[03]  PONCE  DE  LEON  v  REHABILITATION  FINANCE  CORP.   7.

7.  Ponce  de  Leon  contends  that  the  Promissory  Note  in  favor  of  RFC  was  overdue  
GR  No.  L-­‐‑24571    |  December  18,  1970   when  the  mortgage  was  foreclosed.  So  since  the  installments  in  the  promissory  note  
Concepcion,  C.J.   had  "ʺno  fixed  or  determined  dates  of  payment"ʺ,  the  note  was  unenforceable.  Ponce  de  
Alex  Austria   Leon  said  that  RFC  should'ʹve  first  asked  the  court  to  determine  the  terms,  conditions,  
  and  period  of  maturity  of  the  promissory  note.  Ponce  de  Leon  also  claims  that  this  
PLAINTIFF-­‐‑APPELLANT:  Jose  L.  Ponce  De  Leon   sum  of  P495,000  has  not  been  fully  released  by  RFC  to  him  .  
DEFENDANT-­‐‑APPELLANT:  Rehabilitation  Finance  Corporation  ("ʺRFC"ʺ)   7.  The  ISSUE  in  this  case  is  WON  Ponce  de  Leon'ʹs  promissory  note  in  favor  of  RFC  
THIRD-­‐‑PARTY  PLAINTIFFS-­‐‑APPELLANTS:  Rosalina  Soriano,  Teofila  Soriano,  and   was  overdue  when  the  mortgage  was  foreclosed,  because  the  installments  in  the  said  
Rev.  Fr.  Eugenio  R.  Soriano   note  have  "ʺno  fixed  or  determined  dates  of  payment"ʺ,  thus  making  the  note  
  unenforceable?    
TOPIC:   XVIII.   Payment   in   Due   Course   -­‐‑   B.   Presentment   for   Payment   -­‐‑   2.   When   8.  The  SC  said  that  NO,  the  note  WAS  ENFORCEABLE  and  that  NO,  it  was  NOT  
Presentment  for  Payment  should  be  made  -­‐‑  a.  In  General   overdue.  SC  looked  at  the  TERMS  of  the  MORTGAGE  DEED.    Although  the  date  of  
  maturity  of  the  first  installment  was  left  blank,  the  promissory  note  states  that  the  
DIGESTER'ʹS  NOTE:  This  is  a  long-­‐‑winded  and  complicated  case  that  only  tackles  Nego  a  little.  (I  apologize   "ʺdate  of  maturity  (was)  to  be  fixed  as  of  the  date  of  the  last  release,"ʺ  completing  the  
for   the   long   digest,   ang   dami   talagang   facts   haha.)   The   other   issues   raised   here   concern   banking,   mortgage,  
delivery  to  the  plaintiff  of  the  sum  of  P495,000  lent  to  Ponce  de  Leon  by  RFC.  
and   land   titles   and   deeds,   which   aren'ʹt   that   relevant   to   the   Nego   concept   in   our   outline   and   in   our   class  
discussion.  Hence,  I  decided  to  omit  them.   9.  The  SC  said  that:  
  FIRST,  part  of  the  sum  of  P495,000  had  been  delivered  by  RFC  to  the  creditors  of  
RECIT-­‐‑FRIENDLY  CASE  SUMMARY:  (Sorry  mahaba  talaga  siya.  Summarized  version  na  'ʹto   Ponce  de  Leon  and  Francisco  Soriano,  as  agreed  upon  by  them,  in  payment  of  their  
haha.  Just  read  the  first  page,  oks  ka  na  for  recit.)  
outstanding  obligations.  
1.  Plaintiff  Ponce  de  Leon  and  Third-­‐‑Party  Plaintiff  Francisco  Soriano  (survived  and  
SECOND,  the  balance  of  said  sum  of  P495,000  was  turned  over  to  Ponce  de  Leon,  
represented  by  his  children/heirs  in  this  case)  entered  into  a  loan  agreement  with  
with  the  written  authorization  and  conformity  of  Francisco  Soriano.  This  is  borne  out  
PNB.  (Loan  #1)  They  mortgaged  Soriano'ʹs  land  as  security  for  the  loan.    
by  the  fact  that,  prior  to  the  institution  of  this  case,  Ponce  de  Leon  had  not  
2.  Ponce  de  Leon  then  entered  into  another  loan  with  Defendant  RFC  so  he  could  
complained  of  failure  of  the  RFC  to  fully  release  the  aforementioned  sum  of  P495,000.  
build  a  sawmill.  (Loan  #2)  One  of  the  properties  he  mortgaged  was  the  land  of  
Indeed,  in  his  own  complaint  herein,  he  merely  alleged  a  "ʺdelay  in  the  release."ʺ  
Soriano,  which  was  the  security  for  Loan  #1.      
