Case Digest (G.R. No. L-46898-99)
Facts:
Philippine National Bank v. Hon. Rustico De Los Reyes, Amando Arana and Julia Reyes, G.R. Nos. L-46898-99, November 28, 1989, Supreme Court Second Division, Regalado, J., writing for the Court.Petitioner Philippine National Bank (PNB) held a mortgage executed August 30, 1966 over six parcels in Cantilla, Sorsogon to secure a P10,000 loan; two parcels were covered by free patent titles and four were untitled (reflected only by tax declarations). After respondents Amando Arana and Julia Reyes defaulted, PNB conducted an extrajudicial foreclosure under Act No. 3135, purchased the lots at public auction (certificate of sale dated July 1, 1969, registered July 8, 1970), and executed an affidavit of consolidation of ownership July 9, 1970; new titles and transfers of tax declarations were placed in PNB’s name.
Respondents received letters from PNB in 1971 about repurchase; PNB contracted to sell the six parcels to Gerardo Badong in May 1972 but Badong could not take actual possession because respondents refused to surrender two lots covered by certain tax declarations. On July 12, 1972, respondents filed Civil Case No. 2677 for legal redemption under Section 119 of the Public Land Act; on July 24, 1972 PNB filed Special Proceeding No. 2679 ex parte for a writ of possession, which the trial court granted July 27, 1972. PNB later moved to cite the spouses for contempt for refusing to yield possession.
The two actions were heard jointly. At pretrial (Dec. 27, 1973) the parties stipulated, inter alia, that parcels 1 and 2 were titled (free patents), parcels 3–6 untitled but with pending free patent applications, that PNB foreclosed extrajudicially and the bank’s claim at foreclosure was P12,735.30, and that plaintiffs had deposited P12,500 with a PNB branch toward redemption. After trial, the Court of First Instance (Branch I, Sorsogon) in a decision dated May 11, 1976 found the spouses entitled to redeem all six parcels on the theory of the "indivisibility of mortgage," ordered redemption for P12,735.30, rescinded the contract with Badong, and dismissed the contempt petition. PNB’s motion for reconsideration produced a resolution dated January 17, 1977 modifying the court’s ratio by stating that PNB had waived the indivisibility doctrine as to the two titled lots (which it consented be redeemed) and that, although the redemption period for the four untitled parcels was one year, equity allowed their redemption.
PNB filed a petition for review on certiorari to the Supreme Court. The case was submitted for decision without respondents’ brief (resolution dated March 24, 1980). PNB’s assignments of error ch...(Subscriber-Only)
Issues:
- Was the ex parte writ of possession and PNB’s claimed right to actual possession sustained absent judicial confirmation of the extrajudicial foreclosure—i.e., was due process violated?
- Does the doctrine of the indivisibility of mortgage entitle the mortgagors to redeem the untitled parcels together with the titled parcels?
- Was the mortgage on the four untitled parcels (public lands with pending free-patent applications) valid and enforceable so as to permit foreclosure and sale, or was it void ab initio?
- If the mortgage on the untitled parcels was void, what remedy follows—may PNB retain proceeds or must mutual resti...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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