FIRST DIVISION
PHILIPPINE NATIONAL
BANK,
Petitioner,
G.R.
No.
126908
January 16, 2003 -versus-
COURT OF APPEALS,
SPOUSES ANTONIO SO HUAND
SOLEDAD DEL
ROSARIO and SPOUSES MATEO CRUZ
AND CARLITA
RONQUILLO,
Respondents.
chanroblesvirtualawlibrary
D E C I S I O N
CARPIO,
J.:
The Case
This is a petition for
review on certiorari[1]
to set aside the Decision[2]
of the Court of Appeals which affirmed in substance the Decision[3]
of the Regional Trial Court, Branch 27, Cabanatuan City. The Court of
Appeals
sustained the trial court’s ruling that the questioned extrajudicial
foreclosure
was void. The courts a quo declared the sheriff’s certificate of sale
void,
directed
the return of the owner’s duplicate title to the Registry of Deeds for
Cabanatuan City, and cancelled the mortgage inscribed on the title to
the
property.chanrobles virtuallaw libraryred
The Facts
Private respondents
Spouses Mateo Cruz and Carlita Ronquillo ("Spouses Cruz" for brevity)
were
the registered owners of a parcel of land ("Property" for brevity)
situated
in Cabanatuan City and covered by Transfer Certificate of Title No.
T-4699.chanrobles virtuallaw libraryred
In 1957, Spouses Cruz
obtained a loan from petitioner Philippine National Bank ("PNB" for
brevity),
Cabanatuan Branch, for P70,000.00 ("First Loan" for brevity). A real
estate
mortgage on the Property secured the First Loan under Entry No.
10433/NT-9679
annotated on TCT No. T-4699 on November 7, 1957. chanrobles virtuallaw libraryred
On October 16, 1964,
San Nicolas Agricultural Project, Inc. ("SNAPI" for brevity), where
Mateo
Cruz was then Vice-President, obtained an agricultural crop loan from
PNB,
Santiago Branch, for P156,000.00 ("Second Loan" for brevity). Mateo
Cruz
also signed the loan in his personal capacity. A real estate mortgage
on
the Property secured the Second Loan under Entry No. 1003/T-4699
annotated
on TCT No. T-4699 on October 16, 1964. The Spouses Cruz also mortgaged
several other agricultural lands to secure the Second Loan. PNB,
Cabanatuan
Branch, took custody of all the titles to the mortgaged properties.chanrobles virtuallaw libraryred
In November 1977, on
the instance of the Spouses Cruz, Land Bank of the Philippines ("Land
Bank"
for brevity) remitted to PNB, Cabanatuan Branch, P359,500.00 in bonds
and
P174.43 in cash and transferred to PNB, Santiago Branch, P25,500.00 in
bonds.[4]chanrobles virtuallaw libraryred
On December 2, 1977,
PNB issued in favor of the Spouses Cruz a Deed of Release of Real
Estate
Mortgage which cancelled the two mortgages on the Property. The
cancellation
of these mortgages was annotated on TCT No. T-4699. Thus, PNB released
all the titles to the Spouses Cruz. chanrobles virtuallaw libraryred
On March 20, 1980, the
Spouses Cruz obtained a new loan from PNB, Cabanatuan Branch, for
P50,000.00,
later increased to P200,000.00 ("Third Loan" for brevity). A real
estate
mortgage on the Property also secured the Third Loan under Entry No.
47974/T-4699
annotated on TCT No. T-4699 on March 24, 1980. chanrobles virtuallaw libraryred
Private respondents
Spouses Antonio So Hu and Soledad del Rosario ("Spouses So Hu" for
brevity)
became interested in buying the Property. They consulted their counsel,
Atty. Rodolfo Domingo, to examine TCT No. T-4699. Finding an existing
mortgage
annotated on TCT No. T-4699, Atty. Domingo advised the Spouses So Hu to
pay PNB the full amount of the Third Loan before signing the deed of
sale.[5]chanrobles virtuallaw libraryred
On March 18, 1983, the
Spouses So Hu, on behalf of the Spouses Cruz, paid PNB P200,000.00
representing
the Third Loan.[6]
Subsequently, on March 21, 1983, the Spouses Cruz and the Spouses So Hu
signed a Deed of Absolute Sale covering the Property.[7]
Thus, the Spouses So Hu demanded from PNB the release of TCT No. T-4699
on the ground that the Spouses Cruz had already paid all their loans
secured
by real estate mortgages on the Property.[8]
PNB, however, refused. chanrobles virtuallaw libraryred
For the Spouses Cruz’s
alleged failure to pay their Second Loan, PNB filed a Petition for Sale
under Act No. 3135,[9]
as amended, and Presidential Decree No. 385.[10]
On August 27, 1985, Sheriff Ex-Officio Numeriano Y. Galang sold the
Property
in a public auction sale. PNB was the highest and sole bidder of the
Property
for P514,105.36. A sheriff’s certificate of sale[11]
was issued in PNB’s favor and annotated on TCT No. T-4699 as Entry No.