THIRD,  at  any  rate,  the  mortgage  deed  and  promissory  note,  in  effect,  authorized  
3.  Ponce  de  Leon  and  Soriano  executed  a  mortgage  deed  and  a  promissory  note  for  a  
RFC  to  fix  the  date  of  maturity  of  the  installments  therein  stipulated,  which  is  allowed  
total  of  P495k,  with  interest,  to  be  payed  in  installments  for  around  P28k  a  month.    
by  the  Negotiable  Instruments  Law  and  when  a  promissory  note  expresses  "ʺno  time  
4.    The  mortgage  deed  specifically  stipulated  that  the  proceeds  would  be  used  for  the  
for  payment,"ʺ  it  is  deemed  "ʺpayable  on  demand."ʺ    
purchase  of  machinery,  equipment,  construction  of  buildings,  and  the  payment  of  
 
obligations  in  relation  to  the  sawmill  that  Ponce  de  Leon  wanted  to  put  up.  The  
DOCTRINE:  (The  SC  cited  Sections  7,  13,  and  14  of  the  NIL  in  this  case,  and  nothing  in  the  provisions  of  
release  of  the  amoutns  loaned  will  be  at  RFC'ʹs  discretion.   the  outline.  So  I  just  worked  with  what  Sir  provided  in  the  outline  and  connected  it  to  the  case.)    
5.  Ponce  de  Leon  defaulted  in  his  loan  to  RFC.  So  RFC  extrajudicially  foreclosed   Under  NIL,  Sec.  71,  if  an  instrument  is  payable  on  demand,  presentment  must  be  
mortgaged  properties  consisting  of  real  estates,  the  sawmill,  and  its  equipment..   made  within  a  reasonable  time  after  its  issue.  Since  RFC  was  authorized  to  fix  the  
Many  items  of  the  mortgaged  machineries  and  equipments  of  Ponce  de  Leon  could   date  of  maturity  of  the  installments  stipulated  in  the  promissory  note,  and  NIL  Sec.  
not  be  found.   7(b),  said  that  a  promissory  note  expresses  "ʺno  time  for  payment"ʺ  it  is  deemed  
6.  Ponce  de  Leon  said  that  the  typhoons  in  October  and  November  of  1952  destroyed   "ʺpayable  on  demand"ʺ,  RFC  reasonably  presented  the  promissory  note  on  time  to  
his  sawmills  and  hampered  his  operations.  So  in  the  complaint  that  he  filed  with  the   claim  payment  from  Ponce  de  Leon'ʹs  obligations.    
CFI,  he  asked  that  the  amortizations  on  his  obligations  which  became  due  since    
October  1952  be  declared  extinguished.      
FACTS:   c. The  checks  covering  the  releases  were  issued  to  Ponce  de  Leon  in  view  
1. [LOAN  #1]  August  14,  1945  -­‐‑   Plaintiff  Jose  Ponce  de  Leon  and  Francisco  Soriano   of  the  authority  given  to  him  in  writing  by  Soriano  and  Carmelina  
(the   dad   of   third-­‐‑party   plaintiff-­‐‑appellants   in   this   case,   the   Sorianos)   got   a   loan   Russel,  Ponce  de  Leon'ʹs  wife.  (See  Fact  #6)  
from  the  Phil.  National  Bank  (PNB)  for  P10k.   8. March  12,  1952  -­‐‑  Ponce  de  Leon  and  his  wife  Carmelina  executed  an  addendum  
2. To  get  this  loan,  Ponce  De  Leon  and  Soriano  mortgaged  a  parcel  of  land  in  Rizal   to  the  chattel  mortgage.    
as  security.  The  land  was  under  Soriano'ʹs  name.   9. CAUSE  OF  ACTION:    Not  one  of  the  amortization  and  interests,  which  had  
3. August   16,   1945   -­‐‑   Ponce   de   Leon   gave   P2k   to   Soriano   from   the   proceeds   of   the   become  due,  was  paid  by  Ponce  de  Leon.    So  RFC  took  steps  for  the  extra-­‐‑  
P10k  loan.     judicial  foreclosure  of  the  mortgaged  properties  consisting  of  real  estates,  the  
4. The  loan  was  subsequently  increased  to  P17.5k,  and  the  real  estate  mortgage  was   sawmill,  and  its  equipment.    The  RFC  was  the  purchaser  of  all  the  mortgaged  
amended.  (See  Fact  #2).   properties  in  the  ensuing  sheriff'ʹs  sales,  with  the  exception  of  two  parcels  of  land  
5. [LOAN   #2]   May   4,   1951   -­‐‑   Ponce   de   Leon   filed   with   Defendant   Rehablitation   situated  in  Bacolod  City,  which  were  purchased  by  private  individuals.  Many  
Finance   Corp   ("ʺRFC"ʺ)   a   loan   application   to   put   up   a   sawmill.   The   amount   was   items  of  the  mortgaged  machineries  and  equipments  of  Ponce  de  Leon  could  
P800k.     not  be  found.  
