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Philippine Supreme Court Jurisprudence > Year 1981 > July

1981 Decisions > [G.R. No. L-26274 : July 31, 1981.] ALPHA
ChanRobles On-Line Bar INSURANCE AND SURETY CO., INC., Plaintiff-Appellant, vs.
Review ESPERANZA C. REYES, ARTURO R. REYES and DEVELOPMENT
BANK OF THE PHILIPPINES, Defendants-Appellees.:

SECOND DIVISION

[G.R. No. L-26274 : July 31, 1981.]

ALPHA INSURANCE AND SURETY CO., INC., Plaintiff-Appellant, vs.

ESPERANZA C. REYES, ARTURO R. REYES and DEVELOPMENT
BANK OF THE PHILIPPINES, Defendants-Appellees.

DECISION

BARREDO, J.:

An appeal from the decision of the Court of First Instance of

Manila in Civil Case No. 49980, Alpha Insurance and Surety Co.,
Inc. vs. Esperanza C. Reyes, et al., certified by the Court of Appeals
to this Court for the reason that the sole assignment of error of
appellant raises purely a legal question.
The following facts are undisputed:

The spouses Esperanza C. Reyes and Arturo R. Reyes executed on

November 15, 1958 in favor of Alpha Insurance and Surety Co.,
Inc. a second mortgage over their two parcels of land cranad (with a
total area of 540 square meters) and the buildings thereon,
located at Makati, Rizal, in consideration of Alpha Insurance’s
undertaking to act as surety of the said spouses in certain loans
cranad (not to exceed P10,000.00) to be obtained from banks or
financial institutions. The two lots were previously mortgaged to
the Development Bank of the Philippines as security for a loan of
P17,000.00.

In 1958, Esperanza C. Reyes borrowed P5,000.00 from the

Prudential Bank and Trust Company. In 1959, she borrowed also
P5,000.00 from the Philippine Banking Corporation. Alpha
Insurance was her surety and co-maker in two promissory notes
covering the said loans. She and her husband executed indemnity
agreements in favor of Alpha Insurance in addition to the second
mortgage.

Due to the default of Esperanza C. Reyes, Alpha Insurance, as

solidary debtor, was constrained to pay the two loans total balance
of which as of November 21, 1961 was P7,575.00, plus 12%
interest per annum.

As the Reyes spouses did not make any reimbursement to Alpha

Insurance, the latter filed on March 27, 1962 in the Court of First
Instance of Manila the foreclosure action above-mentioned
against the spouses and the DBP.

The DBP in its answer alleged that it had a first mortgage on the
two lots which was superior to Alpha Insurance’s mortgage. It
prayed that, in case of foreclosure, the proceeds of the sale be first
applied to its credit. The Reyes spouses did not file an answer.
They were declared in default.

Judge Jose L. Moya in his decision dated February 1, 1963, simply

ordered the Reyes spouses to pay Alpha Insurance the sum of
P7,575.00 with 12% interest a year from November 22, 1961.

Because the judge had ignored the prayer in Alpha Insurance’s

complaint for the foreclosure of its second mortgage, it filed a
motion for reconsideration, praying that the foreclosure of the
second mortgage be ordered and that the Reyes spouses be
required to pay attorney’s fees.
Judge Moya in his order of February 19, 1963 awarded P757.50 as
attorney’s fees, but he held that the second mortgage could not be
recognized as an encumbrance because the DBP did not consent
to its execution.

Judge Moya relied on the ruling in Associated Insurance & Surety

Co., Inc. vs. Register of Deeds of Pampanga, 105 Phil. 123, which
construed the following provisions of Commonwealth Act No. 459,
the law creating the Agricultural and Industrial Bank:

“SEC. 26. Securities on loans granted by the Agricultural

and Industrial Bank shall not be subject to attachment nor
can they be included in the property of insolvent persons
or institutions, unless all debts and obligations of the
debtor to the Agricultural and Industrial Bank have been
previously paid, including accrued interest, collection
expenses, and other charges.”1

This Court held therein that this section embraces “levy on

execution or any other encumbrance, unless the same is created
with the consent” of the bank and that “(A) different interpretation
would defeat the very purpose of the law which is to maintain
unhampered the value of the property until the encumbrance shall
have been released.”

