2017 (Remedial Law) Bar Exam Questions: Question 7

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Elise obtained a loan of P3 Million from Merchant Bank. Aside from executing a promissory note in favor of Merchant Bank, she executed a deed of real estate mortgage over her house and lot as security for her obligation. The loan fell due but remained unpaid; hence, Merchant Bank filed an action against Elise to foreclose the real estate mortgage. A month after, and while the foreclosure suit was pending, Merchant Bank also filed an action to recover the principal sum of P3 Million against Elise based on the same promissory note previously executed by the latter.

In opposing the motion of Elise to dismiss the second action on the ground of splitting of a single cause of action, Merchant Bank argued that the ground relied upon by Elise was devoid of any legal basis considering that the two actions were based on separate contracts, namely, the contract of loan evidenced by the promissory note, and the deed of real estate mortgage.

Is there a splitting of a single cause of action? Explain your answer. (4%)

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