a. For   this   loan,   Ponce   de   Leon   mortgaged   certain   parcels   of   land,   which   10. Before  the  redemption  period  expired,  Soriano  offered  to  repurchase  the  land  he  
included  the  parcel  of  land  he  mortgaged  with  Soriano.  (See  Fact  #2)   mortgaged  for  P14k.  He  went  to  RFC  and  offered  to  redeem  it  there,  but  he  was  
b. The   application   stated   that   the   properties   offered   for   Loan   #2   were   rejected.  RFC  told  Soriano  to  redeem  the  land  in  the  public  auction.  
encumbered  to  the  PNB  and  to  the  Cu  Unjieng  Bros.     11. [Ponce  De  Leon'ʹs  side]  February  18,  1956  -­‐‑  Ponce  de  Leon  filed  the  present  case  
c. The  application  was  approved  for  P495k.   alleging  that:  
6. Ponce   de   Leon,   his   wife   Carmelina   Russel,   and   Francisco   Soriano   all   signed   a   a. There  was  delay  in  the  releases  of  the  amount  of  the  loan;    
promissory   note   for   P495k,   with   interest   at   6%   per   annum   payable   on   b. That  the  RFC  withheld  the  amount  of  P19,000.00  from  the  loan  until  it  
installments  every  month  for  P28,831.64  in  connection  with  the  mortgage  deed   had  verified  whether  Ponce  de  Leon  had  still  an  unpaid  indebtedness  to  
for  Loan  #2  .  (So  there  are  2  documents  to  take  note  of:  the  promissory  note  and   the  defunct  Agricultural  and  Industrial  Bank,  the  RFC'ʹs  predecessor,  
the  mortgage  deed.)   and  this  was  paid  only  after  one  year  had  passed;    
a. At   the   time   Francisco   Soriano   signed   the   mortgage   deed,   his   spouse   c. That  the  typhoon  in  October  and  November,  1952  had  caused  
Tomasa   was   already   dead.   Her   heirs   are   defendant-­‐‑appellants,   the   destructions  to  his  sawmills  and  hampered  his  operations  for  which  
Sorianos.   None   of   the   heirs   signed   the   mortgage   deed   or   promissory   reason,  he  asks,  in  his  complaint,  that  the  amortizations  on  his  
note.     obligations  which  became  due  since  October,  1952  be  declared  
7. The   mortgage   deed   specifically   stipulated   that   the   proceeds   would   be   used   for   extinguished;  that  the  sheriff'ʹs  sales  be  declared  null  and  void  because  
the   purchase   of   machinery,   equipment,   construction   of   buildings,   and   the   the  properties  were  sold  at  grossly  inadequate  prices  and  that  said  sales  
payment  of  obligations  in  relation  to  the  sawmill  that  Ponce  de  Leon  wanted  to   were  not  conducted  in  accordance  with  law;    
put  up.  The  release  of  the  amoutns  loaned  will  be  at  RFC'ʹs  discretion.   d. That  the  RFC  be  compelled  to  account  for  his  machineries  and  
a. RFC  paid  Ponce  de  Leon'ʹs  obligations  of:   equipments  at  his  lumber  mill  in  Calbayog  and  to  reimburse  him  for  the  
-­‐‑P100k  to  PNB;     value  of  the  unaccounted  machineries  and  equipments;    
-­‐‑P30k  to  Cu  Unjieng  Bros,  and   e. That  the  RFC  be  ordered  to  pay  him  actual  and  moral  damages  for  
-­‐‑P5k  to  Arturo  Colmenares.   P105,000.00  and  costs.    
b. The  balance  of  P352k  was  released  to  Ponce  de  Leon  at  various   f. De  Leon  also  sked  for  the  issuance  of  a  writ  of  preliminary  injunction  to  
amounts.     restrain  the  RFC  from  carrying  out  its  contemplated  public  sale.    
12. The  CFI  of  Rizal  set  the  petition  for  injunction  for  hearing,  but  no  one  appeared   c. The  Sorianos  further  ask  that  they  be  allowed  to  redeem  the  remaining  
for  Defendant  RFC  at  the  hearing.    So  the  CFI  issued  the  preliminary  injunction   one-­‐‑half  share,  that  which  296  the  amount  for  which  the  RFC  acquired  
prayed  for.  Ponce  De  Leon  also  caused  a  notice  of  lis  pendens  to  be  recorded  in   the  whole  lot  in  the  sheriff'ʹs  sale.    
