SOUTHERN MOTORS VS ELISEO BARBOSA, GR # L-9306

FACTS:
Plaintiff Southern Motors brought an action against defendant Barbosa
to foreclose a real estate mortgage constituted by the latter in favor of the former,
as security for the payment of a sum extended by plaintiff to one Alfredo Brillantes,
because the latter failed to settle his obligation in accordance with the terms and
conditions corresponding with the deed of mortgage.
Defendant filed an answer admitting the allegations of the complaint and
alleging by way of special and affirmative defense that he executed the deed of
mortgage for the sole purpose of guaranteeing the above mentioned debt of
Brillantes and that therefore plaintiff cannot foreclose the mortgage property
without a prior exhaustion of the principals properties.
After the case transferred from one judge to another, the trial court rendered
judgment on the pleadings in favor of plaintiff that prompted respondent to appeal
before the CA who certified the case to the SC in view of the fact that the appeal
raises purely questions of law.
ISSUE:
WON plaintiff is required to exhaust debtor-principals property before
he can proceed to foreclose the mortgage.
HELD:
No. Defendants invocation of article 2058 of the Civil Code is
misplaced because the right of the guarantors to demand exhaustion of the
property of the principal debtor under said provision exists only when a pledge or
mortgage has not been given as special security for the payment of the principal
obligation.
Under the given facts of the case, a mortgage was executed as security for
brillantes debt, hence, defendants reliance upon the aforementioned provision
cannot be sustained, for what governs in this case are the provisions under title XVI
of the Civil Code concerning pledge and mortgages.