Case Digest (G.R. No. L-41299)
Facts:
This is Social Security System v. Court of Appeals, G.R. No. L-41299, February 21, 1983, the Supreme Court En Banc, Melencio-Herrera, J., writing for the Court. Petitioners are the Social Security System (SSS); respondents are the Court of Appeals and David B. Cruz, Socorro Concio Cruz, and Lorna C. Cruz.In March 1963 the Cruz spouses obtained a real-estate loan from the SSS secured by their residential lot (TCT No. 2000). They executed a mortgage (initially P39,500, later increased to P48,000) and received a passbook to record monthly amortizations. The Cruzes generally made payments but at times paid late. In June–July 1968 SSS filed an application with the Provincial Sheriff of Rizal for extrajudicial foreclosure, alleging an outstanding indebtedness of P10,702.58 and invoked an automatic-acceleration clause; notices of sheriff's sale were published in the Sunday Chronicle (July 14, 21 and 28, 1968). The Cruzes immediately protested, asserting they were current, and wrote counsel demanding withdrawal; telegraphic exchanges followed but no corrective action by SSS.
On July 24, 1968 the Cruzes and their daughter sued in the Court of First Instance (CFI) of Rizal, seeking damages and attorney's fees against SSS and the Provincial Sheriff for wrongful foreclosure proceedings. SSS answered, invoked the automatic-acceleration clause and counterclaimed for damages for alleged malicious statements by the plaintiffs. On September 23, 1968 the CFI enjoined SSS from holding the sheriff's sale upon the plaintiffs' posting of P2,000 bond. On March 5, 1971 the CFI rendered judgment awarding plaintiffs P2,500 actual damages, P35,000 moral damages, P10,000 exemplary damages, and P5,000 attorney’s fees, and costs.
On appeal the Court of Appeals (First Division) initially affirmed but on reconsideration deleted P5,000 of the moral-damages award (the damages attributed to the first publication), maintaining the rest including P10,000 exemplary damages. SSS filed a Petition for Review on Certiorari to the Supreme Court, assigning errors: (I) that the automatic-acceleration clause ipso jure made installments due; (II) that no prior notice was required before foreclosure; (III) that clerical mistakes by subordinate employees should not be attributable to SSS; (IV) that extenuating circumstances mitigated liability; and (V) that SSS, not being profit-oriented, could not be held liable for damages.
Because the First Division of the Court could not obtain the concurrence of the remaining five justices, the matter was heard En Banc....(Pro-only)
Issues:
- Are the factual findings of the Court of Appeals (that the SSS's foreclosure application was unjustified) subject to disturbance by the Supreme Court?
- Was the SSS amenable to suit and properly held liable for damages arising from the foreclosure proceedings?
- Were the damages awarded by the courts below (actual, moral/temperate, exemplary, attorney's fee...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)