BPI FAMILY SAVINGS BANK v. VDA.

DE COSCOLLUELA
G.R. No. 167724 / June 27, 2006 / Callejo, Sr., J. / Splitting / KJMSTA.ANA

NATURE
PETITIONERS
RESPONDENTS

Petition for Review under Rule 45

BPI Family Savings Bank
Margarita Vda. De Cosculluela

FACTS.

Respondent and her late husband Oscar obtained an agricultural

sugar crop loan from Far East Bank & Trust Co. (later merged with
BPI) for crop years 1997 and 1998. In the book of Far East, the loan
account was treated as a single account, and evidenced by 67
promissory notes.

Sps. Coscolluela executed a real estate mortgage in favor of FEBTC

over their parcel of land as security of loans on credit
accommodation obtained and those that may be obtained.

Under the terms and conditions of the real estate mortgage, in the
event of failure to pay the mortgage obligation or any portion
thereof, the entire principal, interest, penalties, and other charges
shall be immediately due; and Far East mat foreclose the same extra
judicially.

For failure to settle outstanding obligation on the maturity dates, Far

East sent a final demand letter to respondent demanding payment.

Since respondent failed to settle her obligation, Far East filed a

petition for the extrajudicial foreclosure of the mortgaged property,
but only only for 31 of the promissory notes.

During pendency of said case, Far East filed a complaint for collection
of money representing the amounts for the 36 other promissory
notes.

In respondents answer, she alleged that the complaint was barred

by litis pendentia for the pending petition for the extrajudicial
foreclosure of the REM.

Petitioner presented a loan officer as sole witness, who testified that

respondent were granted a loan, which was a single loan account.

Respondent filed a Demurrer to Evidence contending that the loan

officers admission, that there is only one loan account secured by
the REM thus barred the personal action for collection. She insisted
that the filing of said complaint should be dismissed.

Petitioner opposed the demurrer, stating that each promissory note

constituted a separate contract.
The trial court denied the demurrer on the ground that each note
covered a loan distinct from the others.
Respondent filed MR but denied, prompting her to file a certiorari
petition under Rule 65 with CA.
CA granted the petitioner, stating that the remedies sought are
alternative and not cumulative. Thus, in denying the demurrer, RTC
committed grave abuse of discretion.
Petitioner filed MR but it was denied. Hence, this petition.

ISSUES & RATIO.

1. WON collection suit should be dismissed YES
Section 3, Rule 2 of the 1997 Rules of Civil Procedure provides that a party
may not institute one suit for a single cause of action, and, if two or more
suits are instituted on the basis of the same cause of action, the filing of
one on a judgment upon the merits in any one is available as a ground for
the dismissal of others. The law does not permit the owner of a single of
entire cause of action or an entire or indivisible demand to divide and split
the cause to make it the subject of several actions.
The true rule which determined whether a party has only a single and
entire cause of action is whether the entire amount arises from one and
the same act or contract or the several parts arise from distinct and
different acts. As gleaned from the plain terms of the REM, the real estate
of respondent served as a continuing security liable for obligations already
obtainer and obligations obtained thereafter. In this case, the action of
petitioner is anchored on one and the same cause: the nonpayment of
respondent. Though the debt may be covered by several promissory notes
and is covered by a real estate mortgage, the latter is subsidiary to the
former and both refer to one and the same obligation. A mortgage creditor
may institute two alternative remedies against the debtor, either to collect
debt or to foreclose mortgage, but not both.
DECISION.
WHEREFORE instant petition is dismissed for lack of merit.