Credit Digest

1
G.R. No. 94247 September 11, 1991

DIONISIO MOJICA, in behalf of Spouses LEONARDO MOJICA (now deceased) and MARINA RUFIDO,petitioner,
vs.
HON. COURT OF APPEALS, and RURAL BANK OF YAWIT, INC., respondents.
Facts:
Mojica contracted a loan of 20k with RB Kawit secured with REM. The REM states that it secured the payment of 20k loan and
such other loans or other advances already obtained or still to be obtained, if the mortgagors fulfil their obligation then the
mortgage shall become null and void. The loan was fully paid.
A new loan was obtained by the plaintiff from RB Kawit. No formal deed of mortgage was constituted over any property of
borrowers. At the top of PN it contained the note that the PN is secured by REM executed and guaranteed the previously paid
20k loan. The borrowers failed to pay their obligation. RB Kawit foreclosed the real estate mortgage on the justification that it
was adopted as a mortgage for the new loan of 18K. The one year period for redemption elapses after June 1980 without
plaintiffs spouses having redeemed the foreclosure property.
The son of petitioner spouses made a partial payment which RB accepted and received, acknowledged as partial payment of
pastdue loan. Another partial payment was made, received by RB however considered by the bank as deposit for the
repurchase of the foreclosed property. The son, Dionisio inquired for the balance, the RB issued a computation slip.
The bank registered for consolidation of owenership in the ROD acquiring new TCT. The bank scheduled the property to be
sold at public auction. The petitioners were notified. However no sale was consummated and the property remains in the
possession of the RB. The refusal of the same bank to allow Dionisio Mojica to pay the unpaid balance of the loan as per the
"Computation Slip" amounting to P21,272.50, resulted in the filing of a complaint.

ISSUE: WON the foreclosure sale had for its basis, a valid and subsisting mortgage contract.
RULING:
It has long been settled by a long line of decisions that mortgages given to secure future advancements are valid and
legal contracts; that the amounts named as consideration in said contract do not limit the amount for which the mortgage may
stand as security if from the four corners of the instrument the intent to secure future and other indebtedness can be gathered.
A mortgage given to secure advancements is a continuing security and is not discharged by repayment of the amount
named in the mortgage, until the full amount of the advancements are paid fact, it has also been held that where the annotation
on the back of a certificate of title about a first mortgage states "that the mortgage secured the payment of a certain amount of
money plus interest plus other obligations.
There was no necessity for any notation of the later loans on the mortgagors' title. It was incumbent upon any
subsequent mortgagee or encumbrances of the property in question to entry in the books and records of the bank, as first
mortgagee, regarding the credit standing of the debtors.
ISSUE: WON the RB is correct for not allowing the sales as per computation slip.
RULING:
Yes. The property covered by the REM became the acquired asset of the bank. The petitioners have lost its right of
legal redemption after the lapse of one year the date of certificate of sale was registered in the ROD. Conventional
redemption was subject to be exercised up to March 3, 1982 and was extended up to April 19, 1982 for a fixed amount of
P85,000.00. The respondent bank even favored the petitioner by giving them the first preference to repurchase the property
but they failed to avail of this opportunity, although the bank "is certainly disposed to release at anytime" the deposits.
Further, the evidence on record also shows that the mortgage property was auctioned on June 27, 1979. The only bidder was
the respondent bank which bid for P26,387.04. As the highest bidder, the respondent bank can rightfully consolidate its title
over the property.
The petition is DISMISSED.

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G.R. No. 94247 September 11, 1991

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