December 18, 1970
Ponente: Concepcion, C.J.
FACTS:
On October 8, 1951, Jose Ponce De Leon and Francisco Soriano took out a loan from the Rehabilitation Finance Corporation or RFC (now Development Bank of the Philippines) for P495,000.00. The loan was secured by a parcel of land owned by Soriano. A deed of mortgage was then executed in view of the loan. Soriano and Ponce de Leon also executed a promissory note in the amount of P495k, payable in monthly installments of P28,831.64.
Part of the P495k was used to pay off the previous encumbrances amounting to P135k on the property of Soriano. The rest were released to Ponce de Leon in various amounts from December 1951 to July 1952, still pursuant to the deed of mortgage.
The loan went unpaid and so RFC initiated a foreclosure proceeding on the mortgaged property. According to RFC, the monthly payments were supposed to be due in October 1952.
In his defense, Ponce de Leon insists that the amortizations never became due because allegedly, RFC did not complete the disbursement of the loan to him (allegedly, P19k was withheld). He also invokes that on the face of the promissory note it was written that the installments have “no fixed or determined dates of payment”. Hence, the monthly payments were never due therefore the foreclosure is void. He insists that the court should first determine the date of maturity of the loan.
RULING:
Whether or not Ponce de Leon is right. - NO.
During trial and based on the records, Ponce de Leon’s lawyer admitted that all the remainder of the loan was released to Ponce de Leon so he cannot invoke that not all of the P495k was released by RFC.
Anent the issue of the loan’s maturity date, under Secs. 13 and 14 of the Negotiable Instruments Law, when a promissory note expresses “no time for payment,” it is deemed “payable on demand.” Therefore, when RFC demanded payment on October 24, 1952, the installments become due.
