G.R. No. 160758. January 15, 2014.

*
DEVELOPMENT BANK OF THE
PHILIPPINES, petitioner, vs. GUARIÑA AGRICULTURAL AND
REALTY DEVELOPMENT CORPORATION, respondent.
Civil Law; Contracts; Loans; Under the law, a loan requires the delivery of
money or any other consumable object by one party to another who acquires
ownership thereof, on the condition that the same amount or quality shall be paid.
—The agreement between DBP and Guariña Corporation was a loan. Under the
law, a loan requires the delivery of money or any other consumable object by one
party to another who acquires ownership thereof, on the condition that the same
amount or quality shall be paid. Loan is a reciprocal obligation, as it arises from
the same cause where one party is the creditor, and the other the debtor. The
obligation of one party in a reciprocal obligation is dependent upon the obligation
of the other, and the performance should ideally be simultaneous. This means that
in a loan, the creditor should release the full loan amount and the debtor repays it
when it becomes due and demandable.
Same; Same; Mortgages; By its nature, a mortgage remains an accessory
contract dependent on the principal obligation, such that enforcement of the
mortgage contract will depend on whether or not there has been a violation of the
principal obligation.—DBP’s actuations were legally unfounded. It is true that
loans are often secured by a mortgage constituted on real or personal property to
protect the creditor’s interest in case of the default of the debtor. By its nature,
however, a mortgage remains an accessory contract dependent on the principal
obligation, such that enforcement of the mortgage contract will depend on whether
or not there has been a violation of the principal obligation. While a creditor and a
debtor could regulate the order in which they should comply with their reciprocal
obligations, it is presupposed that in a loan the lender should perform its obligation
— the release of the full loan amount — before it could demand that the borrower
repay the loaned amount. In other words, Guariña Corporation would not incur in
delay before DBP fully performed its reciprocal obligation.
Mercantile Law; Banks and Banking; Being a banking institution, DBP owed
it to Guariña Corporation to exercise the highest degree of diligence, as well as to
observe the high standards of integrity and performance in all its transactions
because its business was imbued with public interest.—Being a banking institution,
DBP owed it to Guariña Corporation to exercise the highest degree of diligence, as
well as to observe the high standards of integrity and performance in all its
transactions because its business was imbued with public interest. The high
standards were also necessary to ensure public confidence in the banking system,
for, according to Philippine National Bank v. Pike, 470 SCRA 328 (2005): “The
stability of banks largely depends on the confidence of the people in the honesty
and efficiency of banks.” Thus, DBP had to act with great care in applying the
stipulations of its agreement with Guariña Corporation, lest it erodes such public
confidence. Yet, DBP failed in its duty to exercise the highest degree of diligence
by prematurely foreclosing the mortgages and unwarrantedly causing the
foreclosure sale of the mortgaged properties despite Guariña Corporation not being
yet in default. DBP wrongly relied on Stipulation No. 26 as its basis to accelerate
the obligation of Guariña Corporation, for the stipulation was relevant to an
Omnibus Agricultural Loan, to Guariña Corporation’s loan which was intended for
a project other than agricultural in nature.
Remedial Law; Civil Procedure; Law of the Case; Words and Phrases; Law
of the case has been defined as the opinion delivered on a former appeal, and
means, more specifically, that whatever is once irrevocably established as the
controlling legal rule of decision between the same parties in the same case
continues to be the law of the case, whether correct on general principles or not,
so long as the facts on which such decision was predicated continue to be the facts
of the case before the court.—Law of the case has been defined as the opinion
delivered on a former appeal, and means, more specifically, that whatever is once
irrevocably established as the controlling legal rule of decision between the same
parties in the same case continues to be the law of the case, whether correct on
general principles or not, so long as the facts on which such decision was
predicated continue to be the facts of the case before the court. The concept of law
of the case is well explained in Mangold v. Bacon, an American case, thusly: The
general rule, nakedly and boldly put, is that legal conclusions announced on a first
appeal, whether on the general law or the law as applied to the concrete facts, not
only prescribe the duty and limit the power of the trial court to strict obedience and
conformity thereto, but they become and remain the law of the case in all other
steps below or above on subsequent appeal. The rule is grounded on convenience,
experience, and reason. Without the rule there would be no end to criticism,
reagitation, reexamination, and reformulation. In short, there would be endless
litigation. It would be intolerable if parties litigants were allowed to speculate on
changes in the personnel of a court, or on the chance of our rewriting propositions
once gravely ruled on solemn argument and handed down as the law of a given
case. An itch to reopen questions foreclosed on a first appeal would result in the
foolishness of the inquisitive youth who pulled up his corn to see how it grew.
