Phil Savings Bank vs. Manalac
Phil Savings Bank vs. Manalac
DECISION
YNARES-SANTIAGO, J.:
In view of Maalacs inability to pay the loan installments as they fell due,
their loan obligation was restructured on October 13, 1977. Accordingly,
Maalac signed another promissory note denominated as LC No. 77-232 for
P1,550,000.00 payable to the order of PSBank with interest rate of 19%
annum.[4] To secure the payment of the restructured loan, Maalac executed a
Real Estate Mortgage dated October 13, 1977 in favor of PSBank over the
same aforementioned 8 real properties.
On March 5, 1979, Maalac and spouses Igmidio and Dolores Galicia, with
the prior consent of PSBank,[5] entered into a Deed of Sale with Assumption of
Mortgage involving 3 of the mortgaged properties covered by TCT Nos. N-
6162 (now N-36192), N-8552 (now TCT No. N-36193), and 469843 (now TCT
No. N-36194). The Deed of Sale with Assumption of Mortgage contained the
following stipulations:
1. The VENDEES shall assume as they hereby assume as part of the purchase price,
the amount of P550,000.00, representing the portion of the mortgaged obligation of
the VENDORS in favor of the Philippine Savings Bank, which is secured by that Real
Estate Mortgage contract mentioned in the Second Whereas Clause hereof covering
among others the above-described parcels of land under the same terms and
conditions as originally constituted.
2. The VENDORS hereby warrant valid title to, and peaceful possession of the
property herein sold subject to the encumbrance hereinbefore mentioned.
3. This instrument shall be subject to the Consent of the Philippine Savings Bank.
On August 25, 1981, the spouses Galicia obtained a second loan from
PSBank in the amount of P3,250,000.00 for which they executed Promissory
Note LC No. 81-108. They also executed a Real Estate Mortgage in favor of
the bank covering TCT Nos. N-36192, N-36193, N-36194, 75584 and 87690.
[10]
Since Maalac defaulted again in the payment of their loan installments and
despite repeated demands still failed to pay their past due obligation which
now amounted to P1,804,241.76, PSBank filed with the Office of the
Provincial Sheriff of Rizal a petition for extrajudicial foreclosure of their 5
remaining mortgaged properties, specifically those covered by TCT Nos.
417012, N-1347, N-1348, N-3267, and 343593.
Re: Payment to effect release of TCT Nos. N-36192, 36193, and 36194 under loan
account of Spouses Igmedio and Dolores Galicia; and TCT No. 417012 under Loan
Account of Spouses Rodolfo and Rosita Maalac.
It is understood however, that receipt of said check is not a commitment on the part of
the Bank to release the Four (4) TCTs requested to be released on your letter dated 19
December 1983.
On May 23, 1985, the bank sold the property covered by TCT No. 79996
(previously TCT No. 343593) to Ester Villanueva who thereafter sold it to
Maalac. On October 30, 1985, the land covered by TCT No. 79995 was sold
by the bank to Teresita Jalbuena.
The bank also filed a petition, docketed as LRC Case No. R-3951, before
the Regional Trial Court of Pasig, Branch 159, for the issuance of a writ of
possession against the properties covered by TCT Nos. N-79997, N-79998,
and N-79999 (formerly TCT Nos. N-3267, N-1347, and N-1348) and the
ejectment of the respondents.
In an order dated January 2, 1989, the trial court consolidated LRC Case
No. R-3951 with Civil Case No. 53967. On April 27, 1993, a judgment was
rendered the dispositive portion of which reads:
No costs.
SO ORDERED.[15]
The Court of Appeals affirmed with modification the decision of the trial
court, the decretal portion of which reads:
WHEREFORE, the decision appealed from is AFFIRMED with the modification that
the defendant-appellant Philippine Savings Bank is directed to indemnify the
plaintiffs-appellants in the amount of Two Hundred Thousand Pesos (200,000.00)
each as moral damages. Costs against the defendant-appellant bank.
SO ORDERED.[16]
a.] HELD THAT THE GENERAL RULE WITH RESPECT TO THE ISSUANCE OF
WRITS OF POSSESSION SHOULD NOT BE APPLIED IN THIS CASE, AND
WHAT SHOULD INSTEAD BE APPLIED IS THE EXCEPTION ENUNCIATED
IN VACA VS. COURT OF APPEALS, 234 SCRA 146;
b.] UPHELD THE CONSOLIDATION OF CIVIL CASE NO. 53967 WITH LRC
CASE NO. 3951 WHEN PROCEDURALLY THOSE TWO PROCEEDINGS
COULD SCARCELY BE CONSOLIDATED;
Petitioner claims that the Court of Appeals erred in sustaining the trial
courts order consolidating Civil Case No. 53967 with LRC Case No. R-3951,
arguing that consolidation is proper only when it involves actions, which
means an ordinary suit in a court of justice by which one party prosecutes
another for the enforcement or protection of a right, or a prevention of a
wrong. Citing A.G. Development Corp. v. Court of Appeals,[18] petitioner posits
that LRC Case No. R-3951, being summary in nature and not being an action
within the contemplation of the Rules of Court, should not have been
consolidated with Civil Case No. 53967.
In the same case, the Court likewise rejected the contention that under the
Rules of Court only actions can be consolidated. The Court held that the
technical difference between an action and a proceeding, which involve the
same parties and subject matter, becomes insignificant and consolidation
becomes a logical conclusion in order to avoid confusion and unnecessary
expenses with the multiplicity of suits.
In the instant case, the consolidation of Civil Case No. 53967 with LRC
Case No. R-3951 is more in consonance with the rationale behind the
consolidation of cases which is to promote a more expeditious and less
expensive resolution of the controversy than if they were heard independently
by separate branches of the trial court. Hence, the technical difference
between Civil Case No. 53967 and LRC Case No. R-3951 must be
disregarded in order to promote the ends of justice.
