Manuel L. Quezon University
CASE DIGEST CREDIT TRANSACTIONS PROFESSOR: PROS. DELA CRUZ
Submitted Submitted by: Ma. Ethel Christine S. Din March 30, 2017
C a s e D i g e s t – C r e d i t Tr a n s a c t i o n s 2 0 1 7 ! r o " . Dela Cru#$ Ma. Ethel Christine S. Din
Lim vs. Lutero (G.R. No. L-22!" De#em$er %" &%2' %acts: Lim’s mortgage was execte! o" the 1# th !a$ o% A&ri' 1(20, a"! &rese"te! to the register o% !ee!s o" the 20 th !a$ o% A&ri' 1(20, a"! acta''$ registere! o" the 1) th !a$ o% *"e 1(20, whi'e the mortgage i" %a+or o% the os&ita' was "ot execte! "ti' the 17 th !a$ o% *"e 1(20- The %ormer was execte! to secre %tre a!+a"ceme"ts to .e ma!e .$ Lim *'ia" to the mortgagors to co+er ex&e"ses i"crre! .$ the mortgagors i" the c'ti+atio" a"! har+esti"g to the agric'tra' cro&s %or the $ear 1(20/1(21- The case at .ar a''ege! that there was sti'' !e a"! "&ai! o" sai! mortgage o% which was !e"ie! .$ the s&oses Ltero a"! Maga'o"a- There was a &etitio" %or i"ter+e"tio" 'e! .$ the os&ita' !e Sa" a.'o !e I'oi'o which was gra"te! &o" its a''egatio" that it ha! &rior mortgage &o" the &ro&ert$ i" estio" o% which was "e+er registere! i" the registr$ o% &ro&ert$- I" this co""ectio", *!ge Sa'as co"c'!e! that 415 the com&'ai"t agai"st Ltero a"! Maga'o"a sho'! .e !ismisse! with costs agai"st the &'ai"ti6 425 the 8a%ae' Ltero, the te"a"t sho'! .e a.so'+e! %rom a'' the 'ia.i'it$ 435 the 8D o% the ro+i"ce o% I'oi'o sho'! ca"ce' the mortgage i" %a+or o% Lim 495 the mortgage i" %a+or o% the a%oresai! hos&ita' .e registere! a"! 4#5 the mortgage i" %a+or the hos&ita' sho'! ta:e &re%ere"ce o+er the mortgage execte! i" %a+or o% Lime"ce, this &etitio"-
&ssues:
;hether or "ot the mortgage execte! i" %a+or o% the &'ai"ti6 sho'! &re%ere"ce o+er the mortgage i" %a+or o% the hos&ita''eld:
I" the rst &'ace, it ma$ .e "ote! that the a''ege! mortgage c'aime! .$ sai! hos&ita' was "ot mortgage at a'' a"! co'! "ot, .$ a"$ &ossi.i'it$, there%ore .e gi+e" &riorit$ o+er a %ormer mortgage 'ega''$ execte! a"! recor!e!- The co"te"tio" o% the hos&ita' wo'!, o% corse, there%ore .e gi+e" .t a 'itt'e co"si!eratio" exce&t %or the %act that it c'aims that it was gi+e" &riorit$ o+er the mortgage he'! .$ the a&&e''a"t .$ +irte o% a" ora' agreeme"t or "!ersta"!i"g-
C a s e D i g e s t – C r e d i t Tr a n s a c t i o n s 2 0 1 7 ! r o " . Dela Cru#$ Ma. Ethel Christine S. Din e"ce, the mortgage execte! .$ Ltero a"! Maga'o"a to Lim co"stittes a 'ie" &o" the &ro&ert$ mortgage! a"! is &rior 'ie" o+er the a''ege! mortgage i" %a+or o% the os&ita' !e Sa" a.'o !e I'oi'o-
C)i*+ ,+*i* Cor/. vs. CA %acts: <" Agst 21, 1(79, Ca'a&atia, a stoc:ho'!er o% ri+ate =a''e$ Go'% > Co"tr$ C'., I"c- 4=GCCI5 &'e!ge! his stoc: Certicate ?o- 121( to Chi"a @a":i"g Cor&- 4C@C5 a"! C@C reeste! the a%oreme"tio"e! &'e!ge agreeme"t .e recor!e! to =GCCI’s .oo:s a"! the 'atter re&'ie! that the same was !'$ "ote! i" its cor&orate .oo:s-
