EN BANC
[G.R. No. L-22685. August 25, 1969.]
PHILIPPINE TRUST COMPANY, Plaintiff-Appellee, v. SIMEON POLICARPIO, MODESTA REYES and ILUMINADA (LUMEN) R. POLICARPIO, defendants- appellants.
Feria, Feria, Lugtu & La’O for Plaintiff-Appellee.
Bengzon & Bengzon, for Defendants-Appellants.
SYLLABUS
1. REMEDIAL LAW; PROCEDURE; DECISIONS; REMEDY WHERE DECISION IS INCOMPLETE. — Where the appealed decision is incomplete as it merely disposes that the amount which appellants are being sentenced to pay should be paid within the period provided by law, which under Section 2 of Rule 68 of the Rules of Court fixes only the maximum period within which they may not be compelled to pay, but does not provide for the maximum period within which they would have the right to pay without incurring in the default that would give rise to the power of the court to order the sale of the mortgaged properties, the proper course of action for appellant was not to immediately appeal, as they have done. All they had to do was to invite the attention of the court to the flaw in its judgment; and all the unnecessary delay and expenditure of money and effort which this appeal has entailed would have been avoided.
2. ID.; ID.; REMEDY WHEN APPELLANT IS GUILTY OF DELAY INCOMPLYING WITH THE JUDGMENT. — Where there is nothing in the record to show that appellants have any attempt to settle their obligation during the intervening period, since the judgment of the court a quo of November 14, 1963, or have made any tender of payment thereof, or made a deposit of the money as required by law to prevent the foreclosure sale, one cannot help but engender the suspicion that the appeal taken by the appellants is merely dilatory and for no other purpose than to prolong their enjoyment of the mortgaged properties, to the prejudice of the appellee. This Court will never give its stamp of approval to such kind of attitude and procedure. Rather than return this case to the lower court with instruction to fix the definite period desired by appellants, it is the considered opinion of this Court that on account of the long period that has already elapsed since the judgment of the trial court was rendered and it does not appear that efforts, have been made by appellants to pay the amount decreed therein, the judgment herein should be that the said amount should be paid within thirty (30) days after this decision becomes final and executory.
3. ID.; ATTORNEYS FEE; FIXING THEREOF MAY BE HELD IN THE TRIAL COURT; 5% OF THE AMOUNT OF JUDGMENT, SUFFICIENT. — The matter of reduction of stipulated attorney’s fees could have been pressed upon the trial court whose powers in the premises are no less than those of this Court. Besides, appellants’ contention that no evidence was presented relative to attorney’s fees in connection with the supplemental complaint is without merit, inasmuch as the same contract of mortgage, with the same stipulation as to the amount of attorney’s fees, was involved in both the original as well as the supplemental complaints, and since the existence of such stipulation was not denied in the answer to the original complaint all the allegations of which are admitted in the answer thereto, was merely to allege additional amounts for which the appellants should be liable, it is obvious that the ten per centum (10%) for attorney’s fees should be applied to the total amount alleged in the supplemental complaint. Nonetheless, without necessarily agreeing with the appellants that said stipulated ten per centum (10%) for attorney’s fees is unconscionable and immoral, the Court feels that the five per centum (55%) of the whole amount of the judgment herein is sufficient for the purpose.
2. ID.; ID.; REMEDY WHEN APPELLANT IS GUILTY OF DELAY INCOMPLYING WITH THE JUDGMENT. — Where there is nothing in the record to show that appellants have any attempt to settle their obligation during the intervening period, since the judgment of the court a quo of November 14, 1963, or have made any tender of payment thereof, or made a deposit of the money as required by law to prevent the foreclosure sale, one cannot help but engender the suspicion that the appeal taken by the appellants is merely dilatory and for no other purpose than to prolong their enjoyment of the mortgaged properties, to the prejudice of the appellee. This Court will never give its stamp of approval to such kind of attitude and procedure. Rather than return this case to the lower court with instruction to fix the definite period desired by appellants, it is the considered opinion of this Court that on account of the long period that has already elapsed since the judgment of the trial court was rendered and it does not appear that efforts, have been made by appellants to pay the amount decreed therein, the judgment herein should be that the said amount should be paid within thirty (30) days after this decision becomes final and executory.
