BPI FAMILY SAVINGS BANK v. VDA.

DE COSCOLLUELA
G.R. No. 167724 / June 27, 2006 / Callejo, Sr., J. / Splitting / KJMSTA.ANA
NATURE Petition for Review under Rule 45
PETITIONERS BPI Family Savings Bank
RESPONDENTS Margarita Vda. De Cosculluela

FACTS.
Respondent and her late husband Oscar obtained an agricultural sugar crop loan from Far East
Bank & Trust Co. (later merged with BPI) for crop years 1997 and 1998. In the book of Far East,
the loan account was treated as a single account, and evidenced by 67 promissory notes.
Sps. Coscolluela executed a real estate mortgage in favor of FEBTC over their parcel of land as
security of loans on credit accommodation obtained and those that may be obtained.
Under the terms and conditions of the real estate mortgage, in the event of failure to pay the
mortgage obligation or any portion thereof, the entire principal, interest, penalties, and other
charges shall be immediately due; and Far East mat foreclose the same extra judicially.
For failure to settle outstanding obligation on the maturity dates, Far East sent a final demand
letter to respondent demanding payment.
Since respondent failed to settle her obligation, Far East filed a petition for the extrajudicial
foreclosure of the mortgaged property, but only only for 31 of the promissory notes.
During pendency of said case, Far East filed a complaint for collection of money representing the
amounts for the 36 other promissory notes.
In respondents answer, she alleged that the complaint was barred by litis pendentia for the
pending petition for the extrajudicial foreclosure of the REM.
Petitioner presented a loan officer as sole witness, who testified that respondent were granted a
loan, which was a single loan account.
Respondent filed a Demurrer to Evidence contending that the loan officers admission, that there
is only one loan account secured by the REM thus barred the personal action for collection. She
insisted that the filing of said complaint should be dismissed.
Petitioner opposed the demurrer, stating that each promissory note constituted a separate
contract.
The trial court denied the demurrer on the ground that each note covered a loan distinct from
the others.
Respondent filed MR but denied, prompting her to file a certiorari petition under Rule 65 with CA.
CA granted the petitioner, stating that the remedies sought are alternative and not cumulative.
Thus, in denying the demurrer, RTC committed grave abuse of discretion.
Petitioner filed MR but it was denied. Hence, this petition.

ISSUES & RATIO.

1 WON collection suit should be dismissed YES

Section 3, Rule 2 of the 1997 Rules of Civil Procedure provides that a party may not institute one suit
for a single cause of action, and, if two or more suits are instituted on the basis of the same cause of
action, the filing of one on a judgment upon the merits in any one is available as a ground for the
dismissal of others. The law does not permit the owner of a single of entire cause of action or an entire
or indivisible demand to divide and split the cause to make it the subject of several actions.

The true rule which determined whether a party has only a single and entire cause of action is whether
the entire amount arises from one and the same act or contract or the several parts arise from distinct
and different acts. As gleaned from the plain terms of the REM, the real estate of respondent served as
a continuing security liable for obligations already obtainer and obligations obtained thereafter. In this
case, the action of petitioner is anchored on one and the same cause: the nonpayment of respondent.
Though the debt may be covered by several promissory notes and is covered by a real estate
mortgage, the latter is subsidiary to the former and both refer to one and the same obligation. A
mortgage creditor may institute two alternative remedies against the debtor, either to collect debt or
to foreclose mortgage, but not both.

DECISION.
WHEREFORE instant petition is dismissed for lack of merit.