Vda. de Jacob v. Court of Appeals
REITERATIONFacts
1. The Antecedents: Dr. Alfredo E. Jacob, the registered owner of several parcels of land, granted Jorge Centenera a special power of attorney to mortgage these properties. Centenera, acting as attorney-in-fact, obtained a loan from Bicol Savings & Loan Association in 1972, executing a real estate mortgage and promissory note. The loan was restructured twice, in 1975 and 1976, with Centenera again acting under the same power of attorney. Dr. Jacob died on March 9, 1979. Despite his death, the loan remained unpaid, leading the bank to extrajudicially foreclose the mortgage. A provisional sale was conducted on May 11, 1979, and a definite deed of sale was executed in favor of the bank on November 5, 1982, after the redemption period expired. The bank subsequently obtained a new title to the property. 2. Procedural History: Tomasa Vda. de Jacob, as special administratrix of Dr. Jacob's estate, filed a complaint in the Regional Trial Court (RTC) alleging that the special power of attorney, loan, and mortgages were forged, rendering them null and void. The RTC dismissed her complaint for lack of cause of action and awarded damages to the defendants. The Court of Appeals affirmed the RTC's decision. Separately, after the bank obtained title, it filed a petition for a writ of possession in the RTC, which was granted. The Court of Appeals also affirmed this decision. Both decisions of the Court of Appeals are now before the Supreme Court. 3. The Petition: The petitioner, Tomasa Vda. de Jacob, filed two petitions for review. In G.R. No. 88602, she argues that the Court of Appeals failed to exercise appellate determination on material issues, leading to the nullification of the mortgage, foreclosure, and sale, and that the court ignored the issue of excessive damages. In G.R. No. 89544, the petitioner contends that the extrajudicial foreclosure and auction sale were patently void and that a writ of possession should not have been issued. The Supreme Court consolidated these petitions, finding the arguments to be without merit, particularly noting that the right to extrajudicially foreclose a mortgage survives the death of the mortgagor under Section 7, Rule 86 of the Rules of Court, and that the pendency of a separate civil suit does not bar the issuance of a writ of possession.
Issue(s)
Whether an extrajudicial foreclosure of a mortgage may proceed after the death of the mortgagor. Whether a petition for the issuance of a writ of possession may be barred by estoppel or the pendency of a separate civil suit questioning the validity of the foreclosure. Whether the Court of Appeals failed to exercise appellate determination on material issues regarding the nullification of the mortgage deed and foreclosure proceedings, and whether the Court of Appeals ignored to resolve the issue of excessive and unfounded award of damages.
Ruling
The petitions are DISMISSED for lack of merit. The extrajudicial foreclosure and auction sale were regular and in accordance with law. The writ of possession was validly issued.
Ratio Decidendi
On the validity of extrajudicial foreclosure after the mortgagor's death: The Court held that an extrajudicial foreclosure of a mortgage may proceed even after the death of the mortgagor. Section 7, Rule 86 of the Rules of Court recognizes three remedies for a creditor holding a claim secured by a mortgage against a deceased mortgagor: (1) waive the mortgage and claim the debt from the estate; (2) judicially foreclose the mortgage and prove any deficiency as an ordinary claim; or (3) rely on the mortgage exclusively and foreclose it at any time before it is barred by prescription, without the right to claim for deficiency. The third option clearly allows for foreclosure, including extrajudicial foreclosure, even after the mortgagor's death. The power to foreclose is not an ordinary agency that terminates upon the principal's death but is an authority conferred upon the mortgagee for its own protection, which survives the mortgagor's death. The right of the mortgagee bank to extrajudicially foreclose the mortgage after the death of the mortgagor, acting through his attorney-in-fact, did not depend on the authority in the deed of mortgage but existed independently and is recognized in the Rules of Court. On the issuance of a writ of possession: The Court ruled that the pendency of a separate civil suit questioning the validity of the mortgage and the extrajudicial foreclosure thereof does not bar the issuance of a writ of possession. A writ of possession is a ministerial act of the trial court after the title to the property has been consolidated in the mortgagee. The appellate court found, and the Supreme Court concurred, that the extrajudicial foreclosure and auction sale were regular and in accordance with law. Therefore, the issuance of the writ of possession was proper. On the alleged failure to rule on material issues and excessive damages: The Court stated that the other issues raised in the petition, including those concerning the alleged failure to rule on material issues and the award of damages, are questions of fact. Findings of fact of the appellate court are conclusive and cannot be reviewed at the Supreme Court level. The Court found no merit in the petitioner's contentions regarding these matters.
Main Doctrine
An extrajudicial foreclosure of a mortgage may proceed even after the death of the mortgagor, as the mortgagee's right to foreclose is recognized under Section 7, Rule 86 of the Rules of Court and is not extinguished by the mortgagor's death. The pendency of a separate civil suit questioning the validity of the mortgage does not bar the issuance of a writ of possession once title has been consolidated in the mortgagee.