GR 211499; (June, 2015) (Digest)
G.R. No. 211499 , June 22, 2015
CATHERINE HIPONIA-MAYUGA, Petitioner, vs. METROPOLITAN BANK AND TRUST CO., and its Branch Head, THELMA T. MAURICIO, and BELLE U. AVELINO, Respondents.
FACTS
Petitioner Catherine Hiponia-Mayuga and her late husband, Fernando J. Mayuga, owned a parcel of land in Parañaque City. In the course of his business, Fernando met respondent Belle Avelino, who proposed securing a loan for their joint business ventures. With Catherine’s consent, Fernando obtained a loan from respondent Metropolitan Bank and Trust Co. (Metrobank) on March 28, 1996, in the amount of ₱2,200,000.00, secured by a real estate mortgage (REM) over the subject property. The loan was increased to ₱3,200,000.00 on July 3, 1996, with an amendment to the REM. Catherine claimed the loan proceeds went directly to Belle, though Belle gave Fernando ₱100,000.00 on two occasions. Fernando died on November 17, 1996. Catherine inquired with Metrobank about releasing the property from the mortgage, asserting it was covered by a mortgage redemption insurance (MRI) that should pay the obligation upon the mortgagor’s death. Metrobank replied that Belle was the principal borrower. Belle failed to pay the loan, leading Metrobank to foreclose the mortgaged property on October 16, 1998. Catherine filed a complaint for cancellation of the real estate mortgage and damages against Belle, Metrobank, and its branch head, Thelma Mauricio, alleging collusion between Belle and Thelma and negligence by Metrobank in failing to secure an MRI for Fernando. The Regional Trial Court (RTC) dismissed the complaint against Metrobank and Thelma, finding no collusion, but ordered Belle to pay damages to Catherine. Belle did not appeal the RTC decision. Catherine appealed partially, challenging only the dismissal of her claims against Metrobank and Thelma. The Court of Appeals (CA) affirmed the RTC’s dismissal but modified the decision by deleting the award of damages against Belle, ruling that Fernando was an accommodation mortgagor and Catherine had validly consented, thus negating Belle’s liability for damages. Catherine moved for reconsideration, which was denied.
ISSUE
1. Whether the Court of Appeals erred in modifying the RTC decision by deleting the award of damages against Belle Avelino despite her failure to appeal.
2. Whether the Court of Appeals erred in upholding the RTC’s ruling that there was no connivance between Belle Avelino and Thelma Mauricio in the execution of the real estate mortgage.
3. Whether the Court of Appeals erred in upholding the RTC’s ruling that Metrobank committed no negligence despite failing to secure a mortgage redemption insurance for Fernando Mayuga.
RULING
1. Yes, the Court of Appeals erred in deleting the award of damages against Belle Avelino. Under the Rules of Court, a judgment becomes final and executory as to a party who does not appeal, rendering it immutable. Belle did not appeal the RTC decision; thus, the award of damages against her was final and could not be modified by the appellate court. The CA’s reliance on Section 8, Rule 51—which allows consideration of issues closely related to assigned errors—was misplaced, as the issue of Belle’s liability for damages was separate from the assigned errors regarding collusion and negligence involving Metrobank and Thelma. The Supreme Court reinstated the RTC’s award of damages against Belle.
2. No, the Court of Appeals did not err in upholding the RTC’s finding of no connivance between Belle Avelino and Thelma Mauricio. The records showed no evidence of collusion. The REM was duly signed, and Metrobank acted in good faith based on the documents presented. The burden of proving collusion rested on Catherine, who failed to substantiate her claims.
3. No, the Court of Appeals did not err in upholding the RTC’s finding of no negligence on Metrobank’s part regarding the mortgage redemption insurance. There was no legal or contractual obligation for Metrobank to secure an MRI for Fernando. The MRI was not a requirement for the loan, and even if it existed, it would not automatically extinguish the loan obligation upon Fernando’s death, as Belle was the principal borrower.
DISPOSITIVE PORTION:
The petition was PARTIALLY GRANTED. The Court of Appeals’ decision was AFFIRMED WITH MODIFICATION. The award of damages against Belle Avelino in favor of Catherine Hiponia-Mayuga, as stated in the RTC decision, was REINSTATED. The dismissal of the complaint against Metrobank and Thelma Mauricio was upheld.