Constantino v. Aquino
REITERATIONFacts
The Antecedents: On September 28, 1954, Pastor B. Constantino (plaintiff-appellant) entered into a real estate mortgage contract with Blas Aquino and Eufemia Policarpio (defendants-appellees) to secure a loan of P2,000.00, payable in two years. Subsequently, on February 3 and 23, 1955, the defendants obtained additional loans of P1,000.00 and P2,000.00, respectively, also secured by a mortgage on the same land with identical terms. Despite repeated demands and the passage of two years without payment, the plaintiff initiated an action for foreclosure of mortgage on January 15, 1957. Procedural History: The defendants, in their answer, claimed a verbal promise of a two-year extension and expressed willingness for partial payments. A trial was held on August 20, 1957, but the defendants and their counsel failed to appear. The court rendered a judgment in favor of the plaintiff on September 25, 1957, ordering the defendants to pay the principal amounts with interest and attorney's fees. The defendants received this judgment on September 30, 1957. Following the finality of the judgment, the plaintiff petitioned for its execution, which was granted on January 4, 1958, leading to a Writ of Execution of Foreclosure Mortgage on January 20, 1958. The mortgaged property was auctioned on February 11, 1958, sold to the plaintiff, and the sale was confirmed by the court on March 31, 1958. The defendants filed a motion for reconsideration on April 18, 1958, alleging lack of knowledge, which was denied. A second motion for reconsideration was filed, arguing the judgment and confirmation were void due to the absence of a mandated 90-day payment period. The lower court, on June 24, 1958, suspended the effects of its previous orders, deeming the execution premature. The plaintiff's motion for reconsideration of this suspension was denied on July 18, 1958. Subsequently, the defendants deposited the judgment amount, and on September 18, 1958, the lower court ordered the cancellation of the plaintiff's title and the issuance of a new one in the defendants' names. The Appeal: The plaintiff appealed the lower court's orders suspending the confirmation, denying reconsideration, and cancelling his title. The Court of Appeals certified the case to the Supreme Court, recognizing that the issues involved were purely legal. The central issue revolved around the interpretation and application of Section 2, Rule 70 of the Rules of Court, specifically whether a judgment in a foreclosure case must explicitly order payment within a period of not less than ninety days from service, and if the omission of such an order renders subsequent execution and sale void. The Supreme Court, referencing prior rulings, affirmed that the 90-day period is a substantive right for the mortgagor and its omission renders the execution and sale void. Despite the lower court's initial error in execution, it correctly reconsidered its orders upon realizing the procedural defect. The appeal was dismissed, and the orders affirming the suspension of execution, denying reconsideration, and cancelling the plaintiff's title were affirmed, particularly in light of the defendants' subsequent payment of the judgment debt, rendering the matter moot.
Issue(s)
Whether the trial court's decision in a foreclosure of mortgage case must expressly include an order for the mortgagor to pay the debt within a period of not less than ninety (90) days from the service of such order. Whether the writ of execution and subsequent sale and confirmation of the mortgaged property were premature and void for failure to provide the mortgagor with the mandatory ninety (90) day period to pay the debt. Whether the payment of the judgment debt by the defendants rendered the issues moot.
Ruling
The appeal is dismissed, and the Orders dated June 24, 1958, July 18, 1958, and September 18, 1958, are affirmed.
Ratio Decidendi
On the requirement of an express ninety (90) day order for payment in foreclosure cases: The Court reiterated the principle established in Ponce de Leon v. Ibañez and Herrera v. Arellano, emphasizing that Section 2, Rule 70 of the Rules of Court mandates an express order for the mortgagor to pay the debt within a period of not less than ninety (90) days from the service of such order. This period is not merely a procedural requirement but a substantive right granted to the mortgagor as a final opportunity to pay and save their property from foreclosure. The Court stressed that this ninety-day period is a crucial step in destroying the mortgagor's equity of redemption and cannot be omitted. On the prematurity and voidness of the writ of execution and sale: Applying the established rule, the Court found that the lower court had not issued the prescribed ninety-day order. Consequently, the writ of execution issued on January 4, 1958, and the subsequent auction sale and confirmation thereof were premature and void. The Court clarified that the ninety-day period is to be counted from the date of service of the order directing payment, and since no such order existed, the period had not commenced. The argument that the defendants had more than ninety-six days from receipt of the decision until the writ of execution was issued was overruled, as the ninety-day period must be counted from the service of a specific order for payment, not from the receipt of the judgment itself. On the mootness of the issue due to payment: While the defendants' payment of P7,622.91 into court on July 10, 1958, rendered the issue of foreclosure moot, this payment was made after the trial court had correctly recognized the prematurity of the execution and had suspended its previous orders. The payment was made within ninety days from the trial court's directive to pay, effectively giving the mortgagor the last opportunity to pay and save the property, which is the very purpose of the ninety-day rule. Therefore, even if the trial court's denial of the plaintiff's motion for reconsideration was technically flawed in declaring the issue moot, it did not prejudice the plaintiff's substantial rights as they received their money with increments, and the foreclosure, which the Rules sought to forestall when lawfully possible, was avoided.
Main Doctrine
In an action for foreclosure of mortgage, the trial court must expressly order the mortgagor to pay the debt within a period of not less than ninety (90) days from the service of such order. Failure to provide this period renders the subsequent writ of execution and confirmation of sale void for being premature and violative of the mortgagor's substantive right to redeem.