Alpha Insurance filed a motion for reconsideration wherein it

alleged that the second mortgage was approved by DBP Governor
Roberto S. Benedicto cranad(Exh. A-2) and that the second mortgage
was registered because of that approval and because the DBP
delivered the owner’s duplicate of the title to Alpha Insurance in
order to effect the registration.

Nevertheless, Judge Moya denied the motion. Alpha Insurance

appealed to this Court.

Controversies of this nature should not even be litigated, much

less reach this Supreme Court, adding to its already almost
unmanageable docket. The issue between the parties is so
insubstantial that a little more effort on the part of respective
counsels of the parties and the trial court to get together as to
what should be done would have cleared up matters in a manner
We are certain would have been satisfactory to all concerned. To
think that a litigation like this should last since March 27, 1962 or
more than almost two decades ago when plaintiff-appellant filed
its action of foreclosure is a black spot in the administration of
 justice in this country. This situation is intolerable and the
members of the Bar and the trial judges ought to change their
attitudes and direct their efforts towards more important and
substantial legal matters, thereby serving public interest to the
utmost within their expected capabilities.

Deciding the legal question before Us, even if the DBP were just an
ordinary first mortgagee without any preferential liens under
Republic Act No. 85 or Commonwealth Act 459, the statutes
mentioned in the Associated Insurance case relied upon by the
trial court, it would be unquestionable that nothing may be done to
favor plaintiff-appellant, a mere second mortgagee, until after the
obligations of the debtors-appellees with the first mortgagee have
been fully satisfied and settled. In law, strictly speaking, what was
mortgaged by the Reyeses to Alpha was no more than their equity
of redemption.

Thus, what We perceive to be most appropriate to do at this late

stage is to see to it that the obligations in question are paid
soonest. However, to insist now, after so many wasted years, on
following in this case the ordinary foreclosure procedure provided
by law would only cause further unnecessary delay in the
termination of the insubstantial controversy among the parties
herein.
July-1981
Jurisprudence                  In De la Riva vs. Reynoso, 61 Phil. 734, Antonio de la Riva, the
second mortgagee, filed an action against the mortgagor
[A.M. No. 2440-CFI : Marceliano Reynoso to foreclose the second realty mortgage. La
July 25, 1981.] IGLESIA Urbana Mutual Building and Loan Association, the first mortgagee,
NI CRISTO, Complainant, was joined as a co-defendant.
vs. JUDGE LEOPOLDO B.
This Court held that La Urbana was properly joined as a co-
GIRONELLA, COURT OF
defendant and affirmed the lower court’s judgment ordering
FIRST INSTANCE OF Reynoso to pay within ninety days the amounts due to La Urbana
ABRA, Respondent.
and De la Riva, and, in case of failure to do so, ordering the sale at
public auction of the mortgaged property and the application of
[G.R. No. L-27402 :
the proceeds of the sale to the two mortgage debts.
July 25, 1981.]
Within this precedent, the Court is of the considered opinion and
GUARDIANSHIP OF THE
so holds that to avoid further delay in writing finis to the instant
INCOMPETENT
case which started way back in 1962, without any more ado, all
LEONORA NAVARRO
that has to be done here is to have the property herein involved
AND THE MINORS
ordered by the trial court sold at public auction immediately, the
ADOLFO YUSON AND
proceeds thereof to be used to pay the outstanding obligation, if
OTHERS, ELDEGARDES
still there be any, of the defendants-appellees Esperanza Reyes
YUSON DE PUA, Judicial and Arturo Reyes to the Development Bank of the Philippines; if
Guardian-Appellant, vs. there be any excess thereafter, the same be used to pay their
JUSTINIANO SAN obligation to the plaintiff-appellant, and should there still be any
AGUSTIN, Movant- further excess, the same should be given to the said Defendants-
Appellee. Appellees.

ACCORDINGLY, judgment is hereby rendered modifying the

[G.R. No. L-37425 :
decision of the trial court to conform with the procedure herein
July 25, 1981.] THE
outlined. No costs.
PEOPLE OF THE
Aquino, Concepcion Jr., Abad Santos and De Castro, JJ., concur.
PHILIPPINES, Plaintiff-
Appellee, vs. LITO  
REVOTOC y BELARMINO,
Endnotes
SATURNINO DIAZ y
RESQUED and FREDDIE  1. See, in this connection, Section 19 of Republic Act No. 85.

