[ G.R. No. L-45350. May 29, 1939 ] 68 Phil. 287
[ G.R. No. L-45350. May 29, 1939 ]
BACHRACH MOTOR CO., INC., PLAINTIFF AND APPELLANT, VS. ESTEBAN ICARANGAL AND ORIENTAL COMMERCIAL CO., INC., DEFENDANTS AND APPELLEES. D E C I S I O N
MORAN, J.:
On June 11, 1930, defendant herein, Esteban Icarangal, with one Jacinto Figueroa, for value received, executed in favor of the plaintiff, Bachrach Motor Co., Inc., a promissory note for one thousand six hundred fourteen pesos (P1,614), and in security for its payment, said Esteban Icarangal executed a real estate mortgage on a parcel of land in Pangil, Laguna, which was duly registered on August 5, 1931, in the registry of deeds of the Province of Laguna. Thereafter, promissors defaulted in the payment of the agreed monthly installments; wherefore, plaintiff instituted in the Court of First Instance of Manila an action for the collection of the amount due on the note. Judgment was there rendered for the plaintiff. A writ of execution was subsequently issued and, in pursuance thereof, the provincial sheriff of Laguna, at the indication of the plaintiff, levied on the properties of the defendants, including that which has been mortgaged by Esteban Icarangal in favor of the plaintiff. The other defendant herein, Oriental Commercial Co., Inc., interposed a third-party claim, alleging that by virtue of a writ of execution issued in civil case No. 88253 of the municipal court of. the City of Manila, the property which was the subject of the mortgage and which has been levied upon by the sheriff, had already been acquired by it at the public auction on May 12, 1933. By reason of this third-party claim, the sheriff desisted from the sale of the property and, in consequence thereof, the judgment rendered in favor of the plaintiff remained unsatisfied. Whereupon, plaintiff instituted an action to foreclose the mortgage. The trial court dismissed the complaint and, from the judgment thus rendered, plaintiff took the present appeal.
The sole question before us is whether or not plaintiff-appellant is barred from foreclosing the real estate mortgage after it has elected to sue and obtain a personal judgment against the defendant-appellee on the promissory note for the payment of which the mortgage was constituted as a security.
In Hijos de I. de la Rama vs. Sajo (45 Phil., 703), the mortgage creditor, instead of instituting proceedings for the foreclosure of his mortgage, filed a personal action for the recovery of the debt. The mortgage debtor objected to the action, alleging that, if it be allowed, he would be subjected to two suits, one personal and another for the foreclosure of the mortgage. We answered this objection, laying down the rule that “in the absence of statutory provisions, the mortgagee may waive the right to foreclose his mortgage and maintain a personal action for the recovery of the indebtedness.” And we emphasized the doctrine in the later part of our decision by saying that “the rule is well established that the creditor may waive whatever security he has and maintain a personal action, in the absence of statutory provisions to the contrary.” (P. 705.)
It is true that in Matienzo vs. San Jose (G. R. No. 39510, June 16, 1934), a decision of three justices of this court ruled that “apart from special proceedings regulated by statute, an unsatisfied personal judgment for a debt is no bar to an action to enforce a mortgage or other lien given as security for such debt.” But this decision cannot be made to prevail over a decision given by this court in bane. Besides, the rule laid down in the De la Rama case is more in harmony with the principles underlying our procedural system.