Ca'a&atia o.tai"e! a 'oa" o% 20,000 %rom C@C secre! .$ the !ee! o% &'e!ge!- e !e%a'te! a"! C@C 'e! a &etitio" %or extra/!icia' %orec'osre .e%ore a ?otar$ .'ic De =era reesti"g the 'atter to co"!ct a &.'ic actio" sa'e o% the &'e!ge! stoc:- C@C i"%orme! =GCCI o% the a.o+eme"tio"e! %orec'osre &rocee!i"gs a"! reeste! the &'e!ge! stoc: .e tra"s%erre! to C@C a"! the same .e recor!e! i" =GCCI’s cor&orate .oo:s-
?o"ethe'ess, =GCCI i"%orme! C@C that the$ ca""ot !o their reest %or the reaso" that Ca'a&atia has "sett'e! acco"ts with the c'.- Des&ite o% this, De =era he'! a &.'ic actio" a"! C@C emerge! as the highest .i!!er at 20,000-00 a"! therea%ter isse! a certicate o% sa'e-
=GCCI, !e to %ai're o% Ca'a&atia’s mo"th'$ !es !e'i"e"cies, a'so he'! a" actio" o% the stoc: certicates, o"e o% which is Stoc: Certicate ?o- 121(- C@C reeste! to ca"ce' the sai! stoc: certicate a"! ma:e a "ew o"e "!er its "ame .t to "o a+ai' !e to =GCCI has .ee" so'! the same at a &.'ic actio"- Co"see"t'$, C@C 'e! agai"st =GCCI .e%ore the 8TC Ma:ati %or the "''icatio" .t was 'ater !ismisse! !e to the &remise that it 'ac:e! ris!ictio" o+er the s.ect matter o" the theor$ that it i"+o'+es a" i"tra/cor&orate !is&teSEC eari"g
&ssue:
C a s e D i g e s t – C r e d i t Tr a n s a c t i o n s 2 0 1 7 ! r o " . Dela Cru#$ Ma. Ethel Christine S. Din ;hether or "ot C@C .o"! .$ the =GCCI’s .$/'aws-
'eld: I" or!er to .e .o"!, the 3 r! &art$ mst ha+e acire! :"ow'e!ge o% the &erti"e"t .$/ 'aws at the time the tra"sactio" or agreeme"t sai! 3 r! &art$ a"! shareho'!er was e"tere! i"to- I" this case, at the time the &'e!ge agreeme"t was execte!- =GCCI co'! ha+e easi'$ i"%orme! C@C o% its .$/'aws whe" it se"t "otice %orma''$ recog"ii"g C@C as &'e!gee o% o"e o% Ca'a&atia’s Stoc: Certicates- The &r&ose o% the .$/'aws is to reg'ate the co"!ct a"! !e"e the !ties o% mem.ers towar!s the cor&oratio" a"! amo"g themse'+es- The$ are se'%/ im&ose! a"!, a'thogh a!o&te! &rsa"t to stattor$ athorit$, ha+e "o stats as &.'ic 'aw- e"ce, it is the ge"era''$ acce&te! r'e that 3 r! &erso"s are "ot .o"! .$ .$/'aws exce&t whe" the$ ha+e :"ow'e!ge o% the &ro+isio"s either acta''$ or co"strcti+e'$rther, Sec- )3 o% the Cor&oratio" Co!e &ro+i!es that "o shares o% stoc: agai"st which the cor&oratio" ho'!s a"$ "&ai! c'aim sha'' .e tra"s%erra.'e i" the .oo:s the cor&oratio" ca""ot .e ti'ie! .$ the =GCCI- The term "&ai! c'aims re%er to a"$ "&ai! c'aim arisi"g %rom "&ai! s.scri&tio" a"! "ot i"!e.te!"ess which a s.scri.er or stoc:ho'!er ma$ owe the cor&oratio" arisi"g %rom other tra"sactio"- e"ce, the assai'e! !ecisio" o% the CA is re+erse! a"! the or!er o% SEC e" .a"c is aBrme!-
C a s e D i g e s t – C r e d i t Tr a n s a c t i o n s 2 0 1 7 ! r o " . Dela Cru#$ Ma. Ethel Christine S. Din
EL ,ANCO ESPANOL 0FILIPINO vs. PALANCA %acts:
E"gracio a'a"ca execte! a mortgage! his &arce' o% 'a"! i" %a+or o% E' @a"co as a secrit$ %or his i"!e.te!"ess amo"ti"g to 21, 2(9- 10- is &ro&ert$ is o"'$ worth 7#,000-00 more tha" what he owes- E' @a"co the" mortgage! the &ro&ert$ o% a'a"ca !e to his %ai're to ma:e his &a$me"ts- owe+er, a'a"ca 'e%t %or Chi"a a"! "e+er came .ac: "ti' he !ie!- E' @a"co 'ater gra"te! .$ the cort to execte E"gracio’s &ro&ert$- Se+e" $ears 'ater, =ice"te as the a!mi"istrator o% the estate o% E"gracio 'e! a &etitio" %or the a""'me"t o% the cort’s r'i"g i" %a+or o% E' @a"co a''egi"g that E"gracio was "ot gi+e" !e &rocess as he "e+er recei+e! the smmo"s-
