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AGRICULTURAL
AND
INDUSTRIAL BANK,
G.
R.
No. 48207
April
27, 1942
-versus-
MANUEL TAMBUNTING, ET AL., Defendants. MANUEL TAMBUNTING, Defendant-Appellant. OZAETA,
J :
The question raised in
this appeal is the validity of a stipulation in a mortgage contract
authorizing
the mortgagee to take possession of the mortgaged property upon
foreclosure
of the mortgage.
It appears that on May 31, 1935, the appellant Manuel Tambunting executed a deed of mortgage on a parcel of land with the buildings and other improvements thereon, situated in the City of Manila, in favor of the Teachers' Retirement and Disability Fund, now under the control and administration of the appellee Agricultural and Industrial Bank, to secure the payment of a loan of P17,000, payable after three years from the date of the mortgage, with interest thereon at the rate of 8 per cent per annum payable monthly. It was stipulated in paragraph 8 of the deed of mortgage "that this mortgage shall, after notice to the mortgagor, be considered automatically foreclosed, without the necessity of any judicial proceedings," upon the failure of the mortgagor to comply with any of the stipulations, terms, and conditions therein agreed upon, among which were the payment by the mortgagor of the monthly interests and the payment of the taxes and insurance premiums on the mortgaged premises. In paragraph 9 of the same deed of mortgage, the following was stipulated:
Paragraph 10 of the mortgage provides that in selling the property at public auction the mortgagee shall follow the procedure provided for in Act No. 3135, the mortgagor in any case to be notified by the mortgagee in writing by registered mail of the date of the sale. All of these stipulations were without prejudice to the right of the mortgagee at its option to institute judicial foreclosure proceedings. The
mortgagor having
failed to pay the mortgage after maturity, the mortgagee chose to
foreclose
it judicially by instituting the corresponding action in the Court of
First
Instance of Manila on May 15, 1939, it being alleged in the complaint
that
as of March 31, 1939, the amount due on the mortgage was P19,000.21.
The
defendant answered with a general denial. On January 15, 1940, the
plaintiff,
invoking paragraphs 8 and 9 of the mortgage hereinbefore referred to,
moved
the Court to authorize it to take possession of the mortgaged premises,
alleging that the defendant had failed and still failed to pay the real
estate taxes and insurance premiums on the mortgaged property, forcing
the plaintiff to advance from time to time the necessary amounts in
addition
to the expenses for repairs of the premises. That motion was granted by
the court in an order dated February 8, 1940, from which order the
defendant
has appealed to this Court.
The only assignment of error made by appellant is the following:
In
support of that assignment
of error, appellant contends that paragraph 9 of the deed of mortgage
in
question is null and void. He intimates that although such a
stipulation
is sanctioned by custom and usage in this country it finds no support
in
our laws.
Such argument is beside the point. In order to establish the nullity of the contractual provision in question appellant must show that it is contrary to law, morals, or public order [Article 1255, Civil Code], and this he has failed to do. Article 1859 of the Civil Code says that the creditor may not appropriate to himself the things given in pledge or mortgage, or dispose of them; and article 1884 of the same Code provides that the nonpayment of the debt within the term agreed upon does not vest the ownership of the property in the creditor and that any stipulation to the contrary shall be void. But the stipulation in question authorizing the mortgagee, for the purposes therein specified, to take possession of the mortgaged premises upon foreclosure of the mortgage is not repugnant to either of these articles. On the other hand, such stipulation is in consonance with or analogous to the provisions of Article 1881, et seq. of the Civil Code regarding antichresis and the provisions of the Rules of Court regarding the appointment of a receiver as a convenient and feasible means of preserving and administering the property in litigation. [See Section 1 (e), Rule 61]. Appellant further contends that the authorization given in paragraph 9 to the mortgagee to take possession of the mortgaged premises refers to the automatic extrajudicial foreclosure of the mortgage and that, since the mortgagee chose to institute judicial foreclosure proceedings, it could not invoke said stipulation. If the mortgagee is authorized to take possession of the mortgaged property without the intervention of the court, the mortgagor has no legitimate cause for complaint on account of the court's intervention, by which his rights may be more fully protected. We find the stipulation in question to be valid and accordingly affirm the order appealed from, with costs against the appellant. So ordered. Yulo, C.J., Moran, Paras and Bocobo, JJ., concur. |
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