Courts are allowed, if they so choose, to act like ordinary sensible persons. The
administration of justice is a practical affair. The rule is a practical and a good one
of frequent and beneficial use.
Same; Same; Same; Same; The doctrine of law of the case simply means, that
when an appellate court has once declared the law in a case, its declaration
continues to be the law of that case even on a subsequent appeal, notwithstanding
that the rule thus laid down may have been reversed in other cases.—The doctrine
of law of the case simply means, therefore, that when an appellate court has once
declared the law in a case, its declaration continues to be the law of that case even
on a subsequent appeal, notwithstanding that the rule thus laid down may have
been reversed in other cases. For practical considerations, indeed, once the
appellate court has issued a pronouncement on a point that was presented to it with
full opportunity to be heard having been accorded to the parties, the
pronouncement should be regarded as the law of the case and should not be
reopened on remand of the case to determine other issues of the case, like
damages. But the law of the case, as the name implies, concerns only legal
questions or issues thereby adjudicated in the former appeal.
PETITION for review on certiorari of a decision of the Court of
Appeals.
295
   The facts are stated in the opinion of the Court.
  Office of the Legal Counsel for petitioner.
  Marie Karen C. Jiz for respondent.
BERSAMIN, J.:
The foreclosure of a mortgage prior to the mortgagor’s default on the
principal obligation is premature, and should be undone for being void
and ineffectual. The mortgagee who has been meanwhile given
possession of the mortgaged property by virtue of a writ of possession
issued to it as the purchaser at the foreclosure sale may be required to
restore the possession of the property to the mortgagor and to pay
reasonable rent for the use of the property during the intervening period.
The Case
In this appeal, Development Bank of the Philippines (DBP) seeks the
reversal of the adverse decision promulgated on March 26, 2003 in
C.A.-G.R. CV No. 59491,[1] whereby the Court of Appeals (CA) upheld
the judgment rendered on January 6, 1998[2] by the Regional Trial
Court, Branch 25, in Iloilo City (RTC) annulling the extra-judicial
foreclosure of the real estate and chattel mortgages at the instance of
DBP because the debtor-mortgagor, Guariña Agricultural and Realty
Development Corporation (Guariña Corporation), had not yet defaulted
on its obligations in favor of DBP.
Antecedents
 In July 1976, Guariña Corporation applied for a loan from DBP to
finance the development of its resort complex situated in Trapiche,
Oton, Iloilo. The loan, in the amount of P3,387,000.00, was approved on
August 5, 1976.[3] Guariña Corporation executed a promissory note that
would be due on November 3, 1988.[4] On October 5, 1976, Guariña
Corporation executed a real estate mortgage over several real properties
in favor of DBP as security for the repayment of the loan. On May 17,
1977, Guariña Corporation executed a chattel mortgage over the
personal properties existing at the resort complex and those yet to be
acquired out of the proceeds of the loan, also to secure the performance
of the obligation.[5] Prior to the release of the loan, DBP required
Guariña Corporation to put up a cash equity of P1,470,951.00 for the
construction of the buildings and other improvements on the resort
complex.
