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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
October-2015 Jurisprudence                 

  • G.R. No. 182395, October 05, 2015 - MARITO T. BERNALES, Petitioner, v. NORTHWEST AIRLINES, Respondent.

  • G.R. No. 193990, October 14, 2015 - EASTERN SHIPPING LINES, INC., AND/OR CONGRESSMAN ERWIN L. CHIONGBIAN, Petitioners, v. JULIO C. CANJA, Respondent.

  • G.R. No. 191031, October 05, 2015 - DOLORES L. HACBANG AND BERNARDO J. HACBANG, Petitioners, v. ATTY. BASILIO H. ALO, Respondent.

  • G.R. No. 193271, October 05, 2015 - LOLITA M. SANTIAGO, Petitioner, v. SILVESTRE H. BELLO IV, Respondent.

  • G.R. No. 194767, October 14, 2015 - EDGAR T. BARROSO, Petitioner, v. HON. JUDGE GEORGE E. OMELIO, PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 14, DAVAO CITY AND TRAVELLERS INSURANCE & SURETY CORPORATION, ANTONIO V. BATAO, REGIONAL MANAGER, Respondents.

  • G.R. No. 171897, October 14, 2015 - PHILIPPINE TRUST COMPANY, Petitioner, v. FLORO ROXAS AND EUFEMIA ROXAS, Respondents.

  • G.R. No. 186114, October 07, 2015 - CHEVRON (PHILS.), INC., Petitioner, v. VITALIANO C GALIT, SJS AND SONS CONSTRUCTION CORPORATION AND MR. REYNALDO SALOMON, Respondents.

  • G.R. No. 191526, October 05, 2015 - SPOUSES FLORENTINO AND CONSOLACION TABALNO, Petitioners, v. PAULINO T. DINGAL, SR. AND JUANITA GALOLA VDA. DE DINGAL, Respondents.

  • G.R. No. 211145, October 14, 2015 - SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD REP. BY ITS PRESIDENT, ALFIE ALIPIO, Petitioner, v. BUREAU OF LABOR RELATIONS, HANJIN HEAVY INDUSTRIES AND CONSTRUCTION CO., LTD. (HHIC-PHIL.), Respondents.

  • G.R. No. 213197, October 21, 2015 - REMEGIO A. CHING, Petitioner, v. SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION, Respondent.

  • G.R. No. 203969, October 21, 2015 - ERNESTO OPPEN, INC., Petitioner, v. ALBERTO COMPAS, SUBSTITUTED BY HIS HEIRS NAMELY, CLIFFORD M. COMPAS AND JOAN M. COMPAS, AND PHILIPPINE MERCHANT MARINE SCHOOL, INC., Respondents.

  • G.R. No. 214057, October 19, 2015 - FLORENTINA BAUTISTA-SPILLE REPRESENTED BY HER ATTORNEY-IN-FACT, MANUEL B. FLORES, JR., Petitioner, v. NICORP MANAGEMENT AND DEVELOPMENT CORPORATION, BENJAMIN G. BAUTISTA AND INTERNATIONAL EXCHAN BANK, Respondents.

  • G.R. No. 210841, October 14, 2015 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. ENRICO MIRONDO Y IZON, Accused-Appellant.

  • G.R. No. 211638, October 07, 2015 - MARK ANTHONY SASO, Petitioner, v. 88 ACES MARITIME SERVICE, INC. AND/OR CARMENCITA A. SARREAL AND LIN WEN YU, Respondents.

  • G.R. No. 175483, October 14, 2015 - VALENTINA S. CLEMENTE, Petitioner, v. THE COURT OF APPEALS, ANNIE SHOTWELL JALANDOON, ET AL., Respondents.

  • G.R. No. 182210, October 05, 2015 - PAZ T. BERNARDO, SUBSTITUTED BY HEIRS, MAPALAD G. BERNARDO, EMILIE B. KO, MARILOU B. VALDEZ, EDWIN T. BERNARDO AND GERVY B. SANTOS, Petitioners, v. PEOPLE OF THE PHILIPPINES, Respondent.

