Case Summary (G.R. No. 211499)
Case Background and Procedural History
Catherine Hiponia-Mayuga was married to Fernando J. Mayuga, and they owned property in Barangay Tambo, Parañaque City, secured by a real estate mortgage (REM) with Metrobank. Fernando, involved in motorcycle trading, took out a loan of Php 2,200,000 with Catherine's consent, which was later increased to Php 3,200,000. Catherine claimed that the loan proceeds primarily benefited Belle Avelino, who facilitated the loan, although she conceded that Belle had given Fernando some amounts directly. Following Fernando's death, Catherine sought the release of their property, claiming it was covered by mortgage redemption insurance (MRI), but Metrobank asserted that Belle was the principal borrower. Catherine subsequently filed a complaint to cancel the REM and gained damages, leading to a trial outcome that awarded damages against Belle while dismissing the claims against Metrobank and Thelma.
RTC Ruling
The Regional Trial Court (RTC) ruled in favor of Metrobank and Thelma, affirming the validity of the mortgage contract and the foreclosure due to non-payment of the loan. However, it simultaneously ordered Belle to compensate Catherine for the damages incurred from the foreclosure, reasoning that Belle was the one who obtained the loan and therefore responsible for its payment.
CA Ruling
On appeal, the Court of Appeals (CA) modified the RTC's decision by deleting the award of damages against Belle. The CA treated Fernando as an accommodation mortgagor under Article 2085 of the Civil Code, which permits mortgagors to secure loans for third parties. The CA ruled that since both Fernando and Catherine had consented to the mortgage, the original award for damages lacked a solid legal foundation.
Issues Presented by the Petitioner
Catherine raised several issues in her appeal to the Supreme Court, asserting that the CA erred in modifying the RTC decision by removing the damage award against Belle. She contended that Belle did not appeal the RTC ruling and thus the damages assessed should stand. Additionally, she questioned the CA's conclusions regarding the lack of collusion between Belle and Thelma as well as Metrobank's negligence in securing a mortgage redemption insurance.
Court's Ruling
The Supreme Court partially granted Catherine's petition, reinstating the damages awarded against Belle. It determined that Belle's failure to appeal rendered the RTC ruling regarding her liability final, and thus, the CA mistakenly deleted the damage award. The Court emphasized that any modification concerning damages should not have been made as it did not meet the criteria for a closely related issue as per Section 8, Rule 51 of the Rules of Court.
Errors
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Case Background
- The case revolves around a petition for review on certiorari by Catherine Hiponia-Mayuga against Metropolitan Bank and Trust Co. (Metrobank) and its branch head, Thelma T. Mauricio, alongside Belle U. Avelino.
- This petition seeks to reverse and set aside the decisions of the Court of Appeals which modified the ruling of the Regional Trial Court (RTC) in a case concerning the cancellation of a real estate mortgage (REM).
Parties Involved
- Petitioner: Catherine Hiponia-Mayuga, widow of Fernando J. Mayuga.
- Respondents: Metropolitan Bank and Trust Co. (Metrobank), Thelma T. Mauricio (Metrobank branch head), and Belle U. Avelino (the principal borrower).
Facts of the Case
- Catherine and Fernando owned a parcel of land covered by Transfer Certificate of Title No. 116396, located in Barangay Tambo, Parañaque City.
- Fernando, engaged in a motorcycle business, secured a loan of P2,200,000 from Metrobank on March 28, 1996, with Catherine's consent, using their property as security through a REM.
- The loan amount was later increased to P3,200,000 on July 3, 1996, with an amendment to the mortgage executed.
- Catherine alleged the loan proceeds were diverted to Belle, although she admitted Belle did give Fernando P100,000 on two occasions.
- After Fernando's death on November 17, 1996, Catherine inquired about the mortgage redemption insurance (MRI) but learned that Belle was the principal borrower.
- Catherine filed a compla