The loan was released in several instalments, and Guariña
Corporation used the proceeds to defray the cost of additional
improvements in the resort complex. In all, the amount released totalled
P3,003,617.49, from which DBP withheld P148,102.98 as interest.[6]
Guariña Corporation demanded the release of the balance of the loan,
but DBP refused. Instead, DBP directly paid some suppliers of Guariña
Corporation over the latter’s objection. DBP found upon inspection of
the resort project, its developments and improvements that Guariña
Corporation had not completed the construction works.[7] In a letter
dated February 27, 1978,[8] and a telegram dated June 9, 1978, [9] DBP
thus demanded that Guariña Corporation expedite the completion of the
project, and warned that it would initiate foreclosure proceedings should
Guariña Corporation not do so.[10]
Unsatisfied with the non-action and objection of Guariña
Corporation, DBP initiated extrajudicial foreclosure proceedings. A
notice of foreclosure sale was sent to Guariña Corporation. The notice
was eventually published, leading the clients and patrons of Guariña
Corporation to think that its business operation had slowed down, and
that its resort had already closed.[11]
On January 6, 1979, Guariña Corporation sued DBP in the RTC to
demand specific performance of the latter’s obligations under the loan
agreement, and to stop the foreclosure of the mortgages (Civil Case No.
12707).[12] However, DBP moved for the dismissal of the complaint,
stating that the mortgaged properties had already been sold to satisfy the
obligation of Guariña Corporation at a public auction held on January
15, 1979 at the Costa Mario Resort Beach Resort in Oton, Iloilo. [13] Due
to this, Guariña Corporation amended the complaint on February 6,
1979[14] to seek the nullification of the foreclosure proceedings and the
cancellation of the certificate of sale. DBP filed its answer on December
17, 1979,[15] and trial followed upon the termination of the pre-trial
without any agreement being reached by the parties.[16]
In the meantime, DBP applied for the issuance of a writ of possession
by the RTC. At first, the RTC denied the application but later granted it
upon DBP’s motion for reconsideration. Aggrieved, Guariña
Corporation assailed the granting of the application before the CA
on certiorari (C.A.-G.R. No. 12670-SP entitled Guariña Agricultural
and Realty Development Corporation v. Development Bank of the
Philippines). After the CA dismissed the petition for certiorari, DBP
sought the implementation of the order for the issuance of the writ of
possession. Over Guariña Corporation’s opposition, the RTC issued the
writ of possession on June 16, 1982.[17]
Judgment of the RTC
On January 6, 1998, the RTC rendered its judgment in Civil Case No.
12707, disposing as follows:
WHEREFORE, premises considered, the court hereby resolves that the
extra-judicial sales of the mortgaged properties of the plaintiff by the Office
of the Provincial Sheriff of Iloilo on January 15, 1979 are null and void, so
with the consequent issuance of certificates of sale to the defendant of said
properties, the registration thereof with the Registry of Deeds and the
issuance of the transfer certificates of title involving the real property in its
name.
It is also resolved that defendant give back to the plaintiff or its
representative the actual possession and enjoyment of all the properties
foreclosed and possessed by it. To pay the plaintiff the reasonable rental for
the use of its beach resort during the period starting from the time it
(defendant) took over its occupation and use up to the time possession is
actually restored to the plaintiff.
 And, on the part of the plaintiff, to pay the defendant the loan it obtained
as soon as it takes possession and management of the beach resort and
resume its business operation.
Furthermore, defendant is ordered to pay plaintiff’s attorney’s fee of
P50,000.00.
SO ORDERED.[18]
Decision of the CA
On appeal (C.A.-G.R. CV No. 59491), DBP challenged the judgment
of the RTC, and insisted that:
I
THE TRIAL COURT ERRED AND COMMITTED REVERSIBLE ERROR IN
DECLARING DBP’S FORECLOSURE OF THE MORTGAGED
PROPERTIES AS INVALID AND UNCALLED FOR.