3. ID.; ATTORNEYS FEE; FIXING THEREOF MAY BE HELD IN THE TRIAL COURT; 5% OF THE AMOUNT OF JUDGMENT, SUFFICIENT. — The matter of reduction of stipulated attorney’s fees could have been pressed upon the trial court whose powers in the premises are no less than those of this Court. Besides, appellants’ contention that no evidence was presented relative to attorney’s fees in connection with the supplemental complaint is without merit, inasmuch as the same contract of mortgage, with the same stipulation as to the amount of attorney’s fees, was involved in both the original as well as the supplemental complaints, and since the existence of such stipulation was not denied in the answer to the original complaint all the allegations of which are admitted in the answer thereto, was merely to allege additional amounts for which the appellants should be liable, it is obvious that the ten per centum (10%) for attorney’s fees should be applied to the total amount alleged in the supplemental complaint. Nonetheless, without necessarily agreeing with the appellants that said stipulated ten per centum (10%) for attorney’s fees is unconscionable and immoral, the Court feels that the five per centum (55%) of the whole amount of the judgment herein is sufficient for the purpose.
D E C I S I O N
BARREDO, J.:
Appeal from the decision of the Court of First Instance of Manila (Branch XVII), in its Civil Case No. 41518, and the subsequent order modifying the dispositive portion thereof, sent to Us by the Court of Appeals, the amount involved therein being beyond the latter’s appellate jurisdiction. 1
The constitutive facts which are not disputed in this appeal are stated in the decision of the trial court thus:jgc:chanrobles.com.ph
"From the evidence presented by the plaintiff, it appears that on May 23, 1958, defendant Iluminada (Lumen) R. Policarpio, as principal, and defendant spouses, Simeon Policarpio and Modesta Reyes, as sureties, obtained a loan from the plaintiff, Philippine Trust Company, which is a banking corporation duly organized and existing in accordance with the laws of the Republic of the Philippines, with principal offices at the Philippine Trust Company Building, Plaza Goiti, Manila, in the form of an agreement for credit in current account, in the total sum of P300,000.00 with interest thereon at 9% per annum from said date until fully paid, with the stipulation that the overdraft line would be reduced by P3,000.00 monthly, commencing on July 1, 1958 (Exh. "A"). To guarantee the payment of said obligation, defendants jointly and severally executed a deed of mortgage (Exh. "B") in favor of said plaintiff over the parcels of land including all the improvements existing thereon, covered by Transfer Certificate of Title No. 41144 (now 51668) of the Register of Deeds of the City of Manila, and Transfer Certificate of Title No. 24182 of the Register of Deeds of Rizal, which are more particularly described as follows:chanrob1es virtual 1aw library
(Descriptions of Land)
Said mortgage was duly registered in the Office of the Register of Deeds of Manila on May 23, 1958, and in the Register of Deeds of Rizal on May 28, 1958.
"On June 30, 1958, said overdraft line was increased to P320,000.00 and corresponding amendment of the deed of mortgage was executed, which amendment was duly registered on July 7, 1958, in the Office of the Register of Deeds of Manila and on July 8, 1958, in the Register of Deeds of Rizal (Exhs.’C’ and ’D’). To further guarantee the payment of said additional loan of P20,000.00, defendants jointly and severally executed a chattel mortgage on June 30, 1958, in favor of the plaintiff on those chattels situated at 1301-1303 Rizal Avenue, Manila, which was listed therein and which deed of chattel mortgage was duly registered on July 7, 1958, in the Chattel Mortgage Register of Manila and on July 8, 1958, in the Chattel Mortgage Register of Rizal (Exh.’E’). As further additional security for the payment of said loan, the defendant Iluminada (Lumen) R. Policarpio, executed a deed of assignment and special power of attorney on May 23, 1958, whereby she bound herself to reduce the overdraft line by paying to the plaintiff the sum of at least r3,000.00 a month from the rents of one of the mortgaged properties, which deed was amended on June 30, 1958, to cover the additional loan of r20,000.00 (Exhs.’F’ and ’G’).
