Philippine Trust Company v. Policarpio

BARREDO, J.:

Appeal from the decision of the Court of First Instance of Manila (Branch XVII), in its Civil Case No. 41518, and the subsequent order modifying the dispositive portion thereof, sent to Us by the Court of Appeals, the amount involved therein being beyond the latter's appellate jurisdiction. 1 The constitutive facts which are not disputed in this appeal are stated in the decision of the trial court thus: From the evidence presented by the plaintiff, it appears that on May 23, 1958, defendant Iluminada (Lumen) R. Policarpio, as principal, and defendant spouses, Simeon Policarpio and Modesta Reyes, as sureties, obtained a loan from the plaintiff, Philippine Trust Company, which is a banking corporation duly organized and existing in accordance with the laws of the Republic of the Philippines, with principal offices at the Philippine Trust Company Building, Plaza Goiti, Manila, in the form of an agreement for credit in current account, in the total sum of P300,000.00 with interest thereon at 9% per annum from said date until fully paid, with the stipulation that the overdraft line would be reduced by P3,000.00 monthly, commencing on July 1, 1958 (Exh.

"A"). To guarantee the payment of said obligation, defendants jointly and severally executed a deed of mortgage (Exh. "B") in favor of said plaintiff over the parcels of land including all the improvements existing thereon, covered by Transfer Certificate of Title No. 41144 (now 51668) of the Register of Deeds of the City of Manila, and Transfer Certificate of Title No. 24182 of the Register of Deeds of Rizal, which are more particularly described as follows: (Descriptions of Land) Said mortgage was duly registered in the Office of the Register of Deeds of Manila on May 23, 1958, and in the Register of Deeds of Rizal on May 28, 1958.

On June 30, 1958, said overdraft line was increased to P320,000.00 and corresponding amendment of the deed of mortgage was executed, which amendment was duly registered on July 7, 1958, in the Office of the Register of Deeds of Manila and on July 8, 1958, in the Register of Deeds of Rizal (Exhs. "C" and "D").

To further guarantee the payment of said additional loan of P20,000.00, defendants jointly and severally executed a chattel mortgage on June 30, 1958, in favor of the plaintiff on those chattels situated at 1301-1303 Rizal Avenue, Manila, which was listed therein and which deed of chattel mortgage was duly registered on July 7, 1958, in the Chattel Mortgage Register of Manila and on July 8, 1958, in the Chattel Mortgage Register of Rizal (Exh."E"). As further additional security for the payment of said loan, the defendant Iluminada (Lumen) R. Policarpio, executed a deed of assignment and special power of attorney on May 23, 1958, whereby she bound herself to reduce the overdraft line by paying to the plaintiff the sum of at least P3,000.00 a month from the rents of one of the mortgaged properties, which deed was amended on June 30, 1958, to cover the additional loan of P20,000.00 (Exhs. "F"

and "G"). In accordance with the terms of the deed of mortgage (Exh. "B"), in case of failure or refusal of the debtors to pay any of the amortization of the indebtedness or interest when due or whatever obligation secured by the aforesaid mortgage, the whole obligation would become due and payable.

The defendants have failed and refused to comply with the agreements aforesaid to pay the plaintiff the monthly amortization agreed upon from July, 1958 up to the present, despite repeated demands made by the plaintiff, and as of July 14, 1958, the total indebtedness of the defendants to the plaintiff amounted to P298,121.75. and supplemented by the allegations in the supplemental complaint, admitted unconditionally in the answer thereto, as follows:1äwphï1.ñët 1. That according to the Deed of Mortgage Exhibit "B"

of the complaint, defendants bound themselves to duly pay and discharge all taxes, assessments and governmental charges lawfully imposed upon the mortgaged properties; 2. That defendants failed and refused to pay the realty taxes due on the properties mortgaged in the amounts of P3,186.55 and P6,585.52; 3. That it was also stipulated in the said Deed of Mortgage, that if the mortgagor (defendants herein) shall fail or refuse to pay said taxes and assessments, the mortgagee (plaintiff herein) may in its discretion, pay such taxes or assessments and the mortgagor shall, on demand, repay the mortgagee all sums expended by it for the above purpose with interest at the rate of ten per centum (10%) per annum from the date of such expenditures; 4.

That to protect its interest and pursuant to the provisions of the aforementioned Deed of Mortgage, and upon the request of defendant through defendant Iluminada (Lumen) Policarpio, plaintiff paid the realty taxes on the properties mortgaged in the amount of P3,186.55 last February 20, 1962, and the amount of P6,585.52 on March 22, 1962, or subsequent to the filing of the complaint in this case; 5. That defendants failed and refused and still fail and refuse to pay plaintiff the above sums despite repeated demands made on them to do so; 6. That it is further stipulated in the same Deed of Mortgage, Exhibit "B"

of the complaint, that the defendants shall at all times insure or cause to be insured, and keep insured against loss or damage by fire all the buildings and improvements on the mortgaged properties, and that the defendants shall promptly pay all premiums on such insurance as said premiums may accrue; 7. That the defendants failed and refused to pay the premiums on the insurance of the buildings and improvements on the mortgaged properties in the amounts of P1,522.56 and P388.02; 8. That it is also a provision in the aforestated Deed of Mortgage that if the mortgagor (defendants) shall fail or refuse to pay the above obligation, the mortgagee (plaintiff) may in its discretion, pay such premiums and the mortgagor shall, on demand, repay the mortgagee all sums expended by it for such purpose with interest at the rate of ten per centum (10%) from the date of such expenditures; 9.

That to prevent the insurance policy from expiring and in the exercise of its rights under the Deed of Mortgage, Exhibit "B", plaintiff paid the premiums amounting to P1,522.56 on March 1, 1962 and P388.02 on July 31, 1962, or subsequent to the filing of the complaint in the above-entitled case; 10. That the total amount due plaintiff from defendants as of this date is as follows:1äwphï1.ñët Overdraft balance, inclusive of accrued to date ... P398,311.24 Add: Insurance Premiums & Others Advances: Aug.

30, 1960 - Ins. Premiums P171.12 Sept. 29, 1960 - ....

-do- .... 1,790.47 Nov. 29, 1960 - ....

-do- .... 190.32 Mar. 6, 1961 - ....

-do- .... 1,446.61 Aug. 30, 1961 - ....

-do- .... 161.40 Sept. 25, 1961 - ....

-do- .... 1,689.12 Feb. 21, 1962 - Real Estate Tax 3,186.55 Mar.

1, 1962 - Ins. Premium 1,522.56 Mar. 22, 1962 - Real Estate Tax 6,585.52 -- 16,743.67