SECOND DIVISION

[G.R. No. L-49101. October 24, 1983.]

RAOUL S.V. BONNEVIE and HONESTO V. BONNEVIE,

petitioners, vs. THE HONORABLE COURT OF APPEALS and
THE PHILIPPINE BANK OF COMMERCE, respondents.

Edgardo I. De Leon for petitioners.

Siguion Reyna, Montecillo & Associates for private respondent.

SYLLABUS

1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CONTRACT

OF LOAN WITH MORTGAGE; BEING A CONSENSUAL CONTRACT,
DEEMED PERFECTED AT THE EXECUTION OF THE CONTRACT OF
MORTGAGE; FAILURE TO TAKE IMMEDIATE COLLECTION OF
CONSIDERATION, IMMATERIAL. — From the recitals of the mortgage deed
itself, it is clearly seen that the mortgage deed was executed for and on condition
of the loan granted to the Lozano spouses. The fact that the latter did not collect
from the respondent Bank the consideration of the mortgage on the date it was
executed is immaterial. A contract of loan being a consensual contract, the herein
contract of loan was perfected at the same time the contract of mortgage was
executed. The promissory note executed on December 12, 1966 is only an
evidence of indebtedness and does not indicate lack of consideration of the
mortgage at the time of its execution.

2. ID.; ID.; SALE WITH ASSUMPTION OF MORTGAGE; CONSENT

OF THlE MORTGAGE NOT SECURED; VENDEES ESTOPPED FROM
QUESTIONING VALIDITY OF THE ORIGINAL LOAN WITH MORTGAGE.
— Petitioners admit that they did not secure the consent of respondent Bank to the
sale with assumption of mortgage. Coupled with the fact that the sale/assignment
was not registered so that the title remained in the name of the Lozano spouses,
insofar as respondent Bank was concerned, the Lozano spouses could rightfully
and validly mortgage the property. Respondent Bank had every right to rely on the
certificate of title. It was not hound to go behind the same to look for flaws in the
mortgagor's title, the doctrine of innocent purchaser for value being applicable to
an innocent mortgage for value. (Roxas vs. Dinglasan, 28 SCRA 430; Mallorca vs.
De Ocampo, 32 SCRA 48). Another argument for the respondent Bank is that a
Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 1
 mortgage follows the property whoever the possessor may be and subjects the
fulfillment of the obligation for whose security it was constituted. Finally, it can
also be said that petitioners voluntarily assumed the mortgage when they entered
into the Deed of Sale with Assumption of Mortgage. They are, therefore, estopped
from impugning its validity whether on the original loan or renewals thereof.

3. ID.; MORTGAGE; EXTRA-JUDICIAL FORECLOSURE;

PERSONAL NOTICE UNDER ACT 3135, NOT REQUIRED NOR TO
ANYONE NOT PRIVY TO THE OBLIGATION. — The lack of notice of the
foreclosure sale on petitioners is a flimsy ground. Respondent Bank not being a
party to the Deed of Sale with Assumption of Mortgage, it can validly claim that it
was not aware of the same and hence, it may not be obliged to notify petitioners.
Secondly, petitioner Honesto Bonnevie was not entitled to any notice because as
of May 14, 1968, he had transferred and assigned all his rights and interests over
the property in favor of intervenor Raoul Bonnevie and respondent Bank was not
likewise informed of the same. For the same reason, Raoul Bonnevie is not
entitled to notice. Most importantly, Act No. 3135 does not require personal notice
on the mortgagor. In the case at bar, the notice of sale was published in the Luzon
Courier on June 30, July 7 and July 14, 1968 and notices of the sale were posted
for not less than twenty days in at least three (3) public places in the Municipality
where the property is located. Petitioners were thus placed on constructive notice.

4. ID.; ID.; SANTIAGO CASE; NOT APPLICABLE IN THE CASE AT

BAR. — The case of Santiago vs. Dionisio, 92 Phil. 495, cited by petitioners is
inapplicable because said case involved a judicial foreclosure and the sale to the
vendee of the mortgaged property was duly registered making the mortgagee privy
to the sale.

