Case Digest (G.R. No. 138292)
Facts:
Korea Exchange Bank v. Filkor Business Integrated, Inc., et al., G.R. No. 138292, April 10, 2002, Supreme Court Second Division, Quisumbing, J., writing for the Court.Petitioner Korea Exchange Bank extended multiple credit accommodations to respondent Filkor Business Integrated, Inc.: a US$140,000 loan (January 9, 1997, of which only US$40,000 was repaid), a series of nine trust receipts (June–September 1997) whose proceeds or underlying goods were not turned over to petitioner, and negotiated proceeds from seventeen letters of credit between June and October 1997 that were dishonored for discrepancies. To secure payment, Filkor executed a real estate mortgage (February 9, 1996) covering improvements on a leased lot in the Cavite Export Processing Zone; respondents Kim Eung Joe and Lee Han Sang signed continuing suretyships.
When respondents defaulted, petitioner sued in the Regional Trial Court (RTC) of Cavite City, Civil Case No. N-6689, asserting twenty-seven causes of action, praying for collection and expressly asking that the mortgaged property be foreclosed and sold at public auction if payment was not made within ninety days from judgment. Petitioner moved for summary judgment under Section 1, Rule 35, 1997 Rules of Civil Procedure; the RTC granted summary judgment on March 12, 1999, finding no genuine issue of material fact and entering judgment for petitioner on all causes of action but omitting any order foreclosing and selling the mortgaged property.
Petitioner filed a partial motion for reconsideration seeking incorporation of the foreclosure/sale remedy; the RTC denied it on April 16, 1999, ruling that by filing a civil action for collection petitioner had elected to abandon its mortgage lien and cited Danao v. Court of Appeals (and Manila Trading and Supply Co. v. Co Kim) for the rule that a mortgage creditor may elect to waive the security and sue on the debt. Petitioner then b...(Subscriber-Only)
Issues:
- Was the petition properly filed with the Supreme Court under Rule 45 as raising only questions of law?
- Did the RTC correctly hold that petitioner abandoned its real estate mortgage by filing a collection action, thereby justifying denial of an order foreclosing and selling the...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
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Doctrine:
- (Subscriber-Only)