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Mojica v. CA

The document summarizes a court case regarding the foreclosure of a mortgage by Rural Bank of Kawit. Key details: - In 1971, spouses Leonardo Mojica and Marina Rufido took out a P20,000 loan secured by a mortgage on their property. - In 1974, they took out another P18,000 loan from the bank without a new mortgage. The bank argued the original 1971 mortgage secured this new loan. - The spouses defaulted on the 1974 loan. In 1979, the bank foreclosed on the property using the 1971 mortgage and became owners after a public auction. - The spouses' son later tried to pay off the debt but the bank refused, having

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94 views

Mojica v. CA

The document summarizes a court case regarding the foreclosure of a mortgage by Rural Bank of Kawit. Key details: - In 1971, spouses Leonardo Mojica and Marina Rufido took out a P20,000 loan secured by a mortgage on their property. - In 1974, they took out another P18,000 loan from the bank without a new mortgage. The bank argued the original 1971 mortgage secured this new loan. - The spouses defaulted on the 1974 loan. In 1979, the bank foreclosed on the property using the 1971 mortgage and became owners after a public auction. - The spouses' son later tried to pay off the debt but the bank refused, having

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viviviolette
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G.R. No.

94247 September 11, 1991


DIONISIO MOJICA, in behalf of Spouses LEONARDO MOJICA (now deceased) and
MARINA RUFIDO,petitioner, vs. HON. COURT OF APPEALS, and RURAL BANK OF
YAWIT, INC., respondents.
PARAS, J.:
FACTS: February 1, 1971, plaintiff Leonardo Mojica (now deceased) contracted a
loan of P20,000.00 from defendant Rural Bank of Kawit, Inc. (now respondent)
secured by a real estate mortgage executed on the same date by the plaintiffs.
REM stated: ... 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.
March 5, 1974, a new loan in the amount of P18,000.00 was obtained by plaintiffs
spouses from the defendant Rural Bank which loan matured on March 5, 1975
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
under Doc. No. 62, Page No. 86, Book No.__, Series of 1971. 9 (same REM which
guaranteed P20,000 loan)
Spouses failed to pay their obligation after its maturity on March 5, 1975. Rural
bank 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 subject property was set for auction sale by the Provincial Sheriff of Cavite
for June 27, 1979. In that auction sale, defendant rural bank was the highest bidder,
and its bid corresponded to the total outstanding obligation of plaintiffs spouses
Mojica and Rufido
The proceeds from the sale of the piece of land of plaintiffs spouses were applied
to their outstanding obligation with defendant bank. The corresponding
certificate of sale in favor of defendant bank was executed by the Provincial Sheriff
also on June 27, 1979, and the instrument was recorded in the Office of the Register
of Deeds of Cavite on June 29, 1979. The one year period for redemption elapses
after June 1980 without plaintiffs spouses having redeemed the foreclosure property

July 19, 1980, Dionisio Mojica, the son of petitioners-spouses, in an apparent


attempt to pay the debt of P18,000.00 made a partial payment in the amount of
P24,658.00 (P19,958.00 of this amount in check bounced) which the defendant rural
bank received and accepted with the issuance of the defendant's official receipt No.
101 269, ackowledging the payment as partial payment of 'past due loan', together
with the "interest on past due lose.
August 11, 1980, another partial payment was made by Dionisio Mojica in the
amount of P9,958.00 in payment also of 64 past due loan' plus "interest on past due
loan which payment was received by the defendant rural bank and acknowledged
with the issuance of official receipt No. 101844. These payments were, however,
considered by the bank as deposit for the repurchase of the foreclosed property.
August 14, 1981, 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.
November 10, 1981, said bank executed an affidavit of consolidation of
ownership, which it subsequently filed with the Register of Deeds of Cavite. As a
result, Transfer Certificate of Title No. T-123964, covering the foreclosed piece of
land, was issued in its favor by the Register of Deeds on January 19, 1982. After
having consolidated its ownership over the foreclosed property, defendant bank
scheduled the parcel of land to be sold at public auction on February 26, 1982,
pursuant to the requirement of the law regarding the disposal by a bank of its
acquired assets. Dionisio Mojica and one Teodorico Rufido, brother-in-law of plaintiff
Leonardo Mojica, were notified of such auction sale However, no sale was
consummated during that scheduled sale and the property concerned up to now still
remains in the possession of respondent bank
The refusal of the same bank to allow Dionisio Mojica to pay the unpaid balance
of the loan as per the "Computation Slip" amounting to P21,272.50, resulted in the
filing of a complaint.
TC dismissed complaint. CA affirmed.
ISSUE: WON foreclosure valid
HELD: Yes. Petition dismissed.
RATIO: Contracts which are not ambiguous are to be interpreted according to
their literal meaning and should not be interpreted beyond their obvious
intendment. When clear literal meaning will control. Correspondingly, stipulations in
the mortgage document constitute the law between the parties, which must be
complied with faithfully.

REM expressly stipulates that it serves as guaranty ... 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 as makers ...
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. 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 a 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.
Property was auctioned on June 27, 1979. The only bidder was the respondent
bank which bid for P26,387.04. As the highest bidder, the respondent bank can
rightfully consolidate its title over the property.

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