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SAMUEL ANG v. CRISTETA ABALDONADO

FACTS:

Respondent Cristeta Abaldonado borrowed a loan of P700,000 from petitioner Samuel Ang, which was subject to a compounded interest rate of four percent per month and a penalty interest of four percent compounded in case of delay in payment. Abaldonado failed to pay several installments and received a Demand Letter from Ang. When she did not settle her debt, Ang filed a Petition for Extrajudicial Foreclosure of the Real Estate Mortgage (REM) securing the loan. However, the foreclosure proceedings did not proceed due to a case filed by Abaldonado's children and a waiver executed by Abaldonado. The case was eventually dismissed. Ang assigned his mortgage rights to petitioner Fontaine Bleau Finance and Realty Corporation, which also initiated foreclosure proceedings as the assignee and acquired the property through public bidding. Abaldonado filed a Complaint seeking to nullify the foreclosure proceedings, annul the interest rate, and claim damages, arguing that the interest rate was unconscionable. The RTC dismissed the complaint, but Abaldonado appealed to the CA. The CA reversed the RTC's decision, declaring the foreclosure proceedings null and void due to the usurious interest and penalty. Fontaine Bleau filed a motion for reconsideration, which was denied by the CA. They then filed a petition before the Supreme Court.

ISSUES:

  1. Whether Abaldonado foreclosed her right to redeem the mortgaged property.

  2. Whether the Court of Appeals erred in imposing an interest rate of six percent.

  3. Whether or not laches applies to the case.

  4. Whether or not Abaldonado's inaction constitutes a lack of diligence.

  5. Whether Abaldonado is barred by laches from questioning the validity of the mortgage contract and subsequent foreclosure proceedings.

RULING:

  1. Yes, Abaldonado foreclosed her right to redeem the mortgaged property due to her failure to tender the redemption price or file a corresponding legal action to fix the redemption price.

  2. No, the Court of Appeals did not err in imposing an interest rate of six percent per annum, as it correctly reduced the usurious interest in accordance with the prevailing legal interest rate.

  3. Yes, laches applies to the case. The evidence on record supports the finding of laches.

  4. Yes, Abaldonado's inaction constitutes a lack of diligence. She was never present in the negotiations with the petitioners in trying to reach an amicable settlement for her loan obligation. She admits her passivity in the efforts to satisfy her debt.

  5. Yes, Abaldonado is barred by laches from questioning the validity of the mortgage contract and subsequent foreclosure proceedings. Abaldonado's inaction and delay in questioning the mortgage contract and interest rates imposed amounted to laches, precluding her from seeking relief from the courts. The court also considered her silence during the foreclosure proceedings and her failure to challenge the mortgage contract before the issuance of the Final Deed of Sale. Additionally, the negotiations for an amicable settlement with Abaldonado's children did not detract from her failure to assert her rights in a timely manner.

PRINCIPLES:

  • Laches is the failure or neglect to do that which could or should have been done earlier, giving rise to the presumption that the party entitled to assert a right has abandoned or declined to assert it.

  • Unreasonable delay in asserting one's rights amounts to laches.

  • The elements of laches are conduct on the part of the defendant that gives rise to the situation complained of and a delay in asserting the complainant's rights.

  • Laches is a doctrine that bars a complainant's right to seek relief due to the unreasonable delay and negligence in asserting their rights, and the prejudice that would be caused to the defendant if relief is granted.

  • In order for laches to apply, there must be (1) a delay in asserting the complainant's rights, (2) the complainant having knowledge or notice of the defendant's conduct, (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right, and (4) injury or prejudice to the defendant in the event relief is accorded to the complainant or the suit is not held to be barred.

  • Laches refers to the failure or neglect, for an unreasonable and unexplained length of time, to do that which, through due diligence, could or should have been done to avoid injury.

  • The law protects those who are vigilant in asserting their rights and not those who sleep on their rights.

  • A party who belatedly questions the validity of a mortgage contract or foreclosure proceedings, especially after the transfer of title to the winning bidder, may be barred by laches.