Civil
Commercial
Ponente: MEDIALDEA, J.
Decision Date: 1989-06-30
GR Number: G.R. No. 76733
Digest Team
4 months ago
Avg. Rating:
Summary:
This case involves a dispute between Eastman Chemical Industries, Inc. (Eastman) and the Bank of the Philippine Islands (BPI) regarding the validity of an extrajudicial foreclosure sale of Eastman's mortgaged properties. Eastman had obtained a loan from BPI, which was secured by a real estate mortgage. The mortgage instrument stated that the mortgage would also serve as security for any future loans or accommodations extended by BPI to Eastman. Eastman failed to pay its debt, and BPI initiated foreclosure proceedings. Eastman argued that the foreclosure sale was invalid because it included the peroxide account, which was the subject of a separate civil case. The trial court upheld the validity of the foreclosure sale with respect to the eastman account but annulled it with respect to the peroxide account. The Court of Appeals reversed the trial court's decision and declared the foreclosure sale valid. Eastman filed this petition to challenge the decision of the Court of Appeals.
Doctrine:
A mortgage creditor may pursue either a personal action for debt or a real action to foreclose the mortgage. However, the creditor cannot avail of both remedies simultaneously or successively. When a mortgage creditor initiates foreclosure proceedings, the proceeds from the sale of the mortgaged property should be applied to the mortgagor's obligation, and any surplus should be returned to the mortgagor.
Facts:
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Issues Ratio:
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Dispositive:
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Other Notes:
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