EN
BANC
AGRICULTURAL
AND
INDUSTRIAL BANK,
Plaintiff-Appellee,
G.
R.
No. 48207
April
27, 1942
-versus-
MANUEL
TAMBUNTING,
ET AL.,
Defendants.chanrobles virtual law library
MANUEL
TAMBUNTING,
Defendant-Appellant.
D
E C I S I
O N
OZAETA,
J :
The question raised in
this appeal is the validity of a stipulation in a mortgage contract
authorizing
the mortgagee to take possession of the mortgaged property upon
foreclosure
of the mortgage.
It appears that on
May 31, 1935, the appellant Manuel Tambunting executed a deed of
mortgage
on a parcel of land with the buildings and other improvements thereon,
situated in the City of Manila, in favor of the Teachers' Retirement
and
Disability Fund, now under the control and administration of the
appellee
Agricultural and Industrial Bank, to secure the payment of a loan of
P17,000,
payable after three years from the date of the mortgage, with interest
thereon at the rate of 8 per cent per annum payable monthly. It was
stipulated
in paragraph 8 of the deed of mortgage "that this mortgage shall, after
notice to the mortgagor, be considered automatically foreclosed,
without
the necessity of any judicial proceedings," upon the failure of the
mortgagor
to comply with any of the stipulations, terms, and conditions therein
agreed
upon, among which were the payment by the mortgagor of the monthly
interests
and the payment of the taxes and insurance premiums on the mortgaged
premises.
In paragraph 9 of the same deed of mortgage, the following was
stipulated:
"9. It is further
agreed
and stipulated that, when this mortgage is automatically foreclosed for
any of the causes or reasons enumerated in the next preceding
paragraph,
the Mortgagee or its representative is hereby authorized by the
Mortgagor
to take possession of the property herein mortgaged without the
necessity
of resorting to any court proceedings, or any other judicial action. In
such case and until the property is sold at public auction, the
Mortgagee
is authorized [a] to hold and retain possession of said property; [b]
to
collect all rents due on the same; and [c] to perform all other acts of
administration and management in the most advantageous manner for the
best
interest of the Mortgagee. It is further agreed that in the event said
property is occupied by the Mortgagor, the latter shall pay rental to
the
Mortgagee at the rate to be fixed by the Mortgagee."
Paragraph 10 of the mortgage
provides that in selling the property at public auction the mortgagee
shall
follow the procedure provided for in Act No. 3135, the mortgagor in any
case to be notified by the mortgagee in writing by registered mail of
the
date of the sale. All of these stipulations were without prejudice to
the
right of the mortgagee at its option to institute judicial foreclosure
proceedings.
The
mortgagor having
failed to pay the mortgage after maturity, the mortgagee chose to
foreclose
it judicially by instituting the corresponding action in the Court of
First
Instance of Manila on May 15, 1939, it being alleged in the complaint
that
as of March 31, 1939, the amount due on the mortgage was P19,000.21.
The
defendant answered with a general denial. On January 15, 1940, the
plaintiff,
invoking paragraphs 8 and 9 of the mortgage hereinbefore referred to,
moved
the Court to authorize it to take possession of the mortgaged premises,
alleging that the defendant had failed and still failed to pay the real
estate taxes and insurance premiums on the mortgaged property, forcing
the plaintiff to advance from time to time the necessary amounts in
addition
to the expenses for repairs of the premises. That motion was granted by
the court in an order dated February 8, 1940, from which order the
defendant
has appealed to this Court.
The only assignment
of error made by appellant is the following:
"The trial court
erred
in holding that the plaintiff, Agricultural and Industrial Bank, is
entitled
to the possession and administration of the premises in question while
the case is still pending trial and before the termination of the
foreclosure
suit against the defendant-appellant."
In
support of that assignment
of error, appellant contends that paragraph 9 of the deed of mortgage
in
question is null and void. He intimates that although such a
stipulation
is sanctioned by custom and usage in this country it finds no support
in
our laws.
Such argument is beside
the point. In order to establish the nullity of the contractual
provision
in question appellant must show that it is contrary to law, morals, or
public order [Article 1255, Civil Code], and this he has failed to do.
Article 1859 of the
Civil Code says that the creditor may not appropriate to himself the
things
given in pledge or mortgage, or dispose of them; and article 1884 of
the
same Code provides that the nonpayment of the debt within the term
agreed
upon does not vest the ownership of the property in the creditor and
that
any stipulation to the contrary shall be void. But the stipulation in
question
authorizing the mortgagee, for the purposes therein specified, to take
possession of the mortgaged premises upon foreclosure of the mortgage
is
not repugnant to either of these articles. On the other hand, such
stipulation
is in consonance with or analogous to the provisions of Article 1881, et
seq. of the Civil Code regarding antichresis and the provisions of
the Rules of Court regarding the appointment of a receiver as a
convenient
and feasible means of preserving and administering the property in
litigation.
[See Section 1 (e), Rule 61].
Appellant further
contends
that the authorization given in paragraph 9 to the mortgagee to take
possession
of the mortgaged premises refers to the automatic extrajudicial
foreclosure
of the mortgage and that, since the mortgagee chose to institute
judicial
foreclosure proceedings, it could not invoke said stipulation. If the
mortgagee
is authorized to take possession of the mortgaged property without the
intervention of the court, the mortgagor has no legitimate cause for
complaint
on account of the court's intervention, by which his rights may be more
fully protected.
We find the stipulation
in question to be valid and accordingly affirm the order appealed from,
with costs against the appellant. So ordered.
Yulo, C.J.,
Moran, Paras and Bocobo, JJ., concur. |