  • G.R. No. 194969, October 07, 2015 - CONVOY MARKETING CORPORATION AND/OR ARNOLD LAAB, Petitioners, v. OLIVER B. ALBIA, Respondent.

  • G.R. No. 182208, October 14, 2015 - ASIAN TERMINALS, INC., Petitioner, v. ALLIED GUARANTEE INSURANCE, CO., INC., Respondent.

  • G.R. No. 194410, October 14, 2015 - OCEAN EAST AGENCY, CORPORATION, ENGR. ARTURO D. CARMEN, AND CAPT. NICOLAS SKINITIS, Petitioners, v. ALLAN I. LOPEZ, Respondent.

  • G.R. No. 204105, October 14, 2015 - GERONIMO S. ROSAS, Petitioner, v. DILAUSAN MONTOR AND IMRA-ALI M. SABDULLAH, Respondents.

  • G.R. No. 169457, October 19, 2015 - THE CONSOLIDATED BANK AND TRUST CORPORATION, Petitioner, v. THE COURT OF APPEALS, UNITED PACIFIC LEASING AND FINANCE CORPORATION, Respondents.

  • G.R. No. 201535, October 05, 2015 - NEC SYSTEM INTEGRATED CONSTRUCTION (NESIC) PHILS., INC., Petitioner, v. RALPH T. CRISOLOGO, Respondent.

  • G.R. Nos. 153745-46, October 14, 2015 - NEMENCIO C. PULUMBARIT, SR., Petitioner, v. THE COURT OF APPEALS (17th Division Composed of JUSTICE BIENVENIDO L. REYES, PONENTE; JUSTICE ROBERTO A. BARRIOS, Chairman; AND JUSTICE EDGARDO F. SUNDIAM, Acting Third Member), LOURDES S. PASCUAL, LEONILA F. ACASIO, AND SAN JUAN MACIAS MEMORIAL PARK, INC., Respondents.; G.R. No. 166573 - LOURDES S. PASCUAL, LEONILA F. ACASIO AND SAN JUAN MACIAS MEMORIAL PARK, INC., Petitioners, v. NEMENCIO C. PULUMBARIT, SR., Respondent.

  • A.M. No. P-14-3209, October 20, 2015 - OFFICE OF THE COURT ADMINISTRATOR, Complainant, v. FREDELITO R. BALTAZAR, CLERK OF COURT II, MUNICIPAL CIRCUIT TRIAL COURT, ALLACAPAN-LASAM, CAGAYAN, Respondent.

  • G.R. No. 215313, October 21, 2015 - OLIMPIO O. OLIDANA, Petitioner, v. JEBSENS MARITIME, INC., Respondent.

  • G.R. No. 213014, October 14, 2015 - MAYBANK PHILIPPINES, INC. (FORMERLY PNB-REPUBLIC BANK), Petitioner, v. SPOUSES OSCAR AND NENITA TARROSA, Respondents.

  • G.R. No. 205039, October 21, 2015 - SPOUSES ROZELLE RAYMOND MARTIN AND CLAUDINE MARGARET SANTIAGO, Petitioners, v. RAFFY TULFO, BEN TULFO, AND ERWIN TULFO, Respondents.

  • G.R. Nos. 204481-82, October 14, 2015 - ALBERT G. AMBAGAN, JR., Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.

  • G.R. No. 193420, October 14, 2015 - 7107 ISLANDS PUBLISHING, INC., Petitioner, v. THE HOUSE PRINTERS CORPORATION, Respondent.

  • G.R. No. 191176, October 14, 2015 - DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT (DILG), Petitioner, v. RAUL V. GATUZ, Respondent.

  • A.C. No. 10783, October 14, 2015 - ATTY. BENIGNO T. BARTOLOME, Complainant, v. ATTY. CHRISTOPHER A. BASILIO, Respondent.

  • G.R. No. 197058, October 14, 2015 - GREGORY BALUYO Y GAMORA, FOR AND IN BEHALF OF EMMANUEL GAMORA BALUYO, Petitioner, v. SPOUSES JOAQUIN AND REBECCA DE LA CRUZ, Respondents.