DE VERA y SEBASTIAN,  
Defendants-Appellants.

[G.R. No. L-49028 :

July 25, 1981.]
FRANCISCA ALCAIDE, Back to Home | Back to Main
TITO VICERA and
IGNACIO PALCON,
Petitioners, vs.
HONORABLE
EUFROCINIO S. DELA
MERCED, MUNICIPAL
JUDGE PEDRO J.
CALLEJO JR. and
CESARIO BENEDITO,
Respondents.

[G.R. No. 49634-36 :

July 25, 1981.]
BENJAMIN V. GUIANG
and NATIVIDAD H.
GUIANG; AURELIO B.
HIQUIANA and PASTORA
O. HIQUIANA,
Petitioners, vs.
FILOMENO C. KINTANAR
and CORAZON B.
KINTANAR; CORA ANN
B. KINTANAR, CORA LOU
B. KINTANAR, FIL
ROGER B. KINTANAR,
Private Respondents,
and Hon. Judge SERGIO
APOSTOL, Quezon City
Court of First Instance,
Branch XVI, Quezon City,
Respondent.

[G.R. No. 49634-36 :

July 25, 1981.]
BENJAMIN V. GUIANG
and NATIVIDAD H.
GUIANG; AURELIO B.
HIQUIANA and PASTORA
O. HIQUIANA,
Petitioners, vs.
FILOMENO C. KINTANAR
and CORAZON B.
KINTANAR; CORA ANN
B. KINTANAR, CORA LOU
B. KINTANAR, FIL
ROGER B. KINTANAR,
Private Respondents,
and Hon. Judge SERGIO
APOSTOL, Quezon City
Court of First Instance,
Branch XVI, Quezon City,
Respondent.

[G.R. No. L-51363 :

July 25, 1981.] THE
PEOPLE OF THE
PHILIPPINES, Plaintiff-
Appellee, vs. FEDERICO
CUISON Y PRESTOZA,
Accused-Appellant.
 [G.R. No. L-51785 :
July 25, 1981.] THE
HONORABLE COURT OF
FIRST INSTANCE OF
RIZAL, BRANCH IX,
QUEZON CITY, and
ELENA ONG ESCUTIN,
Petitioners, vs. THE
HONORABLE COURT OF
APPEALS and FELIX
ONG, Respondents. GAN
HENG, Intervenor.

[G.R. No. 52488 : July

25, 1981.] ORTIGAS &
COMPANY, LIMITED
PARTNERSHIP,
Petitioner, vs. COURT OF
APPEALS and MAXIMO
F. BELMONTE,
Respondents.

[G.R. No. L-31705 :

July 27, 1981.]
MARCELO D. MENDIOLA,
Petitioner, vs. THE
HONORABLE COURT OF
APPEALS, MAXIMO
VITUG, PRAGMACIO
VITUG, CONCORDIA
KABILING and MARIA
FAJARDO, Respondents.

[G.R. No. L-50031-32 :

July 27, 1981.] CENTRAL
BANK OF THE
PHILIPPINES, Petitioner,
vs. HONORABLE COURT
OF APPEALS, ISIDRO E.
FERNANDEZ, and JESUS
R. JAYME, Respondents.
 [G.R. No. L-27331 :
July 30, 1981.] ELISEO
ALIMPOOS, CIRIACA
ALIMPOOS, SGT.
MILLARDO M. PATES,
PEDRO BACLAY,
CATALINO YAMILO,
RAFAEL
CAPANGPANGAN,
DALMACIO YGOT and
EUFROCINA ESTORES,
Petitioners, vs. THE
HONORABLE COURT OF
APPEALS, HONORABLE
JUDGE MONTANO A.
ORTIZ, REYNALDO
MOSQUITO and
MATILDE ABASTILLAS
MOSQUITO,
Respondents.

