Facts:

• The case involves a property transaction dispute between Jose V. Herrera (petitioner) and L.P. Leviste & Co., Inc. (respondent).
• On June 10, 1969, Leviste secured a loan of P1,854,311.50 from the Government Service Insurance System (GSIS), using two properties as collateral: one in Parañaque and the other on Buendia Avenue, Makati.
• On November 3, 1971, Leviste sold the Buendia property to Herrera for P3,750,000.00.
• The agreement required Herrera to pay P1,895,688.50, assume the GSIS loan, and substitute the Parañaque property with his own within six months.
• Leviste was responsible for obtaining GSIS's consent for Herrera's assumption of the mortgage.
• The contract included a clause for automatic cancellation and forfeiture of payments if these conditions were not met.
• Herrera took possession of the Buendia property, collected rental income, and made a partial payment of P300,000.00 to GSIS.
• Herrera failed to substitute the collateral or fully pay the mortgage, leading to GSIS foreclosing on the property due to default.
• Leviste assigned the right of redemption to Jose Marcelo, who redeemed the properties.
• Herrera's complaint for damages and cancellation of annotation was dismissed by the Court of First Instance of Rizal, a decision later affirmed by the Court of Appeals.

Issue:

• (Unlock)

Ruling:

• The Supreme Court denied Herrera's motion for reconsideration, upholding the decisions of the lower courts.
• The Court ruled that GSIS, Marcelo, and Leviste did not benefit at Herrera's expense.
• Herrera's loss resul...(Unlock)

Ratio:

• The Court found that GSIS did not benefit at Herrera's expense, as it only received the mortgage loan amount plus interest.
• Marcelo paid an amount close to what Herrera would have paid, and Leviste received a reasonable value for the Buendia property.
• Herrera's loss was due to his own fault in not substituting the collateral, paying the mortgage, or redeeming the property.
• The Court noted tha...continue reading