II
THE TRIAL COURT GRIEVOUSLY ERRED IN HOLDING THE GROUNDS
INVOKED BY DBP TO JUSTIFY FORECLOSURE AS “NOT
SUFFICIENT.” ON THE CONTRARY, THE MORTGAGE WAS
FORECLOSED BY EXPRESS AUTHORITY OF PARAGRAPH NO. 4
OF THE MORTGAGE CONTRACT AND SECTION 2 OF P.D. 385 IN
ADDITION TO THE QUESTIONED PAR. NO. 26 PRINTED AT THE
BACK OF THE FIRST PAGE OF THE MORTGAGE CONRACT.
III
THE TRIAL COURT ERRED IN HOLDING THE SALES OF THE
MORTGAGED PROPERTIES TO DBP AS INVALID UNDER
ARTICLES 2113 AND 2141 OF THE CIVIL CODE.
IV
THE TRIAL COURT GRAVELY ERRED AND COMMITTED [REVERSIBLE]
ERROR IN ORDERING DBP TO RETURN TO PLAINTIFF THE
ACTUAL POSSESSION AND ENJOYMENT OF ALL THE
FORECLOSED PROPERTIES AND TO PAY PLAINTIFF
REASONABLE RENTAL FOR THE USE OF THE FORECLOSED
BEACH RESORT.
300
V
THE TRIAL COURT ERRED IN AWARDING ATTORNEY’S FEES AGAINST
DBP WHICH MERELY EXERCISED ITS RIGHTS UNDER THE
MORTGAGE CONTRACT.[19]
 In its decision promulgated on March 26, 2003, [20] however, the CA
sustained the RTC’s judgment but deleted the award of attorney’s fees,
decreeing:
WHEREFORE, in view of the foregoing, the Decision dated January 6,
1998, rendered by the Regional Trial Court of Iloilo City, Branch 25 in
Civil Case No. 12707 for Specific Performance with Preliminary
Injunction is hereby AFFIRMED with MODIFICATION, in that the award
for attorney’s fees is deleted.
SO ORDERED.[21]
DBP timely filed a motion for reconsideration, but the CA denied its
motion on October 9, 2003.
Hence, this appeal by DBP.
Issues
DBP submits the following issues for consideration, namely:
WHETHER OR NOT THE DECISION OF THE COURT OF APPEALS DATED
MARCH 26, 2003 AND ITS RESOLUTION DATED OCTOBER 9,
DENYING PETITIONER’S MOTION FOR RECONSIDERATION
WERE ISSUED IN ACCORDANCE WITH LAW, PREVAILING
JURISPRUDENTIAL DECISION AND SUPPORTED BY EVIDENCE;
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ADHERED TO THE USUAL COURSE OF JUDICIAL PROCEEDINGS
IN DECIDING C.A.-G.R. CV NO. 59491 AND THEREFORE IN
ACCORDANCE WITH THE “LAW OF THE CASE DOCTRINE.”[22]
Ruling
The appeal lacks merit.
1.
Findings of the CA were supported by the
evidence as well as by law and jurisprudence
DBP submits that the loan had been granted under its supervised
credit financing scheme for the development of a beach resort, and the
releases of the proceeds would be subject to conditions that included the
verification of the progress of works in the project to forestall diversion
of the loan proceeds; and that under Stipulation No. 26 of the mortgage
contract, further loan releases would be terminated and the account
would be considered due and demandable in the event of a deviation
from the purpose of the loan,[23] including the failure to put up the
required equity and the diversion of the loan proceeds to other purposes.
[24] Itassails the declaration by the CA that Guariña Corporation had not
yet been in default in its obligations despite violations of the terms of the
mortgage contract securing the promissory note.
Guariña Corporation counters that it did not violate the terms of the
promissory note and the mortgage contracts because DBP had fully
collected the interest notwithstanding that the principal obligation did
not yet fall due and become demandable.[25]
The submissions of DBP lack merit and substance.
