KOREA EXCHANGE BANK, petitioner, vs.

FILKOR BUSINESS INTEGRATED, INC., KIM EUNG JOE, and LEE

HAN SANG, respondents.
G.R. No. 13822. A!"#$ 1%, 2%%2
FACTS& Respondent FILKOR had three transactions with the respondent
KOREA EXCHANGE BANK:
1. Bo""o'(d US) *%,%%%.%%, of which only US$ 40,000.00 was
paid;
2. E+(,-.(d n#n( /0 ."-1. "(,(#!. but failed to turn over the
proceeds of the goods or the goods themselves and
!. N(2o.#a.(d .3( !"o,((d1 o4 1(5(n.((n /160 $(..("1 o4 ,"(d#.,
which were all dishonored because of discrepancies.
o sec!re pa"#ent $or these o%&i'ations respondent FILKOR
e(ec!ted a Rea& Estate )ort'a'e* It #ort'a'ed to the %an+ the
i#pro,e#ents it constr!cted on the &ot it was &easin' in Ca,ite E(port
-rocessin' .one A!thorit"* Respondents Ki# E!n' /oe and Lee Han 0an'
on their part e(ec!ted a Contin!in' 0!ret"ship %indin' the#se&,es 1oint&"
and se,era&&" with FILKOR to pa" the o%&i'ations to the %an+*
2hen FILKOR %reached a&& its o%&i'ations, petitioner KOREA
EXCHANGE BANK $i&ed a ci,i& case with the RC o$ CA3IE* he
petitioner so!'ht to %e paid $or 45 ca!ses o$ action and that the #ort'a'ed
propert" %e $orec&osed and so&d at a p!%&ic a!ction in case the respondent
$ai&s to pa" within ninet" da"s $ro# the entr" o$ 1!d'#ent*
he tria& co!rt rendered a 1!d'#ent in $a,or o$ the petitioner $or a&&
45 actions %!t $ai&ed to order the $orec&os!re and p!%&ic a!ction o$ the
#ort'a'ed propert" in the e,ent that FILKOR $ai&s to pa" its o%&i'ation*
-etitioner $i&ed a #otion $or partia& reconsideration see+in' that the re&ie$ o$
$orec&os!re %e 'ranted %!t s!ch #otion was denied sa"in' that the petitioner
in optin' to $i&e a ci,i& action $or the co&&ection o$ the de$endant6s o%&i'ation,
has a%andoned its #ort'a'ed &ien on the propert" s!%1ect o$ the rea& estate
#ort'a'e*
BASIS o4 TC71 DECISION: "anao vs. #ourt of $ppeals, 1%4 S#&$ 44',
citing (anila )rading and Supply #o. vs. #o *im, et al., +1 ,hil. 44-
7he r!&e is now sett&ed that a #ort'a'e creditor #a" e&ect to wai,e his
sec!rit" and %rin', instead, an ordinar" action to reco,er the inde%tedness
with the ri'ht to e(ec!te a 1!d'#ent thereon on a&& the properties o$ the
de%tor inc&!din' the s!%1ect #atter o$ the #ort'a'e, s!%1ect to the
8!a&i$ication that i$ he $ai&s in the re#ed" %" hi# e&ected, he cannot p!rs!e
$!rther the re#ed" he has wai,ed..
