Professional Documents
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(3)When, without just cause, he refuses to give a receipt; Manuel went to Ester Servacio (Ester), MTLCs President to
inform her that there was money with PNB for Payment of his
(4)When two or more persons claim the same right to collect; loan. Manuel executed a Special Power of Attorney (SPA)
authorizing Ester to collect the proceeds of the loan. Ester went
(5)When the title of the obligation has been lost to the PNB to inquire, the second time around, about the
proceeds. The bank officer confirmed the existence of such loan,
VOCABULARY but they required Ester to first sign a deed of
release/cancellation of the mortgage before they could release
Hernandez Adriano ObliCon
the proceeds of the loan to her. Outraged, Ester refused the alleged that the SPA merely authorized her to collect the
deed and did not collect the 1.3 Million. proceeds of the loan; there was no explicit agreement that the
MTLC loan would be paid out of the proceeds of the PNB loan.
Ester instituted foreclosure proceeding. To prevent the
foreclosure, the spouses Cinco filed an action for specific There is nothing legally objectionable in a mortgagors act of
performance, damages, and preliminary injunction taking a second or subsequent mortgage on a property already
mortgaged; a subsequent mortgage is recognized as valid by
law and by commercial practice, subject to the prior rights of
ISSUE: WON the unjust refusal of payment released Go Cinco from the previous mortgages. Section 4, Rule 68 of the 1997 Rules of
Responsibility of paying. Civil Procedure on the disposition of the proceeds of sale after
foreclosure
HELD: NO.
Ester Servacio abused her rights according to Article 19 of the
A sad twist in this case for Manuel was that he could not avail of Civil Code where the unjust refusal was contrary to the duty to
consignation to extinguish his obligation to MTLC, as PNB would act with honesty and good faith.
not release the proceeds of the loan unless and until Ester had
signed the deed of release/cancellation of mortgage, which she
unjustly refused to do. Hence, to compel Ester to accept the loan
proceeds and to prevent their mortgaged properties from being
foreclosed, the spouses Go Cinco found it necessary to institute
the present case for specific performance and damages.