Oblicon Digest Cases

ANABELLE A. TALAO

OBLICON

FIRST YEAR, 2ND SEM 2011-2012

AUTONOMY OF CONTRACTS

METROPOLITAN BANK AND TRUST COMPANY, petitioner, vs. FRANCISCO Y. WONG, respondent [G.R. No. 120859. June 26, 2001]

Nature of the Case This is a petition for review on certiorari seeking the reversal and setting aside of the decision dated June 13, 1994 sentencing defendant, Metropolitan Bank and Trust Company to pay the plaintiff, Francisco Wong and resolution dated June 14, 1995 of the Court of Appeals affirming the RTC decision with modification on moral damages and exemplary damages.

Facts In 1976, the Mindanao Grains, Inc. (MGI for brevity), through its officers Wenceslao Buenaventura and Faustino Go, applied for a credit accommodation with the Metropolitan Bank and Trust Company. As a security for such credit accommodation, a real estate mortgage in favor of petitioner consisting of a parcel of land registered in respondent’s name under TCT No 11758 with 31, 292 square meters located at Campo 7, Molave, Zamboanga del Sur was executed by respondent Wong and his wife. Petitioner, MBTC filed an application for extra-judicial foreclosure under Act 3135 on April 11, 1980 because MGI failed to pay their obligation. Thereafter, a notice of foreclosure sale was published in Pagadian Times once, for three consecutive weeks, setting the auction sale of the mortgaged property. No notice was posted in the municipality or city where the mortgaged property was situated. MBTC postpone the scheduled auction sale from June 5, 1980 to July 7, 1980, upon request of Simeon Chang, MGI’s President and was granted. Then, Chang and petitioner agreed that should MGI pay P20,000.00 on or before the scheduled auction sale, the same would be postponed for a period of 60 days. Chang paid the amount on November 3, 1981. Despite such payment, Sheriff Deo Bontia proceeded with the auction sale on November 23, 1981. A certificate of sale was issued to petitioner, MBTC and was registered with the Registry of Deeds on the same day. TCT No. T-17853 was correspondingly issued in the name of petitioner, after the expiration of the one (1) year redemption period. When respondent, Wong applied for a credit accommodation with the Producers Bank of the Philippines, Iloilo City, using as security his TCT No. 11758, he learned that his property was already foreclose and no longer in his name. Feeling aggrieved, respondent filed with the Regional Trial Court, Branch 18, Pagadian City a complaint for reconveyance and damages against petitioner and the Register of Deeds of Zamboanga del Sur.

Issue Whether or not personal notice to respondent a condition sine qua non to the validity of the foreclosure proceedings. Whether or not petitioner’s non-compliance with the posting requirement under fatal to the validity of the foreclosure proceedings.

Held The law only requires (1) the posting of notices of sale in three public places, and (2) the publication of the same in a newspaper of general circulation. Personal notice to the mortgagor is not necessary. Nevertheless, the parties to the mortgage contract are not precluded from exacting additional requirements. In this case, petitioner and respondent in entering into a contract of real estate mortgage, agreed inter alia: all correspondence relative to this mortgage, including demand letters, summonses, subpoenas, or notifications of any judicial or extra-judicial action shall be sent to the MORTGAGOR at 40-42 Aldeguer St. Iloilo City, or at the address that may hereafter be given in writing by the MORTGAGOR to the MORTGAGEE. Precisely, the purpose of the foregoing stipulation is to apprise respondent of any action which petitioner might take on the subject property, thus according him the opportunity to safeguard his rights. When petitioner failed to send the notice of foreclosure sale to respondent, he committed a contractual breach sufficient to render the foreclosure sale on November 23, 1981 null and void. Yes. We take judicial notice of the fact that newspaper publications have more far-reaching effects than posting on bulletin boards in public places. There is a greater probability that an announcement or notice published in a newspaper of general circulation, which is distributed nationwide, shall have a readership of more people than that posted in a public bulletin board, no matter how strategic its location may be, which caters only to a limited few. Hence, the publication of the notice of sale in the newspaper of general circulation alone is more than sufficient compliance with the notice-posting requirement of the law. By such publication, a reasonably wide publicity had been effected such that those interested might attend the public sale, and the purpose of the law had been thereby subserved.

