Forged Mortgage Agreement and Statute of Limitations Liability
The agreement stipulated the repayment of principal and interest in installments of 303,000 baht per month for twelve months, commencing with the first payment on 2538. The loan secured by the borrower’s land registration, with a value of 2,000 baht, was registered. The foreclosure sale yielded insufficient funds to cover the debt, and the borrower, Mr. Ek, passed away, and Mr. Toe failed to repay the debt. Mr. Ek, as the executor of his father’s estate, discovered the contract towards the end of 2047. The loan and mortgage documents held by the father had not been signed by the borrower. Mr. Ek then forged Mr. Toe’s signature on the loan agreement and sent letters demanding payment and urging Mr. Toe and Mr. Tree to redeem the mortgage on January 1st. They requested payment on January 1st, but by the due date, only Mr. Tree had provided 1,000,000 baht. Mr. Ek refused to accept payment, claiming that the debt was not fully repaid as per the agreement, and he filed a lawsuit against Mr. Toe and Mr. Tree to jointly pay the debt and enforce the mortgage on June 2548. It was requested that the court determine whether Mr. Toe and Mr. Tree were liable under the mortgage agreement, and if the foreclosure sale yielded insufficient funds to cover the debt, whether Mr. Ek could seize other assets of Mr. Tree.
Mr. Ek has the right to sue Mr. Toe for repayment of the loan according to Section 653 of the Civil and Commercial Code. While there is a forged signature on the loan agreement, Mr. Toe’s genuine signature as the borrower is present. This loan agreement serves as evidence of the loan, but Mr. Toe has the right to refuse payment due to the statute of limitations. The debt is time-barred because the loan agreement stipulates that the father must repay the principal and interest in installments, constituting a periodic payment, which is subject to a five-year statute of limitations, commencing from the date each installment was due. According to Section 653 of the Civil and Commercial Code, the fact that Mr. Ek filed the lawsuit on June 1st, 2548, renders the debt time-barred. He has no right to demand payment from Mr. Toe according to the loan agreement.
Regarding Mr. Tree, the mortgagor, even though the loan debt is time-barred, it does not extinguish the mortgage rights. Mr. Ek, the mortgagee, still has the right to enforce the mortgage, but he cannot charge interest exceeding five years on the outstanding mortgage balance as stipulated in the Civil and Commercial Code. As the executor of his father’s estate, Mr. Ek has the right to file a lawsuit to enforce the mortgage (Sections 744 and 745) but Mr. Tree has provided 1,000,000 baht to pay off the debt, and Mr. Ek refuses to accept it, claiming it is only partial payment. The Civil and Commercial Code stipulates that the mortgagor must pay off the mortgage debt in installments, therefore, Section 713 of the Civil and Commercial Code and Section 320, which is a general provision, cannot be applied.
Mr. Ek, the defaulting debtor, failed to pay 1,000,000 baht. Even though he initiated a foreclosure sale to fully repay the debt, he is entitled to charge interest on the principal amount of 1,000,000 baht only from January 1st, 2548. Mr. Tree must therefore pay 2,000,000 baht, calculated from January 1st, 2548, from the principal of 1,000,000 baht. According to Section 744 (1) and Section 745 of the Civil and Commercial Code, Mr. Ek can file a lawsuit to enforce the mortgage. However, Mr. Tree provided 1,000,000 baht to pay off the debt, and Mr. Ek refuses to accept it, claiming it is only partial payment, therefore, Mr. Ek cannot invoke Section 713 of the Civil and Commercial Code and Section 320.
Mr. Ek, the creditor in default, failed to pay 1,000,000 baht. Therefore, even though he initiated a foreclosure sale to fully repay the debt, he has the right to charge interest on the principal amount of 1,000,000 baht only from January 2nd, 2548. Mr. Tree must therefore pay 2,000,000 baht, calculated from January 2nd, 2548, from the principal of 1,000,000 baht. The agreement to waive the terms according to Section 744 of the Civil and Commercial Code, allowing the mortgagee to seize other assets of the mortgagor if the foreclosure sale yields insufficient funds to cover the debt, is permissible but does not constitute a beneficial interest, but rather a general civil interest. Therefore, the claim to pursue such a general interest is still subject to the statute of limitations, unlike the right to enforce a beneficial interest, which can be pursued even if the debt is time-barred, as stipulated in Section 745 and Section 193/2527 of the Civil and Commercial Code. Since the loan debt is time-barred, Mr. Ek cannot seize other assets even if he initiates a foreclosure sale yielding insufficient funds.