ISSUE& /Assigned by petitioner0 2hether or not the petitioner had
a%andoned the rea& estate #ort'a'e in its $a,or, %eca!se it $i&ed a si#p&e
co&&ection case* NO
9Resultant Issue0 2hether or not petitioner6s co#p&aint %e$ore the
tria& co!rt was an action $or $orec&os!re o$ a rea& estate #ort'a'e, or an
action $or co&&ection o$ a s!# o$ #one"*
HELD& I. 'a1 an a,.#on 4o" 4o"(,$o1-"( o4 a "(a$ (1.a.( 8o".2a2(*
-etitioner6s a&&e'ations in its co#p&aint, and its pra"er that the #ort'a'ed
propert" %e $orec&osed and so&d at p!%&ic a!ction, indicate that petitioner6s
action was one $or $orec&os!re o$ rea& estate #ort'a'e*
In !(.#.#on("71 ,o8!$a#n. 9(4o"( .3( ."#a$ ,o-"., !(.#.#on(" a$$(2(1&
)o secure payment of the obligations of defendant
#orporation under the /irst to the )wenty0Seventh #ause of
$ction, on /ebruary 1, 111', defendant #orporation
e2ecuted a &eal 3state (ortgage by virtue of which it
mortgaged to plaintiff the improvements standing on 4loc5
1!, 6ot 1, #avite 32port ,rocessing 7one, &osario, #avite,
belonging to defendant #orporation covered by )a2
"eclaration 8o. %10'01 and consisting of a one0story
building called warehouse and spooling area, the
guardhouse, the cutting9sewing area building and the
pac5ing area building. :$ copy of the &eal 3state (ortgage
is attached hereto as $nne2 ;SS. and made an integral
part hereof.<
his a$$(2a.#on 1a.#14#(1 #n !a". .3( "(:-#"(8(n.1 o4 S(,.#on 1, R-$( ;8
o4 .3( 16 R-$(1 o4 C#5#$ <"o,(d-"( on 4o"(,$o1-"( o4 "(a$ (1.a.(
8o".2a2(, which pro,ides:
SECTION 1. Complaint in action or oreclosure. = >n an
action for the foreclosure of a mortgage or other
encumbrance upon real estate, the complaint shall set
forth the date and due e2ecution of the mortgage its
assignments, if any the names and residences of the
mortgagor and the mortgagee a description of the
mortgaged property a statement of the date of the note or
other documentary evidence of the obligation secured by
the mortgage, the amount claimed to be unpaid thereon
and the names and residences of all persons having or
claiming an interest in the property subordinate in right to
that of the holder of the mortgage, all of whom shall be
made defendants in the action.
<"a=(" o4 .3( ,o8!$a#n. 9(4o"( .3( ."#a$ ,o-". "(ad1 a1 4o$$o'1&
?@3&3/A&3, it is respectfully prayed that Budgment be
renderedC
2 22
2. Ardering that the property mortgaged be foreclosed and
sold at public auction in case defendants fail to pay
plaintiff within ninety :10< days from entry of Budgment.
-etitioner6s action %ein' one $or $orec&os!re o$ rea& estate #ort'a'e the
tria& sho!&d ha,e ordered the $orec&os!re and p!%&ic a!ction o$ the
#ort'a'ed propert" in the e,ent that respondent Fi&+or $ai&s to pa" its
o!tstandin' o%&i'ations* his is p!rs!ant to 0ection 4 o$ R!&e :; o$ the
<==5 R!&es o$ Ci,i& -roced!re, which pro,ides:
SEC. 2. !udgment on oreclosure or payment or sale*> I$
!pon the tria& in s!ch action the co!rt sha&& $ind the $acts set
$orth in the co#p&aint to %e tr!e, it sha&& ascertain the a#o!nt
d!e to the p&ainti$$ !pon the #ort'a'e de%t or o%&i'ation,
inc&!din' interest and other char'es as appro,ed %" the
co!rt, and costs, and sha&& render 1!d'#ent $or the s!# so
$o!nd d!e and order that the sa#e %e paid to the co!rt or to
the 1!d'#ent o%&i'ee within a period o$ not &ess than ninet"
9=?@ da"s nor #ore than one h!ndred twent" 9<4?@ da"s $ro#
entr" o$ 1!d'#ent, and that in de$a!&t o$ s!ch pa"#ent the
propert" sha&& %e so&d at p!%&ic a!ction to satis$" the
1!d'#ent*
DIS<OSITION& "#ERE$ORE, the petition is D&$8)3" )he
Arder dated (arch 12, 1111, of the &egional )rial #ourt of #avite
#ity, 4ranch --, in #ivil #ase 8o. 80''-1 is hereby (A">/>3", to
state that the mortgaged property of respondent /il5or be ordered
foreclosed and sold at public auction in the event said respondent
fails to pay its obligations to petitioner within ninety :10< days from
entry of Budgment.