2565. chanrobles virtuallaw libraryred
In October 1986, PNB
found the Spouses So Hu occupying the Property. Through its Assistant
Manager
Vicente Sales of its Cabanatuan Branch, PNB demanded that Spouses So Hu
vacate the Property, as PNB did not authorize them to occupy the
Property.[12]chanrobles virtuallaw libraryred
On November 17, 1986,
the Spouses So Hu filed an action for Annulment of Public Auction Sale
and Certificate of Sale with Petition for a Writ of Preliminary
Injunction.
The defendants were PNB, Jose S. Miranda as Manager of PNB, Cabanatuan
Branch, the Spouses Cruz, Numeriano Y. Galang, as Sheriff Ex-Officio,
and
the Register of Deeds for Cabanatuan City. chanrobles virtuallaw libraryred
In their complaint,
the Spouses So Hu alleged that they were the owners of the foreclosed
Property
under a Deed of Absolute Sale executed by the Spouses Cruz in their
favor.
They stressed that PNB had already cancelled and released the prior
mortgages
on the Property and that they had paid the Third Loan before the
foreclosure.
Thus, the Spouses So Hu sought to declare the foreclosure and
certificate
of sale void. They also prayed for the cancellation of the mortgage on
the Property, delivery of the owner’s duplicate copy of TCT No. T-4699,
and award of damages and attorney’s fees. chanrobles virtuallaw libraryred
In its answer,[13]
PNB argued that the foreclosure was valid since the "all-inclusive
clause"
in the third mortgage deed embraces the Spouses Cruz’s Second Loan
which,
according to PNB, was still unpaid. PNB asserted that the cancellation
and release of the second mortgage were due purely to inadvertence and
mistake. PNB interposed a cross-claim[14]
against the Spouses Cruz that should the trial court grant the relief
prayed
for by the Spouses So Hu, the Spouses Cruz be ordered to pay PNB
P514,105.36.
This amount represented the Spouses Cruz’s alleged outstanding
obligation
under the Second Loan. chanrobles virtuallaw libraryred
During the pendency
of this case, the one-year period of redemption expired without
redemption
being made. On April 10, 1987, PNB executed an Affidavit of
Consolidation
of Ownership. Therefore, the Registry of Deeds for Cabanatuan City
issued
TCT No. 51022 in favor of PNB on June 25, 1987.[15]chanrobles virtuallaw libraryred
On March 2, 1990, the
Spouses Cruz filed their answer[16]
to PNB’s cross-claim whereby the Spouses Cruz admitted that SNAPI
obtained
the Second Loan from PNB with a real estate mortgage on the Property.
However,
the Spouses Cruz contended that they had already fully paid the Second
Loan on December 2, 1977, as shown by the release of the mortgage
annotated
on TCT No. T-4699. The Spouses Cruz further alleged that the
"all-inclusive
clause" is illegal and improper for this clause is too general. The
Spouses
Cruz added that assuming that the Second Loan is still unpaid,
extinctive
prescription and laches had already set in and barred the cross-claim.chanrobles virtuallaw libraryred
Subsequently, PNB filed
a reply. PNB claimed that the release of the second mortgage was a
mistake,
and that the right to foreclose has not prescribed because the
prescriptive
period was suspended by a demand to pay. PNB further claimed that what
it foreclosed was the third mortgage which purportedly also secured the
Second Loan.[17]chanrobles virtuallaw libraryred
On April 29, 1993, after
trial on the merits, the trial court rendered a decision declaring null
and void the certificate of sale in favor of PNB, and ordered the
cancellation
of TCT No. 51022, including the mortgage entries on TCT No. T-4699. The
trial court also awarded moral and exemplary damages, attorney’s fees
and
litigation expenses in favor of the Spouses So Hu and the Spouses Cruz.[18]chanrobles virtuallaw libraryred
On May 11, 1993, PNB
appealed the adverse decision.[19]
The Court of Appeals modified the decision of the trial court, deleting
the award of moral and exemplary damages in favor of the Spouses So Hu.