  • G.R. No. 208802, October 14, 2015 - G.V. FLORIDA TRANSPORT, INC., Petitioner, v. HEIRS OF ROMEO L. BATTUNG, JR., REPRESENTED BY ROMEO BATTUNG, SR., Respondents.

  • G.R. No. 212096, October 14, 2015 - NIGHTOWL WATCHMAN & SECURITY AGENCY, INC., Petitioner, v. NESTOR LUMAHAN, Respondent.

  • A.M. No. P-15-3321 (Formerly OCA I.P.I. No. 08-2966-P), October 21, 2015 - GUIAWAN REGINA BALANZA, Complainant, v. ARSENIO P. CRISTE, CLERK III, REGIONAL TRIAL COURT, BRANCH 21, VIGAN CITY, ILOCOS SUR, Respondent.

  • A.M. No. RTJ-08-2102 (Formerly A.M. OCA IPI No. 07-2762-RTJ), October 14, 2015 - SUGNI REALTY HOLDINGS AND DEVELOPMENT CORPORATION, REPRESENTED BY ITS CHAIRMAN/PRESIDENT, CYNTHIA CRUZ KHEMANI, Complainant, v. JUDGE BERNADETTE S. PAREDES-ENCINAREAL, [THEN IN HER CAPACITY AS ACTING PRESIDING JUDGE, BRANCH 10, REGIONAL TRIAL COURT, IN DIPOLOG CITY], PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 12, OROQUIETA CITY, Respondent.

  • G.R. No. 196597, October 21, 2015 - MODESTO W. RIVERA, Petitioner, v. ALLIED BANKING CORPORATION, CORA D. CORPUS AND ANTONIO H. SANTOS, Respondents.

  • G.R. No. 169442, October 14, 2015 - REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE PRIVATIZATION AND MANAGEMENT OFFICE (PMO), Petitioner, v. ANTONIO V. BAŅEZ, LUISITA BAŅEZ VALERA, NENA BAŅEZ HOJILLA, AND EDGARDO B. HOJILLA, JR., Respondents.

  • G.R. No. 199270, October 21, 2015 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. VERGEL ANCAJAS AND ALLAIN ANCAJAS, Accused-Appellants.

  • G.R. No. 206910, October 14, 2015 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. JULIET PANCHO, Accused-Appellant.

  • G.R. No. 208015, October 14, 2015 - PEOPLE OF THE PHILIPINES, Plaintiff-Appellee, v. RONWALDO LAFARAN Y ACLAN, Accused-Appellant.

  • G.R. No. 184076, October 21, 2015 - ST. RAPHAEL MONTESSORI SCHOOL, INC., REPRESENTED BY TERESITA G. BADIOLA, Petitioner, v. BANK OF THE PHILIPPINE ISLANDS, Respondent.

  • G.R. No. 215319, October 21, 2015 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. APOLONIO BABOR @ "JULITO", Accused-Appellant.

  • G.R. No. 181284, October 20, 2015 - LOLOY UNDURAN, BARANGAY CAPTAIN ROMEO PACANA, NESTOR MACAPAYAG, RUPERTO DOGIA, JIMMY TALINO, ERMELITO ANGEL, PETOY BESTO, VICTORINO ANGEL, RUEL BOLING, JERMY ANGEL, BERTING SULOD, RIO BESTO, BENDIJO SIMBALAN, AND MARK BRAZIL, Petitioners, v. RAMON ABERASTURI, CRISTINA C. LOPEZ, CESAR LOPEZ JR., DIONISIO A. LOPEZ, MERCEDES L. GASTON, AGNES H. LOPEZ, EUSEBIO S. LOPEZ, JOSE MARIA S. LOPEZ, ANTON B. ABERASTURI, MA. RAISSA A. VELEZ, ZOILO ANTONIO A. VELEZ, CRISTINA ABERASTURI, EDUARDO LOPEZ JR., ROSARIO S. LOPEZ, JUAN S. LOPEZ, CESAR ANTHONY R. LOPEZ, VENANCIO L. GASTON, ROSEMARIE S. LOPEZ, JAY A. ASUNCION, NICOLO ABERASTURI, LISA A. ASUNCION, INEZ A. VERAY, HERNAN A. ASUNCION, ASUNCION LOPEZ, THOMAS A. VELEZ, LUIS ENRIQUE VELEZ, ANTONIO H. LOPEZ, CHARLES H. LOPEZ, ANA L. ZAYCO, PILAR L. QUIROS, CRISTINA L. PICAZO, RENATO SANTOS, GERALDINE AGUIRRE, MARIA CARMENCITA T. LOPEZ, and as represented by attorney-in-fact RAMON ABERASTURI, Respondents.