5. ID.; ID.; EXTRA-JUDICIAL FORECLOSURE; PERIOD OF

PUBLICATION OF NOTICE OF AUCTION SALE, CONSTRUED. — As
regards the claim that the period of publication of the notice of auction sale was
not in accordance with law, namely: once a week for at least three consecutive
weeks, the Court of Appeals ruled that the publication of notice on June 30, July 7
and July 14, 1968 satisfies the publication requirement under Act No. 3133
notwithstanding the fact that June 30 to July 14 is only 14 days. We agree. Act No.
3135 merely requires that "such notice shall be published once a week for at least
three consecutive weeks." Such phrase, as interpreted by the Court in Basa vs.
Mercado, 61 Phil. 632, does not mean that notice should be published for three full
weeks.

6. REMEDIAL LAW; EVIDENCE; AFFIDAVIT OF PUBLICATION

BY THE PUBLISHER, BUSINESS/ADVERTISING MANAGER OF A
NEWSPAPER; PRIMA FACIE EVIDENCE OF PUBLICATION. — The
argument that the publication of the notice in the "Luzon Weekly Courier" was not
in accordance with law as said newspaper is not of general circulation must
Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 2
 likewise he disregarded. The affidavit of publication, executed by the publisher,
business/advertising manager of the Luzon Weekly Courier, states that it is "a
newspaper of general circulation in . . . Rizal; and that the Notice of Sheriff's sale
was published in said paper on June 30, July and July 14, 1968." This constitutes
prima facie evidence of compliance with the requisite publication. (Sadang vs.
GSIS, 18 SCRA 491). To be a newspaper of general circulation, it is enough that
"it is published for the dissemination of local news and general information; that it
has a bona fide subscription list of paying subscribers; that it is published at
regular intervals." (Basa vs. Mercado, 61 Phil. 632). The newspaper need not have
the largest circulation so long as it is of general circulation. (Banta vs. Pacheco, 74
Phil. 67). The testimony of three witnesses that they do not read the Luzon Weekly
Courier is not proof that said newspaper is not a newspaper of general circulation
in the province of Rizal.

7. ID.; NOTICE; PUBLICATION; NEWSPAPER OF GENERAL

CIRCULATION, CONSTRUED. — Whether or not the notice of auction sale was
posted for the period required by law is a question of fact. It can no longer be
entertained by this Court. (See Reyes, et al. vs. CA, et al., 107 SCRA 126)
Nevertheless, the records show that copies of said notice were posted in three
conspicuous places in the municipality of Pasig, Rizal namely: the Hall of Justice,
the Pasig Municipal Market and Pasig Municipal Hall. In the same manner, copies
of said notice were also posted in the place where the property was located,
namely: the Municipal Building of San Juan, Rizal; the Municipal Market and on
Benitez Street. The following statement of Atty. Santiago Pastor, head of the legal
department of respondent bank namely: "Q - How many days were the notices
posted in these two places, if you know? A- We posted them only once in one day"
(TSN, p.45, July 25, 1973) is not a sufficient countervailing evidence to prove that
there was no compliance with the posting requirement in the absence of proof or
even of allegation that the notices were removed before the expiration of the
twenty day period. A single act of posting (which may even extend beyond the
period required by law) satisfies the requirement of law. The burden of proving
that the posting requirement was not complied with is now shifted to the one who
alleges non-compliance.

