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    Development Bank of The Philippines, Petitioner, V. Ruben S. Go and Angelita M. Go, and The Honorable Court of APPEALS, Respondents. Decision

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    chappy_leigh118
    The Development Bank of the Philippines (DBP) granted a loan to Ruben and Angelita Go that was secured by a mortgage on their real and personal properties. The Gos later defaulted on the loan, so DBP initiated an extrajudicial foreclosure on the mortgaged properties. The trial court and appellate court found the foreclosure void because the loan had not yet matured. DBP filed a motion seeking to modify the ruling to explicitly include penalties and insurance premiums owed in the amount to be paid by the Gos, as well as to allow judicial foreclosure if payment was not made. The Supreme Court granted modifying the ruling only to specify inclusion of insurance and other charges owed, but denied allowing judicial

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    Development Bank of The Philippines, Petitioner, V. Ruben S. Go and Angelita M. Go, and The Honorable Court of APPEALS, Respondents. Decision

    Uploaded by

    chappy_leigh118
    127 views2 pages
    The Development Bank of the Philippines (DBP) granted a loan to Ruben and Angelita Go that was secured by a mortgage on their real and personal properties. The Gos later defaulted on the loan, so DBP initiated an extrajudicial foreclosure on the mortgaged properties. The trial court and appellate court found the foreclosure void because the loan had not yet matured. DBP filed a motion seeking to modify the ruling to explicitly include penalties and insurance premiums owed in the amount to be paid by the Gos, as well as to allow judicial foreclosure if payment was not made. The Supreme Court granted modifying the ruling only to specify inclusion of insurance and other charges owed, but denied allowing judicial

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    Original Title

    DBP v. Go

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    The Development Bank of the Philippines (DBP) granted a loan to Ruben and Angelita Go that was secured by a mortgage on their real and personal properties. The Gos later defaulted on the loan, so DBP initiated an extrajudicial foreclosure on the mortgaged properties. The trial court and appellate court found the foreclosure void because the loan had not yet matured. DBP filed a motion seeking to modify the ruling to explicitly include penalties and insurance premiums owed in the amount to be paid by the Gos, as well as to allow judicial foreclosure if payment was not made. The Supreme Court granted modifying the ruling only to specify inclusion of insurance and other charges owed, but denied allowing judicial

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    127 views2 pages

    Development Bank of The Philippines, Petitioner, V. Ruben S. Go and Angelita M. Go, and The Honorable Court of APPEALS, Respondents. Decision

    Uploaded by

    chappy_leigh118
    The Development Bank of the Philippines (DBP) granted a loan to Ruben and Angelita Go that was secured by a mortgage on their real and personal properties. The Gos later defaulted on the loan, so DBP initiated an extrajudicial foreclosure on the mortgaged properties. The trial court and appellate court found the foreclosure void because the loan had not yet matured. DBP filed a motion seeking to modify the ruling to explicitly include penalties and insurance premiums owed in the amount to be paid by the Gos, as well as to allow judicial foreclosure if payment was not made. The Supreme Court granted modifying the ruling only to specify inclusion of insurance and other charges owed, but denied allowing judicial

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    DEVELOPMENT BANK OF THE PHILIPPINES, Petitioner, v.

    RUBEN
    S. GO and ANGELITA M. GO, and the HONORABLE COURT OF
    APPEALS, Respondents.
    DECISION
    [private respondents] entered into a contract of loan with [petitioner]
    DBP The contract was evidenced by two (2) promissory notes. The
    above promissory notes were secured by a mortgage contract over
    both the real and personal properties of [private respondents].
    Another provision of the contract required all mortgagors to insure all
    real and personal properties mortgaged with the DBP Pool of
    Accredited Insurance Companies. In this case, [private respondents]
    were made to insure their real and personal properties with [the] DBP
    Pool of Accredited Insurance Companies for P709,000.00 - the net
    replacement cost of the assets mortgaged.
    [Petitioner] DBP extra-judicially foreclosed on (sic) the mortgaged
    properties of [private respondents], claiming that [private
    respondents] had defaulted on their loan contract and the mortgaged
    properties were sold at [a] public auction sale to DBP, the highest
    bidder.
    [private respondents] commenced suit to nullify the extrajudicial
    foreclosure and sale at public auction of [private respondents']
    mortgaged properties.
    the RTC rendered its Decision in favor of the plaintiff spouses Go
    The DBP appealed the case to the CA. The CA reversed the decision of
    the RTC
    The CA held that the extrajudicial foreclosure was void because the
    loan had not yet matured at the time of the foreclosure proceedings.