  • G.R. No. 206513, October 20, 2015 - MUSTAPHA DIMAKUTA Y MARUHOM, Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.

  • G.R. No. 194159, October 21, 2015 - PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, Petitioner, v. MA. MERCEDITAS NAVARRO-GUTIERREZ (AS THEN OMBUDSMAN), DON M. FERRY, JOSE R. TENGCO, JR., ROLANDO M. ZOSA, CESAR C. ZALAMEA, OFELIA I. CASTELL, AND RAFAEL A. SISON, PUBLIC RESPONDENTS, RODOLFO M. CUENCA, MANUEL I. TINIO, AND ANTONIO R. ROQUE, PRIVATE, Respondents.

  • G.R. No. 214506, October 19, 2015 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. OSCAR PARBA Y SOLON, Accused-Appellant.

  • G.R. No. 181683, October 07, 2015 - LORENZO SHIPPING CORPORATION, Petitioner, v. NATIONAL POWER CORPORATION, Respondent.; G.R. No. 184568 - NATIONAL POWER CORPORATION, Petitioner, v. LORENZO SHIPPING CORPORATION, Respondent.

  • G.R. No. 197852, October 19, 2015 - PASIG AGRICULTURAL DEVELOPMENT AND INDUSTRIAL SUPPLY CORPORATION AND CELESTINO E. DAMIAN, Petitioners, v. WILSON NIEVAREZ, ALBERTO HALINA, GLORY VIC NUEVO, RICKY TORRES AND CORNELIO BALLE, Respondent.

  • G.R. No. 177600, October 19, 2015 - MAYOR ANWAR BERUA BALINDONG, LT. COL. JALANDONI COTA, MAYOR AMER ODEN BALINDONG, AND ALI BALINDONG, Petitioners, v. COURT OF APPEALS, STATE PROSECUTOR LEAH ARMAMENTO, OFFICE OF THE SOLICITOR GENERAL AND ZENAIDA LIMBONA, Respondents.; G.R. No. 178684 - ZENAIDA M. LIMBONA, Petitioner, v. HON. JUDGE ALEXANDER S. BALUT OF THE REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 76, Respondent.

  • G.R. No. 176394, October 21, 2015 - COL. ORLANDO E. DE LEON, PN (M), Petitioner, v. LT. GEN. HERMOGENES C. ESPERON, JR., (AFP), AND SPECIAL GENERAL COURT MARTIAL NO. 2, Respondents.; COL. ARMANDO V. BAŅEZ, PN (M), Petitioner-Intervenor.; LTC ACHILLES S. SEGUMALIAN, PN (M), Petitioner-Intervenor.; G.R. No. 177033 - MAJOR LEOMAR JOSE M. DOCTOLERO O-10124 (INFANTRY) PHILIPPINE ARMY AND CAPTAIN WILLIAM VICTORINO F. UPANO O-11876 (INFANTRY) PHILIPPINE ARMY, Petitioners, v. LT. GEN. HERMOGENES C. ESPERON, JR., CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES AND THE SPECIAL GENERAL COURT MARTIAL NO. 2, Respondents.; G.R. No. 177304 - MAJOR JASON L. AQUINO (INF) PA, Petitioner, v. GEN. HERMOGENES C. ESPERON, JR., AS CHIEF OF STAFF OF THE ARMED FORCES OF THE PHILIPPINES AND APPOINTING AND REVIEWING AUTHORITY OF THE SPECIAL GENERAL COURT MARTIAL NO. 2 (SIC), AND THE SPECIAL GENERAL COURT MARTIAL NO. 2, Respondents.; G.R. No. 177470 - 1ST LIEUTENANT ERVIN C. DIVINAGRACIA O-12742 (INF), PHILIPPINE ARMY, Petitioner, v. LT. GEN. HERMOGENES C. ESPERON, JR., CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES AND THE SPECIAL GENERAL COURT MARTIAL NO. 2, Respondents.; G.R. No. 177471 - CAPTAIN JOEY T FONTIVEROS O-11713 (INFANTRY) PHILIPPINE ARMY, Petitioner, v. LT. GEN. HERMOGENES C. ESPERON, JR., CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES AND THE SPECIAL GENERAL COURT MARTIAL NO. 2, Respondent.

