G.R. No. L-8246
October 7, 1913
TOMAS OSORIO Y REYES, as administratrix of the estate of Antonio Osorio, plaintiff-appellant, vs. ANGELA SAN AGUSTIN, as administratrix of the estate of Benito San Agustin, defendant-appellee. CRISANTA HERNANDEZ, intervenor-appellee.

FACTS:
1. On February 28, 1891, Benito San Agustin executed a mortgage in favor of Antonio Osorio to secure a loan of P800, payable after three years with 7% monthly interest, plus a P150 penalty for default.
2. Both mortgagor (Benito San Agustin) and mortgagee (Antonio Osorio) died in 1908. Their respective estates were administered by Angela San Agustin (defendant) and Tomasa Osorio (plaintiff).
3. On May 8, 1909, the plaintiff, as administratrix of Osorio’s estate, filed the mortgage claim with the appraisal committee of Benito San Agustin’s estate. The committee disallowed the claim.
4. Plaintiff appealed the disallowance to the Court of First Instance (CFI) in Case No. 603, seeking a money judgment against the estate. The CFI dismissed the claim, declaring it prescribed. Plaintiff appealed to the Supreme Court.
5. While that appeal was pending, plaintiff filed a separate foreclosure action (CFI Case No. 634) on February 28, 1911, seeking to enforce the mortgage.
6. The defendant and intervenor (Crisanta Hernandez, widow of Benito San Agustin) argued that the action was barred by prescription and that another action was pending for the same cause.
7. The CFI dismissed the foreclosure suit, ruling that (a) another case was pending between the same parties for the same claim, and (b) the foreclosure action had prescribed. Plaintiff appealed.

—

ISSUES:
1. Whether the foreclosure action was barred by lis pendens (another action pending).
2. Whether the foreclosure action had prescribed.
3. Whether the plaintiff, by filing the claim with the appraisal committee, abandoned the mortgage security and forfeited the right to foreclose.

—

RULING:
The Supreme Court AFFIRMED the dismissal of the foreclosure action, based primarily on the election of remedies under Section 708 of the Code of Civil Procedure.

1. On Lis Pendens: The Court found that the foreclosure action (Case No. 634) and the earlier appeal from the committee’s disallowance (Case No. 603) involved the same parties and sought recovery of the same mortgage debt. While the Court did not strictly rely on lis pendens, it noted that pursuing two actions for the same purpose was improper.

2. On Prescription: The Court did not reach the issue of prescription, having resolved the case on election of remedies.

3. On Election of Remedies under Section 708:
– Section 708 provides that a creditor holding a mortgage claim against a deceased debtor’s estate may either:
a. Abandon the security and prosecute the claim before the appraisal committee to share in the general assets; or
b. Foreclose the mortgage through an ordinary court action against the executor/administrator.
– The law does not allow both remedies. By electing to file the claim with the appraisal committee (and appealing its disallowance), the plaintiff abandoned the mortgage security and forfeited the right to bring a separate foreclosure action.
– Allowing both remedies would result in a multiplicity of suits, which the law abhors.

—

DISPOSITIVE PORTION:
The judgment of the lower court dismissing the foreclosure action is AFFIRMED, with costs against the plaintiff.

—

SEPARATE OPINION (Justice Carson, Concurring):
Justice Carson clarified that Section 708 allows an exception: if a creditor forecloses the mortgage and obtains a deficiency judgment, they may prove that deficiency judgment before the committee to share in the general assets. However, this exception did not apply to the case at bar, as the plaintiff had initially abandoned the security by filing with the committee.