FIRST DIVISION
G.R. No. 201892, July 22, 2015
NORLINDA S. MARILAG, Petitioner, v. MARCELINO B. MARTINEZ, Respondent.
D E C I S I O N
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated November 4, 2011 and the Resolution3 dated May 14, 2012 of the Court of Appeals (CA) in CA-G.R. CV No. 81258 which recalled and set aside the Orders dated November 3, 20034 and January 14, 20045 of the Regional Trial Court (RTC) of Las Piñas City, Branch 202 (court a quo) in Civil Case No. 98-0156, and reinstated the Decision6 dated August 28, 2003 directing petitioner Norlinda S. Marilag (petitioner) to return to respondent Marcelino B. Martinez (respondent) the latter's excess payment, plus interest, and to pay attorney's fees and the costs of suit.
February 20, 1998Petitioner's contention that the judicial foreclosure and collection cases enforce independent rights45 must, therefore, fail because the Deed of Real Estate Mortgage46 and the subject PN both refer to one and the same obligation, i.e., Rafael's loan obligation. As such, there exists only one cause of action for a single breach of that obligation. Petitioner cannot split her cause of action on Rafael's unpaid loan obligation by filing a petition for the judicial foreclosure of the real estate mortgage covering the said loan, and, thereafter, a personal action for the collection of the unpaid balance of said obligation not comprising a deficiency arising from foreclosure, without violating the proscription against splitting a single cause of action, where the ground for dismissal is either res judicata or litis pendentia, as in this case.PROMISSORY NOTE
P289,000.00
I, MARCELINO B. MARTINEZ, son of Mr. RAFAEL MARTINEZ, of legal age, Filipino, married and a resident of No. 091 Anabu I-A, Imus, Cavite, by these presents do hereby specifically and categorically PROMISE, UNDERTAKE and bind myself in behalf of my father, to pay to Miss NORLINDA S. MARILAG, Mortgagee-Creditor of my said father, the sum of TWO HUNDRED EIGHTY NINE THOUSAND PESOS (P289,000.00), Philippine Currency, on or before MARCH 31, 1998, representing the balance of the agreed financial obligation of my said father to her. (Emphases supplied)
Executed at Pamplona I, Las Piñas City, Metro Manila, this 20th day of February, 1998.Sgd.
MARCELINO B. MARTINEZ
Promissor44
For non-payment of a note secured by mortgage, the creditor has a single cause of action against the debtor. This single cause of action consists in the recovery of the credit with execution of the security. In other words, the creditor in his action may make two demands, the payment of the debt and the foreclosure of his mortgage. But both demands arise from the same cause, the non-payment of the debt, and, for that reason, they constitute a single cause of action. Though the debt and the mortgage constitute separate agreements, the latter is subsidiary to the former, and both refer to one and the same obligation. Consequently, there exists only one cause of action for a single breach of that obligation. Plaintiff, then, by applying the rule above stated, cannot split up his single cause of action by filing a complaint for payment of the debt, and thereafter another complaint for foreclosure of the mortgage. If he does so, the filing of the first complaint will bar the subsequent complaint. By allowing the creditor to file two separate complaints simultaneously or successively, one to recover his credit and another to foreclose his mortgage, we will, in effect, be authorizing him plural redress for a single breach of contract at so much cost to the courts and with so much vexation and oppression to the debtor. (Emphases and underscoring supplied)Further on the point, the fact that no foreclosure sale appears to have been conducted is of no moment because the remedy of foreclosure of mortgage is deemed chosen upon the filing of the complaint therefor.48 In Suico Rattan & Buri Interiors, Inc. v. CA,49 it was explained:LawlibraryofCRAlaw
x x x x In sustaining the rule that prohibits mortgage creditors from pursuing both the remedies of a personal action for debt or a real action to foreclose the mortgage, the Court held in the case of Bachrach Motor Co., Inc. v. Esteban Icarangal, et al. that a rule which would authorize the plaintiff to bring a personal action against the debtor and simultaneously or successively another action against the mortgaged property, would result not only in multiplicity of suits so offensive to justice and obnoxious to law and equity, but also in subjecting the defendant to the vexation of being sued in the place of his residence or of the residence of the plaintiff, and then again in the place where the property lies. Hence, a remedy is deemed chosen upon the filing of the suit for collection or upon the filing of the complaint in an action for foreclosure of mortgage, pursuant to the provisions of Rule 68 of the Rules of Court. As to extrajudicial foreclosure, such remedy