Case Digest (G.R. No. 118408)
Facts:
The case involves The Abaca Corporation of the Philippines (ABACORP) as the petitioner and Martin O.A. Garcia as the private respondent. The events leading to the case began on September 25, 1961, when Garcia secured a loan of P25,000.00 from ABACORP, executing a promissory note and a real estate mortgage over twenty-six parcels of land as collateral. Garcia defaulted on his payments, prompting ABACORP to initiate extrajudicial foreclosure proceedings. Although the public auction was postponed multiple times at Garcia's request, he ultimately failed to fulfill his payment obligations. Consequently, ABACORP proceeded with the foreclosure and emerged as the sole bidder in the auction sale. However, before a certificate of sale could be issued, Garcia filed a complaint for Annulment of Sale with Injunction and Damages in the Regional Trial Court of Legaspi City. The trial court ruled in favor of ABACORP, allowing the foreclosure to proceed. Dissatisfied with this decision, G...
Case Digest (G.R. No. 118408)
Facts:
Loan and Mortgage Agreement
- On 25 September 1961, private respondent Martin O. Garcia was granted a loan of P25,000.00 by The Abaca Corporation of the Philippines (ABACORP).
- To secure the loan, Garcia executed a promissory note and a real estate mortgage over his 26 parcels of land in favor of ABACORP.
Default and Foreclosure Proceedings
- Garcia defaulted on his payments, prompting ABACORP to initiate extrajudicial foreclosure proceedings.
- The public auction was suspended multiple times at Garcia's request, but he still failed to settle his obligations.
- ABACORP eventually proceeded with the extrajudicial foreclosure and public auction sale, emerging as the sole and winning bidder.
Legal Action by Garcia
- Before a certificate of sale could be issued, Garcia filed a complaint for Annulment of Sale with Injunction and Damages with the Regional Trial Court (RTC) of Legaspi City.
- The RTC ruled in favor of ABACORP, allowing the foreclosure proceedings and auction sale to proceed and ordering Garcia to reimburse ABACORP for litigation expenses.
Appeal to the Court of Appeals
- Dissatisfied with the RTC decision, Garcia appealed to the Court of Appeals (CA).
- The CA reversed the RTC decision, declaring the auction sale null and void and ordering ABACORP to desist from further foreclosure proceedings.
Petition to the Supreme Court
- ABACORP filed a petition for review on certiorari with the Supreme Court, seeking to reverse the CA decision and reinstate the RTC ruling.
Issue:
- Whether the Court of Appeals erred in applying Section 21, Rule 39 of the Revised Rules of Court (governing ordinary execution sales) to the extrajudicial foreclosure sale in this case.
- Whether the Court of Appeals erred in setting aside the sale due to the alleged inadequacy of the bid price.
- Whether the Court of Appeals erred in denying ABACORP's motion for reconsideration.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)