GR 146972; (January, 2008) (Digest)
G.R. No. 146972 ; January 29, 2008
B & I REALTY CO., INC., petitioner, vs. TEODORO CASPE and PURIFICACION AGUILAR CASPE, respondents.
FACTS
Consorcia Venegas owned land covered by TCT No. 247434. Arturo Datuin fraudulently obtained title (TCT No. 377734) in his name and mortgaged the property to petitioner B & I Realty Co., Inc. to secure a P75,000 loan. Venegas later conditionally sold the same property to respondent spouses Caspe. The parties entered into a compromise agreement wherein the Caspes assumed Datuin’s mortgage debt to B & I Realty. The Caspes began paying the mortgage in 1976. In a 1986 decision in an annulment case filed by Venegas, the trial court declared the sale from Venegas to Datuin void, ordered the cancellation of Datuin’s title, and directed the Caspes to pay B & I Realty the remaining mortgage balance of P15,132.00. The Court of Appeals later ruled that this 1986 judgment was not binding on B & I Realty due to a violation of its right to due process.
ISSUE
Whether petitioner B & I Realty’s action for judicial foreclosure of mortgage, filed in 1993, had already prescribed.
RULING
Yes, the action had prescribed. The Court applied Article 1142 of the Civil Code, which states that a mortgage action prescribes after ten years. The prescriptive period commenced on February 12, 1976, when the Caspes made their first payment on the assumed mortgage obligation, thereby effectively acknowledging the debt and setting the date of maturity. The ten-year period expired on February 12, 1986. Petitioner’s filing of the judicial foreclosure action on August 27, 1993, was over seven years beyond the prescriptive period. The Court rejected B & I Realty’s argument that the 1986 trial court decision, which ordered the Caspes to pay the balance, constituted a written acknowledgment that interrupted prescription. Since the CA had definitively ruled that the 1986 decision was not binding on B & I Realty due to a denial of due process, petitioner could not rely on that decision to claim an interruption of the prescriptive period. Consequently, the right to foreclose the mortgage was extinguished by prescription.