The Court of Appeals also remanded the case to the trial court for
further
proceedings on PNB’s cross-claim against the Spouses Cruz. The Court of
Appeals affirmed the trial court’s ruling in all other respects.chanrobles virtuallaw libraryred
Hence, this petition.
The Ruling of
the Court of Appeals
The Court of Appeals
declared the extrajudicial foreclosure void based on the following
findings
of facts: chanrobles virtuallaw libraryred
First, at the time of
sale to spouses Antonio So Hu and Soledad del Rosario, the Property was
already free from any liens and encumbrances, as prior registered
mortgages
on the Property were already cancelled and such cancellation was duly
annotated
at the back of the TCT (except the third which was then yet to be
released).
Conformably, plaintiff had the right to rely on the correctness of such
annotation and on what appears on the face of the title. They cannot be
charged with knowledge of the "all-inclusive clause" in the third
mortgage
since, they were not privy to the said contract between PNB and the
Cruz
spouses. Hence, the validity or invalidity of the all-inclusive clause
is of no consequence. chanrobles virtuallaw libraryred
x x x
This conclusively makes
Antonio So Hu and Soledad del Rosario buyers in good faith.cralaw:red
Second, PNB knew that
Spouses Mateo Cruz and Carlita Ronquillo, appellee spouses So Hu sent
appellant
bank a letter through its PNB-Cabanatuan Branch Manager, Jose Miranda
dated
31 July 2984 (Exhs. D and D-1, Records, p. 126) requesting for the
release
of the mortgage and the owner’s duplicate title in view of the sale of
the Property to them. This notwithstanding, PNB foreclosed the Property
in an auction sale on 27 August 1985. chanrobles virtuallaw libraryred
It need not be stressed
that a mortgagee can only foreclose Property given as a security for an
unpaid obligation. In the case at bar, at least insofar as the
plaintiffs
are concerned, the obligation secured by the Property had already been
paid and they had the right to expect that the Property is released
from
mortgage. Although PNB is not privy to the contract of sale between
spouses
Cruz and So Hu, it cannot raise the issue that the Property still stood
as security for a previous loan because by releasing the Property from
the two previous mortgages, it is obviously estopped from claiming
otherwise.
The rule is embodied in the following provision of the Rules of Court:
x x x[20]chanrobles virtuallaw libraryred
The dispositive portion
of the assailed decision reads: chanrobles virtuallaw libraryred
"WHEREFORE, judgment
is hereby rendered as follows: chanrobles virtuallaw libraryred
1. The
certificate
of sale dated August 27, 1985 issued by the Provincial Sheriff Office
in
favor of PNB is hereby declared null and void and Entry No. 2565 is
hereby
ordered cancelled. Defendant PNB is directed to return the owner’s
duplicate
copy of TCT No. T-51022 to the Registry of Deeds for the City of
Cabanatuan
for its cancellation and TCT No. T-4699 is hereby ordered revived.
Defendant
PNB is likewise ordered to issue a cancellation and discharge of
mortgage
inscribed as Entry Nos. 47103 and 47974 annotated in the memorandum of
encumbrances of TCT No. T-4699; chanrobles virtuallaw libraryred
2. Appellant
Philippine
National Bank is ordered to pay Spouses Antonio So Hu and Soledad del
Rosario
attorney’s fees and litigation expenses in the amount of P25,000.00 and
P15,000.00, respectively, as awarded by the trial court. chanrobles virtuallaw libraryred
3. Further, the
case
is remanded to the trial court for further proceedings/trial for the
purpose
of resolving the issue on PNB’s cross-claim against Spouses Mateo Cruz
and Soledad del Rosario.chanrobles virtuallaw libraryred
SO ORDERED."[21] The Issues
The petition is anchored
on the following assigned errors:chanrobles virtuallaw libraryred
"I
THE COURT OF APPEALS
ERRED IN HOLDING THAT SPOUSES ANTONIO SO HU AND SOLEDAD DEL ROSARIO
CANNOT
BE CHARGED WITH KNOWLEDGE OF THE "ALL-INCLUSIVE CLAUSE" IN THE THIRD
MORTGAGE,
SINCE THEY WERE NOT PRIVY TO THE SAID CONTRACT BETWEEN PNB AND THE CRUZ
SPOUSES DESPITE THAT THE SAID ANNOTATION WAS CLEARLY INSCRIBED ON TCT
NO.