8. CIVIL LAW; MORTGAGE; UNREGISTERED MORTGAGOR;

RIGHT TO REDEEM; DISALLOWED. — On the question of whether or not the
petitioners had a right to redeem the property, the Supreme Court holds that the
Court of Appeals did not err in ruling that they had no right to redeem. No consent
having been secured from respondent Bank to the sale with assumption of
mortgage by petitioners, the latter were not validly substituted as debtors. In fact,
their rights were never recorded and hence, respondent Bank is charged with the
obligation to recognize the right of redemption only of the Lozano spouses. But
even granting that as purchaser or assignee of the property, as the case may be, the
petitioners had acquired a right to redeem the property, petitioners failed to
Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 3
 exercise said right within the period granted by law. The certificate of sale in
favor of appellee was registered on September 2, 1968 and the one year
redemption period expired on September 3, 1969. It was not until September 29,
1969 that petitioner Honesto Bonnevie first wrote respondent and offered to
redeem the property. Moreover, on September 29, 1969, Honesto had at that time
already transferred his rights to intervenor Raoul Bonnevie.

9. ID.; OBLIGATIONS AND CONTRACTS; RENEWAL OF LOAN;

NOT DEPENDENT SOLELY ON THE DEBTOR BUT ON THE DISCRETION
OF THE CREDITOR BANK; BAD FAITH; ABSENCE IN THE CASE AT BAR.
— On the question of whether or not respondent Court of Appeals erred in holding
that respondent Bank did not act in bad faith, the undeniable fact is that the loan
matured on December 26, 1967. On June 10, 1968, when respondent Bank applied
for foreclosure the loan was already six months overdue. Petitioners' payment of
interest on July 12, 1968 does not thereby make the earlier act of respondent Bank
inequitous nor does it ipso facto result in the renewal of the loan. In order that a
renewal of a loan may be effected, not only the payment of the accrued interest is
necessary but also the payment of interest for the proposed period of renewal as
well. Besides, whether or not a loan may be renewed does not solely depend on
the debtor but more so on the discretion of the bank. Respondent Bank may not be,
therefore, charged of bad faith.

DECISION

GUERRERO, J : p

Petition for review on certiorari seeking the reversal of the decision of the
defunct Court of Appeals, now Intermediate Appellate Court, in CA-G.R. No.
61193-R, entitled "Honesto Bonnevie vs. Philippine Bank of Commerce, et al.,"
promulgated August 11, 1978 1(1) as well as the Resolution denying the motion
for reconsideration.

The complaint filed on January 26, 1971 by petitioner Honesto Bonnevie

with the Court of First Instance of Rizal against respondent Philippine Bank of
Commerce sought the annulment of the Deed of Mortgage dated December 6,
1966 executed in favor of the Philippine Bank of Commerce by the spouses Jose
M. Lozano and Josefa P. Lozano as well as the extrajudicial foreclosure made on
September 4, 1968. It alleged among others that (a) the Deed of Mortgage lacks
consideration and (b) the mortgage was executed by one who was not the owner of
the mortgaged property. It further alleged that the property in question was
foreclosed pursuant to Act No. 3135 as amended, without, however, complying
Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 4
 with the condition imposed for a valid foreclosure. Granting the validity of the
mortgage and the extrajudicial foreclosure, it finally alleged that respondent Bank
should have accepted petitioner's offer to redeem the property under the principle
of equity and justice.

On the other hand, the answer of defendant Banks, now private respondent
herein, specifically denied most of the allegations in the complaint and raised the
following affirmative defenses: (a) that the defendant has not given its consent,
much less the requisite written consent, to the sale of the mortgaged property to
plaintiff and the assumption by the latter of the loan secured thereby; (b) that the
demand letters and notice of foreclosure were sent to Jose Lozano at his address;
(c) that it was notified for the first time about the alleged sale after it had
foreclosed the Lozano mortgage; (d) that the law on contracts requires defendant's
consent before Jose Lozano can be released from his bilateral agreement with the
former and doubly so, before plaintiff may be substituted for Jose Lozano and
Alfonso Lim; (e) that the loan of P75,000.00 which was secured by mortgage, after
two renewals remain unpaid despite countless reminders and demands; (f) that the
property in question remained registered in the name of Jose M. Lozano in the
land records of Rizal and there was no entry, notation or indication of the alleged
sale to plaintiff; (g) that it is an established banking practice that payments against
accounts need not be personally made by the debtor himself; and (h) that it is not
true that the mortgage, at the time of its execution and registration, was without
consideration as alleged because the execution and registration of the securing
mortgage, the signing and delivery of the promissory note and the disbursement of
the proceeds of the loan are mere implementation of the basic consensual contract
of loan.

