Case Digest (G.R. No. L-22973) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Mambulao Lumber Company v. Philippine National Bank, G.R. No. L-22973, decided January 30, 1968, the plaintiff-appellant, Mambulao Lumber Company, obtained in 1956 an industrial loan of P100,000 from the Naga Branch of defendant-appellee, Philippine National Bank (PNB), secured by a real estate mortgage over a parcel in Jose Panganiban, Camarines Norte, and a chattel mortgage over its sawmill machinery, trucks and other equipment. The loan was advanced in two tranches (P27,500 on August 2 and P15,500 on October 19, 1956), each evidenced by a promissory note payable in five annual installments with 6% interest. After defaulting on its amortizations, Mambulao Lumber ceased operations around 1958. On September 27, 1961, PNB requested extrajudicial foreclosure of the real property under Act No. 3135, culminating in a public auction on November 21, 1961, where it purchased the land for P56,908.00. The company remitted P738.59 on December 14, 1961, claiming full settlement, but PNB Case Digest (G.R. No. L-22973) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Loan Agreement and Security
- On May 5, 1956, Mambulao Lumber Company applied for an industrial loan of ₱155,000 with PNB’s Naga Branch; the bank approved ₱100,000 only.
- To secure the loan, the company mortgaged:
- A parcel of land in Jose Panganiban, Camarines Norte (TCT No. 381) with buildings and improvements.
- Various sawmill machinery, logging and transport equipment located in its compound.
- Promissory Notes and Default
- August 2, 1956: PNB released ₱27,500; promissory note for five annual installments of ₱6,528.40 (due July 31, 1957–1961).
- October 19, 1956: PNB released ₱15,500; promissory note for five annual installments of ₱3,679.64 (due July 31, 1957–1961).
- The company failed to pay amortizations; operations ceased circa late 1957/early 1958.
- Extrajudicial Foreclosures and Sale of Real Property
- September 27, 1961: PNB requested the Provincial Sheriff of Camarines Norte to foreclose the real estate mortgage; obligation then ₱57,646.59 (excl. attorney’s fees).
- Notices issued; sale scheduled for November 21, 1961, at Daet, Camarines Norte.
- On November 21, 1961, the land and improvements sold to PNB for ₱56,908.00, subject to one-year redemption.
- Payment and Foreclosure of Chattels
- December 14, 1961: Mambulao Lumber sent ₱738.59 to PNB, claiming full settlement; December 16 advised the sheriff likewise.
- PNB asserted remaining balance of ₱9,161.76 plus guarding fees; refused to stop chattel sale.
- December 21, 1961: Deputy Sheriff auctioned chattels as a block for ₱4,200.00; bill of sale issued.
- Post-Sale Events and Lawsuit
- May 24–25, 1962: PNB’s employees, aided by police, removed equipment sold to a third party, despite Mambulao’s protest and demand for court order.
- Mambulao Lumber filed suit for annulment of chattel sale, recovery of value, damages, and attorney’s fees.
Issues:
- Whether the indebtedness as of November 21, 1961, was correctly computed by trial court.
- Whether PNB was entitled to attorney’s fees and foreclosure expenses awarded.
- Whether the extrajudicial sale of chattels was lawful considering payment and venue stipulation.
- Whether PNB and the sheriff are liable for conversion of chattels and must reimburse their value.
- Whether Mambulao Lumber is entitled to damages and attorney’s fees for wrongful foreclosure and removal.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)