Facts:

The case at hand is Bank of the Philippine Islands (BPI) vs. Spouses Ireneo M. Santiago and Liwanag P. Santiago, as well as Centrogen, Inc., represented by Edwin Santiago. This legal conflict originated from the extrajudicial foreclosure of a parcel of land situated in Sta. Cruz, Laguna, registered under Transfer Certificate of Title No. T-131382 and owned by the Spouses Santiago. The property was mortgaged to Far East Bank and Trust Company (FEBTC) to secure various loans taken out by Centrogen. Initially, Ireneo M. Santiago executed a real estate mortgage over the subject property for a loan of P490,000. Subsequently, this property was again mortgaged to cover a loan obligation of P1,504,280, after which Centrogen defaulted on these loans.

BPI, the successor corporation of FEBTC following a merger, initiated the foreclosure proceedings on December 13, 2002, by filing an Extrajudicial Foreclosure of Real Estate Mortgage with the Regional Trial Court (RTC) of Sta. Cruz, Laguna.

Facts:

Bank of the Philippine Islands (BPI) initiated an extrajudicial foreclosure sale over a parcel of land covered by Transfer Certificate of Title No. T-131382, mortgaged by Spouses Ireneo and Liwanag Santiago, in connection with loan obligations originally incurred by Centrogen, Inc. (represented by Edwin Santiago) from Far East Bank and Trust Company (FEBTC), which later merged with BPI. The property secured two loan obligations, one for P490,000.00 and another for P1,504,280.00; however, the Santiago spouses and Centrogen claimed that the first loan was fully paid (as evidenced by a Union Bank check) and that the original loan agreement was for a higher amount intended for financing a squalene project. Upon default by Centrogen, BPI, assuming the rights of the merged FEBTC, proceeded with the foreclosure sale. Meanwhile, the Santiago spouses and Centrogen filed a complaint seeking a temporary restraining order (TRO), and later, a preliminary injunction, to stop the sale pending resolution of the disputed mortgage annulment. Originally, BPI was served a summons through the Branch Manager of its Sta. Cruz, Laguna branch—a service BPI later contended was unauthorized under Section 11, Rule 14 of the Revised Rules of Court. To remedy this, a new summons was duly served on BPI’s Corporate Secretary prior to the issuance of the injunction. Ultimately, the Regional Trial Court (RTC) granted the TRO and later the writ of preliminary injunction to enjoin the foreclosure sale until the main case could be heard.

Issue:

1. Whether or not the RTC acquired jurisdiction over BPI when the original summons was improperly served on the Branch Manager rather than on an officer authorized by law, and if the subsequent service on the Corporate Secretary effectively cured the defect.
2. Whether the RTC committed a grave abuse of discretion in granting the writ of preliminary injunction that enjoined the foreclosure sale, given that BPI argued that the Santiago spouses and Centrogen had not shown a clear legal right to be protected.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)