  • G.R. No. 172902, October 21, 2015 - RAMON IKE V. SEŅERES, Petitioner, v. DELFIN JAY M. SABIDO IX, VICTORIA P. GARCHITORENA, WALDO Q. FLORES, AND ESTRELLA F. ALABASTRO, Respondent.

  • G.R. No. 171953, October 21, 2015 - NATIONAL HOUSING AUTHORITY, Petitioner, v. ERNESTO ROXAS, Respondent.

  • G.R. No. 194814, October 21, 2015 - ROSARIO ENRIQUEZ VDA. DE SANTIAGO, Petitioner, v. ATTY. JOSE A. SUING, Respondent.; G.R. NO. 194825 - JAIME C. VISTAR, Petitioner, v. ATTY. JOSE A. SUING, Respondent.

  • G.R. No. 166391, October 21, 2015 - MICROSOFT CORPORATION, Petitioner, v. ROLANDO D. MANANSALA AND/OR MEL MANANSALA, DOING BUSINESS AS DATAMAN TRADING COMPANY AND/OR COMIC ALLEY, Respondent.

  • G.R. No. 161006, October 14, 2015 - ROGELIO BARONDA, Petitioner, v. HON. COURT OF APPEALS, AND HIDECO SUGAR MILLING CO., INC., Respondents.

  • G.R. No. 161006, October 14, 2015 - ROGELIO BARONDA, Petitioner, v. HON. COURT OF APPEALS, AND HIDECO SUGAR MILLING CO., INC., Respondents.

  • G.R. No. 161006, October 14, 2015 - ROGELIO BARONDA, Petitioner, v. HON. COURT OF APPEALS, AND HIDECO SUGAR MILLING CO., INC., Respondents.

  • G.R. No. 212861, October 14, 2015 - MELVIN P. MALLO, Petitioner, v. SOUTHEAST ASIAN COLLEGE, INC. AND EDITA ENATSU, Respondents.

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    G.R. No. 213014, October 14, 2015 - MAYBANK PHILIPPINES, INC. (FORMERLY PNB-REPUBLIC BANK), Petitioner, v. SPOUSES OSCAR AND NENITA TARROSA, Respondents.

      G.R. No. 213014, October 14, 2015 - MAYBANK PHILIPPINES, INC. (FORMERLY PNB-REPUBLIC BANK), Petitioner, v. SPOUSES OSCAR AND NENITA TARROSA, Respondents.

    PHILIPPINE SUPREME COURT DECISIONS

    FIRST DIVISION

    G.R. No. 213014, October 14, 2015

    MAYBANK PHILIPPINES, INC. (FORMERLY PNB-REPUBLIC BANK1), Petitioner, v. SPOUSES OSCAR AND NENITA TARROSA, Respondents.

    D E C I S I O N

    PERLAS-BERNABE, J.:

    Assailed in this petition for review on certiorari2 are the Decision3 dated November 29, 2013 and the Resolution4 dated May 13, 2014 of the Court of Appeals (CA) in CA-G.R. CV No. 02211, which affirmed the Decision5 dated June 16, 2005 of the Regional Trial Court of Bacolod City, Branch 41 (RTC) in Civil Case No. 98-10451 declaring the extrajudicial foreclosure sale of the property covered by Transfer Certificate of Title (TCT) No. T-5649 as null and void for being barred by prescription.

