation Finance Corporation (now Development Bank of the Philippines) on September 7, 1950, for the development of his 18.5-hectare abaca plantation. The loan was secured by a first mortgage on his homestead. The loan was to be used for purchasing work animals and farm implements (P1,000), constructing a farmhouse and laborers' quarters (P1,500), and developing and maintaining the abaca land (P11,500). The bank released P13,000.00 of the loan but refused further releases after the plantation was attacked by mosaic disease, which destroyed the abaca plants. Mirang failed to pay the yearly amortizations, leading to the extrajudicial foreclosure of the mortgage under Act 3135. The property was sold at public auction on July 30, 1957, where the bank was the highest bidder for P2,010.00. By that time, Mirang's indebtedness had reached P19,714.35. Mirang did not exercise his right of redemption within one year, prompting the bank to file a complaint to recover the balance of the indebtedness. The Court of First Instance of Davao ruled in favor of the bank, directing Mirang to pay P16,013.13 plus 6% interest per annum from July 30, 1957, attorney's fees of P500.00, and the costs of the suit. Mirang appealed the decision.
Issue:
- Does the Development Bank of the Philippines have the right to recover the balance of the indebtedness...