The agreement between DBP and Guariña Corporation was a loan.
Under the law, a loan requires the delivery of money or any other
consumable object by one party to another who acquires ownership
thereof, on the condition that the same amount or quality shall be paid.
[26] Loan is a reciprocal obligation, as it arises from the same cause
where one party is the creditor, and the other the debtor. [27] The
obligation of one party in a reciprocal obligation is dependent upon the
obligation of the other, and the performance should ideally be
simultaneous. This means that in a loan, the creditor should release the
full loan amount and the debtor repays it when it becomes due and
demandable.[28]
In its assailed decision, the CA found and held thusly:
xxxx
x x x It is undisputed that appellee obtained a loan from appellant, and
as security, executed real estate and chattel mortgages. However, it was
never established that appellee was already in default. Appellant, in a
telegram to the appellee reminded the latter to make good on its
construction works, otherwise, it would foreclose the mortgage it executed.
It did not mention that appellee was already in default. The records show
that appellant did not make any demand for payment of the promissory
note. It appears that the basis of the foreclosure was not a default on the
loan but appellee’s failure to complete the project in accordance with
appellant’s standards. In fact, appellant refused to release the remaining
balance of the approved loan after it found that the improvements
introduced by appellee were below appellant’s expectations.
The loan agreement between the parties is a reciprocal obligation.
Appellant in the instant case bound itself to grant appellee the loan amount
of P3,387,000.00 condition on appellee’s payment of the amount when it
falls due. Furthermore, the loan was evidenced by the promissory note
 which was secured by real estate mortgage over several properties and
additional chattel mortgage. Reciprocal obligations are those which arise
from the same cause, and in which each party is a debtor and a creditor of
the other, such that the obligation of one is dependent upon the obligation of
the other (Areola vs. Court of Appeals, 236 SCRA 643 [1994]). They are to
be performed simultaneously such that the performance of one is
conditioned upon the simultaneous fulfilment of the other (Jaime Ong vs.
Court of Appeals, 310 SCRA 1 [1999]). The promise of appellee to pay the
loan upon due date as well as to execute sufficient security for said loan by
way of mortgage gave rise to a reciprocal obligation on the part of appellant
to release the entire approved loan amount. Thus, appellees are entitled to
receive the total loan amount as agreed upon and not an incomplete amount.
The appellant did not release the total amount of the approved loan.
Appellant therefore could not have made a demand for payment of the loan
since it had yet to fulfil its own obligation. Moreover, the fact that appellee
was not yet in default rendered the foreclosure proceedings premature and
improper.
The properties which stood as security for the loan were foreclosed
without any demand having been made on the principal obligation. For an
obligation to become due, there must generally be a demand. Default
generally begins from the moment the creditor demands the performance of
the obligation. Without such demand, judicial or extrajudicial, the effects of
default will not arise (Namarco vs. Federation of United Namarco
Distributors,
304
Inc., 49 SCRA 238 [1973]; Borje vs. CFI of Misamis Occidental, 88 SCRA 576
[1979]).
xxxx
Appellant also admitted in its brief that it indeed failed to release the full
amount of the approved loan. As a consequence, the real estate mortgage of
appellee becomes unenforceable, as it cannot be entirely foreclosed to
satisfy appellee’s total debt to appellant (Central Bank of the Philippines vs.
Court of Appeals, 139 SCRA 46 [1985]).
Since the foreclosure proceedings were premature and unenforceable, it
only follows that appellee is still entitled to possession of the foreclosed
properties. However, appellant took possession of the same by virtue of a
writ of possession issued in its favor during the pendency of the case. Thus,
the trial court correctly ruled when it ordered appellant to return actual
possession of the subject properties to appellee or its representative and to
pay appellee reasonable rents.
