G.R. No. 208892 - SPOUSES ANTHONY ROGELIO BERNARDO AND MA. MARTHA BERNARDO, VS. UNION BANK OF THE PHILIPPINES AND THE HON. COURT OF APPEALS.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, the RTC ruled as follows: WHEREFORE, in view of the foregoing, the Order dated March 31, 2009 is hereby reconsidered and set aside. On the other hand, the Motion for Judicial Consignation is hereby granted. Accordingly, [petitioners are] hereby ordered to consign and deposit with the Office of the Clerk of Court, Muntinlupa City[,] within ten days from receipt hereof[,] the remaining balance of the total purchase price of the subject property[,] with interest thereon at the rate of 16% per annum up to May 15, 2007. Further, upon full payment by [petitioners] of the agreed purchase price of the subject property, [Union Bank] is hereby ordered to execute a deed of sale in favor of [petitioners]. [22] Union Bank filed a Motion for Reconsideration but the RTC denied the motion in its Order dated September 30, 2009. [23] Aggrieved, Union Bank filed a Petition for Certiorari before the CA assailing the RTC Orders. Ruling of the CA In its Decision dated February 21, 2013, the CA granted the Petition for Certiorari, and reversed and set aside the Order of the RTC. [24] It upheld the validity of the Compromise Agreement entered into by the parties. [25] The CA found that the RTC had gravely abused its discretion "when it interpreted the Compromise Agreement in such a way as to digress from the clear wordings thereof," [26] viz.: To the mind of this Court, the RTC went beyond the clear wordings of the Compromise Agreement, particularly the remedies available to [Union Bank] in case [petitioners fail] to comply with the terms and conditions of the [agreement]. Instead of applying the parties' intention, the RTC interpreted the contract for them. This is not in harmony with the "plain meaning rule" under statutory construction. x x x x Evidently, one of the remedies available to [Union Bank was] to resort to its rights mentioned under the [real estate mortgage] contract, which necessarily include[d] the power and authority "to take actual possession and control" of the mortgaged property in the event of [petitioners'] non-compliance with the terms of the Compromise Agreement. [27] (Emphasis supplied.) Moreover, the CA ruled that the Compromise Agreement did not have the effect of extinguishing petitioners' loan obligation to Union Bank. [28] It pointed out that the Compromise Agreement simply granted a new payment scheme and interest rate to petitioners without any alteration as regards their original loan obligation to the bank. [29] Petitioners moved for reconsideration but the CA denied the motion in its Resolution dated July 18, 2013. As a result, petitioners filed the present Petition for Certiorari assailing the CA Decision and Resolution. Issues The issues for the Court's resolution are: first, whether petitioners' original loan obligation to Union Bank was novated by the Compromise Agreement; [30] and second, whether Union Bank can resort to the exercise of its rights and remedies under the real estate mortgage contract in case of petiti