Case Digest (G.R. No. 201892)
Facts:
Norlinda S. Marilag v. Marcelino B. Martinez, G.R. No. 201892, July 22, 2015, Supreme Court First Division, Perlas-Bernabe, J., writing for the Court.Petitioner Norlinda S. Marilag (creditor-mortgagee) loaned P160,000 to Rafael Martinez on July 30, 1992, secured by a real estate mortgage on TCT No. T-208400, with a stipulated interest of 5% per month payable in six months. Rafael defaulted; petitioner filed a judicial foreclosure in RTC-Imus on November 10, 1995 (Civil Case No. 1208-95). Rafael was declared in default; following ex parte evidence the RTC-Imus issued a decision on January 30, 1998 reducing the interest to 12% p.a. and adjudging Rafael liable for P229,200 (principal plus reduced interest) — the record contains no proof that that foreclosure decision had become final.
Before learning of the January 30, 1998 RTC-Imus decision, respondent Marcelino B. Martinez agreed to pay Rafael’s obligation (the parties negotiated an aggregate figure of P689,000), paid a total of P400,000, and executed a promissory note dated February 20, 1998 (the subject PN) for P289,000 to cover the remaining balance allegedly owed by his father. After learning of the foreclosure decision, respondent refused to pay the PN balance; petitioner then sued respondent on July 2, 1998 in the RTC of Las Piñas (court a quo), docketed Civil Case No. 98-0156 (collection case). Respondent answered, alleged overpayment, and filed a compulsory counterclaim for return of the excess, release of the mortgage, damages, attorney’s fees and costs.
The court a quo in a Decision dated August 28, 2003 denied petitioner’s claim on the PN, found an overpayment of P171,000, declared a quasi-contract of solutio indebiti, and ordered petitioner to return the excess with 6% interest and attorney’s fees and costs. On reconsideration the court a quo reversed itself in an Order dated November 3, 2003, concluding that the foreclosure and collection actions were distinct, upholding the PN (P289,000 due), applying Central Bank Circular No. 905 (suspending the Usury Law), and directing respondent to pay P289,000 plus legal interest and fees; the court denied respondent’s motion for reconsideration on January 14, 2004. Respondent appealed to the Court of Appeals (CA).
The CA, in a Decision dated November 4, 2011 (CA-G.R. CV No. 81258), recalled and set aside the court a quo’s November 3, 2003 and January 14, 2004 orders and reinstated the court a quo’s August 28, 2003 Decision, ruling that the collection case was barred by res judicata and, alternatively,...(Pro-only)
Issues:
- Was the CA correct in holding that res judicata barred petitioner’s collection case?
- If not res judicata, was the collection case nevertheless barred by litis pendentia (or election of remedy) because petitioner had earlier filed a judicial foreclosure?
- Are respondent’s overpayment claims compensable and what interest and attorneys’ ...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)