Mojica vs CA [G.R. No. 94247 ] Case Digest

 

Mojica vs CA

G.R. No. 94247

 

Facts:

                Leonardo Mojica contracted a loan of P20,000.00 from defendant Rural Bank of Kawit, Inc.  This loan was secured by a real estate mortgage executed on the same date by the plaintiffs spouses Leonardo Mojica and Marina Rufido. 

The real estate mortgage contract states among others:

... agreement for the payment of the loan of P20,000.00 and such other loans or other advances already obtained or still to be obtained by the mortgagors ..

... but if the mortgagors shall well and truly fulfill the obligation above stated according to the terms thereof then this mortgage shall become null and void.

The spouses mortgaged to the Rural Bank of Kawit, a parcel of land consisting of 218,794 square meters, located in Naic, Cavite. The loan of P20,000.00 by the plaintiffs spouses was fully and completely paid. On March 5, 1974, a new loan in the amount of P18,000.00 was obtained by plaintiffs spouses from the defendant Rural Bank which loan matured on March 5, 1975. No formal deed of real mortgage was constituted over any property of the borrowers, although the top of the promissory note dated March 5, 1974, contained the following notation.

This promissory note is secured by a Real Estate Mortgage executed before the Notary Public of the Municipality of Kawit, Mrs. Felisa Senti under Doc. No. 62, Page No. 86, Book No.__, Series of 1971. The Real Estate Mortgage mentioned above is the registered mortgage which guaranteed the already paid loan of P20,000.00 granted on February 1, 1971. 

The spouses Leonardo Mojica and Marina Rufido failed to pay their obligation after its maturity on March 5, 1975. Respondent rural bank extrajudicially foreclosed the real estate mortgage on the justification that it was adopted as a mortgage for the new loan of P18,000.00.  The subject property was set for auction sale by the Provincial Sheriff of Cavite for June 27, 1979. In that auction sale, defendant rural bank was the highest bidder, and its bid corresponded to the total outstanding obligation of plaintiffs spouses Mojica and Rufido.

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:

                Whether or not the foreclosure sale by the Sheriff on June 27, 1979, had for its basis, a valid and subsisting mortgage contract.

 

Held:

                YES. 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. In 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 arising there under' 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 the books and records of the bank, as first mortgagee, regarding the credit standing of the debtors.