relation  with  this  case.   d. They  also  ask  that  Ponce  de  Leon  be  ordered  to  reimburse  them  for  
13. [RFC'ʹs  side]  RFC  filed  its  answer  saying  the  mortgage  was  legal,  as  well  as  the   whatever  amount  they  may  use  in  redeeming  the  lot  and  expenses  
Sheriff'ʹs  sales.  It  counter-­‐‑claimed  that  Ponce  de  Leon  should  be  ordered  to  pay   incident  thereto  and  that  Ponce  de  Leon  and  the  RFC  be  made  to  pay  
the  deficiency  claim  representing  the  balance  of  the  latter'ʹs  indebtedness,  rental   them  moral  damages  which  their  father  suffered  and  attorney'ʹs  fees.    
of  the  lot  and  house  at  Taft  Avenue,  Pasay  City  occupied  by  Ponce  de  Leon,  and   16. Both  RFC  and  Ponce  de  Leon  affirm  the  legality  of  the  mortgage  deed  insofar  as  
damages.   Soriano  is  concerned.  RFC  further  contends  that  the  mortgage  was  binding  on  
14. [The  Sorianos'ʹ  side]  Soriano  wrote  a  letter  to  the  RFC  President,  asking  him  to   the  whole  Soriano  lot  and  that  there  was  no  valid  redemption  of  this  lot.    
intervene  so  he  can  redeem  his  land.  RFC  said  that  Soriano  could  redeem  his   17. Ponce  de  Leon  interposed  a  counterclaim  for  various  sums  of  money  allegedly  
former  property,  for  not  less  than  its  appraised  value  of  P59,647.05,  payable  20%   received  from  him  by  Francisco  Soriano  and  his  children.  (The  third-­‐‑party  
down  and  the  balance  in  ten  years,  with  6%  interest.  Soriano  did  not  redeem  the   plaintiffs  in  this  case.)  
lot  under  the  conditions  of    RFC.  He  then  filed  a  third-­‐‑party  complaint  in  this   18. CFI  Rizal:    Dismissed  Plaintiff  Ponce  de  Leon'ʹs  complaint,  with  costs  against  him  
case  with  the  RFC  and  Jose  L.  Ponce  de  Leon  as  the  third-­‐‑party  defendants.   and  ordered  Ponce  de  Leon  to  pay  Defendant  RFC  P529,265.54  with  interest.  CFI  
(Kaya  ang  daming  parties  sa  case  na  'ʹto  hehe)   declared  the  mortgage  of  1/2  of  the  lot  covered  by  the  Original  Transfer  Cert.  of  
a.  Due  to  the  death  of  Francisco  Soriano,  he  was  substituted  as  third-­‐‑party   Title  belonging  to  the  third-­‐‑party  plaintiffs,  the  Sorianos,  as  NULL  and  VOID,  as  
plaintiff  by  his  children,  namely,  Teofila  Soriano  del  Rosario,  Rosalina   well  as  the  sheriff'ʹs  sale  in  favor  of  RFC  (as  to  the  other  1/2  of  the  lot)  NULL  and  
Soriano  and  Rev.  Fr.  Eugenio  Soriano.    (Hence  the  parties  in  this  case)   VOID.  
15. The  Sorianos  contend  that:   As  to  Ponce  de  Leon,  the  CFI  ruled  that:  
a.  The  mortgage  in  favor  of  RFC  and  promissory  note  signed  by   a. The  typhoons  did  not  relieve  Ponce  de  Leon  from  his  obligations  under  
Francisco  Soriano  lacked  the  latter'ʹs  consent  and  was  without   the  promissory  note  and  the  deed  of  mortgage  in  favor  of  RFC;  
consideration  insofar  as  Francisco  Soriano  is  concerned  and  hence   b. The  sheriff'ʹs  sale  of  the  mortgaged  properties  is  valid;  
null  and  void  as  to  him  and  his  children;     c. RFC  does  not  need  to  account  for  the  machineries  and  equipment  of  the  
b. That  the  mortgaged  lot  for  Loan  #1,  covered  by  original  certificate  of   sawmill  or  reimburse  their  value,  since  it'ʹs  their  property  already  
title  in  the  name  of  Francisco  Soriano  belonged  to  the  conjugal   because  Ponce  de  Leon  failed  to  exercise  his  right  of  redemption;  
partnership  of  the  latter  and  his  wife,  Tomasa  Rodriguez,  now   d. Ponce  de  Leon  may  not  recover  damages  from  RFC  for  the  alleged  delay  
deceased,     in  the  release  of  the  loan  amounts  since  the  contract  stipulates  that  the  
i. And  since  the  latter  was  already  dead  when  the  mortgage  was   proceeds  of  the  loan  will  be  released  at  RFC'ʹs  discretion.  Since  Ponce  de  
executed,  and  her  children,who  have  thus  inherited  her  share   Leon'ʹs  offer  of  redemption  came  LONG  AFTER  the  expiration  of  the  
have  not  signed  the  mortgage  contract  and  promissory  note,   period,  he  has  no  right  to  recover  any  damages.  