is deemed elected by the mortgage creditor upon filing of the petition not with any court of justice but with the office of the sheriff of the province where the sale is to be made, in accordance with the provisions of Act No. 3135, as amended by Act No. 4118. (Emphases supplied)As petitioner had already instituted judicial foreclosure proceedings over the mortgaged property, she is now barred from availing herself of an ordinary action for collection, regardless of whether or not the decision in the foreclosure case had attained finality. In fine, the dismissal of the collection case is in order. Considering, however, that respondent's claim for return of excess payment partakes of the nature of a compulsory counterclaim and, thus, survives the dismissal of petitioner's collection suit, the same should be resolved based on its own merits and evidentiary support.50redarclaw
Settled is the principle which this Court has affirmed in a number of cases that stipulated interest rates of three percent (3%) per month and higher are excessive, iniquitous, unconscionable, and exorbitant. While Central Bank Circular No. 905-82, which took effect on January 1, 1983, effectively removed the ceiling on interest rates for both secured and unsecured loans, regardless of maturity, nothing in the said circular could possibly be read as granting carte blanche authority to lenders to raise interest rates to levels which would either enslave their borrowers or lead to a hemorrhaging of their assets. Since the stipulation on the interest rate is void for being contrary to morals, if not against the law, it is as if there was no express contract on said interest rate; thus, the interest rate may be reduced as reason and equity demand. (Emphases supplied)As such, the stipulated 5% monthly interest should be equitably reduced to 1% per month or 12% p.a. reckoned from the execution of the real estate mortgage on July 30, 1992. In order to determine whether there was any overpayment as claimed by respondent, we first compute the interest until January 30, 199855 when he made a payment in the amount of P300,000.00 on Rafael's loan obligation. Accordingly, the amount due on the loan as of the latter date is hereby computed as follows:LawlibraryofCRAlaw
Thus, as of January 30, 1998, only the amount of P265,600.00 was due under the loan contract, and the receipt of an amount more than that renders petitioner liable for the return of the excess. Respondent, however, made further payment in the amount of P100,000.0057 on the belief that the subject loan obligation had not yet been satisfied. Such payments were, therefore, clearly made by mistake, giving rise to the quasi-contractual obligation of solutio indebiti under Article 215458 in relation to Article 216359 of the Civil Code. Not being a loan or forbearance of money, an interest of 6% p.a. should be imposed on the amount to be refunded and on the damages and attorney's fees awarded, if any, computed from the time of demand60 until its satisfaction.61 Consequently, petitioner must return to respondent the excess payments in the total amount of P134,400.00, with legal interest at the rate of 6% p.a. from the filing of the Answer on August 6, 199862 interposing a counterclaim for such overpayment, until fully settled.
Principal P160,000.00Add: Interest from 07/30/1992 to 01/30/1998 (P160,000.00 X 12% X 5.5 yrs.) 105,600.00Amount due on the loan P265,600.00Less: Payment made on 01/30/98 ( 300,000.00)Overpayment as of 01/30/98 (P 34,400.00)56
Endnotes:
* Designated Acting Member per Special Order No. 2103 dated July 13, 2015.
** Per Special Order No. 2102 dated July 13, 2015.
*** Designated Acting Member per Special Order No. 2108 dated July 13, 2015.
1Rollo, pp. 8-16.
2 Id. at 29-45. Penned by Associate Justice Leoncia R. Dimagiba with Associate Justices Noel G. Tijam and Marlene Gonzales concurring.
3 Id. at 60-61.
4 Id. at 26-28. Penned by Judge Elizabeth Yu Garay.
5 Records, pp. 462-466.
6Rollo, pp. 19-25.
7 Id. at 30.
8 Id. at 20.
9 Records, pp. 31-34.
10 Id. at 33-34.
11 Id. at 25 and 220-221.
12 Id. at 12.
13 Id.
14 Id. at 1-5.
15 Id. at 23-30.
16 Id. at 25 and 28.
17Rollo, pp. 19-25.
18 Id. at 23-24.
19 Filing of the Answer with Compulsory Counterclaim for the Return of the Overpayment; records, pp. 23 and 28.
20Rollo, p. 25.
21 Id. at 26-28.
22 Id. at 27-28.
23 Dated December 1, 2003; records, pp. 445-450.
24 Id. at 462-466.
25Rollo, p. 40.
26 Id. at 29-45.
27 Id. at 41.
28 Id. at 43-44.
29 Id. at 60-61.
30Heirs of Miguel v. Heirs of Miguel, G.R. No. 158916, March 19, 2014, 719 SCRA 413, 427.
31Brown-Araneta v. Araneta, G.R. No. 190814, October 9, 2013, 707 SCRA 222, 244; Yap v. Chua, G.R. No. 186730, June 13, 2012, 672 SCRA 419, 428-429.
32Film Development Council of the Philippines v. SM Prime Holdings, Inc., G.R. No. 197937, April 3, 2013, 695 SCRA 175, 187.
33BPI Family Savings Bank, Inc. v. Vda. de Coscolluela, 526 Phil. 419, 436-437 (2006).
