Case 1: Nunez v.

GSIS Family Bank

Facts:

History

Leonilo S. Nuez, obtained 3 loans from GSIS Family Bank which are namely:
A. First Loan- April 6, 1976 which matured on June 30, 1978
B. Second Loan- July 7, 1976 which matured on June 30, 1978
C. Third Loan (amended the first loan to secure which amended loan the same
property was mortgaged)- July 7, 1976 which matured on June 30, 1978
D. Fourth Loan- which matured on Dec. 27, 1978 to secure which he execued a
Real Estate Mortgage
He executed a Promissory Note in the amount of more than P1.5M due and payanle on Dec
27.1978
After 19 years after Leonilos promissory note matured on or Dec 1997, GSIS famly bank
undertook to extrajuducally foreclose the properties used for the first and second loans; bank
said that the petitioner failed to pay his principal obligations and interest due from dec 27
1978 up to the moment petition was filed which is a violation of the terms and conditions of
the loans secured uner Real Estate Mortgages on 1997
Properties was set for a public auction in Jan 9, 1998 in which bank as the highest and only
bidder with cert of sale granted in favor of the bank
Two of the parcels of land secured the fourth loan was extrajudicially foreclosed on 1999 and
cert of sale was granted to the bank at the public auction
Leonilo filed a complaint against GSIS Family Bank with the following grounds:

Denied securing a fourth loan but nevertheless alleged that for the purposes of action,
the same shall be assumed to have been validly secured

Art 1142 and 1144 of the Civil Code, he stated that the bank has no longer had any right
as prescription has set in when it filed a Petition for Extrajudicial Foreclose of Mortgage

Real Estate Mortgage shows that the fourth loan was annotated with the two titles
subject of the 1999 foreclosure which was more than 11 years after the prescriptive
period to foreclose had set in

RTC Ruling

Ruled in favor of Leonilo who died during the pendency of the case, substituted by his heirs,
herein petitioners, on the ground that banks cause for action had already prescribed so said
proceedings for extrajudicial foreclosure of real estate mortgaged were null and void
Bank filed a motion for reconsideration on the last day of the 15-day period to file for an
appeal but did not comply with the provision of Sec 4, Rule 15 of the Rules of Court on
NOTICE OF HEARING
RTC denied motion for reconsideration saying that even if techinicality is set aside to serve
the ends of justice, litigations should also end at some point or else they will become endless
Bank filed a notice of appeal in which petitioners filed a moion to dismiss for being late
granted by RTC

CA Ruling

CA found for the bank stating that thought the right to appeal is a statutory and not a a
natural right, is is still an essential part of the judicial system; RTC should have given the
banks Notice of Appeal so better serve the ends of justice
Ground used by GSIS Fam Bank

Strictly and rigidly apply the rules of procedure would result to injustice and irreparable
damage to the government as it will lose a substantial amount if not allowed to recover
proceeds of the loans

RTC lack of jurisdiction when it lost its jurisdiction of the case in view of the perfection
of the petitioners appeal

Lack or excess of jurisdiction when it denied banks motion for reconsideration there
being strong reasons to admit said motion

Denied motion for reconsideration filed by the heirs of Nunez

Issue:

1. WON CA committed grave abuse of discretion in reversing the decision of RTC?

2. WON GSIS Family Bank could still appeal a judgment which has become final and executory

SC Ruling

Ruled in favor of the petitioners on the following grounds in which CAs decision has been
reversed and set aside, RTC decision is final and executory:

Requirement of notice under Sec 4 and 5 of the Rules of Court is mandatory in which
the bank has failed to include

Filed a Notice of Appeal, out of time, hence tbe decision of RTC has become final and
executory

Bank failed to adequately explain the failure to abide by the rule since their explanation
of the handling counses is unsatisfactory

Court says that the loss to be suffered by the governement is caused by the respondents
own doing or undoing

Failure to timely perfect an appeal cannot simply be dismissed as a mere technicality for
it is jurisdictional as it deprives the appelate court of jurisdiction over the appeal

Bank has already passed precriptive period to an action to foreclose a real estate
mortgage which is 10 years; no letter of demand, court action or foreclosure proceeding
was undertaken; why it waited more than ninetten years after the right to file a
collection suit

Art 1141 of Civil Code- real actions over immovables or rights

Art 1142 of Civil Code- mortagage action which prescribes in 10 years

The reason that Art 1142 is placed right after Art 1141 because it is an exception the rule
so Art 1142 should apply