[G.R. No. L-28373 :

July 30, 1981.]
JOSEFINA RODRIGUEZ,
accompanied by her
husband RAMON DE LA
RAMA, and LETICIA
RODRIGUEZ,
accompanied by her
husband PORFIRIO
BLANCAFLOR,
Petitioners, vs. THE
COURT OF APPEALS and
ANITA RODRIGUEZ,
accompanied by her
husband ROSENDO DE
LA RAMA; CAROLINA
RODRIGUEZ,
accompanied by her
husband ISIDRO
LACSON and MARIA
VICTORIA RODRIGUEZ,
accompanied by her
husband EUSEBIO
LOPEZ, Respondents.
[G.R. No. L-30252 : July
30, 1981.] ANITA
RODRIGUEZ,
accompanied by her
husband ROSENDO DE
LA RAMA; CAROLINA
RODRIGUEZ,
accompanied by her
husband ISIDRO
LACSON; and MARIA
VICTORIA RODRIGUEZ,
accompanied by her
husband EUSEBIO
LOPEZ, Petitioners, vs.
THE HONORABLE
COURT OF APPEALS,
JOSEFINA RODRIGUEZ,
accompanied by her
husband RAMON DE LA
RAMA; and LETICIA
RODRIGUEZ,
accompanied by her
husband PORFIRIO
BLANCAFLOR,
Respondents.

[G.R. No. L-45640 :

July 30, 1981.]
FELOMINO RAMIREZ
and RUSTICO VALDEZ,
Petitioners, vs. HON.
ILDEFONSO BLEZA,
Judge of the Court of
First Instance of Oriental
Mindoro, HON.
ZACARIAS V. GARCIA,
Municipal Judge of
Bongabong, Oriental
Mindoro, PABLO QUIJOL,
ABEDIANO GAANAN,
and DR. CONSTANCIO
BONDAL, Respondents.

[G.R. No. L-50065 :

July 30, 1981.]
PERSHING TAN QUETO,
Petitioner-Appellant, vs.
CARMELITO, RUFO,
HERACLEO and ELENA,
all surnamed
CANDONGO, and
VICENTE CALIMPONG,
representing deceased
wife, BENITA
CANDONGO,
Respondents-Appellees.

[G.R. No. L-52431 :

July 30, 1981.] RODOLFO
FARIÑAS, Petitioner, vs.
COMMISSION ON
ELECTIONS and
ANTONIO F. LAZO,
Respondents.

[G.R. No. L-55398 :

July 30, 1981.] REGINA
STA. ROMANA VDA. DE
ALCANTARA, Petitioner,
vs. HONORABLE
CORONA IBAY SOMERA
in her capacity as
Presiding Judge, Court
of First Instance of La
Union cranad(Balaoan),
JOAQUIN STA. ROMANA
and JOSE DELA PEÑA,
Respondents.

[G.R. No. L-55629 :

July 30, 1981.]
MAGDALENA RAMO,
NARCISO ALBARRACIN,
ANTONIO DUMLAO and
NORMA RICAFORT,
Petitioners, vs.
INOCENCIA ELEFAÑO
and HON. AUXENCIO C.
DACUYCUY, in his
capacity as Presiding
Judge of Branch IV,
Court of First Instance of
Leyte, Respondents.

[G.R. No. L-56028 :

July 30, 1981.] NILO A.
MALANYAON, Petitioner-
Appellant, vs. HON.
ESTEBAN M. LISING, as
Judge of the CFI of
Camarines Sur, Br. VI,
and CESARIO GOLETA,
as Municipal Treasurer
of Bula, Camarines Sur,
Respondents-Appellees.

[A.M. No. P-1176 :

July 31, 1981.] DR. SY
TIAN TIN, Complainant,
vs. ROLANDO
MACAPUGAY, Deputy
Sheriff of the Court of
First Instance of
Malolos, Bulacan,
Respondent.
 [A.C. No. 1377 : July
31, 1981.] DORIS R.
RADAZA, Complainant,
vs. ROBERTO T. TEJANO,
Respondent.

[A.M. No. 2040-MJ :

July 31, 1981.]
ALEJANDRA G.
LEGASPI, Complainant,
vs. HON. GIDEON DE
PEDRO, Circuit Municipal
Judge of Ibajay-Nabas,
Ibajay, Aklan,
Respondent.

[A.M. No. P-2108 :

July 31, 1981.]
BENJAMIN BARRERA,
Petitioner, vs. MARTY
DESACADA,
Respondent.

[A.M. No. 2380-CFI :

July 31, 1981.]
ROMULADO BAYLEN,
Complainant, vs. HON.
SANCHO INSERTO,
Judge of the Court of
First Instance of Iloilo,
Branch I, Iloilo City,
Respondent.

[A.M. No. 2428-CFI :

July 31, 1981.] JESUS O.
TUAZON, Petitioner, vs.
HON. ELVIRO L.
PERALTA, Respondent.

[G.R. No. L-26274 :

July 31, 1981.] ALPHA
INSURANCE AND
SURETY CO., INC.,
Plaintiff-Appellant, vs.
ESPERANZA C. REYES,
ARTURO R. REYES and
DEVELOPMENT BANK
OF THE PHILIPPINES,
Defendants-Appellees.

[G.R. No. L-30051 :

July 31, 1981.]
NATIONAL
WATERWORKS AND
SEWERAGE AUTHORITY,
Petitioner, vs. NATIONAL
WATERWORKS AND
SEWERAGE AUTHORITY
SUPERVISORS
ASSOCIATION AND
COURT OF INDUSTRIAL
RELATIONS,
Respondents.

[G.R. Nos. L-30722-25

: July 31, 1981.] THE
PEOPLE OF THE
PHILIPPINES, Plaintiff-
Appellee, vs. CONRADO
SAN MIGUEL, JESUS
BUENAVENTURA,
GONZALO PEREZ,
ALIPIO PEREZ, RICARDO
PEREZ and RAUL
MENDOZA, Defendants-
Appellants.

[G.R. No. L-31605 :

July 31, 1981.] THE
PEOPLE OF THE
PHILIPPINES, Plaintiff-
Appellee, vs. PANFILO
BLAS, Defendant-
Appellee.

[G.R. No. L-36162 :

July 31, 1981.] THE
PEOPLE OF THE
PHILIPPINES, Plaintiff-
Appellee, vs. PAULITO
GARCIA and PABLO
CANONIGO, Defendants-
Appellants.

[G.R. No. L-37641 :

July 31, 1981.] THE
PEOPLE OF THE
PHILIPPINES, Plaintiff-
Appellee, vs. ANTONIO
AGBOT, Defendant-
Appellee.

[G.R. No. L-37836 :

July 31, 1981.] THE
PEOPLE OF THE
PHILIPPINES, Plaintiff-
Appellee, vs. CLAUDIO
BULAONG and FONSO
LAURECIO, Accused-
Appellants.

[G.R. No. L-38652 :

July 31, 1981.] THE
PEOPLE OF THE
PHILIPPINES, Plaintiff-
Appellee, vs.
CRISTITUTO LARIOSA
alias “Totot”, Accused-
Appellant.

[G.R. No. L-44371 :

July 31, 1981.] THE
PEOPLE OF THE
PHILIPPINES, Plaintiff-
Appellee, vs. VITALIANO
CIRIA @ Mano,
Defendant-Appellee.

[G.R. No. L-46558 :

July 31, 1981.]
PHILIPPINE AIR LINES,
INC., Petitioner, vs. THE
COURT OF APPEALS and
JESUS V. SAMSON,
Respondents.

[G.R. No. L-47847 :

July 31, 1981.]
DIRECTOR OF LANDS,
Petitioner, vs. COURT OF
APPEALS and MANUELA
PASTOR, Respondents.

[G.R. No. 50044 : July

31, 1981.] THE PEOPLE
OF THE PHILIPPINES,
Plaintiff-Appellee, vs.
ALEJANDRO PEREZ y
LANA, Defendant-
Appellee.

[G.R. No. L-50320 :

July 31, 1981.]
PHILIPPINE APPAREL
WORKERS UNION,
Petitioners, vs. THE
NATIONAL LABOR
RELATIONS
COMMISSION and
PHILIPPINE APPAREL,
INC., Respondents.

[G.R. No. L-51218 :

July 31, 1981.] MARY DE
V. FRAUENDORFF,
Petitioner, vs. JUDGE
JOSE R. CASTRO,
Presiding Judge of the
Court of First Instance of
Rizal, Quezon City
Branch IX, ZODIAC
PHARMACEUTICAL CO.,
INC. & SAMTOP
INVESTMENT &
DEVELOPMENT
CORPORATION,
Respondents.

[G.R. No. L-51414 :

July 31, 1981.] PAQUITO
G. BALASABAS,
Petitioner, vs. HON.
GREGORIO U.
AQUILIZAN, Judge of the
Court of Agrarian
Relations, Cotabato City,
Respondent.

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