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[G.R. No. 120859.January 23, 2002]
METROBANK vs. WONG
THIRD DIVISION
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated JAN 23 2002.
G.R. No. 120859(Metropolitan Bank and Trust Company, petitioner vs. Francisco Y. Wong, respondent.)
G.R. No. 120816(Francisco Y. Wong, petitioner vs. Metropolitan Bank and Trust Company, and Register of Deeds for Zamboanga del Sur, respondents.)
On June 26, 2001, we denied the petition for review on certiorari filed by the Metropolitan Bank and Trust Company (petitioner) against Francisco Wong (respondent), on two grounds: first, while personal notice to the mortgagor is not necessary under Act No. 3135, the parties to the mortgage contract are not precluded from exacting such additional requirement; and second, the case of Olizon v. Court of Appeals [1] cralaw , relied upon by petitioner, has not actually dispensed with the posting requirement under Section 3 of Act No. 3135.The pertinent portion of our Decision reads:
"The Act only requires (1) the posting of notices of sale in three public places, and (2) the publication of the same in a newspaper of general circulation.Personal notice to the mortgagor is not necessary.Nevertheless, the parties to the mortgage contract are not precluded from exacting additional requirements.In this case, petitioner and respondentin entering into a contract of real estate mortgage, agreed inter alia:
'all correspondence relative to this mortgage, including demand letters, summonses, subpoenas, or notifications of any judicial or extra-judicial action shall be sent to the MORTGAGOR at 40-42 Aldeguer St. Iloilo City, or at the address that may hereafter be given in writing by the MORTGAGOR to the MORTGAGEE.'
"Precisely, the purpose of the foregoing stipulation is to apprise respondent of any action which petitioner might take on the subject property, thus according him the opportunity to safeguard his rights.When petitioner failed to send the notice of foreclosure sale to respondent, he committed a contractual breach sufficient to render the foreclosure sale on November 23, 1981 null and void.
'The second query must be answered in the affirmative.An incisive scrutiny of Olizon shows that this Court has not actually dispensed with the posting requirement under Section 3 of Act no. 3135, xxx.:
"Obviously, as correctly pointed out by respondent, what prompted the Court to dispense with the posting requirement is the "unusual nature of the attendant facts and the peculiarity of the confluent circumstances" Involved in Olizon.It bears stressing that in the said case, the extra-judicial foreclosure sale sought to be annulled was conducted more than 15 years ago, thus, even on the equitable ground of laches, the Olizons' action for annulment of foreclosure proceedings and certificate of sale was bound to fail."
Petitioner now seeks reconsideration of our Decision.Invoking the case of Cortez v. Intermediate Appellate Court, [2] cralaw petitioner contends that this Court construed a similar stipulation between the parties therein, regarding the sending of all correspondence to the mortgagor, as a mere expression of general intent.As such, it may not prevail against the parties' specific intent to make Act No. 3135 (which does not require personal notice of foreclosure) the controlling law between them.
The Cortez case finds no application to the case at bar.Indeed, it cannot provide solace to petitioner's cause.
First , our Decision is sustained by the much later cases of Grand Farms, Inc. v. Court of Appeals, [3] cralaw and Concepcion v. Court of Appeals. [4] cralaw In these cases where similarly worded stipulations between the parties are involved, we ruled that while personal notice to the mortgagor is not necessary under Act No. 3135, nevertheless, the parties to the mortgage contract are not precluded from exacting additional requirements, such as notice of foreclosure to the mortgagor.Said stipulations, not being contrary to law, morals, good customs, public order or public policy, shall be considered as the law between the contracting parties and shall be faithfully complied with.In Grand Farms, this Court held:
"While private respondent was constituted as their attorney-in-fact by petitioners, the inclusion of the aforequoted paragraph (k) in the mortgage contract nevertheless rendered personal notice to the latter indispensable.As we stated in Community Savings & Loan Association, Inc., et al., vs. Court of Appeals, et al., where he had the occasion to contrue an identical provision:
'On the other important point that militates against the petitioner's first ground for this petition is the fact that no notice of the foreclosure proceedings was ever sent by CSLA to the deceased mortgagor Antonio Esguerra or his heirs in spite of an express stipulation in the mortgage agreement to that effect.Said Real Estate Mortgage provides, in Sec. 10 thereof that:
'(10) All correspondence relative to this mortgage, including demand letters, summons, subpoenas, or notifications of any judicial or extrajudicial actions shall be sent to the Mortgagor at the address given above or at the address that may hereafter be given in writing by the Mortgagor to the Mortgagee, and the mere act of sending any correspondence by mail or by personal delivery to the said address shall be valid and effective notice the Mortgagor for all legal purposes, xxx.