    The Facts

    On December 15, 1980, respondents-spouses Oscar and Nenita Tarrosa (Sps. Tarrosa) obtained from then PNB-Republic Bank, now petitioner Maybank Philippines, Inc. (Maybank), a loan in the amount of P91,000.00. The loan was secured by a Real Estate Mortgage6 dated January 5, 1981 (real estate mortgage) over a 500-square meter parcel of land situated in San Carlos City, Negros Occidental (subject property), covered by TCT No. T-5649,7 and the improvements thereon.8

    After paying the said loan, or sometime in March 1983, Sps. Tarrosa obtained another loan from Maybank in the amount of P60,000.00 (second loan),9 payable on March 11, 1984.10 However, Sps. Tarrosa failed to settle the second loan upon maturity.11

    Sometime in April 1998, Sps. Tarrosa received a Final Demand Letter12 dated March 4, 1998 (final demand letter) from Maybank requiring them to settle their outstanding loan in the aggregate amount of P564,579.91, inclusive of principal, interests, and penalty charges.13 They offered to pay a lesser amount, which Maybank refused.14 Thereafter, or on June 25, 1998, Maybank commenced extrajudicial foreclosure proceedings15 before the office of Ex-Officio Provincial Sheriff Ildefonso Villanueva, Jr. (Sheriff Villanueva). The subject property was eventually sold in a public auction sale held on July 29, 199816 for a total bid price of P600,000.00, to the highest bidder, Philmay Property, Inc. (PPI), which was thereafter issued a Certificate of Sale17 dated July 30, 1998.18

    On September 7, 1998, Sps. Tarrosa filed a complaint19 for declaration of nullity and invalidity of the foreclosure of real estate and of public auction sale proceedings and damages with prayer for preliminary injunction against Maybank, PPI, Sheriff Villanueva, and the Registry of Deeds of San Carlos City, Negros Occidental (RD-San Carlos), before the RTC, docketed as Civil Case No. 98-10451. They averred, inter alia, that: (a) the second loan was a clean or unsecured loan; (b) after receiving the final demand letter, they tried to pay the second loan, including the agreed interests and charges, but Maybank unjustly refused their offers of payment; and (c) Maybank's right to foreclose had prescribed or is barred by laches.20

    On the other hand, Maybank and PPI countered21 that: (a) the second loan was secured by the same real estate mortgage under a continuing security provision therein; (b) when the loan became past due, Sps. Tarrosa promised to pay and negotiated for a restructuring of their loan, but failed to pay despite demands; and (c) Sps. Tarrosa's positive acknowledgment and admission of their indebtedness controverts the defense of prescription.

    The RTC Ruling

    In a Decision23 dated June 16, 2005, the RTC held that the second loan was subject to the continuing security provision in the real estate mortgage.24 However, it ruled that Maybank's right to foreclose, reckoned from the time the mortgage indebtedness became due and payable on March 11, 1984, had already prescribed, considering the lack of any timely judicial action, written extrajudicial demand or written acknowledgment by the debtor of his debt that could interrupt the prescriptive period.25 Accordingly, it declared the extrajudicial foreclosure proceedings affecting the subject property as null and void, and ordered Maybank to pay Sps. Tarrosa moral and exemplary damages, as well as attorney's fees and litigation expenses.26

    Maybank filed a motion for reconsideration27 which was, however, denied in an Order28 dated December 9, 2005, prompting it to appeal29 to the CA.

    The CA Ruling

    In a Decision30 dated November 29, 2013, the CA affirmed the RTC ruling that Maybank's right to foreclose the real estate mortgage over the subject property is already barred by prescription. It held that the prescriptive period should be reckoned from March 11, 1984 when the second loan had become past due and remained unpaid since demand was not a condition sine qua non for the accrual of the latter's right to foreclose under paragraph 5 of the real estate mortgage. It observed that Maybank failed to present evidence of any timely written extrajudicial demand or written acknowledgment by the debtors of their debt that could have effectively interrupted the running of the prescriptive period.31

    Undaunted, Maybank moved for reconsideration,32 which was denied in a Resolution33 dated May 13, 2014; hence this petition.

    The Issues Before the Court

    The essential issue for the Court's resolution is whether or not the CA committed reversible error in finding that Maybank's right to foreclose the real estate mortgage over the subject property was barred by prescription.chanrobleslaw

    The Court's Ruling

    The petition is meritorious.

