G.R. No. 26236 , July 29, 1927
COMPAÑIA GENERAL DE TABACOS DE FILIPINAS, plaintiff-appellee, vs. SANTIAGO JALANDONI, as judicial administrator of the property of Eduarda Benedicto, deceased, defendant-appellant.

FACTS

Compañia General de Tabacos de Filipinas (plaintiff) filed an action to recover a sum of money secured by a real estate mortgage executed by Eduarda Benedicto on November 23, 1921. The mortgage covered several parcels of land in Dingle, Iloilo, registered under Torrens Certificate of Title No. 335 in Benedicto’s name. The mortgage was duly registered in the Registry of Property on February 9, 1923, and the lien was annotated on the certificate of title. The mortgage secured a sugar crop loan that matured on June 30, 1925, and carried a 10% annual interest rate and a P5,000 penalty clause for non-payment. After Benedicto’s death, the plaintiff sued her judicial administrator, Santiago Jalandoni (defendant), for the unpaid principal, accrued interest, and the stipulated penalty. The defendant denied the allegations in his answer but presented no evidence at trial. The Court of First Instance of Iloilo ruled in favor of the plaintiff, ordering payment of the debt and, in default thereof, the sale of the mortgaged properties. The defendant appealed.

ISSUE

1. Whether the mortgage executed by Eduarda Benedicto is valid and enforceable against her estate.
2. Whether the trial court erred in ordering the sale of the mortgaged properties upon default.
3. Whether the penalty clause of P5,000 should be included in the judgment.

RULING

The Supreme Court AFFIRMED the decision of the trial court in toto.

1. On the validity of the mortgage: The mortgage was valid and enforceable. The evidence, including the notarized mortgage deed (Exhibit A) and the Torrens certificate of title (Exhibit D) with the mortgage duly annotated, conclusively proved its existence and registration. The defendant presented no evidence to rebut its validity. The Court found no merit in the appellant’s challenge to the mortgage’s legality.

2. On the order to sell the properties: The trial court correctly ordered the sale of the mortgaged properties in case of non-payment. This is the proper legal remedy for the enforcement of a mortgage under the Civil Code. The mortgage contract itself provides for this remedy, and the plaintiff’s prayer for relief included it.

3. On the penalty clause: The penalty of P5,000 was correctly included in the judgment. The penalty was expressly stipulated in the mortgage contract (Exhibit A) as part of the obligation. The defendant offered no evidence to contest its enforceability. The Court saw no reason to delete it from the award.

DISPOSITIVE PORTION:
The judgment of the lower court is affirmed, with costs against the appellant.