Most of the provisions of our Code of Civil Procedure are taken from that of California, and in that jurisdiction the rule has always been, and still is, that a party who sues and obtains a personal judgment against a defendant upon a note, waives thereby his right to foreclose the mortgage securing it. (Ould vs. Stoddard, 54 Cal., 613; Felton vs. West, 102 Cal, 268; Craiglow vs. Williams, 514 Cal. App., 45; 188 Pac, 76, following doctrine in Biddel vs. Brizzolara, 64 Cal., 354; 30 Pac, 609; Brown vs. Willis, 67 Cal., 235; 7 Pac, 682; Barbieri vs. Ramelii, 84 Cal., 154; 23 Pac, 1086; Toby vs. Oregon Pac. R. Co., 98 Cal., 490; 33 Pac, 550; McKean vs. German-American Sav. Bank,, 118 Cal., 334; 50 Pac, 656; Woodward vs. Brown, 119 Cal, 283; 63 Am. St. Rep., 108; 51 Pac, 2, 542; Meyer vs. Weber, 133 Cal, 681; 65 Pac, 1110; Crisman vs. Lanterman, 149 Cal, 647, 651; 117 Am. St. Rep., 167; 87 Pac, 89; Gnarin vs. Swiss American Dank, 102 Cal, 181; 121 Pac, 726.) The same rule obtains in the States of Idaho, Montana, Nevada and Utah. (See 2 Johns on Mortgages, 988, 101a, 1019, 1046.) It is true that this rule is founded on express statutory provisions to that effect. We have here, however, section 708 of our Code of Civil Procedure which provides that a creditor holding a claim against the deceased, secured by a mortgage or other collateral security, has to elect between enforcing such security or abandoning" it by presenting his claim before the committee and share in the general assets of the estate. Under this provision, it has been uniformly held by this court that, if the plaintiff elects one of the two remedies thus provided, he waives the other, and if he fails, he fails utterly. (Veloso vs. Heredia, 33 Phil., 306; Cf. Osorio vs. San Agustin, 25 Phil., 404.) The same rule applies under the Insolvency Law. (Sec 59, Act No. 1956; Unson and Lacson vs. Central Capiz, 47 Phil., 42; Chartered Bank of India, Australia and China vs. Imperial, 48 Phil., 931; O’Brien vs. Del Rosario and Bank of the Philippine Islands, 49 Phil., 657.) There is indeed no valid reason for not following the same principle of procedure in ordinary civil actions. With the substitution of the administrator or executor in place of the deceased, or of the assignee or receiver in place of the insolvent debtor, the position of the parties plaintiff and defendant in the litigation is exactly the same in special or insolvency proceedings as in ordinary civil actions.
But, even if we have no such section 708 of our Code of Civil Procedure, or section 59 of the Insolvency Law, we have still the rule against splitting a single cause of action. This rule, though not contained in any statutory provision, has been applied by this court in all appropriate cases. Thus, in Santos vs. Moir (36 Phil., 350, 359), we said: “It is well recognized that a party cannot split a single cause of action into parts and sue on each part separately. A complaint for the recovery of personal property with damages for detention states a single cause of action which cannot be divided into an action for possession and one for damages; and if suit is brought for possession only a subsequent action cannot be maintained to recover the damages resulting from the unlawful detention.” In Rubio de Larena vs. Villanueva (53 Phil., 923, 927), we reiterated the rule by stating that" * * * a party will not be permitted to split up a single cause of action and make it the basis for several suits" and that when a lease provides for the payment of the rent in separate installments, each installment constitutes an independent cause of action, but when, at the time the complaint is filed, there are several installments due, all of them constitute a single cause of action and should be included in a single complaint, and if some of them are not so included, they are barred. The same doctrine is stated in Lavarro vs. Labitoria (54 Phil, 788), wherein we said that “a party will not be permitted to split up a single cause of action and make it a basis for several suits” and that a claim for partition of real property as well as for improvements constitutes a single cause of action, and a complaint for partition alone bars a subsequent complaint for the improvements. And in Blossom & Co. vs. Manila Gas Corporation (55 Phil., 226, 240), we held that “as a general rule a contract to do several things at several times is divisible in its nature, so as to authorize successive actions; and a judgment recovered for a single breach of a continuing contract or covenant is no bar to a suit for a subsequent breach thereof. But where the covenant or contract is entire, and the breach total, there can be only one action, and plaintiff must therein recover all his damages.”