&ssue:
;hether or "ot !e &rocess was "ot o.ser+e!-
'eld:
Fes- The Cort r'e! agai"st a'a"ca- The reisites %or !icia' !e &rocess ha! .ee" met which are 1- There mst .e a" im&artia' cort or tri."a' c'othe! with !icia' &ower to hear a"! !eci!e the matter .e%ore it 2- *ris!ictio" mst .e 'aw%''$ acire! o+er the &erso"
o% the !e%e"!a"t or
o+er the &ro&ert$ s.ect o% the &rocee!i"gs 3- The !e%e"!a"t mst .e gi+e" the o&&ort"it$ to .e hear! a"!
C a s e D i g e s t – C r e d i t Tr a n s a c t i o n s 2 0 1 7 ! r o " . Dela Cru#$ Ma. Ethel Christine S. Din 9- *!gme"t mst .e re"!ere! a%ter a 'aw%' heari"ge"ce, the !gme"t i" estio" is "ot +oi!- It is e"tire'$ reg'ar i" %orm, a"! the a''ege! !e%ect is o"e which is "ot a&&are"t o" its %ace- The !gme"t a&&ea'e! %rom is withot error a"! the same is accor!i"g'$ aBrme!-
1ALONTE 1S. CA %acts: *oai" =a'mo"te so'! to his !aghter astora 3 &arce's o% 'a"! 'ocate! i" *ae", ?e+a Ecia with a tota' area o% 70-) hectares- A %ew !a$s 'ater, astora o.tai"e! a 'oa" o% 1),000 %rom the ?@ a"! execte! a mortgage as a secrit$ %or &a$me"t thereo%- astora the" !e%a'te! i" the &a$me"t o% the 'oa" there%ore ?@ co"!cte! a" extra/!icia' sa'e o% the s.ect &ro&ert$ %or the satis%actio" o% astora’s !e.t- ?@ was the so'e a"! o"'$ .i!!er %or #,#29-90- <"
etitio"ers a+erre! that there was i"sBcie"t &.'icatio" o% the "otice o% sa'e, the &osti"g o% the "otice was "ot i" accor!a"ce with 'aw, the &rice o.tai"e! !ri"g actio" sa'e was "co"scio"a.'$ 'ow, the sheri6 who co"!cte! the sa'es ha! athorit$ to !o so, a"! the actio" sa'e was +oi! as it was co"!cte! o" a !ec'are! ho'i!a$-
&ssues:
1- ;hether or "ot the %orec'osre sa'e i"+a'i!ate! .ecase it was co"!cte! o" a ho'i!a$-
C a s e D i g e s t – C r e d i t Tr a n s a c t i o n s 2 0 1 7 ! r o " . Dela Cru#$ Ma. Ethel Christine S. Din 2- ;hether or "ot the actio" sho'! .e "''ie! !e to the &rice o.tai"e! !ri"g sai! actio" sa'e was "co"scio"a.'$ 'ow-
'eld:
1. (o. etitio"ers re'ie! o" Sectio" 31 o% the 8e+ise! A!mi"istrati+e Co!e- owe+er, sai! &ro+isio" is "ot a&&'ica.'e to actio" sa'es- The &retermissio" o% a ho'i!a$ a&&'ies o"'$ where that !a$ or the 'ast !a$ %or the !oi"g a"$ act reire! or &ermitte! .$ 'aw %a''s o" a ho'i!a$, or whe" the 'ast !a$ o% a gi+e" &erio! %or !oi"g a" act %a''s o" a ho'i!a$- It !oes "ot a&&'$ to a !a$ xe! .$ a" oBce or oBcer o% the go+er"me"t %or a" act to .e !o"e, as !isti"gishe! %rom a &erio! o% time withi" which a" act sho'! .e !o"e, which ma$ .e o" a"$ !a$ withi" that s&ecie! &erio!Si"ce A&ri' 10, 1()1 was "ot the !a$ or 'ast !a$ set .$ 'aw %or the extra!icia' %orec'osre sa'e, "or the 'ast !a$ o% a gi+e" &erio!, .t a !ate xe! .$ the !e&t$ sheri6, the a%oresai! sa'e ca""ot 'ega''$ .e ma!e o" the "ext sccee!i"g .si"ess !a$ withot the "otices o% sa'e o" the !a$ .ei"g &oste! as &rescri.e! "!er Sectio" (, Act- ?o 313#Co"%orma.'$, the extra!icia' %orec'osre co"!cte! o" Agst 1(, 1(#9 was +a'i!, "otwithsta"!i"g the %act that the sai! !ate was !ec'are! a ho'i!a$- Act 313# mere'$ reires sBcie"t &.'icatio" a"! &osti"g o% the "otice o% sa'e .e !o"e, as reire! .$ 'aw-
