Philippine National Bank v. Viña
REITERATIONFacts
The Antecedents: The Philippine National Bank (PNB) granted an agricultural loan of P160,000 to Diego de la Viña, evidenced by a promissory note dated July 15, 1919. To secure the loan, Diego de la Viña, through his attorney-in-fact Jose Maria de la Viña, executed a special mortgage on certain properties. The loan was to be paid in ten yearly installments, with the first installment due on or before July 15, 1919. The deceased Diego de la Viña, through his administrator Jose Maria de la Viña, failed to pay any installments except for P12,008.80 paid on January 21, 1921, towards the first installment for 1920. As of November 30, 1922, the total amount due, including principal and accumulated interest, was P194,569.48. Procedural History: The PNB filed a complaint for foreclosure of the mortgage. The administrator of Diego de la Viña's estate denied the allegations and raised two special defenses: (a) that PNB had prosecuted its claim before the commission appointed to consider claims against the estate, which allowed the claim and reported it to the court; and (b) that PNB was estopped from pursuing foreclosure under Section 708 of the Code of Civil Procedure due to abandoning its security. The trial court rendered a decision sentencing the defendant administrator to pay P184,569.48 with interest and costs, and ordered the sale of the mortgaged property in case of non-payment. The administrator appealed. The Petition: The administrator contended that the trial court erred in not holding that PNB was estopped from foreclosing the mortgage because it had presented its claim to the committee on claims. The core issue was whether PNB, by presenting its claim to the committee, was barred from bringing a separate foreclosure action.
Issue(s)
Whether the Philippine National Bank is estopped from foreclosing the mortgage after allegedly presenting its claim to the committee on claims for the estate of Diego de la Viña. Whether the trial court committed a clerical error in the dispositive portion of its judgment regarding the amount due.
Ruling
The Supreme Court affirmed the trial court's decision with a modification regarding the amount awarded. The Court held that the Philippine National Bank was not estopped from foreclosing the mortgage. The Court also corrected a clerical error in the dispositive portion of the judgment, increasing the awarded amount to P194,569.48.
Ratio Decidendi
On the issue of estoppel and the right to foreclose: The Court reiterated the principle under Section 708 of the Code of Civil Procedure, which provides that a mortgage creditor has two options: either present the claim to the committee on claims or realize upon the security by an action against the executor or administrator. However, the creditor cannot pursue both remedies successively, as the law aims to prevent multiplicity of litigations. The Court meticulously examined the evidence, including letters exchanged between PNB and the administrator's attorney. These communications demonstrated that PNB explicitly stated it was not willing to prosecute its claim against the estate under Section 708 of Act No. 190. Furthermore, at the time of the communication, the full credit was not yet demandable, and there was no violation by the debtor that would accelerate the maturity of all installments. Therefore, PNB did not present its claim to the committee on claims in a manner that would constitute a claim for the entire credit. The Court concluded that since PNB did not present its claim to the committee on claims, it retained the perfect right to bring the action for foreclosure. The Court also noted that if the committee on claims had indeed approved the bank's letter as a claim for the entire credit, it acted officiously, and its ruling would not affect the bank's rights. On the alleged clerical error in the judgment: The Court acknowledged the appellee bank's submission regarding a clerical error in the dispositive part of the judgment. The trial court's findings indicated that the total amount due as of November 30, 1922, was P194,569.48, plus daily interest. The judgment, however, awarded only P184,569.48. Citing decisions from United States courts, the Supreme Court held that clerical mistakes in the amount of a judgment may be corrected by the appellate court if the record sufficiently shows the correct amount. Given the facts found by the trial court and the lack of objection from the appellant to the petition for amendment, the Court found a clerical error (lapsus calami) that needed correction in the interest of justice. Consequently, the dispositive portion of the judgment was modified to reflect the correct amount of P194,569.48.
Main Doctrine
A mortgage creditor, who has not presented their claim to the committee on claims in the settlement of an estate, retains the right to bring an action for foreclosure. The prosecution of a claim before the committee on claims and a subsequent action for foreclosure are mutually exclusive remedies under Section 708 of the Code of Civil Procedure, to avoid multiplicity of litigations.