After petitioner Honesto V. Bonnevie had rested his case, petitioner Raoul
S.V. Bonnevie filed a motion for intervention. The intervention was premised on
the Deed of Assignment executed by petitioner Honesto Bonnevie in favor of
petitioner Raoul S.V. Bonnevie covering the rights and interests of petitioner
Honesto Bonnevie over the subject property. The intervention was ultimately
granted in order that all issues be resolved in one proceeding to avoid multiplicity
of suits.

On March 29, 1976, the lower court rendered its decision, the dispositive
portion of which reads as follows: LibLex

"WHEREFORE, all the foregoing premises considered, judgment is

hereby rendered dismissing the complaint with costs against the plaintiff and
the intervenor."

After the motion for reconsideration of the lower court's decision was
denied, petitioners appealed to respondent Court of Appeals assigning the
following errors:
Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 5
 1. The lower court erred in not finding that the real estate
mortgage executed by Jose Lozano was null and void;

2. The lower court erred in not finding that the auction sale made
on August 19, 1968 was null and void;

3. The lower court erred in not allowing the plaintiff and the
intervenor to redeem the property;

4. The lower court erred in not finding that the defendant acted in
bad faith; and

5. The lower court erred in dismissing the complaint.

On August 11, 1978, the respondent court promulgated its decision

affirming the decision of the lower court, and on October 3, 1978 denied the
motion for reconsideration. Hence, the present petition for review.

The factual findings of respondent Court of Appeals being conclusive upon

this Court, We hereby adopt the facts found by the trial court and found by the
Court of Appeals to be consistent with the evidence adduced during trial, to wit:

"It is not disputed that spouses Jose M. Lozano and Josefa P. Lozano
were the owners of the property which they mortgaged on December 6,
1966, to secure the payment of the loan in the principal amount of
P75,000.00 they were about to obtain from defendant-appellee Philippine
Bank of Commerce; that on December 8, 1966, they executed in favor of
plaintiff-appellant the Deed of Sale with Assumption of Mortgage, for and in
consideration of the sum of P100,000.00, P20,000.00 of which amount being
payable to the Lozano spouses upon the execution of the document, and the
balance of P75,000.00 being payable to defendant-appellee; that on
December 6, 1966, when the mortgage was executed by the Lozano spouses
in favor of defendant-appellee, the loan of P75,000.00 was not yet received
by them, as it was on December 12, 1966 when they and their co-maker
Alfonso Lim signed the promissory note for that amount; that from April 28,
1967 to July 12, 1968, plaintiff-appellant made payments to
defendant-appellee on the mortgage in the total amount of P18,944.22; that
on May 4, 1968, plaintiff-appellant assigned all his rights under the Deed of
Sale with Assumption of Mortgage to his brother, intervenor Raoul
Bonnevie; that on June 10, 1968, defendant-appellee applied for the
foreclosure of the mortgage, and notice of sale was published in the Luzon
Weekly Courier on June 30, July 7, and July 14, 1968; that auction sale was
conducted on August 19, 1968, and the property was sold to
defendant-appellee for P84,387.00; and that offers from plaintiff-appellant to
repurchase the property failed, and on October 9, 1969, he caused an adverse
claim to be annotated on the title of the property." (Decision of the Court of
Appeals, p. 5)
Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 6
 Presented for resolution in this review are the following issues:

Whether the real estate mortgage executed by the spouses Lozano in

favor of respondent bank was validly and legally executed.

II

Whether the extrajudicial foreclosure of the said mortgage was

validly and legally effected.

III

Whether petitioners had a right to redeem the foreclosed property.

