Case Digest (G.R. No. 192971)
Facts:
In Floro Mercene v. Government Service Insurance System, petitioner Floro Mercene obtained two loans from respondent GSIS on January 19, 1965 (P29,500.00) and May 14, 1968 (P14,500.00), each secured by a real estate mortgage over his Quezon City property (TCT No. 90535) duly annotated on March 24, 1965 and May 15, 1968, respectively. On June 11, 2004, Mercene filed a complaint for Quieting of Title in the RTC, Branch 220, Quezon City, alleging that GSIS never exercised its rights as mortgagee, that the mortgages constituted a cloud on his title, and that GSIS’s right to foreclose had prescribed after ten years. GSIS answered, contending failure to state a cause of action and that prescription does not run against a government entity. During pre-trial, Mercene moved for judgment on the pleadings, which the RTC granted. By Decision dated September 15, 2005, the RTC declared both mortgages ineffective, ordered their cancellation, and denied other claims. GSIS appealed to the CA. OnCase Digest (G.R. No. 192971)
Facts:
- Loan Transactions and Mortgages
- On January 19, 1965, petitioner Floro Mercene obtained a ₱29,500.00 loan from respondent GSIS, secured by real estate mortgage over his Quezon City property, annotated on TCT No. 90535 on March 24, 1965.
- On May 14, 1968, Mercene contracted a second GSIS loan of ₱14,500.00, likewise secured by real estate mortgage on the same parcel, annotated on the title on May 15, 1968.
- Quieting of Title Complaint and Pleadings
- On June 11, 2004, Mercene filed a complaint for Quieting of Title, alleging (a) GSIS never exercised its mortgagee rights since 1968, (b) the mortgages constituted a cloud on his title, and (c) GSIS’s right to foreclose had prescribed.
- GSIS answered, asserting (a) failure to state a cause of action, and (b) prescription does not run against it as a government entity.
- Judgment on the Pleadings and RTC Decision
- At pre-trial, Mercene moved for judgment on the pleadings, which the RTC granted without objection.
- In its September 15, 2005 Decision, the RTC:
- Declared both real estate mortgages ineffective and ordered their cancellation on TCT No. 90535.
- Held that GSIS’s right to foreclose had prescribed after ten years, since GSIS is a juridical person with capacity to sue and be sued.
- Court of Appeals Decision
- GSIS appealed. On January 30, 2010, the CA reversed the RTC, reasoning that prescription runs only from accrual of cause of action—i.e., when demand is made or when the obligation becomes due and demandable—and Mercene’s complaint did not allege maturity dates or demand.
- The CA dismissed the complaint for failure to state a cause of action and denied reconsideration on April 7, 2011.
Issues:
- Whether the CA erred in considering issues not raised before the RTC.
- Whether the CA erred in disregarding the alleged judicial admission by GSIS that its foreclosure right had prescribed.
- Whether the CA erred in ruling that the real estate mortgages had yet to prescribe.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)