2. (o. ;he" there is a right to re!eem, i"a!eac$ o% the &rice is o% "o mome"t %or the reaso" that the !gme"t !e.tor has a'wa$s the cha"ce to re!eem a"! reacire &ro&ert$- The &rchase &rice o% #,#29-90 was %o"! .$ the cort to sBce- I" %act, the &ro&ert$ ma$ .e so'! %or 'ess tha" its %air mar:et +a'e &recise'$ .ecase the 'esser the &rice the easier %or the ow"er to e6ect re!em&tio"-
C a s e D i g e s t – C r e d i t Tr a n s a c t i o n s 2 0 1 7 ! r o " . Dela Cru#$ Ma. Ethel Christine S. Din
DE1ELOPENT ,AN3 OF T4E P4ILIPPINES vs. 1DA. DE OLL
%acts:
<" A&ri' 12, 1(97 a"! Decem.er #, 1(97, D@ 4the" :"ow" as the 8eha.i'itatio" i"a"ce Cor&-5 gra"te! agric'tra' 'oa"s i" the amo"t o% 120,000-00 a"! 22,000-00, res&ecti+e'$ i" %a+or o% Se.astia" Mo'' Sr-, who to secre the &a$me"t o% sai! 'oa"s mortgage! i" %a+or o% D@ 19 &arce's o% 'a"! com&risi"g the &ro&ert$ :"ow" acie"!a Mo''H- Mo'' Sr- s.see"t'$ !ie! a"! therea%ter, his heir execte! a" extra!icia' &artitio" o% his estate i"c'!i"g the s.ect &ro&ert$ !es&ite the %act the$ are .o"!, oi"t'$ a"! se+era''$, to assme &a$me"t o% the i"!e.te!"ess o% the !ecease! with D@- <" the same !ate, D@ gra"te! a!!itio"a' 'oa"s 4agric'tra' a"! i"!stria'5- Sai! 'oa"s were gra"te! o" the secrit$ o% the same &ro&erties a'rea!$ mortgage! to D@ whi'e i"!stria' 'oa"s were secre! .$ mortgages o" machi"eries, ei&me"t a"! some other rea' estate-
Therea%ter, the heirs %ai'e! to com&'$ with the terms o% the 'oa" co"tracts a"! co"see"t'$, &ro&erties were extra/!icia''$ %orec'ose! a"! 'ater o" awar!e! to the D@
C a s e D i g e s t – C r e d i t Tr a n s a c t i o n s 2 0 1 7 ! r o " . Dela Cru#$ Ma. Ethel Christine S. Din which is the so'e a"! highest .i!!er- As the &rocee!s o% the %orec'osre sa'e !o "ot sBce the i"!e.te!"ess, the D@ 'e! a com&'ai"t %or co''ectio" o% sm o% mo"e$ stati"g the !ecie"cies o% the heirs- 8TC Ma"i'a sstai"e! the a%orestate! !ecie"c$ c'aims o% D@-
&ssues:
1- ;hether or "ot the %orec'osre sa'e mst .e set asi!e %or the reaso" that the &rice o.tai"e! was "co"scio"a.'e2- ;hether or "ot the actio" %or reco+er$ was &rematre'$ i"stitte! !ri"g the re!em&tio" &erio!-
'eld:
1. (o. The "oreclosure sale cannot be set aside. 2. (o. The action "or reco)ery o" de*ciency +udgment may be *led during ,eriod o" redem,tion. <"ce the actio" sa'e o% the mortgage! &ro&ert$ is e6ecte! a"! the res'ti"g !ecie"c$ i" the mortgage !e.t is ascertai"e!, the mortgagee/ cre!itor is the" a"! there e"tit'e! to secre !ecie"c$ !gme"t which ma$ imme!iate'$ .e execte!, whether or "ot the mortgagor is sti'' e"tit'e! to re!eem the &ro&ert$ so'!-
TUALAD vs. 1ICENCIO (5& SCRA &5!