IV

Granting that petitioners had such a right, whether respondent was

justified in refusing their offers to repurchase the property.

As clearly seen from the foregoing issues raised, petitioners' course of

action is three-fold. They primarily attack the validity of the mortgage executed by
the Lozano spouses in favor of respondent Bank. Next, they attack the validity of
the extrajudicial foreclosure and finally, appeal to justice and equity. In attacking
the validity of the deed of mortgage, they contended that when it was executed on
December 6, 1966 there was yet no principal obligation to secure as the loan of
P75,000.00 was not received by the Lozano spouses "so much so that in the
absence of a principal obligation, there is want of consideration in the accessory
contract, which consequently impairs its validity and fatally affects its very
existence." (Petitioners' Brief, par. 1, p. 7)

This contention is patently devoid of merit. From the recitals of the

mortgage deed itself, it is clearly seen that the mortgage deed was executed for and
on condition of the loan granted to the Lozano spouses. The fact that the latter did
not collect from the respondent Bank the consideration of the mortgage on the date
it was executed is immaterial. A contract of loan being a consensual contract, the
herein contract of loan was perfected at the same time the contract of mortgage
was executed. The promissory note executed on December 12, 1966 is only an
evidence of indebtedness and does not indicate lack of consideration of the
mortgage at the time of its execution.

Petitioners also argued that granting the validity of the mortgage, the
subsequent renewals of the original loan, using as security the same property
which the Lozano spouses had already sold to petitioners, rendered the mortgage
null and void.
Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 7
 This argument failed to consider the provision 2(2) of the contract of
mortgage which prohibits the sale, disposition of, mortgage and encumbrance of
the mortgaged properties, without the written consent of the mortgagee, as well as
the additional proviso that if in spite of said stipulation, the mortgaged property is
sold, the vendee shall assume the mortgage in the terms and conditions under
which it is constituted. These provisions are expressly made part and parcel of the
Deed of Sale with Assumption of Mortgage.

Petitioners admit that they did not secure the consent of respondent Bank to
the sale with assumption of mortgage. Coupled with the fact that the
sale/assignment was not registered so that the title remained in the name of the
Lozano spouses, insofar as respondent Bank was concerned, the Lozano spouses
could rightfully and validly mortgage the property. Respondent Bank had every
right to rely on the certificate of title. It was not bound to go behind the same to
look for flaws in the mortgagor's title, the doctrine of innocent purchaser for value
being applicable to an innocent mortgagee for value. (Roxas vs. Dinglasan, 28
SCRA 430; Mallorca vs. De Ocampo, 32 SCRA 48). Another argument for the
respondent Bank is that a mortgage follows the property whoever the possessor
may be and subjects the fulfillment of the obligation for whose security it was
constituted. Finally, it can also be said that petitioners voluntarily assumed the
mortgage when they entered into the Deed of Sale with Assumption of Mortgage.
They are, therefore, estopped from impugning its validity whether on the original
loan or renewals thereof.

Petitioners next assail the validity and legality of the extrajudicial

foreclosure on the following grounds: LLpr

a) Petitioners were never notified of the foreclosure sale.

b) The notice of auction sale was not posted for the period
required by law.

c) The publication of the notice of auction sale in the Luzon

Weekly Courier was not in accordance with law.

The lack of notice of the foreclosure sale on petitioners is a flimsy ground.

Respondent Bank not being a party to the Deed of Sale with Assumption of
Mortgage, it can validly claim that it was not aware of the same and hence, it may
not be obliged to notify petitioners. Secondly, petitioner Honesto Bonnevie was
not entitled to any notice because as of May 14, 1968, he had transferred and
assigned all his rights and interests over the property in favor of intervenor Raoul
Bonnevie and respondent Bank was not likewise informed of the same. For the
same reason, Raoul Bonnevie is not entitled to notice. Most importantly, Act No.
3135 does not require personal notice on the mortgagor. The requirement on notice

Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 8
 is that:

"Section 3. Notice shall be given by posting notices of the sale for

not less than twenty days in at least three pub]ic places of the municipality
or city where the property is situated, and if such property is worth more
than four hundred pesos, such notice shall also be published once a week for
at least three consecutive weeks in a newspaper of general circulation in the
municipality or city."

