Title
Caneland Sugar Corp. vs. Alon
Case
G.R. No. 142896
Decision Date
Sep 12, 2007
Caneland Sugar Corp. sought to nullify a mortgage and stop foreclosure, but the Supreme Court ruled the petition moot after the sale, citing P.D. No. 385's mandate on loan recovery.
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Case Digest (G.R. No. 142896)

Facts:

  1. Filing of Complaint: On July 15, 1999, Caneland Sugar Corporation (petitioner) filed a complaint with the Regional Trial Court (RTC) of Silay City, Branch 40, against Land Bank of the Philippines (respondent) and Sheriff Eric B. de Vera. The complaint sought damages, injunction, and the nullity of a mortgage over petitioner's property covered by TCT No. T-11292. Petitioner also requested a temporary restraining order (TRO) to stop the auction sale of its property.

  2. RTC Orders: On July 21, 1999, the RTC issued an order to hold the auction sale in abeyance. However, another foreclosure sale was scheduled for October 15, 1999. The RTC, in an order dated October 14, 1999, again held the sale in abeyance but rescheduled it for November 15, 1999, citing Presidential Decree (P.D.) No. 385, which mandates foreclosure by government financial institutions when arrearages reach 20% of the total obligation.

  3. Motion for Reconsideration: Petitioner filed a Motion for Reconsideration, which was denied by the RTC on November 8, 1999.

  4. Appeal to the Court of Appeals: Petitioner filed a Petition for Certiorari and Prohibition with Injunction with the Court of Appeals (CA), which denied the petition on March 22, 2000. Petitioner's Motion for Reconsideration was also denied on April 17, 2000.

  5. Foreclosure Sale: Despite the legal proceedings, the foreclosure sale was conducted, and a Certificate of Sale was issued to respondent on June 26, 2000.

  6. Petition to the Supreme Court: Petitioner filed a Petition for Review on Certiorari under Rule 45, arguing that the RTC's authorization of the foreclosure amounted to prejudgment and that P.D. No. 385 was inapplicable due to respondent's alleged control over petitioner's operations.

Issue:

  1. Whether the Court of Appeals erred in finding that the RTC did not commit grave abuse of discretion in refusing to enjoin the extrajudicial foreclosure of petitioner's property.
  2. Whether the foreclosure sale, having already been conducted, rendered the petition moot and academic.
  3. Whether P.D. No. 385 applies to the case, given petitioner's allegations of respondent's control over its operations.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)


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