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Rural Bank of Caloocan Vs CA Digest

Maxima Castro and Severino Valencia applied for industrial loans of P3,000 each from the Rural Bank of Caloocan and mortgaged Castro's house and lot. When the property was subject to a sheriff's sale for non-payment, Castro filed a case to recover the property. The Supreme Court ruled that the promissory note Castro executed was valid and bound her beyond the P3,000 loan amount. However, the mortgage contract could be invalidated due to substantial mistake committed by Castro and the bank as a result of fraud by Valencia. The Supreme Court affirmed the lower court's judgment.

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2K views1 page

Rural Bank of Caloocan Vs CA Digest

Maxima Castro and Severino Valencia applied for industrial loans of P3,000 each from the Rural Bank of Caloocan and mortgaged Castro's house and lot. When the property was subject to a sheriff's sale for non-payment, Castro filed a case to recover the property. The Supreme Court ruled that the promissory note Castro executed was valid and bound her beyond the P3,000 loan amount. However, the mortgage contract could be invalidated due to substantial mistake committed by Castro and the bank as a result of fraud by Valencia. The Supreme Court affirmed the lower court's judgment.

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mansikiabo
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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RURAL BANK OF CALOOCAN VS CA, G.R NO. 32116 APRIL 21,1981

FACTS: On December 7,1959 respondent Maxima Castro together with Severino Valencia they went to the rural bank of Caloocan to apply for an industrial loan in the amount of P3,000.00 each of them and mortgaged the house and lot of Mrs Castro and also they executed a promissory note in favor of the bank. On February 13,1961 the subject property was a subject of sheriff sale but was postponed due to the request of Castro and Valencia with the consent of the bank and was scheduled on April 10,1961 which was a special holiday but the auction continued in the amount of P6,000.00 prompting Mrs Castro o filed a case against the bank for the recovery of her property . ISSUE: Whether or not the promissory note executed by Mrs Castro is valid or not? HELD: Supreme court declare the promissory note valid between the bank and Castro and the mortgage contract binding on Castro beyond the amount of P3,000.00 for while contracts may not be in may not be invalidated insofar as they affect the bank and Castro on the ground of fraud because the bank was not a participant thereto suc may however be invalidated on the ground of substantial mistake mutually committed bt them as a consequence of the fraud and misrepresentation inflicted by the Valencias. Wherefore finding no irreversible error in the judgment under review. We affirmed the same in toto.

DIGESTED BY : JIM LUTON

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