34Chua v. Metropolitan Bank & Trust Company, 613 Phil. 143, 154 (2009).
35BPI Family Savings Bank, Inc. v. Vda. de Coscolluela, supra note 33, at 437-438.
36Flores v. Lindo, Jr., 664 Phil. 210, 216 (2011).
37Allandale Sportsline, Inc. v. The Good Dev't. Corp., 595 Phil. 265, 280 (2008).
38 Flores v. Lindo, Jr., supra note 36.
39Spouses Tanchan v. Allied Banking Corporation, 592 Phil. 252, 273-274 (2008).
40 Article 1293 of the Civil Code defines novation as follows:LawlibraryofCRAlaw
Art. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made even without the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new debtor gives him rights mentioned in articles 1236 and 1237.
41S.C. Megaworld Construction and Development Corporation v. Parada, G.R. No. 183804, September 11, 2013, 705 SCRA 584, 602.
42 in behalf of. (n.d.). Dictionary.com Unabridged. <http://dictionary.reference.com/browse/in behalf of> (last visited July 15, 2015).
43S.C. Megaworld Construction and Development Corporation v. Parada, supra note 41.
44 Records, p. 12.
45Rollo, p. 78.
46 Records, pp. 190 to 190-A.
47 68 Phil. 287, 293-294 (1939).
48Suico Rattan & Buri Interiors, Inc. v. CA, 524 Phil. 92, 116 (2006).
49 Id.
50Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corp., 556 Phil. 822, 851 (2007).
51Agner v. BPI Family Savings Bank, Inc., G.R. No. 182963, June 3, 2013, 697 SCRA 89, 102.
52RGM Industries, Inc. v. United Pacific Capital Corporation, 689 Phil. 660, 664-665 (2012).
53Chua v. Timan, 584 Phil. 144, 148 (2008).
54Agner v. BPI Family Savings Bank, Inc., supra note 51.
55 Records, p. 220.
56 Id.
57 On February 20, 1998; id. at 221.
58 ART. 2154. If something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises.
59 ART. 2163. It is presumed that there was a mistake in the payment if something which had never been due or had already been paid was delivered; but he from whom the return is claimed may prove that the delivery was made out of liberality or for any other just cause.
60Siga-an v. Villanueva, 596 Phil. 760, 776 (2009), citing the case of Eastern Shipping Lines, Inc. v. Court of Appeals (G.R. No. 97412, July 12, 1994, 234 SCRA 78, 95-97), holding that when an obligation, not constituting a loan or forbearance of money is breached, an interest on the amount of damages awarded may be imposed at the rate of 6% per annum.
61Nacar v. Gallery Frames, G.R. No. 189871, August 13, 2013, 703 SCRA 439, 458.
62 Records, p. 23-30.
63 Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except:LawlibraryofCRAlaw
(1) When exemplary damages are awarded; (2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest; (3) In criminal cases of malicious prosecution against the plaintiff; (4) In case of a clearly unfounded civil action or proceeding against the plaintiff; (5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim; (6) In actions for legal support; (7) In actions for the recovery of wages of household helpers, laborers and skilled workers; (8) In actions for indemnity under workmen's compensation and employer's liability laws; (9) In a separate civil action to recover civil liability arising from a crime; (10) When at least double judicial costs are awarded; (11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
64 In S.C. Megaworld Construction and Development Corporation v. Parada, supra note 41 at 611-612, the Court held:LawlibraryofCRAlaw
ChanRoblesVirtualawlibraryThe rule is settled that the trial court must state the factual, legal or equitable justification for its award of attorney's fees. Indeed, the matter of attorney's fees cannot be stated only in the dispositive portion, but the reasons must be stated in the body of the court's decision. This failure or oversight of the trial court cannot even be supplied by the CA. As concisely explained in Frias v. San Diego-Sison:LawlibraryofCRAlaw65Villareal v. Ramirez, 453 Phil. 999, 1012 (2003).
ChanRoblesVirtualawlibraryArticle 2208 of the New Civil Code enumerates the instances where such may be awarded and, in all cases, it must be reasonable, just and equitable if the same were to be granted. Attorney's fees as part of damages are not meant to enrich the winning party at the expense of the losing litigant. They are not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate. The award of attorney's fees is the exception rather than the general rule. As such, it is necessary for the trial court to make findings of facts and law that would bring the case within the exception and justify the grant of such award. The matter of attorney's fees cannot be mentioned only in the dispositive portion of the decision. They must be clearly explained and justified by the trial court in the body of its decision. On appeal, the CA is precluded from supplementing the bases for awarding attorney's fees when the trial court failed to discuss in its Decision the reasons for awarding the same. Consequently, the award of attorney's fees should be deleted. (Emphases supplied)