 However, the award for attorney’s fees is deleted. As a rule, the award
of attorney’s fees is the exception rather than the rule and counsel’s fees are
not to be awarded every time a party wins a suit. Attorney’s fees cannot be
recovered as part of damages because of the policy that no premium should
be placed on the right to litigate (Pimentel vs. Court of Appeals, et al., 307
SCRA 38 [1999]).[29]
xxxx
We uphold the CA.
To start with, considering that the CA thereby affirmed the factual
findings of the RTC, the Court is bound to uphold such findings, for it is
axiomatic that the trial court’s factual findings as affirmed by the CA are
binding on appeal due to the Court not being a trier of facts.
_______________
[29] Supra note 1, at pp. 41-43.
305
Secondly, by its failure to release the proceeds of the loan in their
entirety, DBP had no right yet to exact on Guariña Corporation the
latter’s compliance with its own obligation under the loan. Indeed, if a
party in a reciprocal contract like a loan does not perform its obligation,
the other party cannot be obliged to perform what is expected of it while
the other’s obligation remains unfulfilled.[30] In other words, the latter
party does not incur delay.[31]
Still, DBP called upon Guariña Corporation to make good on the
construction works pursuant to the acceleration clause written in the
mortgage contract (i.e., Stipulation No. 26),[32] or else it would foreclose
the mortgages.
DBP’s actuations were legally unfounded. It is true that loans are
often secured by a mortgage constituted on real or personal property to
protect the creditor’s interest in case of the default of the debtor. By its
nature, however, a mortgage remains an accessory contract dependent on
the principal obligation,[33] such that enforcement of the mortgage
contract will depend on whether or not there has been a violation of the
principal obligation. While a creditor and a debtor could regulate the
order in which they should comply with their
_______________
[30] Cortes v. Court of Appeals, G.R. No. 126083, July 12, 2006, 494 SCRA 570, 576.
[31] Article 1169, Civil Code; IV Tolentino, op. cit., at p. 109.
 [32] Records, Volume 2, at p. 646-a.
Stipulation No. 26 reads:
26.  That the Mortgagee reserves the right to reduce or stop releases/advances if after
inspection and verification the accomplishment of the financed project does not justify giving the
full amount, or if the conditions of the project do not show improvement commensurate with the
amount already advanced/released. In such an event or in the event of abandonment of the
project, all advances/releases made shall automatically become due and demandable and the
Mortgagee shall take such legal steps as are necessary to protect its interest.
[33] Rigor v. Consolidated Orix Leasing and Financing Corporation, 387 SCRA 437,
444 (2002).
306
reciprocal obligations, it is presupposed that in a loan the lender should
perform its obligation — the release of the full loan amount — before it
could demand that the borrower repay the loaned amount. In other
words, Guariña Corporation would not incur in delay before DBP fully
performed its reciprocal obligation.[34]
Considering that it had yet to release the entire proceeds of the loan,
DBP could not yet make an effective demand for payment upon Guariña
Corporation to perform its obligation under the loan. According
to Development Bank of the Philippines v. Licuanan,[35] it would only
be when a demand to pay had been made and was subsequently refused
that a borrower could be considered in default, and the lender could
obtain the right to collect the debt or to foreclose the mortgage. Hence,
Guariña Corporation would not be in default without the demand.
Assuming that DBP could already exact from the latter its
compliance with the loan agreement, the letter dated February 27, 1978
that DBP sent would still not be regarded as a demand to render Guariña
Corporation in default under the principal contract because DBP was
only thereby requesting the latter “to put up the deficiency in the value
of improvements.”[36]
Under the circumstances, DBP’s foreclosure of the mortgage and the
sale of the mortgaged properties at its instance were premature, and,
therefore, void and ineffectual.[37]
Being a banking institution, DBP owed it to Guariña Corporation to
exercise the highest degree of diligence, as well as
_______________
[34] Selegna Management and Development Corporation v. United Coconut Planters
Bank, G.R. No. 165662, May 3, 2006, 489 SCRA 125, 138.
 [35] G.R. No. 150097, February 26, 2007, 516 SCRA 644.