"In accordance with the terms of the deed of mortgage (Exh -’B’), in case of failure or refusal of the debtors to pay any of the amortizations of the indebtedness or interest when due or whatever obligation secured by the aforesaid mortgage, the whole obligation would become due and payable. The defendants have failed and refused to comply with the agreements aforesaid to pay the plaintiff the monthly amortizations agreed upon from July, 1958 up to the present, despite repeated demands made by the plaintiff, and as of July 14, 1958, the total indebtedness of the defendants to the plaintiff amounted to 298,121.75."cralaw virtua1aw library
and supplemented by the allegations in the supplemental complaint, admitted unconditionally in the answer thereto, as follows:jgc:chanrobles.com.ph
"1. That according to the Deed of Mortgage Exhibit ’B’ in the complaint, defendants bound themselves to duly pay and discharge all taxes, assessments and governmental charges lawfully imposed upon the mortgage properties;
"2. That defendants failed and refused to pay the realty taxes due on the properties mortgaged in the amounts of r3,186.55 and r6,585.52;
"3. That it was also stipulated in the said Deed of Mortgage, that if the mortgagor (defendants herein) shall fail or refuse to pay said taxes and assessments, the mortgagee (plaintiff herein) may in its discretion, pay such taxes or assessments and the mortgagor shall, on demand, repay the mortgagee all sums expended by it for the above purpose with interest at the rate of ten per centum (10%) per annum from the date of such expenditures;
"4. That to protect its interest and pursuant to the provisions of the aforementioned Deed of Mortgage, and upon the request of defendant through defendant Iluminada (Lumen) Policarpio, plaintiff paid the realty taxes on the properties mortgaged in the amount of P3,186.55 last February 20, 1962, and the amount of P6,585.52 on March 22, 1962, or subsequent to the filing of the complaint in this case;
"5. That defendants failed and refused and still fail and refuse to pay plaintiff the above sums despite repeated demands made on them to do so;
"6. That it is further stipulated in the same Deed of Mortgage, Exhibit ’B’ of the complaint, that the defendants shall at all times insure or cause to be insured, and keep insured against loss or damage by fire all the buildings and improvements on the mortgaged properties, and that the defendants shall promptly pay all premiums on such insurance as said premiums may accrue;
"7. That the defendants failed and refused to pay the premiums on the insurance of the buildings and improvements on the mortgaged properties in the amounts of P1,522.56 and p388.02;
"8. That it is also a provision in the aforestated Deed of Mortgage that if the mortgagor (defendants) shall fail or refuse to pay the above obligation, the mortgagee (plaintiff) may in its discretion, pay such premiums and the mortgagor shall, on demand, repay the mortgagee all sums expended by it for such purpose with interest at the rate of ten per centum (10%) from the date of such expenditures;
"9. That to prevent the insurance policy from expiring and in the exercise of its rights under the Deed of Mortgage, Exhibit ’B’, plaintiff paid the premiums amounting to P1,522.56 on March 1, 1962 and r388.02 on July 31, 1962, or subsequent to the filing of the complaint in the above-entitled case;
"10. That the total amount due plaintiff from defendants as of this date is as follows:chanrob1es virtual 1aw library
Overdraft balance, inclusive of accrued to date P398,311.24
Add: Insurance Premiums & Other Advances:chanrob1es virtual 1aw library
Aug. 30, 1960-Ins. Premiums P 171.12
Sept. 29, 1960 — do — 1,790:47
Nov. 29, 1960 — do — 190.32
Mar. 6, 1961 — do — 1,446.61
Aug. 30, 1961 — do — 161.40
Sept. 25, 1961 — do — 1,689.12
Feb. 21, 1962 — Real Estate Tax 3,186.55
Mar. 1, 1962 — Ins. Premium 1,522.56
Mar. 22, 1962 — Real Estate Tax 6,585.52 — 16,743.67
———— ————
P415.054.91
Add: Accrued Interest on Advances:chanrob1es virtual 1aw library
10% int. on P171.12 from
8/30/60 to 9/25/62-767 days at
P.104753 daily rate P 35.98
10% int. o P1,790.47 from 9/29/60
to 9/25/62-727 days at P.49735
daily rate P 361.57
10% int. on P190.32 from l l/29/60
to 9/25/62-666 days at P.05287
daily rate P35.21