    An action to enforce a right arising from a mortgage should be enforced within ten (10) years from the time the right of action accrues, i.e., when the mortgagor defaults in the payment of his obligation to the mortgagee; otherwise, it will be barred by prescription and the mortgagee will lose his rights under the mortgage.34 However, mere delinquency in payment does not necessarily mean delay in the legal concept. To be in default is different from mere delay in the grammatical sense, because it involves the beginning of a special condition or status which has its own peculiar effects or results.35

    In order that the debtor may be in default, it is necessary that: (a) the obligation be demandable and already liquidated; (b) the debtor delays performance; and (c) the creditor requires the performance judicially or extrajudicially,36unless demand is not necessary - i.e., when there is an express stipulation to that effect; where the law so provides; when the period is the controlling motive or the principal inducement for the creation of the obligation; and where demand would be useless. Moreover, it is not sufficient that the law or obligation fixes a date for performance; it must further state expressly that after the period lapses, default will commence. Thus, it is only when demand to pay is unnecessary in case of the aforementioned circumstances, or when required, such demand is made and subsequently refused that the mortgagor can be considered in default and the mortgagee obtains the right to file an action to collect the debt or foreclose the mortgage.38

    In the present case, both the CA and the RTC reckoned the accrual of Maybank's cause of action to foreclose the real estate mortgage over the subject property from the maturity of the second loan on May 11, 1984. The CA further held that demand was unnecessary for the accrual of the cause of action in light of paragraph 5 of the real estate mortgage, which pertinently provides:

    5. In the event that the Mortgagor herein should fail or refuse to pay any of the sums of money secured by this mortgage, or any part thereof, in accordance with the terms and conditions herein set forth, or should he/it fail to perform any of the conditions stipulated herein, then and in any such case, the Mortgagee shall have the right, at its election to foreclose this mortgage, [x x x].39

    However, this provision merely articulated Maybank's right to elect foreclosure upon Sps. Tarrosa's failure or refusal to comply with the obligation secured, which is one of the rights duly accorded to mortgagees in a similar situation.40 In no way did it affect the general parameters of default, particularly the need of prior demand under Article 116941 of the Civil Code, considering that it did not expressly declare: (a) that demand shall not be necessary in order that the mortgagor may be in default; or (b) that default shall commence upon mere failure to pay on the maturity date of the loan. Hence, the CA erred in construing the above provision as one through which the parties had dispensed with demand as a condition sine qua non for the accrual of Maybank's right to foreclose the real estate mortgage over the subject property, and thereby, mistakenly reckoned such right from the maturity date of the loan on March 11, 1984. In the absence of showing that demand is unnecessary for the loan obligation to become due and demandable, Maybank's right to foreclose the real estate mortgage accrued only after the lapse of the period indicated in its final demand letter for Sps. Tarrosa to pay, i.e., after the lapse of five (5) days from receipt of the final demand letter dated March 4, 1998.42 Consequently, both the CA and the RTC committed reversible error in declaring that Maybank's right to foreclose the real estate mortgage had already prescribed.

    Thus, considering that the existence of the loan had been admitted, the default on the part of the debtors-mortgagors had been duly established, and the foreclosure proceedings had been initiated within the prescriptive period as afore-discussed, the Court finds no reason to nullify the extrajudicial foreclosure sale of the subject property.

    WHEREFORE, the petition is GRANTED. The Decision dated

    November 29, 2013 and the Resolution dated May 13, 2014 of the Court of Appeals in CA-G.R. CV No. 02211 are hereby REVERSED AND SET ASIDE. The complaint in Civil Case No. 98-10451 is DISMISSED.

    SO ORDERED.

    Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Perez, JJ., concur.

    Endnotes:


    1 "PNB-Republic Planters Bank" in some parts of the records.

    2Rollo, pp. 10-29.

    3 Id. at 32-40. Penned by Associate Justice Edgardo L. Delos Santos with Associate Justices Pamela Ann Abella Maxino and Maria Elisa Sempio Diy concurring.