T-4699 UNDER ENTRY NO. 47974/T-4699 GIVING NOTICE TO THE WHOLE WORLD
THAT
- AMENDMENT OF THE MORTGAGE IN FAVOR OF PNB, INSCRIBED UNDER ENTRY NO.
47103 IN THE SENSE THAT THE CONSIDERATION THEREOF HAS BEEN INCREASED TO
PHILIPPINE PESOS: TWO HUNDRED THOUSAND PESOS: (P200,000.00) AND TO
SECURE
ANY AND ALL OBLIGATIONS WITH PNB, WHETHER CONTRACTED BEFORE, DURING OR
AFTER THE DATE OF THIS INSTRUMENT.chanrobles virtuallaw libraryred
II
THE COURT OF APPEALS
ERRED IN NOT HOLDING THAT THE SALE OF THE MORTGAGED PROPERTY BETWEEN
SPOUSES
CRUZ AND SPOUSES SO HU DID NOT BIND PNB. chanrobles virtuallaw libraryred
III
THE COURT OF APPEALS
ERRED IN NOT HOLDING THAT PNB’S MORTGAGE LIEN AND THE PROPERTY
MORTGAGED
ARE INSEPARABLE, SO MUCH SO THAT WHOEVER MAY SUBSEQUENTLY ACQUIRE TITLE
TO THE MORTGAGED PROPERTY IS BOUND BY THE TERMS OF THE MORTGAGE WHETHER
THE TRANSFER BE WITH OR WITHOUT THE CONSENT OF PNB.chanrobles virtuallaw libraryred
IV
THE COURT OF APPEALS
ERRED IN AWARDING SPOUSES SO HU P25,000 ATTORNEY’S FEES AND P15,000.00
LITIGATION EXPENSES WITHOUT FACTUAL AND LEGAL BASES."[22]chanrobles virtuallaw libraryred
The main issue to resolve
is the validity of the extrajudicial foreclosure of the third mortgage
deed which secured the allegedly unpaid Second Loan. The validity of
the
extrajudicial foreclosure in turn hinges on two important questions.
First,
whether the Spouses Cruz indeed failed to pay the Second Loan. Second,
if the Second Loan is still unpaid, whether the parties to the third
mortgage
deed intended to include the Second Loan in the third mortgage deed.chanrobles virtuallaw libraryred
The Ruling of
the Court
We deny the petition.
We affirm the finding of the courts a quo that the foreclosure of the
mortgage
on the Property was void.chanrobles virtuallaw libraryred
Records show that PNB’s
application for foreclosure, filed on July 15, 1985, was based on the
Spouses
Cruz’s third mortgage deed.[23]
However, the Spouses So Hu had already paid on March 18, 1983 the
principal
obligation secured by the third mortgage.[24]
A mortgage is but an accessory contract, the consideration of which is
the same consideration of the principal contract without which it
cannot
exist as an independent contract.[25]
Since the full amount of the Third Loan was paid as early as March 18,
1983, extinguishing the loan obligation under the principal contract,
the
mortgage obligation under the accessory contract has likewise been
extinguished.cralaw:red
Foreclosure is valid
where the debtor is in default in the payment of his obligation. In the
instant case, PNB foreclosed the third mortgage even when the
obligation,
the Third Loan, secured by the mortgage has been completely paid prior
to the foreclosure. Obviously, the Property could no longer be
foreclosed
to satisfy an extinguished obligation.cralaw:red
PNB, on the other hand,
mainly argues that the third mortgage deed also covered the Second Loan
which remained unpaid. The consideration, allegedly, of the third
mortgage
deed also includes the Spouses Cruz’s Second Loan that was supposedly
still
outstanding then. The issue then turns on whether the Spouses Cruz paid
the Second Loan, for if they did, the foreclosure was without any legal
basis.chanrobles virtuallaw libraryred
The Spouses
Cruz’s
Second Loan
PNB’s defense is anchored
on the Spouses Cruz’s alleged failure to pay the Second Loan. Under the
so-called "all-inclusive clause" in the third mortgage deed, PNB
maintains
that the Spouses Cruz intended to secure all obligations contracted
before,
during or after the date of the third mortgage deed, including the
supposedly
unpaid Second Loan. We must first resolve whether the Spouses Cruz
defaulted
in paying their Second Loan. If the Second Loan had in fact been paid,
it would be immaterial whether the "all-inclusive clause" covered the
Second
Loan or not since the payment of the Second Loan would have
extinguished
the mortgage obligation. chanrobles virtuallaw libraryred
The trial court expressly
stated that the Spouses Cruz or SNAPI had already paid the Second Loan
as early as December 2, 1977, as shown by the release of the titles to
the Spouses Cruz and the cancellation of the mortgages on TCT No.
