GR 39443; (October, 1935) (Digest)
G.R. No. 39443; October 8, 1935
AMADEO MATUTE, plaintiff-appellant, vs. FRANCISCO BANZALI, defendant-appellant.
FACTS
Plaintiff Amadeo Matute and defendant Francisco Banzali had commercial dealings, resulting in a liquidated debt of P8,612.44 owed by Banzali to Matute as of May 1, 1920. To secure this debt, Banzali mortgaged two parcels of his land in Sigaboy, Davao, agreeing to pay 12% annual interest and P250 in attorney’s fees if judicial collection became necessary. A separate account existed for transactions related to a coconut-planting contract on Matute’s lands. Matute filed suit to collect the debt with accrued interest and to foreclose the mortgage. Banzali defended by claiming full payment, prescription of the action, and counterclaims. The trial court ordered Banzali to pay P10,575.85. Both parties appealed.
ISSUE
1. Whether the action was properly one for foreclosure of mortgage.
2. Whether the defendant’s debt had been fully paid or the action had prescribed.
3. The correct computation of the outstanding debt, including credits and counterclaims.
4. Whether attorney’s fees were properly awarded.
RULING
1. The action was correctly one for foreclosure of mortgage. The mortgage, registered under Act No. 2837 (as the lands were unregistered), was valid and enforceable under the Code of Civil Procedure provisions on foreclosure, not requiring registration under the Mortgage Law or Land Registration Act. The trial court erred in treating it as a simple collection suit.
2. The action had not prescribed. The ten-year prescriptive period for a written contract began from the last payment on September 27, 1925; the complaint filed on June 2, 1932, was within the period. No laches was present due to Matute’s repeated demands.
3. After recomputation, Banzali’s total indebtedness was P13,855.10, plus 12% interest from January 1, 1932. The Court adjusted the accounts, crediting Banzali for various payments and items (including carabaos and coconut trees valued by the trial court) and charging him for acknowledged chits. The counterclaims were unsupported by evidence and already accounted for in the liquidation.
4. The award of attorney’s fees was eliminated because Matute did not claim them in his complaint.
The appealed judgment was modified: Banzali was ordered to pay Matute P13,855.10 with 12% interest from January 1, 1932, and if unpaid within three months, the mortgaged property would be sold at public auction. No costs were awarded.
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