G.R. No. L-6515 October 18, 1954
DAGUHOY ENTERPRISES, INC., plaintiff-appellee, vs. RITA L. PONCE, with whom is joined her husband, DOMINGO PONCE, defendants-appellants.

FACTS

Daguhoy Enterprises, Inc., a corporation, filed a case against spouses Rita L. Ponce and Domingo Ponce to collect a loan of P6,190 secured by a mortgage on a parcel of land. Rita L. Ponce executed the mortgage deed in favor of the corporation on June 24, 1950, for a P5,000 loan, later amended on March 10, 1951, to increase the loan to P6,190. The defendants presented the mortgage deeds for registration but withdrew them from the Register of Deeds after being advised of defects. They then mortgaged the same property to the Rehabilitation Finance Corporation (RFC). Potenciano Gapol, the majority stockholder of Daguhoy Enterprises, Inc., filed a separate civil case (No. 13753) for accounting against Domingo Ponce and his son Buhay M. Ponce. In that case, Domingo and Buhay deposited an RFC check for P6,190 and interest in court. Gapol, representing the corporation, petitioned to withdraw the amount but was denied due to opposition from the defendants unless the mortgage was cancelled. The corporation later filed the present collection case. The trial court rendered judgment on the pleadings in favor of the plaintiff corporation.

ISSUE

Whether the trial court correctly rendered judgment on the pleadings, ordering the defendants to pay the loan, considering the defendants’ affirmative defenses including the alleged dissolution of the plaintiff corporation and the effect of the deposit made in the separate civil case.

RULING

The Supreme Court affirmed the trial court’s decision with modification. The Court held that under Article 1198 of the New Civil Code, the defendants lost the benefit of the period for payment (the loan was payable within six years) because they failed to perfect the mortgage security by registering the deeds and instead withdrew them and mortgaged the property to another. Thus, the obligation became immediately demandable. The defense that the corporation had no capacity to sue due to a stockholders’ resolution to dissolve it was rejected because a mere resolution does not effect dissolution, and under the Corporation Law, a dissolved corporation continues as a judicial entity for three years to wind up its affairs. The deposit of the loan amount in the separate civil case did not constitute payment relieving the defendants from interest, as the parties in that case were different, and the plaintiff corporation was prevented from withdrawing the deposit due to the defendants’ opposition. The attorney’s fees were reduced from P1,000 to P300. The amount deposited in Civil Case No. 13753 may be withdrawn to satisfy the judgment.