    Petitioner DBP filed a Motion for Partial Reconsideration.5 It sought the


    modification of paragraph 6 of the dispositive portion of the CA
    Decision. Paragraph 6 allegedly failed to take into consideration and/or
    incorporate the 8% per annum penalty charge and insurance
    premiums and other charges stated in paragraphs 2 and 3,
    respectively. Petitioner also argued that the way paragraph 6 is written
    will convey the idea that private respondents are only liable to pay the
    principal amount of the loan plus the regular 18% per annum interest.
    DBP likewise argues that the provision may be interpreted to mean
    that in the event of private respondents' failure to pay the amount
    within ninety (90) days from finality of the CA Decision, extrajudicial
    foreclosure is the only remedy available to it.
    Thus, petitioner prayed that said paragraph 6 be amended to read as
    follows:
    6. The plaintiffs-appellees are hereby ordered to pay defendantappellant DBP the P494,000.00 principal amount of their loan with
    18% interest per annum from the date the loan was granted up to full
    payment, (plus 8% per annum penalty charge as provided in
    paragraph "2," supra,) and the total amount of insurance premiums
    and other charges (as provided in paragraph "3," supra,) less
    payments already made, within ninety (90) days from the finality of
    this decision, otherwise, the defendant-appellant DBP shall be
    entitled to a writ of execution to finally judicially foreclose the
    mortgaged properties and sell the same at public auction to satisfy the
    loan.
    The CA denied the Motion for Partial Reconsideration.
    Petitioner DBP now comes to this
    The petition is partly meritorious.
    Petitioner offers no sufficient support for its allegation that the CA
    committed grave abuse of discretion. The petition contains no
    explanation of how the CA exercised its judgment capriciously or

    whimsically or in an arbitrary or despotic manner. The loan contract


    states:
    As to the second part of petitioner's prayer seeking to amend the
    dispositive portion to include entitlement to a writ of execution to
    judicially foreclose the mortgaged properties, we find no basis to grant
    the same.
    The mortgage contract states that petitioner may resort to either
    judicial or extrajudicial foreclosure in case of default. 28 Petitioner opted
    for extrajudicial foreclosure. However, both the trial court and the CA
    declared the extrajudicial foreclosure void for being premature. For all
    intents and purposes, there has been no foreclosure. Therefore, this
    Court, or any other court for that matter, cannot issue a writ of
    execution to judicially foreclose the property.
    If and when private respondents default on their obligation subject of
    this decision, then petitioner, once again, shall have the option to
    resort to either judicial or extrajudicial foreclosure. Should it opt to
    judicially foreclose the mortgage, it should follow the procedure in Rule
    68 of the Rules of Court. We cannot allow the petitioner to resort to
    short-cuts in the procedure for judicial foreclosure even in the guise of
    avoiding multiplicity of suits through the mere expediency of amending
    a duly-promulgated decision of the appellate court.

    WHEREFORE, premises considered, the Petition for Review is GRANTED


    IN PART. Paragraph 6 of the assailed September 23, 2004 Decision of
    the Court of Appeals is MODIFIED as follows:
    6. The plaintiffs-appellees are hereby ordered to pay defendantappellant DBP the P494,000.00 principal amount of their loan with
    18% interest per annum from the date the loan was granted up to full
    payment, plus the total amount of insurance premium and other
    charges as provided in paragraph "3," supra, less payments already
    made, within ninety (90) days from the finality of this decision,
    otherwise, the defendant-appellant shall be entitled to foreclose the
    mortgaged properties and sell the same at public auction to satisfy the
    loan.
    No pronouncement as to costs.
    SO ORDERED.

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