T-4699.
In addition, the trial court found that the Spouses Cruz remitted to
PNB
various Land Bank bonds and cash in payment of their first two loans
with
PNB. The pertinent portion of the trial court’s decision reads: chanrobles virtuallaw libraryred
"The PNB called to the
witness stand Severina Rarela, Chief of the Securities and
Documentation
Specialist, Bond Servicing Department of the Land Bank of the
Philippines
who testified that as of November 3, 1977, they have released in favor
of PNB at the instance of Spouses Cruz Land Bank bonds in the amount of
P25,500.00 and P359,500.00 and cash of P174.43. It would appear
therefore
that the execution of the release of mortgage registered as Entry No.
31968
was not a mistake. The obligation of SNAPI or Mateo Cruz has been fully
paid and that is the actual reason why the PNB executed a release of
mortgage
and returned the owner’s duplicate copy of TCT No. T-4699 and other
titles
to said defendant Spouses Cruz."[26]chanrobles virtuallaw libraryred
This Court is not a
trier of facts. It is not this Court’s function to analyze or weigh all
over again the evidence already considered in the proceedings below.[27]
Since the issue of the payment of the Second Loan is factual, resolving
the same is beyond this Court’s jurisdiction. Moreover, we respect the
trial court’s factual findings in the absence of exceptional
circumstances
to warrant a reversal,[28]
and there is none in the instant case. chanrobles virtuallaw libraryred
To prove that he had
already settled the Second Loan, Mateo Cruz testified, among others,
that
the Department of Agrarian Reform paid his outstanding loans (First and
Second Loans) with PNB through the issuance of Land Bank bonds and
cash.
In his cross-examination, he stated in part: chanrobles virtuallaw libraryred
"ATTY. INCISO
Q How did you pay the
loan?
A It was paid by the
Land Bank because those properties together with my other agricultural
lands consisting of 100 hectares were mortgaged to the PNB and the Land
Bank was the one who bought it because it was under agrarian reform and
the Land Bank paid those accounts that I have in that bank, otherwise
TCT
No. T-4699 should have not given to me by the Land Bank if it was not
paid,
sir."[29]chanrobles virtuallaw libraryred
What is telling is that
Land Bank indeed paid PNB, Cabanatuan Branch, bonds and cash in the
total
amount of P359,674.43. PNB, however, refused to acknowledge such
payment
for the Second Loan and insisted that this amount was used to pay the
Spouses
Cruz’s other loans with PNB, Cabanatuan Branch. Yet, other than its
bare
allegation, PNB failed to show what these other alleged loans were.chanrobles virtuallaw libraryred
On the other hand, PNB
failed to prove clearly and convincingly that the Spouses Cruz have not
yet paid their Second Loan. PNB’s evidence consisted, among others, of
SNAPI’s statements of account,[30]
a letter from Manuel Ornedo, former PNB, Cabanatuan Branch Assistant
Manager,[31]
and testimony of a Land Bank officer.[32]
While the statements
of account showed that SNAPI has an unpaid obligation of P514,105.36,
as
of August 1985, the same failed to show the correct computation of the
loan. On the request of the Spouses Cruz, Land Bank transferred
P25,500.00
worth of bonds to PNB, Santiago Branch[33]
but PNB never reflected this amount in the statements of account. PNB
simply
stated that the Second Loan was not yet fully paid according to its
statements
of account. chanrobles virtuallaw libraryred
PNB’s rebuttal witness,
Severina Rarela, testified that Land Bank paid PNB in cash and in
bonds.
