Case Digest (G.R. No. L-41299)
Facts:
In March 1963 spouses David B. Cruz and Socorro Concio Cruz obtained a real estate loan from the Social Security System (SSS) secured by their Pateros residential lot; the mortgage was executed March 26, 1963 for an original P39,500 later increased to P48,000 and carried monthly amortizations. The SSS filed an application for extrajudicial foreclosure on July 9, 1968 and published sheriff's sale notices on July 14, 21 and 28, 1968; the Cruzes and their daughter Lorna C. Cruz sued the SSS and the Provincial Sheriff on July 24, 1968 for damages, the Trial Court awarded various damages on March 5, 1971, the Court of Appeals affirmed with modification, and the SSS brought the case to the Supreme Court.
Issues:
- Did the spouses David B. Cruz and Socorro Concio Cruz violate their mortgage contract so as to justify the SSS's publications of foreclosure notices?
- Can the SSS be held civilly liable for the publication and related acts, and what damages, if any, are appropriate?
Ruling:
The Court upheld the Court of Appeals' factual finding that the foreclosure application was not justified and that the published indebtedness was incorrect. The Court held that the SSS is amenable to suit under its charter but modified the judgment by setting aside the awards of actual, moral, temperate, and exemplary damages; it awarded private respondents P3,000.00 as nominal damages, P5,000.00 as attorney's fees, and costs against the SSS.
Ratio:
The Court refused to disturb the Court of Appeals' appreciation of the evidence that the Cruzes were, as of June 30, 1968, current in their installments and that the foreclosure filing relied on an incorrect account. The Court reasoned that the SSS, being a juridical entity that may "sue and be sued" (Sec. 4(k), RA 1161; Sec. 4(k), PD 24), had waived immunity to suit but that such waiver does not ipso jure establish liability; absent gross negligence or malice the facts did not justify compensatory, moral, or exemplary damages, although the clerical mistake in confusing Socorro J. Cruz with Socorro C. Cruz warranted nominal damages under Art. 2221 and an award of attorney's fees under Art. 2208.
Doctrine:
- Factual findings of the Court of Appeals will not be disturbed except under recognized exceptions.
- The SSS is a juridical entity that can sue and be sued (Sec. 4(k), RA 1161; Sec. 4(k), PD 24).
- A chartered waiver to be sued permits resort to the courts but does not automatically negate defenses or impose liability.
- Awards of moral, temperate, or exemplary damages require proof of gross negligence, malice, or wantonness.
- Clerical error or mistaken identity by a mortgagee may justify only nominal damages and attorney's fees (see Art. 2221; Art. 2208).