CivPro-Monzon v Relova

P5M for the property that‘s why there‘s an excess). This residue is in the custody of Atty. Luna as Branch Clerk of Court.

Case : Monzon v Relova Doctrine : A cause of action is the act or omission by which a party violates the right of another. A cause of action exists if the elements are present: 1. 2. 3.

Right in favor of plaintiff by whatever means and under whatever law it arises or is created An obligation on the part of the named defendant to respect or not to violate such right An act or omission on the part of such defendant violative of the right of plaintiff or constituting breach of the obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages

Fast Recit : Spouses Relova and Perez filed a petition for injunction since Monzon issued promissory notes to the respective spouses with lots as security (2A- Perez, Lot 2B- Relova). Monzon was indebted to Coastal Lending which foreclosed the property due to the non-payment non-payment of Monzon’s 3.4 million debt. Addio was the highest bidder in the sale. sale. There was an excess of 1.6 M from Addio’ s payment of 5M. The Spouses contend that they should be given the residue as stated in Rule 68, Sec 4. The residue money is with Atty. Luna (clerk of court). However, case at bar involves Extrajudicial Foreclosure (Act 3135) and not Rule 68’s judicial foreclosure. Spouses do not have cause of action a gainst Atty. Luna. Case is remanded back to trial court to check if motion for injunction is to be treated as complaint for collection of money.

Facts : 





Spouses Relova and Perez filed a petition for Injunction. They allege that Monzon issued a promissory note in favor of sps. Perez. The amount was P600K and secured by Lot2A in Brgy Kaybagal, Tagaytay City with about 300 sqm. A deed of absolute sale over the parcel of land was later executed in favor of the Perez spouses. The same thing happened with sps. Relova wherein a promissory note in the amount of P200k was issued secured by Lot2B with about 200 sqm. There was a 5% interest per month. A deed of conditional sale over the parcel of land was later issued in favor of sps. Relova. Monzon was indebted to the Coastal Lending Corporation. Coastal Lending then extrajudicially foreclosed the property of Monzon which included Lots 2A and 2B. The winning bidder in this extrajudicial foreclosure was Addio properties. Of the amount paid by Addio, there was a residue of roughly P1.6M (indebtedness of Monzon was only around P3.4M while Addio paid



Monzon argues that she has already fulfilled her obligation t o the spouses via dacion en pago evidenced by the Deed of Conditional Sale and the Deed of Absolute Sale.

RTC: 



Due to Monzon and counsel’s absence on said hearing date despite due notice, granted an oral Motion by the respondents by issuing an Order allowing the ex parte presentation of evidence by respondents. Atty. Luna should deliver the residue to spouses Relova and Perez. At this point in time, Addio properties intervened.

CA: Affirmed RTC, denied Monzon’s appeal re : violation of due process since she was not allowed to present in court again after not appearing in first hearing (order of default)

Issue : Whether or not there was a cause of a ction against Atty Luna. – Luna. – No.  No. Held. SC : Reversed and set aside the ruling of the CA. Atty. Luna should not deliver the residue to the spouses since Rule 68 governs judicial foreclosure and the issue at bar is under Act 3135 Extrajudicial Foreclosure. Also, the SC ruled that the Failure to file a responsive pleading within the reglementary period is the sole ground for an order of default and not the nonappearance during oral motion. The case is remanded back to trial court for respondents to submit a manifestation where the petition for injunction should be treated as complaint for the collection of money. Ratio: Rule 68 governs judicial foreclosure of mortgages. Extrajudicial foreclosure of mortgages which was what transpired in the case at bar is governed by Act 3135. Unlike Rule 68, Act 3135 does not grant to junior encumbrancers the right to receive the balance of the purchase price. The only right  given  given to second mortgagees in said issuances is the right to redeem foreclosed property pursuant to Sec 6 of Act 3135 “any person having lien on the property subsequent to mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one yr from and after date of the sale.

A cause of action is the act or omission by which a party violates the right of another. A cause of action exists if the elements are present: 1. 2. 3.

Right in favor of plaintiff by whatever means and under whatever law it arises or is created An obligation on the part of the named defendant to respect or not to violate such right An act or omission on the part of such defendant violative of the right of plaintiff or constituting breach of the obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages

In view of the foregoing, the respondent spouses do not have a cause of a ction against Atty Luna for the delivery of amounts. The case should be dismissed in so far Atty Luna is concerned but the same is not necessarily true with respect to Monzon. The case is remanded back to trial court for respondents to submit a manifestation where the petition for injunction should be treated as complaint for the collection of money. If respondents answer in affirmative, case shall proceed with presentation of evidence for defense. If Monzon successful in proving defense of dacion en pago, there would be double sales with Addio. The remedy of respondent is to recover possession. If Addio is entitled to properties, respondents’ remedy is to file action for damages against Monzon. If respondents answer in negative, the case shall be dismissed without prejudice to the exercise of respondents’ rights as mortgage creditors. They will be first mortgagor if their mortgage was executed prior to execution of contract with Addio.