Peoples Bank & Trust Co. v. Manuel Olondriz

Summary

This case involved a mortgage foreclosure dispute where Carlos M. Olondriz mortgaged conjugal property to secure a P14,000 debt, but the property was later titled half to him and half to his children. After Carlos died owing P15,400, Peoples Bank & Trust Co. (assignee of the original creditor) sought to foreclose the entire property against the heirs. The Supreme Court En Banc affirmed that the entire property could be foreclosed because the husband's mortgage of conjugal property under Civil Code articles 1412-1413 created a lien on the whole property, regardless of subsequent title division. However, the Court modified the judgment to reflect the original mortgage amount of P14,000 rather than the inflated P15,400 claimed. The decision established that only the original mortgagor needed notification of assignment, and that conjugal property mortgages bind the entire property even after partial retitling to heirs.