ANTONIO P. TAMBUNTING v. SPS. EMILIO SUMABAT AND ESPERANZA BAELLO
GR NO. 144101, Sep 16, 2005
This case involves dispute over a land.
The land was registered in the name of the spouses and was used as mortgaged to secure a loan to Tambunting amounting to P7k. On 1976 Respondents were then informed that their debt increased to P15k for failure to pay the monthly amortizations.
On May 1977 respondents defaulted in their obligation petitioner Commercial House Finance (CHFI) as assignee of the mortgage, initiated foreclosure proceedings but it did not push through because of the complaint for injunction filed by respondents. But the case was subsequently dismissed for failure of parities to appear at the hearing.
Respondents then filed an action for declaratory relief seeking a declaration of the extent of their actual indebtedness on 1979. Petitioners were declared in default for failure to file an answer with the reglementary period. They moved for dismissal on the ground that the mortgage deed, had ALREADY been BREACHED PRIOR to the filing of the declaratory relief. But motion was denied for having filed out of time and petitioners had already been declared in default.
On 1981 CFI fixed respondent’s liability at P15k & authorized them to consign the amount to the court. And respondents consigned the amount in 1981.
On March 1995, respondents received a notice of sheriff’s sale wherein the mortgaged property was foreclosed by CFHI on Feb 8, 1995 and an extrajudicial sale of the property would be held on March 27, 1995. Respondents instituted a petition for preliminary injunction, damages and cancellation of annotation of encumbrance BUT the public action scheduled on the same day proceeded and the property was sold to CHFI. Respondents failed to redeem the property. Hence, consolidation of ownership to CHFI. Because of this, respondents amended their complaint to an action for nullification of foreclosure, sheriff’s sale and consolidation of title reconveyance and damages.
On 2000 RTC ruled that the 1981 CFI decision already attained finality and the mortgage was extinguished when respondents paid by consigning the amount in court and the 10 yr period within which petitioners should have foreclosed the property was already barred by prescription. Trial court nullified the foreclosure and extrajudicial sale of the property, as well as the consolidation of title in CHFI’s name in 1995. It then ordered the register of deeds of Caloocan City to cancel TCT No. 310191 and to reconvey the property to respondents.
Petitioners claimed that CFI was barred from taking cognizance of the action for declaratory relief since, petitioners being already in default in their loan amortizations, There existed a violation of the mortgage deed even before the institution of the action. Hence, the CFI could not have rendered a valid judgment in Civil Case No. C-7496 and the consignation made pursuant to a void judgment was likewise void.
ISSUE:
WON the CFI has the jurisdiction over the action for declaratory relief
RULING:
No. A court has no more jurisdiction over an action for declaratory relief if its subject, i.e., the statute, deed, contract, etc., has already been infringed or transgressed before the institution of the action. Here, there was an infringement of the mortgage terms before the filing of Civil Case No. C-7496. Thus, the CFI lacked jurisdiction when it took cognizance of the case in 1979. And in the absence of jurisdiction, its decision was void and without legal effect.
However, the petiton must fail since the mortgage action prescribes after 10 years. Here, petitioners’ right of action accrued in May 1977 when respondents defaulted in their obligation to pay their loan amortizations. It was from that time that the ten-year period to enforce the right under the mortgage started to run. The period was interrupted when respondents filed Civil Case No. C-6329 sometime after May 1977 and the CFI restrained the intended foreclosure of the property. However, the period commenced to run again on November 9, 1977 when the case was dismissed. The respondents’ institution of Civil Case No. C-7496 in the CFI on March 16, 1979 did not interrupt the running of the ten-year prescriptive period because he court lacked jurisdiction over the action for declaratory relief. All proceedings therein were without legal effect. Thus, petitioners could have enforced their right under the mortgage, including its foreclosure, only until November 7, 1987. The foreclosure held on February 8, 1995 was therefore some seven years too late. The public auction, consolidation of title in CHFI’s favour and the issuance of the TCT in its name were all void.
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