'The Court of Appeals, in appreciating the forgoing provision ruled that it "is an additional stipulation between the parties.As such, it is the law between them and as it not contrary to law, morals, good customs and public policy, the same should be complied with faithfully (Article 1306, New Civil Code of the Philippines).Thus, while publication of the foreclosure proceedings in the newspaper of general circulation was complied with, personal notice is still required, as in the case at bar, when the same was mutually agreed upon by the parties as additional condition of the mortgage contract.Failure to comply with this additional stipulation would render illusory Article 1306 of the New Civil Code of the Philippines.'
x x x���������������� x x x
"We do not agree with respondent court that paragraph (k) of the mortgage contract in question was intended merely to indicate the address to which the communications stated therein should be sent.This interpretation is rejected by the very text of said paragraph as above construed.We do not see any conceivable reason why the interpretation placed on an identically worded provision in the mortgage contract involved in Community Savings & Loan Association, Inc. should be adopted with respect to the same provision involved in the case at bar.
"Xxx.Those mentioned in paragraph (k) are specific and additional requirements intended for the mortgagors so that, thus apprised, they may take the necessary legal steps for the protection of their interests such as the payment of the loan to prevent foreclosure or to subsequently arrange for redemption of the property foreclosed.
"What private respondent would want is to have paragraph (k) considered as non-existent and consequently disregarded.Furthermore, it bears mention that private respondent having caused the formulation and preparation of the printed mortgage contract in question, any obscurity that it imputes thereto or which supposedly appears therein should not favor it as a contracting party."
And second, there exists a crucial distinction between the situation of the parties in Cortez and in the case at bar.Unlike in Cortez where the mortgagor was the borrower of the loan that was secured by the mortgage, respondent, in the present case, mortgaged his property merely to accommodate Mindanao Grains, Inc. (MGI), the actual borrower.In short, respondent was merely an "accommodation mortgagor."Not being a party to the contract of loan between MGI and petitioner, respondent has the right to demand from the latter a personal notice of foreclosure under the Real Estate Mortgage.
Also, respondent's assertion that as a condition precedent to his execution of the real estate mortgage, the said document must clearly state (which it does) that his address is 40-42 Aldeguer St., Iloilo City, the place where "all correspondence relative to the mortgage, including demand letters, summonses, subpoenas, or notifications of any judicial or extra-judicial actions shall be sent, "clearly shows that the intention of the parties is that the mortgagee should notify the mortgagor or the other parties concerned of the foreclosure proceeding.To be sure, the importance of such personal notice to respondent herein cannot be overemphasized.In variance with Cortez where the mortgagors were very much aware of their default, in this case, no such default or knowledge thereof could be imputed to respondent.
Evidently, what petitioner would like us to do is to disregard its obligation, under the Real Estate Mortgage, to furnish respondent with personal notice of foreclosure.This cannot be done in view of the basic rule in our civil Code that "obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith." [5] cralaw
The rest of petitioner's arguments deserve scant consideration, the same being mere rehash of those raised in the petition which have been fully passed upon in our Decision.
WHEREFORE, the motion is hereby DENIED with finality.
SO ORDERED.
Very truly yours,
(Sgd.) JULIETA Y. CARREON
Clerk of Court
Endnotes:
[1] cralaw 236 SCRA 148 (1994).
[2] cralaw 175 SCRA 545 (1994).
[3] cralaw 193 SCRA 748 (1991).
[4] cralaw 274 SCRA 614 (1997).
[5] cralaw Article 1159, Civil Code of the Philippines.
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