    4 Id. at 41-42. Penned by Associate Justice Edgardo L. Delos Santos with Associate Justices Ramon Paul L. Hernando and Pamela Ann Abella Maxino concurring.

    5 Records, pp. 390-413. Penned by Judge Ray Alan T. Drilon.

    6 Id. at 180-183.

    7 Id. at 178-179.

    8 See id. at 4, 183, and 391.

    9 See id. at 391 and 395.

    10 See id. at 407-408.

    11 See id. at 396-397. See also rollo, p. 33.

    12 Records, p. 199.

    13Rollo, p. 34.

    14 Records, p. 29.

    15 See Application for Foreclosure of Real Estate Mortgage under R.A. 3135, as Amended; id at 184-186.

    16 See Notice of Extra Judicial Sale dated July 1, 1998; id. at 187.

    17 Id. at 188-189.

    18 See rollo, p. 34.

    19 Dated September 1, 1998; records, pp. 2-11.

    20 See id. at 4-7.

    21 See Answer dated January 21,1999; id. at 28-34.

    22 See id. at 28-30 and  180. The real estate mortgage specifically provided that the same is being executed:

    [F]or and in consideration of certain loans, overdrafts and other credit accommodations obtained from [REPUBLIC PLANTERS BANK], and to secure the payment of the same and those that may hereafter be obtained x x x as well as those [REPUBLIC PLANTERS BANK] may extend to [Sps. Tarrosa], including interest and expenses or any other obligation owing, to [REPUBLIC PLANTERS BANK] x x x

    23 Id. at 390-413.

    24 See id. at 405.

    25 See id. at 407-408.

    26 See id. at 412-413.

    27 Dated July 15,2005. Id. at 414-425.

    28 Id. at 479-486.

    29 See Notice of Appeal dated December 13, 2005; id. at 493-494.

    30Rollo, pp. 32-40.

    31 See id. at 36-39.

    '2 See motion for reconsideration dated January 16, 2014; CA rollo, pp. 160-168.

    33Rollo, pp. 41-42.

    34Cando v. Sps. Olazo, 547 Phil. 630, 637 (2007).

    35 See Social Security System v. Moonwalk Development and Housing Corporation, G.R. No. 73345, April 7, 1993, 221 SCRA 119, 128; citation omitted.

    36Cruz v. Gruspe, G.R. No. 191431, March 13, 2013, 693 SCRA 415, 421-422.

    37 See Rivera v. Sps. Chua, G.R. Nos. 184458 and 184472, January 14, 2015. See also Article 1169 of the Civil Code.

    38DBF v. Licuanan, 545 Phil. 544, 554 (2007).

    39Rollo, p. 39.

    40 In Caltex Philippines, Inc. v. Intermediate Appellate Court, 257 Phil. 753, 764 (1989), it was held:chanRoblesvirtualLawlibrary
    [W]here a debt is secured by a mortgage and there is a default in payment on the part of the mortgagor, the mortgagee has a choice of one (I) of two (2) remedies, but he cannot have both. The mortgagee may:

    1)  foreclose the mortgage; or

    2)  file an ordinary action to collect the debt.

    When the mortgagee chooses the foreclosure of the mortgage as a remedy, he enforces his lien by the sale on foreclosure of the mortgaged property. The proceeds of the sale will be applied to the satisfaction of the debt. With this remedy, he has a prior lien on the property. In case of a deficiency, the mortgagee has the right to claim for the deficiency resulting from the price obtained in the sale of the real property at public auction and the outstanding obligation at the time of the foreclosure proceedings x x x.ChanRoblesVirtualawlibrary
    41 Article 1169 of the Civil Code reads:chanRoblesvirtualLawlibrary
    Art. 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation.

    However, the demand by the creditor shall not be necessary in order that delay may exist:

    (1) When the obligation or the law expressly so declare; or
    (2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or

    (3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.

    In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins.
    42 Records, p. 199.

    G.R. No. 213014, October 14, 2015 - MAYBANK PHILIPPINES, INC. (FORMERLY PNB-REPUBLIC BANK), Petitioner, v. SPOUSES OSCAR AND NENITA TARROSA, Respondents.


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