Mambulao Lumber v.

PNB,
G.R. No. L-22973, January 30, 1968
Angeles, J.
FACTS:

On May 5, 1956, the plaintiff requested a P155,000 industrial loan from PNB's Naga Branch,
offering real estate, machinery, and equipment as collateral. However, PNB approved only
P100,000. To secure the loan, the plaintiff mortgaged a land parcel, buildings, and equipment.
PNB released P27,500 on August 2, 1956, and P15,500 on October 19, 1956, under promissory
notes for repayment.

The plaintiff failed to make payments and stopped operations around late 1957 or early 1958.
PNB requested the Provincial Sheriff to take possession of the mortgaged property and chattels,
planning to sell them at public auction. Foreclosure notices were sent, and despite protests from
the plaintiff, the foreclosure process began.

Despite the plaintiff's claims of full payment, PNB demanded the remaining balance. The
foreclosure sale occurred on November 21, 1961, for both the real estate and chattels. After the
sale, Mariano Bundok purchased the properties from PNB.

The plaintiff's attempts to stop the sales and their claims of full payment were disregarded, and
the properties were eventually sold to Mariano Bundok.

ISSUE:

Whether or not. (AFFIRMATIVE)

RULING: