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    Cerna v. Court of Appeals

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    In the first case, Cerna questioned being found solidarily liable for a loan taken out by Delgado that was secured by mortgaging Cerna's property. The court held that only Delgado signed the promissory note so he alone was bound by the contract, and mortgaging property did not make the mortgagor solidarily liable with the principal debtor. In the second case, PNB claimed to be a mortgagee in good faith for loans to Carag secured by mortgaging property covered by a homestead patent. The court held the mortgages were void as the property could not be alienated or encumbered under the homestead patent. In the

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    Cerna v. Court of Appeals

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    In the first case, Cerna questioned being found solidarily liable for a loan taken out by Delgado that was secured by mortgaging Cerna's property. The court held that only Delgado signed the promissory note so he alone was bound by the contract, and mortgaging property did not make the mortgagor solidarily liable with the principal debtor. In the second case, PNB claimed to be a mortgagee in good faith for loans to Carag secured by mortgaging property covered by a homestead patent. The court held the mortgages were void as the property could not be alienated or encumbered under the homestead patent. In the

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    In the first case, Cerna questioned being found solidarily liable for a loan taken out by Delgado that was secured by mortgaging Cerna's property. The court held that only Delgado signed the promissory note so he alone was bound by the contract, and mortgaging property did not make the mortgagor solidarily liable with the principal debtor. In the second case, PNB claimed to be a mortgagee in good faith for loans to Carag secured by mortgaging property covered by a homestead patent. The court held the mortgages were void as the property could not be alienated or encumbered under the homestead patent. In the

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    © All Rights Reserved
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    Download as doc, pdf, or txt
    82 views3 pages

    Cerna v. Court of Appeals

    Uploaded by

    kez
    In the first case, Cerna questioned being found solidarily liable for a loan taken out by Delgado that was secured by mortgaging Cerna's property. The court held that only Delgado signed the promissory note so he alone was bound by the contract, and mortgaging property did not make the mortgagor solidarily liable with the principal debtor. In the second case, PNB claimed to be a mortgagee in good faith for loans to Carag secured by mortgaging property covered by a homestead patent. The court held the mortgages were void as the property could not be alienated or encumbered under the homestead patent. In the

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    of 3

    Cerna v.

    Court of Appeals
    30 March 1993
    Campos, Jr. J.

    Facts:

    Delgado loaned a sum of money of 17,500, with interest of 12% per annum, to Leviste to be
    paid within 90 days. Delgado put his Jeepney and the Taunus car of his attorney-in-fact Cerna,
    as chattel mortgage for the said loan. Period lapsed without Delgado paying the loan. Leviste
    filed a collection suit against Delagado and Cerna as solidary debtors. Cerna questioned the
    ruling of both the lower court and CA finding him solidarily liable and that the filling of
    collection suit barred the foreclosure of the mortgage.

    Issue:

    Whether or not Cerna is solidarily liable to the debt of Leviste.

    Held:

    No. Only Delgado signed the promissory note and accordingly, he was the only one bound by
    the contract of loan. Nowhere did it appear in the promissory note that petitioner was a co-
    debtor. The law is clear that "(c)ontracts take effect only between the parties. There is also no
    legal provision nor jurisprudence in our jurisdiction which makes a third person who secures the
    fulfillment of another's obligation by mortgaging his own property to be solidarily bound with
    the principal obligor. A chattel mortgage may be "an accessory contract"12 to a contract of loan,
    but that fact alone does not make a third-party mortgagor solidarily bound with the principal
    debtor.

    We agree with petitioner that the filing of collection suit barred the foreclosure of the
    mortgage. Thus: "A mortgagee who files a suit for collection abandons the remedy of
    foreclosure of the chattel mortgage constituted over the personal property as security for the
    debt or value of the promissory note which he seeks to recover in the said collection suit."
    PNB v. Banatao
    07 April 2009
    Brion, Jr. J.

    Facts:

    Banatao et al initiated an action against Carag et al before RTC for the recovery of real property,
    a new land formation on the banks of the Cagayan River. Carag has secured a homestead
    patent, which they use as REM for their loan to PNB. The bank relied on the OCT which at the
    time did not contain any annotation of liens and encumbrances. RTC decided in favor of
    Banatao. CA set aside the decision and remamded the record to the trial court. Some year
    later, Banatao and Carag entered into a compromise agreement whereby ownership of northern
    half will be with Banatao while the Southern half goes to Carag. PNB moved for the setting
    aside of the compromise agreements and annulment of mortgage.

    Issue:

    Whether or not the mortgages constituted is void.

    Held:

    Yes. The present case deserves exactly the same treatment, and the PNB cannot claim that it is
    a mortgagee in good faith. The proscription against alienation or encumbrance is unmistakable
    even on a cursory reading of the OCTs. Thus, one who contracts with a homestead patentee is
    charged with knowledge of the law's proscriptive provision that must necessarily be read into
    the terms of any agreement involving the homestead. Under the circumstances, the PNB simply
    failed to observe the diligence required in the handling of its transactions and thus made the
    fatal error of approving the loans secured by mortgages of properties that cannot, in the first
    place, be mortgaged.

    Both the defendants respondents and the bank are to be faulted for the invalidity of the
    mortgages. We cannot, however, apply the doctrine of pari delicto in accordance with the ruling
    that the doctrine does not apply when the contract is prohibited by law. [23] A saving factor for
    the bank under the situation is that a mortgage is merely an accessory agreement and does not
    affect the principal contract of loan. The mortgages, while void, can still be considered as
    instruments evidencing the indebtedness of defendants to the PNB in a proper case for the
    collection of the defendants loans.
    Belo v. PNB
    01 March 2001
    De Leon, Jr. J.

    Facts:

    Belo owned an agricultural land which she leased a portion to Sps. Eslabon in connection with
    the said spouses’ sugar plantation business. To finance their business venture, respondents
    spouses Eslabon obtained a loan from PNB secured by a real estate mortgage on their own four
    (4) residential houses located in Roxas City, as well as on the land owned by Belo. Sps Eslabon
    failed to pay mortgages and thereafter extrajudicial foreclosure proceedings against the
    mortgaged properties were instituted by PNB. PNB was the highest bidder at the auction. Sps
    Belo filed action to annul the mortgage, with an alternative cause of action to compel PNB to
    accept offer of spouses Belo which is based on the winning bid price of PNB (P447,632.00) plus
    interest and expenses.

    Issue:

    Whether or not the REM and the foreclosure proceedings are valid.

    Held:

    Yes. An accommodation mortgage is not necessarily void simply because the accommodation
    mortgagor did not benefit from the same. The validity of an accommodation mortgage is
    allowed under Article 2085 of the New Civil Code which provides that “(t)hird persons who are
    not parties to the principal obligation may secure the latter by pledging or mortgaging their own
    property.” The courts a quo correctly held that the letter of Eduarda Belo addressed to
    respondent PNB manifesting her intent to redeem the property is a waiver of her right to
    question the validity of the SPA and the mortgage contract as well as the foreclosure and the
    sale of her subject property.

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