This witness competently testified that, on the instance of the Spouses
Cruz, Land Bank transferred P25,500.00 worth of bonds to PNB, Escolta
Branch
(where the account of SNAPI and Mateo Cruz were allegedly transferred).
This witness further testified that Land Bank paid directly to PNB,
Cabanatuan
Branch, P359,673.43 in bonds and in cash on the instance of the Spouses
Cruz.chanrobles virtuallaw libraryred
PNB further stressed
that instead of paying PNB, Santiago Branch, where Mateo Cruz obtained
the Second Loan, Land Bank issued bonds and cash to PNB, Cabanatuan
Branch.
PNB then concluded that this payment was not intended to pay the Second
Loan. PNB overlooked the fact that the Spouses Cruz obtained the Second
Loan from PNB, Santiago Branch, though the titles to the mortgaged
properties
were with PNB, Cabanatuan Branch. Why was the second mortgage, securing
a loan obtained from the PNB, Santiago Branch, annotated on TCT No.
T-4699
when this title, like the rest of the titles to the mortgaged
properties,
was in the possession of PNB, Cabanatuan Branch? It clearly appears
that
these PNB branches have coordinated with each other to accommodate the
Spouses Cruz’s loan applications. However, when it came to the payment
of the loans, PNB now claims that these branches acted separately and
independently
from each other. It is unfair to compel the Spouses Cruz to show how
PNB
applied the Land Bank bonds and cash. Having indisputably received the
payments, it was PNB’s burden to show how it applied these payments.chanrobles virtuallaw libraryred
A review of the trial
court’s findings convinces us that the Spouses Cruz, through Land Bank,
were able to pay not only the First Loan but more importantly the
Second
Loan. The trial court also took note of the more significant fact of
cancellation
of the mortgages on TCT No. T-4699 and the release of the titles of the
Spouses Cruz’s lands, which fact bolstered the Spouses Cruz’s stand.chanrobles virtuallaw libraryred
We find that the Spouses
Cruz had paid the Second Loan in 1977 resulting in the cancellation of
the second mortgage and release of TCT No. T-4699 and other titles to
the
Spouses Cruz. With this, the questioned foreclosure is undoubtedly
without
any legal basis, as the Third Loan was fully paid in 1983 and the
Second
Loan was completely settled in 1977. This being the case, the issue of
whether the "all-inclusive clause" in the third mortgage deed includes
the Second Loan is now moot and academic.
Award of
Damages
and Attorney’s Fees
The records do not support
any award for moral and exemplary damages to private respondents. As
found
by the Court of Appeals, the Spouses So Hu have not sufficiently proved
that PNB acted maliciously and in bad faith when it foreclosed the
Property.
On the contrary, PNB believed, although mistakenly, that it still had
an
unpaid claim for which the Property stood as a security.[34]
As we ruled in Expertravel & Tours, Inc. vs. Court of Appeals -chanrobles virtuallaw libraryred
"Moral damages are not
punitive in nature but are designed to compensate and alleviate in some
way the physical suffering, mental anguish, fright, serious anxiety,
besmirched
reputation, wounded feelings, moral shock, social humiliation, and
similar
injury unjustly caused to a person. Although incapable of pecuniary
computation,
moral damages, nevertheless, must somehow be proportional to and in
approximation
of the suffering inflicted. Such damages, to be recoverable, must be
the
proximate result of a wrongful act or omission the factual basis for
which
is satisfactorily established by the aggrieved party."[35]chanrobles virtuallaw libraryred
Since the record is
bereft of any evidence to prove the moral damages allegedly suffered by
the Spouses So Hu and the Spouses Cruz, this Court cannot award
exemplary
damages.[36]
We also disallow the award of attorney’s fees for lack of factual and
legal
basis in the text of the decisions of the courts a quo. We ruled in
Pimentel
vs. Court of Appeals that -
"With respect to petitioner's
contention that the respondent court erred in affirming the trial
court's
decision awarding P10,000.00 attorney's fees to private respondent, we
rule in favor of petitioner. The text of the trial court's decision
does
not mention the reason for the award of attorney's fees and the award
was
simply contained in the dispositive portion of the trial court's
decision.
