Facts:
The private respondents, Eugenio
Lim, et al., borrowed from petitioner Santiago Syjuco, Inc., the sum of
P800,000.00. The loan was given on the security of a first mortgage on property
registered in the names of said borrowers as owners in common under Transfer
Certificates of Title Numbered 75413 and 75415 of the Registry of Deeds of
Manila. Thereafter, additional loans on the same security were obtained by the
private respondents from Syjuco, so that as of May 8, 1967, the aggregate of
the loans stood at P2,460,000.00, exclusive of interest, and the security had
been augmented by bringing into the mortgage other property, also registered as
owned pro indiviso by the private respondents under two titles: TCT Nos. 75416
and 75418 of the Manila Registry.
The private respondents failed to pay it
despite demands therefore; that Syjuco consequently caused extra-judicial proceedings
for the foreclosure of the mortgage to be commenced by the Sheriff of Manila;
and that the latter scheduled the auction sale of the mortgaged property on
December 27, 1968. The attempt to foreclose triggered off a legal battle that
has dragged on for more than twenty years now, fought through five (5) cases in
the trial courts, two (2) in the Court
of Appeals, and three (3) more in the
Supreme Court.
One of the complaints filed by the
private respondents was filed not in their individual names, but in the name of
a partnership of which they themselves were the only partners: "Heirs of
Hugo Lim." The complaint advocated the theory that the mortgage which
they, together with their mother, had individually constituted (and thereafter
amended during the period from 1964 to 1967) over lands standing in their names
in the Property Registry as owners pro indiviso, in fact no longer belonged to
them at that time, having been earlier deeded over by them to the partnership,
"Heirs of Hugo Lim," more precisely, on March 30, 1959, hence, said
mortgage was void because executed by them without authority from the
partnership. Syjuco filed an instant petition for certiorari, prohibition and
mandamus. It prays in its petition that the default judgment rendered against
it by Judge Castro be annulled on the ground of, among others, estoppel, res
judicata, and Article 1819 of the Civil Code.
Issue:
Whether
or not the private respondents are estopped to avoid the aforementioned
mortgage.
Held:
Yes. The Supreme Court ruled that the respondent
partnership was inescapably chargeable with knowledge of the mortgage executed
by all the partners thereof, its silence and failure to impugn said mortgage
within a reasonable time, let alone a space of more than 17 years, brought into
play the doctrine of estoppel to preclude any attempt to avoid the mortgage as
allegedly unauthorized. Equally or even more preclusive of the respondent
partnership’s claim to the mortgaged property is the last paragraph of Art.
1819 of the Civil Code, which contemplates a situation similar to the case at
bar. It states that ‘where the title to
real property is in the names of all the partners, a conveyance executed by the
entire partners pass all their rights in such property. Consequently, those
members' acts, declarations and omissions cannot be deemed to be simply the
individual acts of said members, but in fact and in law, those of the
partnership. Finally, the Supreme Court emphasizes that the right of the
private respondents to assert the existence of the partnership could have been
stressed at the time they instituted their first action, considering that the
actions involved property supposedly belonging to it, and therefore, the
partnership was the real party in interest. What was done by them was to split
their cause of action in violation of the well-known rule that only one suit
may be instituted for a single cause of action.
No comments:
Post a Comment