at  least,  the  one-­‐‑half  share  of  the  lot  belonging  now  to  the   e. Ponce  de  Leon  should  pay  for  damages  and  for  the  amounts  it  owes  
Soriano  sisters  and  brothers,  the  thirdparty  plaintiffs,  it  means   RFC.  
that  they  (the  Soriano  children)  have  not  been  legally   19. As  to  the  Sorianos,  the  CFI  ruled  that:  
included  in  the  mortgage  to  the  RFC.  So  RFC  had  not   a. (1)  CFI  overruled  their  claim  to  the  effect  that  Francisco  Soriano  had  
acquired  said  one-­‐‑half  share  in  the  sheriff'ʹs  sale.     signed  the  promissory  note  and  the  deed  of  mortgage  in  favor  of  the  
RFC  without  knowledge  of  the  contents  thereof  and  without  any  
consideration  therefor;  but    
 (2)  Held  that,  being  registered  in  the  name  of  "ʺFrancisco  Soriano,   Leon   also   claims   that   this   sum   of   P495,000   has   not   been   fully   released   by  
married  to  Tomasa  Rodriguez,"ʺ  the  property  covered  by  original   RFC  to  him  .    
certificate  of  title  No.  8094—  hereinafter  referred  to  as  the  Parañaque   o SC:  What  Ponce  de  Leon  is  saying  is  contrary  to  the  facts  of  record.    During  
property—is  presumed  to  belong  to  the  conjugal  partnership  of  said     the   trial,   Ponce   de   Leon'ʹs   counsel,   Atty.   Jose   Orozco,   made   the   following  
spouses,  and  that,  the  RFC  having  failed  to  offset  this  presumption,  the   admission:   "ʺOut   of   the   loan   of   P495,000.00,   the   following   were   paid   to   the  
mortgage  on  and  the  sale  of  the  property  by  the  sheriff  are  null  and  void   creditors   of   Jose   Ponce   de   Leon:   P100,000.00   to   the   PNB,   P30,000.00   to   Cu  
as  to  one-­‐‑half  (1/2)  thereof.     Unijeng   Bros.,   P5,000.00   to   Arturo   Colmenares,   P1,000.00   to   Lorenzo  
(3)  RFC  was  justified  in  rejecting  the  offer,  made  by  the  Sorianos,  to   Balagtas.   The   total   amount   paid   to   the   creditors   is   P136,000.00   which   were  
redeem  said  property  for,  pursuant  to  section  78  of  Republic  Act  No.   taken  out  of  the  proceeds  of  P495,000,00.  The  rest  were  all  paid  in  the  name  
337,  redemption  could  be  effected  "ʺonly  by  paying  the  amount  fixed  in   of  Jose  Ponce  de  Leon."ʺ    
the  order  of  execution"ʺ;     o In   short,   part   of   the   sum   of   P495,000   had   been   delivered   by   RFC   to   the  
(4)  Ponce  de  Leon'ʹs  counterclaim  against  the  Sorianos  is  barred  by  the   creditors  of  Ponce  de  Leon  and  Francisco  Soriano,  as  agreed  upon  by  them,  
statute  of  limitations;     in  payment  of  their  outstanding  obligations,  and  the  balance  of  said  sum  of  
(5)  Neither  Ponce  de  Leon  nor  RFC  may  recover  damages  from  the   P495,-­‐‑000   was   turned   over   to   the   plaintiff,   with   the   written   authorization  
Sorianos,  their  alleged  bad  faith  not  bound  to  pay  damages  to  the  RFC,   and  conformity  of  Francisco  Soriano.  This  is  borne  out  by  the  fact  that,  prior  
the  action  of  the  former  against  the  latter  not  being  altogether   to  the  institution  of  this  case,  Ponce  de  Leon  had  not  complained  of  failure  
unjustified.   of   the   RFC   to   fully   release   the   aforementioned   sum   of   P495,000.   Indeed,   in  
20. All  the  parties  appealed  from  the  decision.  Hence  this  case.     his  own  complaint  herein,  he  merely  alleged  a  "ʺdelay  in  the  release."ʺ  
  o At  any  rate,  the  mortgage  deed  and  promissory  note,  in  effect,  authorized    
ISSUES  and  RULING:     RFC   to   fix   the   date   of   maturity   of   the   installments   therein   stipulated,  
• [NEGO  ISSUE]  WON  Ponce  de  Leon'ʹs  promissory  note  in  favor  of  RFC  was   which   is   allowed   by   the   Negotiable   Instruments   Law   and   when   a  
overdue  when  the  mortgage  was  foreclosed,  because  the  installments  in  the   promissory   note   expresses   "ʺno   time   for   payment,"ʺ   it   is   deemed   "ʺpayable  
said  note  have  "ʺno  fixed  or  determined  dates  of  payment"ʺ,  thus  making  the   on   demand."ʺ   (See   Sections   13,   14,   and   7   of   the   NIL.)  
note  unenforceable?      