[36] Supra note 8.
[37] Development Bank of the Philippines v. Licuanan, supra, note 35, at p. 654.
307
to observe the high standards of integrity and performance in all its
transactions because its business was imbued with public interest.
[38] The high standards were also necessary to ensure public confidence
in the banking system, for, according to Philippine National Bank v.
Pike:[39] “The stability of banks largely depends on the confidence of
the people in the honesty and efficiency of banks.” Thus, DBP had to act
with great care in applying the stipulations of its agreement with Guariña
Corporation, lest it erodes such public confidence. Yet, DBP failed in its
duty to exercise the highest degree of diligence by prematurely
foreclosing the mortgages and unwarrantedly causing the foreclosure
sale of the mortgaged properties despite Guariña Corporation not being
yet in default. DBP wrongly relied on Stipulation No. 26 as its basis to
accelerate the obligation of Guariña Corporation, for the stipulation was
relevant to an Omnibus Agricultural Loan, to Guariña Corporation’s
loan which was intended for a project other than agricultural in nature.
Even so, Guariña Corporation did not elevate the actionability of
DBP’s negligence to the CA, and did not also appeal the CA’s deletion
of the award of attorney’s fees allowed by the RTC. With the decision of
the CA consequently becoming final and immutable as to Guariña
Corporation, we will not delve any further on DBP’s actionable
actuations.
_______________
[38] Comsavings Bank (now GSIS Family Savings Bank) v. Capistrano, G.R. No. 170942,
August 28, 2013, 704 SCRA 72; citing Philippine National Bank v. Chea Chee Chong, G.R.
Nos. 170865 and 170892, April 25, 2012, 671 SCRA 49, 62-63; Solidbank Corporation v.
Arrieta, G.R. No. 152720, February 17, 2005, 451 SCRA 711, 720; and Philippine
Commercial International Bank v. Court of Appeals, G.R. Nos. 121413, 121479 and 128604,
January 29, 2001, 350 SCRA 446, 472.
[39] G.R. No. 157845, September 20, 2005, 470 SCRA 328, 347.
308
2.
The doctrine of law of the case
did not apply herein
 DBP insists that the decision of the CA in C.A.-G.R. No. 12670-SP
already constituted the law of the case. Hence, the CA could not decide
the appeal in C.A.-G.R. CV No. 59491 differently.
Guariña Corporation counters that the ruling in C.A.-G.R. No.
12670-SP did not constitute the law of the case because C.A.-G.R. No.
12670-SP concerned the issue of possession by DBP as the winning
bidder in the foreclosure sale, and had no bearing whatsoever to the legal
issues presented in C.A.-G.R. CV No. 59491.
Law of the case has been defined as the opinion delivered on a
former appeal, and means, more specifically, that whatever is once
irrevocably established as the controlling legal rule of decision between
the same parties in the same case continues to be the law of the case,
whether correct on general principles or not, so long as the facts on
which such decision was predicated continue to be the facts of the case
before the court.[40]
The concept of law of the case is well explained in Mangold v.
Bacon,[41] an American case, thusly:
The general rule, nakedly and boldly put, is that legal conclusions
announced on a first appeal, whether on the general law or the law as
applied to the concrete facts, not only prescribe the duty and limit the power
of the trial court to strict obedience and conformity thereto, but they
become and remain the law of the case in all
_______________
[40] Kilosbayan, Incorporated v. Morato, G.R. No. 118910, July 17, 1995, 246 SCRA 540, 559,
citing People v. Pinuila, 103 Phil. 992, 999 (1958).
[41] 237 Mo. 496, cited and quoted in Zarate v. Director of Lands, 39 Phil. 747, 750 (1919).
