Case Digest (G.R. No. 184556)
Facts:
China Banking Corporation v. Qbro Fishing Enterprises, Inc., G.R. No. 184556, February 22, 2012, the Supreme Court En Banc, Villarama, Jr., J., writing for the Court.In 1994, Trans-Filipinas Realty Corporation (TFRC) obtained a loan from China Banking Corporation (petitioner) for P7,000,000, later increased to a P14,000,000 credit line. On May 10, 1996, the Board of Directors of Qbro Fishing Enterprises, Inc. (respondent) adopted a resolution authorizing the mortgage of its properties to secure obligations incurred or which might thereafter be incurred by TFRC with petitioner "irrespective of the amount including any renewals, extensions and/or roll-overs thereof."
Pursuant to that authorization, on June 3, 1996 respondent, through its president and treasurer, executed a real estate mortgage over nine parcels (TCT Nos. T-38759 to T-38767) as collateral for TFRC’s additional loan of P34,500,000; the mortgage was annotated in the Registry of Deeds of General Santos City. TFRC defaulted on its obligations and, after demand letters, petitioner filed a petition for extrajudicial foreclosure of the mortgaged properties; petitioner was the highest bidder at the public auction and received a Certificate of Sale.
Respondent brought a complaint in the Regional Trial Court (RTC), Branch 23, General Santos City (Civil Case No. 6665), seeking annulment of the mortgage, the foreclosure proceedings and the auction sale. The RTC, after trial, dismissed respondent’s complaint (Decision dated February 26, 2004), finding that although there were two mortgages, foreclosure could not be set aside because denying enforcement would unjustly enrich respondent; the RTC relied on the rule that extrajudicial foreclosure requires only that the loan be due and demandable and that the mortgagor failed to pay (citing Valmonte v. Court of Appeals).
Respondent appealed to the Court of Appeals (CA). The CA, in CA‑G.R. CV No. 00226, reversed the RTC in a Decision dated June 27, 2008, declaring the November 17, 1997 foreclosure proceedings null and void insofar as respondent’s mortgaged properties were concerned and directing the issuance of an amended certificate of sale in petitioner’s name covering only TFRC’s foreclosed properties (TCT Nos. T-34226 and T-34227). The CA denied petitioner’s motion for reconsideration in a Resolution dated September 5, 2008.
...(Pro-only)Issues:
- Were TFRC and Qbro Fishing Enterprises separate and distinct juridical persons for purposes of determining whether there was one or two loan accounts?
- Was the petition for extrajudicial foreclosure valid with respect to Qbro Fishing Enterprises’ mortgaged properties (i.e., could petitioner properly consolidate the loans/mortgages and foreclose ...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)