The rule against splitting a single cause of action is intended “to prevent repeated litigation between the same parties in regard to the same subject of controversy; to protect defendant from unnecessary vexation; and to avoid the costs and expenses incident to numerous suits.” (1 C. J., 1107.) It comes from that old maxim nemo bedet bis vexare pro una et eadem cause (no man shall be twice vexed for one and the same cause). (Ex parte Lange, 18 Wall., 163, 168; 21 Law. ed., 872; also U. S. vs. Throckmorton, 98 U. S., 61; 25 Law. ed., 93.) And it developed, certainly not as an original legal right of the defendant, but as an interposition of courts upon principles of public policy to prevent inconvenience and hardship incident to repeated and unnecessary litigations. (1 C. J., 1107.)
For non-payment of a note secured by mortgage, the creditor has a single cause of action against the debtor. This single cause of action consists in the recovery of the credit which execution of the security. In other words, the creditor in his action may make two demands, the payment of the debt and the foreclosure of his mortgage. But both demands arise from the same cause, the non-payment of the debt, and, for that reason, they constitute a single cause of action. Though the debt and the mortgage constitute separate agreements, the latter is subsidiary to the former, and both refer to one and the same obligation. Consequently, there exists only one cause of action for a single breach of that obligation. Plaintiff, then, by applying the rule above stated, cannot split up his single cause of action by filing a complaint for payment of the debt, and thereafter another complaint for foreclosure of the mortgage. If he does so, the filing of the first complaint will bar the subsequent complaint. By allowing the creditor to file two separate complaints simultaneously or successively, one to recover his credit and another to foreclose his mortgage, we will, in effect, be authorizing him plural redress for a single breach of contract at so much cost to the courts and with so much vexation and oppress ion to the debtor.
We hold, therefore, that, in the absence of express statutory provisions, a mortgage creditor may institute against the mortgage debtor either a personal action for debt or a real action to foreclose the mortgage. In other words, he may pursue either of the two remedies, but not both. By such election, his cause of action can by no means be impaired, for each of the two remedies is complete in itself. Thus, an election to bring a personal action will leave open to him all the properties of the debtor for attachment and execution, even including the mortgaged property itself. And, if he waives such personal action and pursues his remedy against the mortgaged property, an unsatisfied judgment thereon would still give him the right to sue for a deficiency judgment, in which case, all the properties of the defendant, other than the mortgaged property, are again open to him for the satisfaction of the deficiency. In either case, his remedy is complete, his cause of action undiminished, and any advantages attendant to the pursuit of one or the other remedy are purely accidental and are all under his right of election. On the other hand, a rule that would authorize the plaintiff to bring a personal action against the debtor and simultaneously or successively another action against the mortgaged property, would result not only in multiplicity of suits so offensive to justice (Soriano vs. Enriques, 24 Phil., 584) and obnoxious to law and equity (Osorio vs. San Agustin, 25 Phil., 404), but also in subjecting the defendant to the vexation of being sued in the place of his residence or of the residence of the plaintiff, and then again in the place where the property lies.
In arriving at the foregoing conclusion, we are not unaware of the rule prevailing in certain States of the American Union; to the effect that, in cases like the one at bar, the creditor can pursue his remedies against the note and against the. security concurrently or successively. The reason given for the rule seems to be that the causes of action in the two instances are not the same, one being personal and the other, real. But, as we have heretofore suited, the creditor’s cause of action is not only single bat indivisible, although the agreements of the parties, evidenced by the note and the deed of mortgage, may give rise to different remedies. (Frost vs. Witter, 132, Cal., 421.) The cause of action should not be confused with the remedy created for its enforcement. And considering, as we have shown, that one of the two remedies available to the creditor is as complete as the other, he cannot be allowed to pursue both in violation of those principles of procedure intended to secure simple, speedy and unexpensive administration of justice.
Judgment is affirmed, with costs against the appellant. Avancena, C. J., Villa-Real, and Concepcion, JJ., concur. Imperial and Laurel, JJ., see dissenting opinion. Diaz, J., concurs with Justice Imperial, and vote to reverse the appealed judgment.