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Philippines National Bank vs. Heirs of Alonday

Philippines National Bank, Petitioner versus. Heirs of Benedicto and Azucena Alonday, Respondents. Present: *SERENO, CJ, LEONARDO-DE CASTRO,Acting Chairperson, BERSAMIN, PERLAS-BERNABE, and CAGUIOA,JJ

G.R. No. 171865 | 2016-10-25

DECISION

BERSAMIN, J.:

The issue is whether the all-embracing or dragnet clause contained in the first mortgage contract executed between the parties for the security of the first loan could authorize the foreclosure of the property under the mortgage to secure a second loan despite the full payment of the second loan.

Antecedents

On September 26, 1974, the Spouses Benedicto and Azucena Alonday (Spouses Alonday) obtained an agricultural loan of P28,000.00 from the petitioner at its Digos, Davao del Sur Branch, and secured the obligation by constituting a real estate mortgage on their parcel of land situated in Sta. Cruz, Davao del Sur...