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Licuanan
GR No. 150097, February 26, 2007
Facts:
In 1975, DBP granted Respondents a third loan of P22,000 maturing in 1985, and
was secured by a real estate mortgage over three parcels of land.
In 1981, DBP sent a letter to Respondents informing them that they would
institute extrajudicial foreclosure proceedings for breach of the conditions of the
mortgage (of the first loan).
Respondents then filed a complaint for recovery of real properties and damages in
RTC of Lingayen against DBP and Peralta.
Issue:
Weather or not demand is necessary to make respondents guilty of default.
Ruling:
Yes. It is only when demand to pay is made and subsequently refused that
respondents can be considered in default and DBP obtains the right to file an action to
collect the debt or foreclose the mortgage.
The maturity dates only indicate when payment can be demanded. It is the refusal
to pay after demand that gives the creditor a cause of action against the debtor.
Since demand was never made by DBP, the foreclosure was premature and
therefore null and void.
Further, DBP's argument that respondents are estopped from questioning the
validity of the foreclosure sale since they offered to repurchase the foreclosed
properties is incorrect.