In the case at bar, the notice of sale was published in the Luzon Courier on
June 30, July 7 and July 14, 1968 and notices of the sale were posted for not less
than twenty days in at least three (3) public places in the Municipality where the
property is located. Petitioners were thus placed on constructive notice.

The case of Santiago vs. Dionisio, 92 Phil. 495, cited by petitioners is

inapplicable because said case involved a judicial foreclosure and the sale to the
vendee of the mortgaged property was duly registered making the mortgaged privy
to the sale.

As regards the claim that the period of publication of the notice of auction
sale was not in accordance with law, namely: once a week for at least three
consecutive weeks, the Court of Appeals ruled that the publication of notice on
June 30, July 7 and July 14, 1968 satisfies the publication requirement under Act
No. 3135 notwithstanding the fact that June 30 to July 14 is only 14 days. We
agree. Act No. 3135 merely requires that "such notice shall be published once a
week for at least three consecutive weeks." Such phrase, as interpreted by this
Court in Basa vs. Mercado, 61 Phil. 632, does not mean that notice should be
published for three full weeks.

The argument that the publication of the notice in the "Luzon Weekly
Courier" was not in accordance with law as said newspaper is not of general
circulation must likewise be disregarded. The affidavit of publication, executed by
the publisher, business/advertising manager of the Luzon Weekly Courier, states
that it is "a newspaper of general circulation in . . . Rizal: and that the Notice of
Sheriff's sale was published in said paper on June 30, July 7 and July 14, 1968."
This constitutes prima facie evidence of compliance with the requisite publication.
(Sadang vs. GSIS, 18 SCRA 491) Cdpr

To be a newspaper of general circulation, it is enough that "it is published

for the dissemination of local news and general information; that it has a bona fide
subscription list of paying subscribers; that it is published at regular intervals."
(Basa vs. Mercado, 61 Phil. 632). The newspaper need not have the largest
circulation so long as it is of general circulation. (Banta vs. Pacheco, 74 Phil. 67).
The testimony of three witnesses that they do read the Luzon Weekly Courier is no
proof that said newspaper is not a newspaper of general circulation in the province
Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 9
 of Rizal.

Whether or not the notice of auction sale was posted for the period required
by law is a question of fact. It can no longer be entertained by this Court. (see
Reyes, et al. vs. CA, et al., 107 SCRA 126). Nevertheless, the records show that
copies of said notice were posted in three conspicuous places in the municipality
of Pasig, Rizal namely: the Hall of Justice, the Pasig Municipal Market and Pasig
Municipal Hall. In the same manner, copies of said notice were also posted in the
place where the property was located, namely: the Municipal Building of San
Juan, Rizal; the Municipal Market and on Benitez Street. The following statement
of Atty. Santiago Pastor, head of the legal department of respondent bank, namely:

"Q How many days were the notices posted in these two places, if you
know?

A We posted them only once in one day." (TSN, p. 45, July 25, 1973)

is not a sufficient countervailing evidence to prove that there was no

compliance with the posting requirement in the absence of proof or even of
allegation that the notices were removed before the expiration of the twenty-day
period. A single act of posting (which may even extend beyond the period required
by law) satisfies the requirement of law. The burden of proving that the posting
requirement was not complied with is now shifted to the one who alleges non
compliance.