10% int. on P1,446.61 from 3/6/61
to 9125/62-569 days at P.4018
daily rate P 228.62
10% int. on P161.40 from 8/30/61
to 9/25/62-392 days at P.04483
daily rate P17.57
10% int. on P1,689.12 from 9/25/61
to 9/25/62-366 days at P.4692
daily rate P171.73
10% int. on P3,186.55 from 2/21/62
to 9/25/62-217 days at P.88515
daily rate P192.08
10% int. on P1,522.56 from 3/1/62
to 9/25/62-209 days at P.42293
daily rate P88.39
10% int. on P6,585.52 from 3/22/62
to 9/25/62-188 days at P1,829.31
daily rate 341.91 1,475.06
———— ————
P416,529.97
Add: Demand Loan due on
June 30, 1958 P20,000.00
9% int. on P20,000.00 from
7/1/58 to 9/25/62-1,548
days at P5.00 daily rate 7,740.00 27,740.00
————
Other charges 300.00
————
Total due Plaintiff as of
Sept. 25, 1962 444, 569.97"
==========
Upon these facts, the court a quo rendered a decision (Amended) the dispositive part of which reads:jgc:chanrobles.com.ph
"WHEREFORE, judgment is hereby rendered, ordering the defendants, Simeon of Policarpio, Modesta Reyes and Iluminada (Lumen R. Policarpio, to pay to the plaintiff, Philippine Trust Company, the sum of P444,569.97, with interest thereon at 9% per annum from September 25, 1962, until fully paid, plus 10% of the amount due as attorney’s fees and the costs of the suit.
"Upon failure of said defendants to pay said amounts within the period provided by law, let the mortgaged properties and the improvements thereon be sold at public auction in accordance with the provision of law."cralaw virtua1aw library
A review of the pleadings reveals that in their answer to the original complaint, appellants did not raise any issue which can be of any materiality in this appeal. The proceedings lasted from September 29, 1959 when the complaint was filed to November 14, 1963 when the amendatory judgment aforequoted was rendered mainly because of postponements requested by appellants. After appellee rested its case on September 16, 1960, appellants secured further delay until August 22, 1963 when the trial court denied their last motion for postponement and declared the case submitted for decision. Appellants made no move to have this order reconsidered in order to give them a chance to present evidence. In fact, they do not complain in such regard in this instance. Against the judgment of the trial court rendered on October 14, 1963 and amended on November 14, 1963, they have assigned only two alleged errors as follows:chanrob1es virtual 1aw library
THE LOWER COURT ERRED IN ITS DECISION RENDERED IN THE ABOVE-ENTITLED CASE, IN THAT, IN THE DISPOSITIVE PART OF ITS DECISION, IT DISREGARDED AND IGNORED THE CLEAR PROVISION OF SECTION 2, RULE 68, NEW RULES OF COURT.
THE LOWER COURT ERRED IN AWARDING TO THE PLAINTIFF- APPELLEE THE SUM OF r44,456.99 OR 10
The constitutive facts which are not disputed in this appeal are stated in the decision of the trial court thus:jgc:chanrobles.com.ph
"From the evidence presented by the plaintiff, it appears that on May 23, 1958, defendant Iluminada (Lumen) R. Policarpio, as principal, and defendant spouses, Simeon Policarpio and Modesta Reyes, as sureties, obtained a loan from the plaintiff, Philippine Trust Company, which is a banking corporation duly organized and existing in accordance with the laws of the Republic of the Philippines, with principal offices at the Philippine Trust Company Building, Plaza Goiti, Manila, in the form of an agreement for credit in current account, in the total sum of P300,000.00 with interest thereon at 9% per annum from said date until fully paid, with the stipulation that the overdraft line would be reduced by P3,000.00 monthly, commencing on July 1, 1958 (Exh. "A"). To guarantee the payment of said obligation, defendants jointly and severally executed a deed of mortgage (Exh. "B") in favor of said plaintiff over the parcels of land including all the improvements existing thereon, covered by Transfer Certificate of Title No. 41144 (now 51668) of the Register of Deeds of the City of Manila, and Transfer Certificate of Title No. 24182 of the Register of Deeds of Rizal, which are more particularly described as follows:chanrob1es virtual 1aw library
(Descriptions of Land)
Said mortgage was duly registered in the Office of the Register of Deeds of Manila on May 23, 1958, and in the Register of Deeds of Rizal on May 28, 1958.