309
other steps below or above on subsequent appeal. The rule is grounded on
convenience, experience, and reason. Without the rule there would be no
end to criticism, reagitation, reexamination, and reformulation. In short,
there would be endless litigation. It would be intolerable if parties litigants
were allowed to speculate on changes in the personnel of a court, or on the
chance of our rewriting propositions once gravely ruled on solemn
argument and handed down as the law of a given case. An itch to reopen
questions foreclosed on a first appeal would result in the foolishness of the
inquisitive youth who pulled up his corn to see how it grew. Courts are
allowed, if they so choose, to act like ordinary sensible persons. The
 administration of justice is a practical affair. The rule is a practical and a
good one of frequent and beneficial use.
The doctrine of law of the case simply means, therefore, that when an
appellate court has once declared the law in a case, its declaration
continues to be the law of that case even on a subsequent appeal,
notwithstanding that the rule thus laid down may have been reversed in
other cases.[42] For practical considerations, indeed, once the appellate
court has issued a pronouncement on a point that was presented to it
with full opportunity to be heard having been accorded to the parties, the
pronouncement should be regarded as the law of the case and should not
be reopened on remand of the case to determine other issues of the case,
like damages.[43] But the law of the case, as the name implies, concerns
only legal questions or issues thereby adjudicated in the former appeal.
The foregoing understanding of the concept of the law of the
case exposes DBP’s insistence to be unwarranted.
To start with, the ex parte proceeding on DBP’s application for the
issuance of the writ of possession was entirely independent from the
judicial demand for specific performance herein. In fact, C.A.-G.R. No.
12670-SP, being the interlocu-
_______________
[42] Zarate v. Director of Lands, 39 Phil. 747, 750 (1919).
[43] Bachrach Motor Co. v. Esteva, 67 Phil. 16 (1938).
310
tory appeal concerning the issuance of the writ of possession while the
main case was pending, was not at all intertwined with any legal issue
properly raised and litigated in C.A.-G.R. CV No. 59491, which was the
appeal to determine whether or not DBP’s foreclosure was valid and
effectual. And, secondly, the ruling in C.A.-G.R. No. 12670-SP did not
settle any question of law involved herein because this case for specific
performance was not a continuation of C.A.-G.R. No. 12670-SP (which
was limited to the propriety of the issuance of the writ of possession in
favor of DBP), and vice versa.
3.
Guariña Corporation is legally entitled to the
restoration of the possession of the resort complex
and payment of reasonable rentals by DBP
 Having found and pronounced that the extrajudicial foreclosure by
DBP was premature, and that the ensuing foreclosure sale was void and
ineffectual, the Court affirms the order for the restoration of possession
to Guariña Corporation and the payment of reasonable rentals for the use
of the resort. The CA properly held that the premature and invalid
foreclosure had unjustly dispossessed Guariña Corporation of its
properties. Consequently, the restoration of possession and the payment
of reasonable rentals were in accordance with Article 561 of the Civil
Code, which expressly states that one who recovers, according to law,
possession unjustly lost shall be deemed for all purposes which may
redound to his benefit to have enjoyed it without interruption.
WHEREFORE, the Court AFFIRMS the decision promulgated on
March 26, 2003; and ORDERS the petitioner to pay the costs of suit.
SO ORDERED.
Sereno (CJ.), Leonardo-De Castro, Villarama, Jr. and Reyes,
JJ., concur.
Judgment affirmed.
 
311
Notes.—It is a basic legal principle that whatever is once irrevocably
established as the controlling legal rule or decision between the same
parties in the case continues to be the law of the case, whether correct on
general principles or not, so long as the facts on which such decision
was predicated continue to be the facts of the case before the court.
(Albaña vs. Belo, 602 SCRA 140 [2009])
The principle of the law of the case holds that whatever has been
irrevocably established as the controlling legal rule between the parties
in a case continues to be the law of the case, whether correct on general
principles or not, so long as the facts on which such decision was
predicated continue to be facts of the case before the Court. (Penta
Capital Finance Corporation vs. Bay, 663 SCRA 192 [2012])
——o0o——
© Copyright 2022 Central Book Supply, Inc. All rights reserved.