FORTUNE HOMES, INC., PETITIONER, VS. COURT OF APPEALS, NATIONAL INVESTMENT AND DEVELOPMENT CORPORATION, SHERIFF OF BACOLOD CITY AND REGISTER OF DEEDS OF BACOLOD CITY, RESPONDENTS.

This case is about the validity of an extrajudicial foreclosure on April
13, 1968 of a 1965 mortgage on a 53-hectare lot located in Bacolod
City, which was given as security for a loan of one million dollars, and
the mortgagor’s liability to pay National Investment and Development
Corporation a deficiency of P9,850,915.75 with 6% interest per annum from June 30, 1973 until the amount is paid.

Fortune Homes, Inc., the operator of the Fortune Town Subdivision in
Bacolod City, mortgaged to National Investment and Development
Corporation (a subsidiary of the Philippine National Bank) the said lot
in con­sideration of NIDC’s acting as the primary obligor in the loan of
$1,000,000 extended to Fortune Homes by the Continental Illinois
National Bank and Trust Company of Chicago (Exh. B).

Fortune Homes failed to pay three amortizations on the loan. NIDC was
constrained to pay the sum. NIDC asked the sheriff to foreclose the
mortgage. On April 29, 1968, he sold the mortgaged property at public
auction. NIDC offered the highest bid of P1,446,343.65. The sheriff
issued to it a certi­ficate which was annotated TCT-No. T-15305, the
title covering the lot.

Two days before the expiration of the one-year period of redemption, or
on July 30, 1969, Fortune Homes filed an injunction suit in the Court of
First Instance to prevent NIDC from consolidating its title over the
mortgaged lot. The petition was amended to annul the foreclosure sale.
Actually, NIDC consolidated its title on April 19, 1974 during the
pendency of the case. It was issued a new title (270, Record on Appeal).

The trial court in its 1976 judgment found that the mortgage was validly
foreclosed. On NIDC’s counter­claim, it ordered Fortune Homes to pay
the deficiency already mentioned. The judgment was affirmed by the Court
of Appeals which clarified that the interest on the deficiency was six
percent per annum.

Fortune Homes has not raised any important legal issue. Its brief has no assignment of errors and no definite prayer.

It argues that the foreclosure sale was void because (1) it did not
receive the full amount of the loan, (2) the balance of $200,000 was
withheld by the PNB, (3) the NIDC prevented fulfillment of the
obligation, (4) it was not in default and (5) the fore­closure was
premature.

All these contentions, which involve factual issues, were thoroughly and
exhaustively resolved by the trial court and the Appellate Court.

For example, its contention that it actually received only $800,000 of
the loan is belied by the admission of Eriberto Roxas, its board
chairman, and Luis L. Gonzaga, a director, that a portion of the
“compensating balance” of $200,000 was credited to Fortune Homes account
(32-33 tsn August 10, 1977; 42-43 tsn February 21, 1972).

On the question of its default, there is no doubt that Fortune Homes
failed to pay three amortizations which NIDC had to pay (Exh. I-7 to
I-9). Under the acceleration clause of the mortgage (Exh. D, par. [c]),
NIDC had the right to treat all the amortizations due and demandable,
and, as stipulated, to resort to extra­judicial foreclosure.

Fortune Homes’ other argument that NIDC failed to live up to its purpose
is not an issue that can be properly ventilated in this appeal.

NIDC in its brief observes that Fortune Homes diverted the proceeds of
the loan for other purposes. It was able to develop only twenty percent
of the project (pp. 29-30).

WHEREFORE, the judgment of the Court of Appeals is affirmed. Costs against the petitioner.
SO ORDERED.

Makasiar, (Chairman), Guerrero, Escolin, and Gutierrez, Jr., JJ., concur.

Concepcion, Jr., and Abad Santos, JJ., no part.