ANABELLE A. TALAO

OBLICON

FIRST YEAR, 2ND SEM 2011-2012

REFORMATION OF INSTRUMENTS

YOLANDA ROSELLO-BENTIR, SAMUEL PORMIDA and CHARITO PORMIDA, petitioners, vs. HONORABLE MATEO M. LEANDA, in his capacity as Presiding Judge of RTC, Tacloban City, Branch 8, and LEYTE GULF TRADERS, INC., respondents. [G.R. No. 128991. April 12, 2000] Nature of the Case This is a petition for review on certiorari seeking the reversal and setting aside of the decision of the Court of Appeals dated January 17, 1997 and reinstating the order of the Regional Trial Court of Tacloban City, Branch 7 dated December 15, 1995 dismissing the action for reformation.

Facts Yolanda Rosello Bentir et al entered into a contract of lease of a parcel of land with respondent, Leyte Gulf Traders for a period of 20 years starting from May 5, 1968. The lease was extended for another four (4) years or until May 31, 1992. On May 5, 1989, petitioner Bentir sold the leased premises to petitioner spouse, Samuel Pormada and Charito Pormada. Respondent, Leyte Gulf Traders questioned the sale alleging that it had a right of first refusal. Rebuffed, respondent, filed a case seeking reformation of the expired contract of lease on the ground that its lawyer inadvertently omitted to incorporate in the contract of lease executed in 1968, the verbal agreement between parties that respondent has a right of first refusal over the leased property. On December 15, 1995, the trial court through Judge Espina issued an order dismissing the complaint premised on its finding that the action for reformation had already prescribed. On December 29, 1995, the respondent corporation filed a motion for reconsideration and on January 11, 1996, the respondent corporation filed an urgent ex-parte motion for issuance of an order directing the petitioners, or their representatives or agents to refrain from taking possession of the land in question. But on May 10, 1996, respondent Judge Navidad issued an order reversing the order of dismissal on the grounds that the action for reformation had not yet expired and the dismissal was premature and precipitate denying respondent corporation of its right tro procedural due process.

Facts:P entered into a contract of lease of a parcel of land with D for a period of 20 yearsstarting from 1968. P is the lessee; D is the lessor. In 1989, D sold the leased premises to E. Pquestioned the sale alleging that it had a right of first refusal. Rebuffed, P filed a case seekingreformation of the expired contract of lease on the ground that its lawyer inadvertently omitted toincorporate in the contract of lease executed in 1968, the verbal agreement between the partiesthat P has a right of first refusal over the leased property. Issue: Whether the action for reformation should prosper Held: No. Since the purpose of an action for declaratory relief is to secure an authoritativestatement of the rights and obligations of the parties for their guidance in the enforcement thereof, or compliance therewith and not to settle issues arising from the breach thereof, it maybe entertained only before the breach or violation of the law or contract to which it refers. Here,P brought the present action for reformation after an alleged breach or violation of the contractwas already committed by D.

ANABELLE A. TALAO

OBLICON

FIRST YEAR, 2ND SEM 2011-2012

AUTONOMY OF CONTRACTS

MARLENE DAUDEN-HERNAEZ, petitioner, vs. HON. WALFRIDO DE LOS ANGELES, Judge of the Court of First Instance of Quezon City, HOLLYWOOD FAR EAST PRODUCTIONS, INC., and RAMON VALENZUELA, respondents [G.R. No. L-27010 April 30, 1969]

Nature of the Case This is a petition for writ of certiorari to set aside certain orders of the Court of first Instance of Quezon City (Branch IV) dismissing a complaint for breach of contract and damage, etc.

Facts Marlen Dauden Hernaez, a motion picture actress filed a complaint against respondent, Hollywood Far East Productions, Inc and its President Ramon Valenzuela to recover P14,700 representing a balance due to her for her services as leading actress in two (2) motion pictures produced by the company and to recover damages. Her petition was dismissed by the lower court because it was defective. There was no evidence or any written contract or document, either public or private considering that the claim is more than P500, thereby violating Article 1356 and 1358 of the Civil Code.