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    DIONISIO MOJICA vs. CA, and RURAL BANK OF YAWIT, INC.

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    Jan Mar Gigi Gallego
    The plaintiffs' spouses obtained a loan of PHP 20,000 from the defendant rural bank, secured by a real estate mortgage on their property. This first loan was fully paid off. A second loan of PHP 18,000 was then obtained, but no new mortgage was executed. When the second loan matured and was not paid, the bank foreclosed on the original mortgage to recover the amount. The plaintiffs argued that the original mortgage did not secure future loans after the first was paid. However, the court ruled that based on the language of the original mortgage contract, it was intended to secure not just the first loan but also future loans obtained by the borrowers. Thus the foreclosure on the basis of the original mortgage

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    DIONISIO MOJICA vs. CA, and RURAL BANK OF YAWIT, INC.

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    Jan Mar Gigi Gallego
    82 views2 pages
    The plaintiffs' spouses obtained a loan of PHP 20,000 from the defendant rural bank, secured by a real estate mortgage on their property. This first loan was fully paid off. A second loan of PHP 18,000 was then obtained, but no new mortgage was executed. When the second loan matured and was not paid, the bank foreclosed on the original mortgage to recover the amount. The plaintiffs argued that the original mortgage did not secure future loans after the first was paid. However, the court ruled that based on the language of the original mortgage contract, it was intended to secure not just the first loan but also future loans obtained by the borrowers. Thus the foreclosure on the basis of the original mortgage

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    DIONISIO MOJICA vs. CA, and RURAL BANK OF YAWIT, INC.,

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    DIONISIO MOJICA vs. CA, and RURAL BANK OF YAWIT, INC.,

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    The plaintiffs' spouses obtained a loan of PHP 20,000 from the defendant rural bank, secured by a real estate mortgage on their property. This first loan was fully paid off. A second loan of PHP 18,000 was then obtained, but no new mortgage was executed. When the second loan matured and was not paid, the bank foreclosed on the original mortgage to recover the amount. The plaintiffs argued that the original mortgage did not secure future loans after the first was paid. However, the court ruled that based on the language of the original mortgage contract, it was intended to secure not just the first loan but also future loans obtained by the borrowers. Thus the foreclosure on the basis of the original mortgage

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    82 views2 pages

    DIONISIO MOJICA vs. CA, and RURAL BANK OF YAWIT, INC.

    Uploaded by

    Jan Mar Gigi Gallego
    The plaintiffs' spouses obtained a loan of PHP 20,000 from the defendant rural bank, secured by a real estate mortgage on their property. This first loan was fully paid off. A second loan of PHP 18,000 was then obtained, but no new mortgage was executed. When the second loan matured and was not paid, the bank foreclosed on the original mortgage to recover the amount. The plaintiffs argued that the original mortgage did not secure future loans after the first was paid. However, the court ruled that based on the language of the original mortgage contract, it was intended to secure not just the first loan but also future loans obtained by the borrowers. Thus the foreclosure on the basis of the original mortgage

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    DIONISIO MOJICA vs. CA, and RURAL BANK OF YAWIT, INC.

    ,
    FACTS:

    Plaintiff Leonardo Mojica (deceased) contracted a loan of P20,000.00 from defendant Rural Bank of
    Kawit, Inc. (now respondent). This loan was secured by a real estate mortgage executed on the same
    date by the plaintiffs spouses Leonardo Mojica and Marina Rufido

    The real estate mortgage contract states among others:

    ... agreement for the payment of the loan of P20,000.00 and such other loans or other advances already
    obtained or still to be obtained by the mortgagors ...

    2. ... but if the mortgagors shall well and truly fulfill the obligation above stated according to the terms
    thereof then this mortgage shall become null and void.

    The loan of P20,000.00 by the plaintiffs spouses was fully and completely paid. A new loan in the
    amount of P18,000.00 was obtained by plaintiffs spouses from the defendant Rural Bank which loan
    matured.

    No formal deed of real mortgage was constituted over any property of the borrowers, although the top
    of the promissory note dated March 5, 1974, contained the following notation. “This promissory note is
    secured by a Real Estate Mortgage executed before the Notary Public of the Municipality of Kawit, Mrs.
    Felisa Senti”

    The Real Estate Mortgage mentioned above is the registered mortgage which guaranteed the already
    paid loan of P20,000.00 granted on February spouses Leonardo Mojica and Marina Rufido failed to pay
    their obligation after its maturity. Which prompt the bank to extrajudicially foreclosed the real estate
    mortgage on the justification that it was adopted as a mortgage for the new loan of P18,000.00. The
    proceeds from the sale of the piece of land of plaintiffs spouses were applied to their outstanding
    obligation with defendant bank

    Meanwhile, the son of petitioners-spouses, attempted to pay the debt of P18,000.00 which the
    defendant rural bank received and accepted with the issuance of the defendant's official receipt.

    Upon inquiry by Dionisio Mojica on the unpaid balance of the loan, the respondent rural bank issued a
    'Computation Slip" indicating therein, that as of August 14, 1981, the outstanding balance plus interest
    computed from March 5, 1975 was P21,272.50 (Ibid.).

    However, the bank executed an affidavit of consolidation of ownership, which it subsequently filed with
    the Register of Deeds of Cavite. As a result, a TCT was issued in its favor by the Register of Deeds. The
    bank then refused to allow Dionisio Mojica to pay the unpaid balance of the loan which resulted in the
    filing of a complaint.
    ISSUE: Whether or not the foreclosure sale had for its basis, a valid and subsisting mortgage contract.
    Otherwise stated, there is a need to ascertain the intention of the parties as to the coverage of the
    mortgage in question with respect to future advancements.

    RULING:

    It has long been settled by a long line of decisions that mortgages given to secure future advancements
    are valid and legal contracts; that the amounts named as consideration in said contract do not limit the
    amount for which the mortgage may stand as security if from the four corners of the instrument the
    intent to secure future and other indebtedness can be gathered.

    A mortgage given to secure advancements is a continuing security and is not discharged by repayment
    of the amount named in the mortgage, until the full amount of the advancements are paid (Lim Julian v.
    Lutero, 49 Phil. 704-705 [1926]). In fact, it has also been held that where the annotation on the back of a
    certificate of title about a first mortgage states "that the mortgage secured the payment of a certain
    amount of money plus interest plus other obligations arising there under' there was no necessity for any
    notation of the later loans on the mortgagors' title. It was incumbent upon any subsequent mortgagee
    or encumbrances of the property in question to the books and records of the bank, as first mortgagee,
    regarding the credit standing of the debtors.

    The evidence on record shows that the amounts of P4,700.00 and P9,958.00 were accepted by the bank
    on July 19 and August 11, 1980 as deposits for conventional redemption after the property covered by
    real estate mortgage became the acquired asset of the bank and priced at P85,000.00 and after
    petitioner had lost all rights of legal redemption because more than one year had already elapsed from
    June 29, 1979, the date the certificate of sale was registered in the office of the Registry of Deeds of
    Cavite. Indeed, the conventional redemption was subject to be exercised up to March 3, 1982 and was
    extended up to April 19, 1982 for a fixed amount of P85,000.00. The respondent bank even favored the
    petitioner by giving them the first preference to repurchase the property but they failed to avail of this
    opportunity, although the bank "is certainly disposed to release at anytime" the deposits.

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