Case Summary (G.R. No. 210582)
Factual Background
On January 19, 1998, Rudy Cataquiz entered into a sales agreement and a construction contract with Francisco M. Soriano Co. Inc. (FMSCI) for a residential lot and house in Davao City amounting to P70,000.00 and P190,000.00, respectively. To finance this, Rudy sought a housing loan from HDMF, designating FMSCI as the beneficiary of the loan proceeds. HDMF approved the loan, issuing a Notice of Approval on March 12, 1998. Rudy later executed a Loan and Mortgage Agreement on March 14, 1998, which included the amount of P188,500.00, with the mortgage annotated in Rudy's title. He completed the house construction on March 26, 1998, but tragically passed away on April 19, 1998.
Procedural History
After Rudy’s death, his parents, the Spouses Cataquiz, attempted to have the title of the property transferred to them, which HDMF denied, arguing that Rudy failed to complete the loan acceptance due to his untimely demise. The Spouses Cataquiz filed a complaint for specific performance and damages against HDMF and FMSCI. In its defense, HDMF and FMSCI contended that the housing loan was invalid as Rudy did not submit the required documents before his death, leading to the loan's exclusion from relevant accounts.
Ruling of the Regional Trial Court (RTC)
On June 27, 2006, the RTC ruled in favor of the Spouses Cataquiz, instructing HDMF to release the death benefits to them, turn over the title of the property, and consider Rudy's loan fully paid due to his death. The RTC found HDMF at fault for not including Rudy’s loan in the takeout loans, given that he had timely submitted all necessary documentation. The RTC also held FMSCI liable for acting in bad faith, evident from its negligence during the loan application process.
Ruling of the Court of Appeals (CA)
Upon appeal, the CA affirmed the RTC's decision but modified it to require the Spouses Cataquiz to cover the premium for the mortgage redemption insurance (MRI) related to the subject loan. The CA highlighted HDMF's failure to provide any justifiable grounds for its inaction concerning the loan despite Rudy’s compliance with requirements. The court reiterated that denaturalizing the loan due to Rudy's death contravened principles of equity, especially since all obligations on Rudy’s part were fulfilled before his passing.
Arguments by HDMF
HDMF elevated the matter, arguing that the burden of premium payment for MRI should not fall on the Spouses Cataquiz and that the coverage was only effective upon the release of funds. HDMF maintained that, given Rudy’s death before the disbursement, he could not be considered a mortgagor, and therefore, his loan approval was void.
Supreme Court's Ruling
The Supreme Court dismissed HDMF's petition, concluding there was no reversible error in the CA’s ruling. It underscored the binding nature of the Loan and Mortgage Agreement, executed during Rudy&#
...continue readingCase Syllabus (G.R. No. 210582)
Case Background
- The case involves a Petition for Review on Certiorari filed by the Home Development Mutual Fund (HDMF) to contest the decisions of the Court of Appeals (CA) and the Regional Trial Court (RTC) regarding the housing loan and property title of Rudy N. Cataquiz.
- Rudy entered into a sales agreement and construction contract with Francisco M. Soriano Co. Inc. (FMSCI) for a property in Davao City.
- He applied for a housing loan from HDMF, which was approved, but he died shortly before the loan was finalized.
Facts of the Case
- On January 19, 1998, Rudy contracted with FMSCI for a lot and house construction amounting to a total of P260,000.00.
- He designated FMSCI as the beneficiary of the loan proceeds from HDMF.
- A loan approval for P180,000.00 was issued on March 12, 1998, followed by a Loan and Mortgage Agreement on March 14, 1998.
- Rudy accepted the completed house on March 26, 1998, but died on April 19, 1998.
- After his death, his parents (respondents) sought the title and possession of the property but were denied by HDMF due