In Civil Case No. C-11232, the petitioner-spouses claim ownership of the foreclosed
property against the respondent bank and Nicanor Reyes to whom the former sold the
property by negotiated sale; the complaint alleged that the DBP knew the assumption
of mortgage between the mortgagors and the petitioner-spouses and the latter have
paid to the respondent bank certain amounts to update the loan balances of the
mortgagors and transfer and restructuring fees which payments are duly receipted; the
petitioner-spouses were already in possession of the property since September 28,
1979 and long before the respondent bank sold the same property to respondent
Nicanor Reyes on October 28, 1984; and the respondent bank never took physical
possession of the property. In a similar manner, the following facts were duly
established in the case at bench: 1. The petition for issuance of the writ of possession
was only filed sometime in May 1988 although the right of redemption lapsed as early
as May 7, 1983; 2. Appellant bank neither obtained physical possession of the
properties nor did they file any action for ejectment against the plaintiffs-appellants; 3.
On December 16, 1983, the plaintiffs-appellants issued a check in favor of the
appellant bank to effect the release of TCT Nos. 36192, 36193, 36194 and 417012
which was applied by appellant bank to the plaintiffs-appellants account and that of
the Galicias and; 4. Appellant bank executed a Deed of Absolute Sale over TCT No.
79996 (formerly TCT No. 417012) on May 23, 1985 in favor of a certain Elsa Calusa
Villanueva who thereafter sold it back to the plaintiffs-appellants. Hence, the same
ruling in the Barican case should be applied, that is, the obligation of a court to issue a
writ of possession in favor of the purchaser in a foreclosure of mortgage case ceases
to be ministerial.
We agree with the petitioner. While indeed the two cases demonstrate
palpable similarities, the Court of Appeals overlooked essential differences
that would render the Barican doctrine inapplicable to the instant case. In
Barican, the issuance of the writ of possession was deferred because a
pending action for the declaration of ownership over the foreclosed property
was made by an adverse claimant who was in possession of the subject
property. Clearly, the rights of the third parties, who are plaintiffs in the
pending civil case, would be adversely affected with the implementation of the
writ.
In the instant case, the petitioner bank became the absolute owner of the
properties subject of the writ of possession, after they were foreclosed, and
titles thereto were consolidated in the name of the bank. It sufficiently
established its ownership over the parcels of land subject of the writ of
possession, by presenting in evidence the Certificate of Sale, [22] Affidavit of
Consolidation of Ownership,[23] and copies of new TCTs of the foreclosed
properties in the name of the petitioner.[24] Unlike in Barican, the ownership of
the foreclosed properties are not open to question the ownership thereof
being established by competent evidence.
On the issue of novation, the Court of Appeals held that novation occurred
when PSBank applied P1,000,000.00 of the P1,200,000.00 PCIB Check No.
002133 tendered by Maalac to the loan account of the Galicias and the
remaining P200,000.00 thereof to Maalacs account. It held that when the bank
applied the amount of the check in accordance with the instructions contained
therein, there was novation of the previous mortgage of the properties. It
further observed that the bank was fully aware that the issuance of the check
was conditional hence, when it made the application thereof, it agreed to be
bound by the conditions imposed by Maalac.[25]
The elements of novation are patently lacking in the instant case. Maalac
tendered a check for P1,200,000.00 to PSBank for the release of 4 parcels of
land covered by TCT Nos. N-36192, 36193, and 36194, under the loan
account of the Galicias and 417012 (now TCT No. 79996) under the loan
account of Maalac. However, while the bank applied the tendered amount to
the accounts as specified by Maalac, it nevertheless refused to release the
subject properties. Instead, it issued a receipt with a notation that the
acceptance of the check is not a commitment on the part of the bank to
release the 4 TCTs as requested by Maalac.
Art. 1293. Novation which consists in substituting a new debtor in the place of the
original one, may be made without the knowledge or against the will of the latter, but
not without the consent of the creditor. Payment by the new debtor gives him the
rights mentioned in articles 1236 and 1237.[28]
In order to change the person of the debtor, the old one must be expressly
released from the obligation, and the third person or new debtor must assume
the formers place in the relation. Novation is never presumed. Consequently,
that which arises from a purported change in the person of the debtor must be
clear and express. It is thus incumbent on Maalac to show clearly and
unequivocally that novation has indeed taken place.[29] In Magdalena Estates
Inc. v. Rodriguez,[30] we held that the mere fact that the creditor receives a
guaranty or accepts payments from a third person who has agreed to assume
the obligation, when there is no agreement that the first debtor shall be
released from responsibility, does not constitute a novation, and the creditor
can still enforce the obligation against the original debtor.
Maalac has not shown by competent evidence that they were expressly
taking the place of Galicia as debtor, or that the latter were being released
from their solidary obligation. Nor was it shown that the obligation of the
Galicias was being extinguished and replaced by a new one. The existence of
novation must be shown in clear and unmistakable terms.
Moral damages are meant to compensate the claimant for any physical
suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation and similar injuries unjustly
caused. Although incapable of pecuniary estimation, the amount must
somehow be proportional to and in approximation of the suffering inflicted.
Moral damages are not punitive in nature and were never intended to enrich
the claimant at the expense of the defendant. There is no hard-and-fast rule in
determining what would be a fair and reasonable amount of moral damages,
since each case must be governed by its own peculiar facts. Trial courts are
given discretion in determining the amount, with the limitation that it should not
be palpably and scandalously excessive. Indeed, it must be commensurate to
the loss or injury suffered.[32]
SO ORDERED.