It is now settled that the reasons or grounds for an award must be set
forth in the decision of the court."[37]chanrobles virtuallaw libraryred
WHEREFORE, the Decision
of the Court of Appeals dated October 23, 1996 is AFFIRMED with
modification.
The award of attorney’s fees and litigation expenses to the Spouses
Antonio
and Soledad So Hu is deleted and the cross-claim of Philippine National
Bank against the Spouses Mateo and Carlita Cruz is dismissed for lack
of
merit. Costs against petitioner. chanrobles virtuallaw libraryred
SO ORDERED. chanrobles virtuallaw libraryred
Davide, Jr., C.J.,
(Chairman), Vitug,
Ynares-Santiago, and Azcuna, JJ., concur.chan
robles virtual law library
____________________________
Endnotes
[1]
Under Rule 45 of the Rules of Court.
[2]
Penned by Justice Conrado M. Vasquez, Jr. and concurred in by Justices
Arturo B. Buena and Angelina Sandoval-Gutierrez.
[3]
Penned by Judge Ricardo G. Bernardo, Jr.
[4]
Records of Civil Case No. 70-AF (8723-R), p. 297.
[5]
TSN, January 26, 1988, p. 5; TSN, July 4, 1988, pp. 3-5.
[6]
TSN, January 26, 1988, pp. 6-7.
[7]
Records of Civil Case No. 70-AF (8723-R), Exhibit B, p. 124.
[8]
Records of Civil Case No. 70-AF (8723-R), Exhibit D, p. 126.
[9]
"An Act to Regulate the Sale of Property Under Special Powers Inserted
in or Annexed to Real Estate Mortgages".
[10]
"Requiring Government Financial Institutions to Foreclose Mandatorily
all
Loans with Arrearages, Including Interest and Charges Amounting to At
Least
Twenty (20%) Percent of the Total
Outstanding
Obligation".
[11]
Records of Civil Case No. 70-AF (8723-R), Exhibit 2, p. 208.
[12]
CA Decision dated October 23, 1996 (hereinafter CA Decision), Rollo, p.
34.
[13]
Records of Civil Case No. 70-AF (8723-R), pp. 32-39.
[14]
Ibid., p. 38.
[15]
Records of Civil Case No. 70-AF (8723-R), Exhibit 3, p. 210.
[16]
Records of Civil Case No. 70-AF (8723-R), p. 176.
[17]
Ibid., pp. 181-183.
[18]
Rollo, pp. 66 -77.
[19]
Records of Civil Case No. 70-AF (87323-R), p. 318.
[20]
CA Decision, Rollo, pp. 35-38.
[21]
Ibid., p. 38.
[22]
Petition for Review dated December 17, 1996 (hereinafter Petition),
Rollo,
p. 17.
[23]
Records of Civil Case No. 70-AF (8723-R), Exhibit H, p. 130.
[24]
Ibid., Exhibit C, p. 125.
[25]
Ganzon, et al. vs. Hon. Inserto, et al., 208 Phil. 630 (1983).
[26]
Rollo, p. 76.
[27]
Philippine National Bank vs. Court of Appeals, 324 SCRA 714 (2000).
[28]
Dee vs. Court of Appeals, 325 SCRA 466 (2000).
[29]
TSN, August 14, 1991, pp. 6-7.
[30]
Records of Civil Case No. 70-AF (8723-R), Exhibits 11 and 12, pp. 221,
222.
[31]
Records of Civil Case No. 70-AF (8723-R), Exhibit 10, pp. 218-220.
[32]
TSN, February 3, 1992.
[33]
Records of Civil Case No. 70-AF (8723-R), p. 297; Exhibits 3-A and 4-A,
pp. 300-304.
[34]
CA Decision, Rollo, p. 37, citing MHP Garments, Inc. vs. Court of
Appeals,
236 SCRA 227 (1994) and Tan vs. Court of Appeals, 239 SCRA 310 (1994).
[35]
309 SCRA 141 (1999).
[36]
Articles 2229 and 2234 of the Civil Code.
[37]
307 SCRA 38 (1999).
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