G.R. No. 171206 -

Ruling

Accordingly, as one of the creditors of Flaviano, respondent notified [17] the probate court of its claim in the amount of P382,753.19 as of October 11, 1978, exclusive of interests and charges. During the pendency of the intestate proceedings, Edgar and Oscar were able to obtain several loans from respondent, secured by promissory notes [18] which they signed. In an Order [19] dated December 14, 1978 (December 14, 1978 Order), the probate court terminated the proceedings with the surviving heirs executing an extra-judicial partition of the properties of Flavianos estate. The loan obligations owed by the estate to respondent, however, remained unsatisfied due to respondents certification that Flavianos account was undergoing a restructuring. Nonetheless, the probate court expressly recognized the rights of respondent under the mortgage and promissory notes executed by the Sps. Maglasang, specifically, its right to foreclose the same within the statutory period. [20] In this light, respondent proceeded to extra-judicially foreclose the mortgage covering the Sps. Maglasangs properties and emerged as the highest bidder at the public auction for the amount of P350,000.00. [21] There, however, remained a deficiency on Sps. Maglasangs obligation to respondent. Thus, on June 24, 1981, respondent filed a suit to recover the deficiency amount of P250,601.05 as of May 31, 1981 against the estate of Flaviano, his widow Salud and petitioners, docketed as Civil Case No. 1998-0. [22] The RTC Ruling and Subsequent Proceedings After trial on the merits, the RTC (formerly, the probate court) [23] rendered a Decision [24] on April 6, 1987 directing the petitioners to pay respondent, jointly and severally, the amount of P434,742.36 with interest at the rate of 12% p.a., plus a 4% penalty charge, reckoned from September 5, 1984 until fully paid. [25] The RTC found that it was shown, by a preponderance of evidence, that petitioners, after the extra-judicial foreclosure of all the properties mortgaged, still have an outstanding obligation in the amount and as of the date as above-stated. The RTC also found in order the payment of interests and penalty charges as above-mentioned as well as attorneys fees equivalent to 10% of the outstanding obligation. [26] Dissatisfied, petitioners elevated the case to the CA on appeal, contending, [27] inter alia , that the remedies available to respondent under Section 7, Rule 86 of the Rules of Court (Rules) are alternative and exclusive, such that the election of one operates as a waiver or abandonment of the others. Thus, when respondent filed its claim against the estate of Flaviano in the proceedings before the probate court, it effectively abandoned its right to foreclose on the mortgage. Moreover, even on the assumption that it has not so waived its right to foreclose, it is nonetheless barred from filing any claim for any deficiency amount. During the pendency of the appeal, Flavianos widow, Salud, passed away on Ju