On the question of whether or not the petitioners had a right to redeem the
property, We hold that the Court of Appeals did not err in ruling that they had no
right to redeem. No consent having been secured from respondent Bank to the sale
with assumption of mortgage by petitioners, the latter were not validly substituted
as debtors. In fact, their rights were never recorded and hence, respondent Bank is
charged with the obligation to recognize the right of redemption only of the
Lozano spouses. But even granting that as purchaser or assignee of the property, as
the case may be, the petitioners had acquired a right to redeem the property,
petitioners failed to exercise said right within the period granted by law. The
certificate of sale in favor of appellee was registered on September 2, 1968 and the
one year redemption period expired on September 3, 1969. It was not until
September 29, 1969 that petitioner Honesto Bonnevie first wrote respondent and
offered to redeem the property. Moreover, on September 29, 1969, Honesto had at
that time already transferred his rights to intervenor Raoul Bonnevie.

On the question of whether or not respondent Court of Appeals erred in

holding that respondent Bank did not act in bad faith, petitioners rely on Exhibit
"B" which is the letter of Jose Lozano to respondent Bank dated December 8, 1966
advising the latter that Honesto Bonnevie was authorized to make payments for the
amount secured by the mortgage on the subject property, to receive
Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 10
 acknowledgment of payments, obtain the Release of the Mortgage after full
payment of the obligation and to take delivery of the title of said property. On the
assumption that said letter was received by respondent Bank, a careful reading of
the same shows that the plaintiff was merely authorized to do acts mentioned
therein and does not mention that petitioner is the new owner of the property nor
request that all correspondence and notice should be sent to him. LLphil

The claim of appellants that the collection of interests on the loan up to July
12, 1968 extends the maturity of said loan up to said date and accordingly on June
10, 1968 when defendant applied for the foreclosure of the mortgage, the loan was
not yet due and demandable, is totally incorrect and misleading. The undeniable
fact is that the loan matured on December 26, 1967. On June 10, 1968, when
respondent Bank applied for foreclosure, the loan was already six months overdue.
Petitioners' payment of interest on July 12, 1968 does not thereby make the earlier
act of respondent Bank inequitous nor does it ipso facto result in the renewal of the
loan. In order that a renewal of a loan may be effected, not only the payment of the
accrued interest is necessary but also the payment of interest for the proposed
period of renewal as well. Besides, whether or not a loan may be renewed does not
solely depend on the debtor but more so on the discretion of the bank. Respondent
Bank may not be, therefore, charged of bad faith.

WHEREFORE, the appeal being devoid of merit, the decision of the Court
of Appeals is hereby AFFIRMED. Costs against petitioners.

SO ORDERED.

Aquino, J., concur.

Makasiar (Chairman), Abad Santos and Escolin, JJ., concur in the result.

Concepcion, Jr., J., did not take part.

De Castro, J., is on leave.

Footnotes
1. Third Division, Reyes, L.B., J., ponente; Busran and Nocon, JJ., concurring.
2. "4. The MORTGAGOR shall not sell, dispose of, mortgage, nor in any manner
encumber the mortgaged properties without the written consent of
MORTGAGEE. If in spite of this stipulation, a mortgaged property is sold, the
Vendee shall assume the mortgaged in the terms and conditions under which it is
constituted, it being understood that the assumption of the Vendee (does) not
release the Vendor of his obligation to the MORTGAGEE; on the contrary, both
the Vendor and the Vendee shall be jointly and severally liable for said mortgage
obligation . . ."

Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 11
Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 12
 Endnotes

1 (Popup - Popup)
1. Third Division, Reyes, L.B., J., ponente; Busran and Nocon, JJ., concurring.

2 (Popup - Popup)
2. "4. The MORTGAGOR shall not sell, dispose of, mortgage, nor in any manner
encumber the mortgaged properties without the written consent of
MORTGAGEE. If in spite of this stipulation, a mortgaged property is sold, the
Vendee shall assume the mortgaged in the terms and conditions under which it is
constituted, it being understood that the assumption of the Vendee (does) not
release the Vendor of his obligation to the MORTGAGEE; on the contrary, both
the Vendor and the Vendee shall be jointly and severally liable for said mortgage
obligation . . ."

Copyright 1994-2019 CD Technologies Asia, Inc. Jurisprudence 1901 to 2019 First Release 13