"On June 30, 1958, said overdraft line was increased to P320,000.00 and corresponding amendment of the deed of mortgage was executed, which amendment was duly registered on July 7, 1958, in the Office of the Register of Deeds of Manila and on July 8, 1958, in the Register of Deeds of Rizal (Exhs.’C’ and ’D’). To further guarantee the payment of said additional loan of P20,000.00, defendants jointly and severally executed a chattel mortgage on June 30, 1958, in favor of the plaintiff on those chattels situated at 1301-1303 Rizal Avenue, Manila, which was listed therein and which deed of chattel mortgage was duly registered on July 7, 1958, in the Chattel Mortgage Register of Manila and on July 8, 1958, in the Chattel Mortgage Register of Rizal (Exh.’E’). As further additional security for the payment of said loan, the defendant Iluminada (Lumen) R. Policarpio, executed a deed of assignment and special power of attorney on May 23, 1958, whereby she bound herself to reduce the overdraft line by paying to the plaintiff the sum of at least r3,000.00 a month from the rents of one of the mortgaged properties, which deed was amended on June 30, 1958, to cover the additional loan of r20,000.00 (Exhs.’F’ and ’G’).
"In accordance with the terms of the deed of mortgage (Exh -’B’), in case of failure or refusal of the debtors to pay any of the amortizations of the indebtedness or interest when due or whatever obligation secured by the aforesaid mortgage, the whole obligation would become due and payable. The defendants have failed and refused to comply with the agreements aforesaid to pay the plaintiff the monthly amortizations agreed upon from July, 1958 up to the present, despite repeated demands made by the plaintiff, and as of July 14, 1958, the total indebtedness of the defendants to the plaintiff amounted to 298,121.75."cralaw virtua1aw library
and supplemented by the allegations in the supplemental complaint, admitted unconditionally in the answer thereto, as follows:jgc:chanrobles.com.ph
"1. That according to the Deed of Mortgage Exhibit ’B’ in the complaint, defendants bound themselves to duly pay and discharge all taxes, assessments and governmental charges lawfully imposed upon the mortgage properties;
"2. That defendants failed and refused to pay the realty taxes due on the properties mortgaged in the amounts of r3,186.55 and r6,585.52;
"3. That it was also stipulated in the said Deed of Mortgage, that if the mortgagor (defendants herein) shall fail or refuse to pay said taxes and assessments, the mortgagee (plaintiff herein) may in its discretion, pay such taxes or assessments and the mortgagor shall, on demand, repay the mortgagee all sums expended by it for the above purpose with interest at the rate of ten per centum (10%) per annum from the date of such expenditures;
"4. That to protect its interest and pursuant to the provisions of the aforementioned Deed of Mortgage, and upon the request of defendant through defendant Iluminada (Lumen) Policarpio, plaintiff paid the realty taxes on the properties mortgaged in the amount of P3,186.55 last February 20, 1962, and the amount of P6,585.52 on March 22, 1962, or subsequent to the filing of the complaint in this case;
"5. That defendants failed and refused and still fail and refuse to pay plaintiff the above sums despite repeated demands made on them to do so;
"6. That it is further stipulated in the same Deed of Mortgage, Exhibit ’B’ of the complaint, that the defendants shall at all times insure or cause to be insured, and keep insured against loss or damage by fire all the buildings and improvements on the mortgaged properties, and that the defendants shall promptly pay all premiums on such insurance as said premiums may accrue;
"7. That the defendants failed and refused to pay the premiums on the insurance of the buildings and improvements on the mortgaged properties in the amounts of P1,522.56 and p388.02;
"8. That it is also a provision in the aforestated Deed of Mortgage that if the mortgagor (defendants) shall fail or refuse to pay the above obligation, the mortgagee (plaintiff) may in its discretion, pay such premiums and the mortgagor shall, on demand, repay the mortgagee all sums expended by it for such purpose with interest at the rate of ten per centum (10%) from the date of such expenditures;
