Case Digest (G.R. No. 173864)
Facts:
Bangko Sentral ng Pilipinas v. Agustin Libo-on, G.R. No. 173864, November 23, 2015, Supreme Court Third Division, Peralta, J., writing for the Court. Petitioner is Bangko Sentral ng Pilipinas (BSP); respondent is Agustin Libo-on (one of the Spouses Libo-on).
On August 29 and September 17, 1997, the Spouses Libo-on obtained two loans from the Rural Bank of Hinigaran, Inc. (P100,000 and P300,000) evidenced by promissory notes payable within 360 days and secured by a real estate mortgage over a parcel covered by TCT No. T-67129 in favor of the Rural Bank. On September 19 and October 17, 1997, the Rural Bank obtained loans from BSP (P800,000 and P640,000) by executing instruments styled “promissory note with trust receipt agreement” and depositing various promissory notes and the supporting TCTs (including the Spouses Libo-on’s promissory note and TCT) with BSP as security.
When the Spouses Libo-on defaulted, BSP on May 3, 2000 demanded payment and subsequently initiated extrajudicial foreclosure proceedings against the mortgaged property. Before an auction could be completed, respondent filed suit for damages and sought injunctive relief in the Regional Trial Court (RTC), 6th Judicial Region, Branch 51 challenging BSP’s authority to foreclose. The RTC issued a writ of preliminary injunction on October 25, 2000 and, after trial on stipulated issues, rendered judgment on February 25, 2004 declaring BSP’s extrajudicial foreclosure and the related notice of sale irregular and unlawful, made the injunction permanent, and ordered BSP to pay attorney’s fees (P40,000 plus P1,000 per court appearance) and litigation expenses (P10,000); moral damages were denied.
BSP appealed to the Court of Appeals (CA-Cebu City), which on March 21, 2006 denied the appeal and affirmed the RTC decision; the CA’s July 18, 2006 resolution was also appealed. BSP then filed a Petition for Review on Certiorari under Rule 45 before the Supreme Court, assailing (1) the ruling that BSP lacked a right to foreclose due...(Pro-only)
Issues:
- Did BSP have the right to foreclose the real estate mortgage by virtue of an alleged assignment of credit effected through the “promissory note with trust receipt agreement” absent a notarized deed of assignment or other formal transfer document?
- Was there privity of contract between the Spouses Libo-on and BSP that would permit BSP to enforce the mortgage?
- Was the award of attorney’s fees and liti...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)