-­‐‑-­‐‑  NO,  the  note  was  ENFORCEABLE.  NO,  it  was  NOT  overdue.     DISPOSITIVE:   It   is   thus   clear   that   the   lower   court   erred   in   annulling   the   RFC  
o TERMS  OF  THE  MORTGAGE  DEED  AND  PROMISSORY  NOTE:     mortgage   on   the   Parañaque   property   and   its   sale   to   the   RFC   as   regards   one-­‐‑half   of  
(See  Fact  #6  for  context)     said  property,  and  that  the  decision  appealed  from  should,  accordingly,  be  modified,  
The  total  sum  of  P495,000  involved  therein  shall  be  satisfied  in  quarterly   by  eliminating  therefrom  the  second  paragraph  of  its  dispositive  part,  quoted  earlier  
installments  of  P28,831.64  each—  representing  interest  and  amortization— in   this   decision.   With   this   modification   and   that   of   other   pertinent   parts   of   the  
and  that,  although  the  date  of  maturity  of  the  first  installment  was  left  blank,   decision   appealed   from,   the   same   is   hereby   affirmed   in   all   other   respects,   with   the  
the  promissory  note  states  that  the  "ʺdate  of  maturity  (was)  to  be  fixed  as  of   costs  of  this  instance  against  plaintiff,  Jose  L.  Ponce  de  Leon  and  third-­‐‑party  plaintiffs,  
the  date  of  the  last  release,"ʺ  completing  the  delivery  to  the  plaintiff  of  the   Rosalina   Soriano,   Teofila   Soriano   del   Rosario   and   Father   Eugenio   Soriano.   It   is   so  
sum  of  P495,000  lent  to  him  by  the  RFC.     ordered.  
o [Ponce   de   Leon'ʹs   side]   The   Promissory   Note   in   favor   of   RFC   was   overdue    
when   the   mortgage   was   foreclosed.   So   since   the   installments   in   the  
PROVISIONS:  
promissory   note   had   "ʺno   fixed   or   determined   dates   of   payment"ʺ,   the   note  
was   unenforceable.   RFC   should'ʹve   first   asked   the   court   to   determine   the   • NIL,  Sec.  71.  Presentment,  where  instrument  is  not  payable  on  demand;  and  
terms,  conditions,  and  period  of  maturity  of  the  promissory  note.  Ponce  de   where  payable  on  demand.  –    
 Where  the  instrument  is  not  payable  on  demand,  presentment  must  be   Where  an  instrument  is  issued,  accepted,  or  indorsed  when  overdue,  it  is,  as  
made  on  the  day  it  falls  due.     regards  the  person  so  issuing,  accepting,  or  indorsing  it,  payable  on  demand.  
Where  it  is  payable  on  demand,  presentment  must  be  made  within  a   ____________________________________________________________________________  
reasonable  time  after  its  issue,     NOTES:    
But  in  the  case  of  a  bill  of  exchange,  presentment  for  payment  will  be   (I   added   the   2nd   issue   which   is   only   super   slightly   related   to   Nego.   This   is   NOT  
sufficient  if  made  within  a  reasonable  time  after  the  last  negotiation  thereof.   RELEVANT  to  our  topic  in  the  case,  but  just  in  case  Sir  asks,  I  included  it  na  rin  hehe.)  
 
• NIL,  Section  81.  When  delay  in  making  presentment  is  excused.  –  Delay  in  
ISSUE   #2:   WON   the   CFI   erred   in   ruling   that   the   promissory   note   and   deed   of  
making  presentment  for  payment  is  excused  when  the  delay  is  caused  by  
mortgage  executed  by  Francisco  Soriano  in  favor  of  RFC  is  valid  as  regards  1/2  of  
circumstances  beyond  the  control  of  the  holder,  and  not  imputable  to  his  
the  property?  -­‐‑-­‐‑   NO.  The  promissory  note  and  mortgage  deed  executed  by  Soriano  
default,  misconduct,  or  negligence.  When  the  cause  of  delay  ceases  to  
is  VALID.    
operate,  presentment  must  be  made  with  reasonable  diligence.  
