The creditor forecloses on mortgaged property in order to obtain payment for a loan which the debtor is unable or unjustifiably refuses to pay. This is the same reason when the creditor chooses to file a case against the debtor for collection of debt.
However, the creditor must choose either of the two remedies. If he opts to sue for collection of a loan, he waives his right to foreclose on the mortgage securing the loan. "Nemo debet bis vexare pro una et eadem causa." No man shall be twice vexed for one and the same cause.
Likewise, based on Circular 57-97 and Section 1(b), Rule 111 of the Rules of Court, a creditor who chooses to sue the debtor for violation of Batas Pambansa (BP) Blg. 22 is barred from foreclosing on the mortgaged property. While BP 22 is a criminal remedy and foreclosure of mortgage is a civil remedy, the creditor's principal purpose in suing the debtor for BP 22 is to be able to collect his debt. This is the same purpose in trying to foreclose on the mortgaged property.
Thus, we repeat: "If the debtor fails or unjustly refuses to pay his debt when it falls due and the debt is secured by a mortgage and by a check, the creditor has three options against the debtor and the exercise of one will bar the exercise of the others. He may pursue either of the three but not all or a combination of them."
The three options are: (1) The creditor files a collection suit against the debtor, in which case all the properties of the debtor may be subject to attachment and execution including the the mortgaged property itself; (2) The creditor forecloses on the mortgaged property, in which case if the debt is not fully satisfied he may sue the debtor for the deficiency which will open up all the other properties of the debtor in order to pay for the deficiency; or (3) The creditor files a case against the debtor for violation of BP 22 if the checks securing the obligation bounce.
Circular 57-97 and Section 1(b), Rule 111 of the Rules of Court both provide that the criminal action for violation of BP 22 shall be deemed to necessarily include the corresponding civil action. No reservation to file such civil action separately will be allowed or recognized.
Reference: Sps. Simon Yap vs. First e-Bank Corporation [G.R. No. 169889, September 29, 2009]
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