"9. That to prevent the insurance policy from expiring and in the exercise of its rights under the Deed of Mortgage, Exhibit ’B’, plaintiff paid the premiums amounting to P1,522.56 on March 1, 1962 and r388.02 on July 31, 1962, or subsequent to the filing of the complaint in the above-entitled case;
"10. That the total amount due plaintiff from defendants as of this date is as follows:chanrob1es virtual 1aw library
Overdraft balance, inclusive of accrued to date P398,311.24
Add: Insurance Premiums & Other Advances:chanrob1es virtual 1aw library
Aug. 30, 1960-Ins. Premiums P 171.12
Sept. 29, 1960 — do — 1,790:47
Nov. 29, 1960 — do — 190.32
Mar. 6, 1961 — do — 1,446.61
Aug. 30, 1961 — do — 161.40
Sept. 25, 1961 — do — 1,689.12
Feb. 21, 1962 — Real Estate Tax 3,186.55
Mar. 1, 1962 — Ins. Premium 1,522.56
Mar. 22, 1962 — Real Estate Tax 6,585.52 — 16,743.67
———— ————
P415.054.91
Add: Accrued Interest on Advances:chanrob1es virtual 1aw library
10% int. on P171.12 from
8/30/60 to 9/25/62-767 days at
P.104753 daily rate P 35.98
10% int. o P1,790.47 from 9/29/60
to 9/25/62-727 days at P.49735
daily rate P 361.57
10% int. on P190.32 from l l/29/60
to 9/25/62-666 days at P.05287
daily rate P35.21
10% int. on P1,446.61 from 3/6/61
to 9125/62-569 days at P.4018
daily rate P 228.62
10% int. on P161.40 from 8/30/61
to 9/25/62-392 days at P.04483
daily rate P17.57
10% int. on P1,689.12 from 9/25/61
to 9/25/62-366 days at P.4692
daily rate P171.73
10% int. on P3,186.55 from 2/21/62
to 9/25/62-217 days at P.88515
daily rate P192.08
10% int. on P1,522.56 from 3/1/62
to 9/25/62-209 days at P.42293
daily rate P88.39
10% int. on P6,585.52 from 3/22/62
to 9/25/62-188 days at P1,829.31
daily rate 341.91 1,475.06
———— ————
P416,529.97
Add: Demand Loan due on
June 30, 1958 P20,000.00
9% int. on P20,000.00 from
7/1/58 to 9/25/62-1,548
days at P5.00 daily rate 7,740.00 27,740.00
————
Other charges 300.00
————
Total due Plaintiff as of
Sept. 25, 1962 444, 569.97"
==========
Upon these facts, the court a quo rendered a decision (Amended) the dispositive part of which reads:jgc:chanrobles.com.ph
"WHEREFORE, judgment is hereby rendered, ordering the defendants, Simeon of Policarpio, Modesta Reyes and Iluminada (Lumen R. Policarpio, to pay to the plaintiff, Philippine Trust Company, the sum of P444,569.97, with interest thereon at 9% per annum from September 25, 1962, until fully paid, plus 10% of the amount due as attorney’s fees and the costs of the suit.
"Upon failure of said defendants to pay said amounts within the period provided by law, let the mortgaged properties and the improvements thereon be sold at public auction in accordance with the provision of law."cralaw virtua1aw library
A review of the pleadings reveals that in their answer to the original complaint, appellants did not raise any issue which can be of any materiality in this appeal. The proceedings lasted from September 29, 1959 when the complaint was filed to November 14, 1963 when the amendatory judgment aforequoted was rendered mainly because of postponements requested by appellants. After appellee rested its case on September 16, 1960, appellants secured further delay until August 22, 1963 when the trial court denied their last motion for postponement and declared the case submitted for decision. Appellants made no move to have this order reconsidered in order to give them a chance to present evidence. In fact, they do not complain in such regard in this instance. Against the judgment of the trial court rendered on October 14, 1963 and amended on November 14, 1963, they have assigned only two alleged errors as follows:chanrob1es virtual 1aw library
"I
THE LOWER COURT ERRED IN ITS DECISION RENDERED IN THE ABOVE-ENTITLED CASE, IN THAT, IN THE DISPOSITIVE PART OF ITS DECISION, IT DISREGARDED AND IGNORED THE CLEAR PROVISION OF SECTION 2, RULE 68, NEW RULES OF COURT.
"II
THE LOWER COURT ERRED IN AWARDING TO THE PLAINTIFF- APPELLEE THE SUM OF r44,456.99 OR 10