o [The  Sorianos'ʹ  arguments]  One  of  the  theories  that  the  Sorianos  raised  was  
• NIL,  Section  13.  When  date  may  be  inserted.  –  Where  an  instrument   that  when  the  promissory  note  and  mortgage  deed  (See  Fact  #6)  was  that  
expressed  to  be  payable  at  a  fixed  period  after  date  is  issued  undated,  or   when  they  were  executed  by  Francisco  Soriano,  he  was:    
where  the  acceptance  of  an  instrument  payable  at  a  fixed  period  after  sight  is   -­‐‑Somewhat  absent-­‐‑minded,  owing  to  senility  and  being  a  septuagenarian,    
undated,  any  holder  may  insert  therein  the  true  date  of  issue  or  acceptance,   -­‐‑Illiterate  and  could  only  write  his  name  
and  the  instrument  shall  be  payable  accordingly.  The  insertion  of  a  wrong   -­‐‑Persuaded  to  sign  the  promissory  note  and  mortgage  deed  through  fraud,  
date  does  not  avoid  the  instrument  in  the  hands  of  a  subsequent  holder  in   deceit,  and  undue  influence  
due  course;  but  as  to  him,  the  date  so  inserted  is  to  be  regarded  as  the  true   -­‐‑Did  not  know  the  true  nature  of  the  instruments  when  he  affixed  the  
date.  
signatures  
• NIL,  Section  14.  Blanks;  when  may  be  filled.  –  Where  the  instrument  is   -­‐‑-­‐‑>  Background  story:  Rosalina  Soriano,  Francisco'ʹs  daughter,  said  that  her  
wanting  in  any  material  particular,  the  person  in  possession  thereof  has  a   father  was  an  absent-­‐‑minded  old  man.  Ponce  de  Leon  borrowed  her  father'ʹs  
prima  facie  authority  to  complete  it  by  filling  up  the  blanks  therein.  And  a   certificate  of  title  saying  that  he  wanted  to  see  if  it  was  valid.  Rosalina  gave  
signature  on  a  blank  paper  delivered  by  the  person  making  the  signature  in   the  certificate  to  Ponce  de  Leon,  then  it  was  never  returned  to  her.  It  turns  
order  that  the  paper  may  be  converted  into  a  negotiable  instrument  operates   out  that  Pocne  de  Leon  mortgaged  it  to  PNB,  deceiving  Francisco  int  
as  a  prima  facie  authority  to  fill  it  up  as  such  for  any  amount.  In  order,   osigning  the  mortgage  contract.  In  1951,  Francisco  received  a  sheriff'ʹs  notice  
however,  that  any  such  instrument  when  completed  may  be  enforced   of  foreclosure  on  his  land.  Francisco  went  to  Ponce  de  Leon  and  got  angry  at  
against  any  person  who  became  a  party  thereto  prior  to  its  completion,  it   him.  Ponce  de  Leon  assured  Francisco  that  he  would  redeem  the  land,  but  he  
must  be  filled  up  strictly  in  accordance  with  the  authority  given  and  within  a   never  did.    
reasonable  time.  But  if  any  such  instrument,  after  completion,  is  negotiated   o Thus,  the  instruments  are  null  and  void  because  they  lack  cause  and  
to  a  holder  in  due  course,  it  is  valid  and  effectual  for  all  purposes  in  his   consideration.  
hands,  and  he  may  enforce  it  as  if  it  had  been  filled  up  strictly  in  accordance   o [CFI'ʹs  decision]  The  fact  that  Francisco  Soriano  may  have  been  
with  the  authority  given  and  within  a  reasonable  time.   absentminded  could  not  be  said  to  have  the  effect  of  vitiating  his  consent  
• NIL,  Section  7.  When  payable  on  demand.  –  An  instrument  is  payable  on   to  the  mortgage  deed  because  the  execution  and  signing  of  a  contract  is  not  
demand  –   a  matter  that  concerns  past  events  in  which  absent-­‐‑  mindedness  may  be  
(a)  When  it  is  expressed  to  be  so  payable  on  demand,  or  at  sight,  or  on   taken  into  account.  Besides,  the  testimony  of  Rosalina  Soriano  to  the  effect  
presentation;  or   that  her  father  told  Ponce  de  Leon  that  the  latter  fooled  him  shows  that  the  
(b)  In  which  no  time  for  payment  is  expressed.   old  man  Soriano  could  remember  past  events,  for  if  truly  absentminded,  
 Francisco  would  not  recollect  what  he  claims  to  be  what  really  took  place  at   Soriano  is  not  that  clear,  strong  and  convincing  evidence  beyond  mere  
the  RFC  office  as  testified  to  by  Rosalina.     preponderance  of  evidence,  required  to  show  the  falsity  or  nullity  of  a  
o Neither  could  Francisco  Soriano  be  considered  feebleminded  if  we  believe   notarial  document.  