%acts:
=ice"cios o.tai"e! a 'oa" %rom Tma'a! amo"ti"g to 9,00-00- As a secrit$ %or the &a$me"t o% the 'oa", the$ execte! a chatte' mortgage i" %a+or o% Tma'a! o+er their hose o% stro"g materia's which stoo! o" a 'a"!, re"te! %rom the Ma!riga' > Com&a"$ Therea%ter, the$ !e%a'te! i" &a$me"t o% the 'oa" which res'te! to %orec'osre o% the hose i" &rsa"ce o% their co"tract- E+e"ta''$, the hose was so'! to Tma'a! a"! i"stitte! a ci+i' case .e%ore the MTC o% Ma"i'a to ha+e =ice"cios +acate the &ro&ert$ o% which was sstai"e! .$ the MTC- The tria' cort a'so or!ere! =Ice"cio to &a$ re"t "ti' the$ ha+e com&'ete'$ +acate! the hose- =ice"cio the" estio"e! the +a'i!it$ o% the Chatte' Mortgage
C a s e D i g e s t – C r e d i t Tr a n s a c t i o n s 2 0 1 7 ! r o " . Dela Cru#$ Ma. Ethel Christine S. Din o" the gro"! that 415 the sig"atre o" it was o.tai"e! throgh %ra! a"! 425 the mortgage is a hose there%ore ca" o"'$ .e the s.ect o% a 8ea' Estate Mortgage<" a&&ea', 8TC %o"! i" %a+or o% Tma'a!, a"! si"ce =ice"cio %ai'e! to com&'$ with the or!er o% the MTC to &a$ re"t "ti' the$ ha+e +acate! the hose, 8TC isse! a writ o% exectio"- ?o"ethe'ess, the s.ect hose was !emo'ishe! &rsa"t to a" or!er o% the cort i" a" eectme"t sit agai"st =ice"cio %or "o"/&a$me"t o% re"ta's-
&ssue:
;hether or "ot the chatte' mortgage is +oi! %or ha+i"g its s.ect a" immo+a.'e thi"g-
'eld:
(o. A'thogh the hose is a" immo+a.'e &ro&ert$, &arties to a co"tract ma$ treat the same as &erso"a' &ro&ert$ which .$ "atre wo'! .e rea' &ro&ert$ a"! it wo'! .e +a'i! a"! goo! mere'$ i" so %ar as the co"tracti"g &arties are co"cer"e!- @$ &ri"ci&'e o% esto&&e', the ow"er !ec'ari"g his hose to .e a chatte' ma$ "o 'o"ger s.see"t'$ c'aim otherwise-
A3ATI LEASING AND FINANCE CORP. vs. 6EARE1ER TE7TILE ILLS" INC. AND COURT OF APPEALS
%acts:
;eare+er Texti'e,
to o.tai"
"a"cia' accommo!atio"s %rom
Ma:ati
Leasi"g,
!isco"te! a"! assig"e! se+era' recei+a.'es "!er a 8ecei+a.'e rchase Agreeme"t with Ma:ati Leasi"g- As a secrit$ %or the co''ectio" o% recei+a.'es, ;eare+er Texti'e execte! a chatte' mortgage o+er se+era' raw materia's a"! machi"er$ 4!r$er5-
C a s e D i g e s t – C r e d i t Tr a n s a c t i o n s 2 0 1 7 ! r o " . Dela Cru#$ Ma. Ethel Christine S. Din
Therea%ter, ;eare+er !e%a'te! a"! e+e"ta''$ the machi"er$ was %orec'ose!-
