Maybank Philippines v. Spouses Oscar

Summary

This case involves a dispute over prescription of foreclosure rights between Maybank and Spouses Tarrosa. The spouses obtained secured loans in 1980 and 1983, with the second loan maturing in 1984 but remaining unpaid. When Maybank foreclosed in 1998 after sending a demand letter, the spouses challenged the foreclosure as time-barred by prescription. Both the RTC and CA ruled in favor of the spouses, finding that Maybank's right to foreclose had prescribed from the 1984 loan maturity date. However, the Supreme Court reversed, holding that the prescription period should be reckoned from the 1998 demand letter, not the loan maturity date, since the mortgage provision did not expressly dispense with the Civil Code requirement of prior demand for default. The Court emphasized that demand remains necessary unless expressly waived, and since the foreclosure was initiated within the prescriptive period from the demand, it was valid.