the  testimony  of  Rosalina  which  shows  Soriano'ʹs  determination  to  see  to  it   o With  reference  to  the  contention  that  there  was  no  consideration  received  by  
that  the  wrong  done  him  was  righted  and  that  his  property  may  not  be  taken   Francisco  Soriano  out  of  the  mortgage  contract  and  the  promissory  note  
away  from  him,  for  according  to  Rosalina,  he  even  went  to  Negros  alone  to   executed  in  connection  therewith,  this  is  a  matter  which  concerned  merely  
see  Ponce  de  Leon  he  received  the  Sheriff'ʹs  notice  of  foreclosure  and  as   Francisco  Soriano  and  Jose  L.  Ponce  de  Leon  for  Francisco  Soriano  had  
shown  by  his  alleged  going  to  see  Ponce  de  Leon  a  number  of  times  about   expressly  in  writing  authorized  Jose  L.  Ponce  de  Leon  to  have  the  check  or  
his  land  and  of  his  enlisting  the  aid  of  Ramon  Lacson     checks  covering  the  amount  of  the  mortgage  issued  in  the  name  of  said  Jose  
o The  Sorianos  stress  that,  according  to  Felipe  Cuaderno,  Jr.,  the  Notary   L.  Ponce  de  Leon.    
Public,  when  the  latter  asked  Francisco  Soriano,  after  he  had  translated  the   o Whatever  arrangements  the  latter  and  Francisco  Soriano  may  have  had  with  
mortgage  deed  into  Tagalog  if  he  (Francisco)  understood  it,  it  was  Ponce  de   respect  to  the  amounts  thus  given  by  the  RFC  on  account  of  the  mortgage  is  
Leon  who  said  that  the  old  man  already  knew  it.     not  the  concern  of  the  RFC  if  Ponce  de  Leon  did  not  in  fact  give  any  portion  
o But,  granting  that  this  was  what  happened,  yet,  Francisco  Soriano  would   of  the  amount  to  Francisco  Soriano.    
certainly  have  protested  against  the  statement  of  Ponce  de  Leon  if  Francisco   o At  any  rate,  there  is  ample  evidence  to  show  that  Francisco  Soriano  received  
did  not  really  know  what  the  transaction  was  about  or  he  would  have  told   part  of  the  consideration  of  the  loan  from  the  RFC.  It  will  be  recalled  that  
Cuaderno  that  the  document  was  not  in  accordance  with  the  agreement   part  of  this  loan  was  paid  for  the  obligation  of  Francisco  Soriano  and  Ponce  
between  him  and  Ponce  de  Leon  considering  that  the  document  was  already   de  Leon  to  the  Philippine  National  Bank  secured  by  a  mortgage  of  the  lot  in  
translated  to  the  old  man  by  Cuaderno  in  the  Tagalog  language  which   the  name  of  Francisco  Soriano.  
Soriano  understood.     o There  is  therefore  no  ground  for  declaring  the  mortgage  contract  and  
o Besides,  if  Ponce  de  Leon  really  deceived  Francisco  Soriano  into  signing  the   promissory  note  invalid  for  lack  of  consideration  insofar  as  Francisco  
mortgage  deed  and  promissory  note  so  much  so  that  in  October,  1951,  the   Soriano  and  his  children  are  concerned."ʺ4  The  facts  thus  relied  upon  by  His  
old  man  Soriano  was  so  angry  at  Ponce  de  Leon  that  he  told  the  latter  that  he   Honor,  the  Trial  Judge,  are  borne  out  by  the  record,  and  We  are  fully  in  
fooled  him  as  testified  to  by  Rosalina  Soriano,  then  why  was  it  that  Ponce  de   accord  with  the  conclusions  drawn  therefrom.  
Leon  was  wade  one  of  the  sponsors  of  the  thanksgiving  mass  of  the  Neo-­‐‑
 
Prysbeter  Rev.  Fr.  Eugenio  Soriano,  the  old  man'ʹs  son  and  one  of  the  present  
third-­‐‑party  plaintiffs?    
o The  conduct  of  the  Sorianos  in  making  Ponce  de  Leon  one  of  the  sponsors  in  
the  thanksgiving  mass  of  Rev.  Fr.  Eugenio  Soriano  in  which  Ponce  de  Leon  
spent  a  considerable  amount  for  the  big  feast  that  followed  the  mass  is  
inconsistent  with  the  Sorianos'ʹ  claim  that  Ponce  de  Leon  had  hoodwinked  
Francisco  Soriano  into  signing  the  mortgage  instrument  and  the  promissory  
note.    
o Moreover,  the  mere  oral  unsupported  testimony  of  Rosalina  Soriano,  an  
interested  party  and  one  of  the  plaintiffs  herein,  is  not  sufficient  to  overcome  
the  legal  presumption  of  the  regularity  of  the  mortgage  deed,  a  contract  
celebrated  with  all  the  legal  requisites  under  the  safeguard  of  a  notarial  
certificate.  Such  unsupported  testimony  of  the  interested  party  Rosalina