Case Digest (G.R. No. 236605)
Facts:
The case involves Carmelita C. Cruz and Vilma Low Tay, operating under "Republic Shoes & Handbags Manufacturing," who secured various loans from Metropolitan Bank and Trust Company (Metrobank) from 1993 to 2004 by mortgaging a real property covered by Transfer Certificate of Title No. PT-66603 in Pasig City. Despite executing a promissory note on April 15, 2004 for a loan balance of PHP 8,600,000.00, Cruz et al. allegedly defaulted. They, however, contended they had overpaid their loans by PHP 3,540,529.55 as of September 21, 2004, according to an audit they commissioned. Metrobank maintained the loans remained unpaid, claiming a balance of PHP 8,344,188.55 as of September 30, 2004. Cruz et al. filed a Complaint for Accounting with the Regional Trial Court (RTC) of Marikina City on May 4, 2005 to clarify payments made. Subsequently, on January 6, 2009, Metrobank extrajudicially foreclosed the mortgage through the RTC of Pasig City, became the highest bidder, and o
Case Digest (G.R. No. 236605)
Facts:
- Parties and Relationship
- Petitioners Carmelita C. Cruz and Vilma Low Tay, doing business as "Republic Shoes & Handbags Manufacturing," obtained various loans from Metropolitan Bank and Trust Company (Metrobank) from 1993 to 2004.
- To secure these obligations, petitioners mortgaged a real property covered by Transfer Certificate of Title (TCT) No. PT-66603, Pasig City.
- Loan and Payments Dispute
- Petitioners executed a promissory note dated April 15, 2004 for the restructured outstanding balance of PHP 8,600,000.00.
- Metrobank alleged nonpayment of the restructured loans, while petitioners denied default and claimed overpayment.
- Petitioners hired an accountant to audit loan payments, who discovered an overpayment of PHP 3,540,529.55 as of September 21, 2004.
- Metrobank claimed an outstanding balance of PHP 8,344,188.55 as of September 30, 2004.
- Legal Proceedings
- On May 4, 2005, petitioners filed a Complaint for Accounting against Metrobank at the Regional Trial Court (RTC) of Marikina City.
- On January 6, 2009, Metrobank filed a Petition for Extrajudicial Foreclosure of Real Estate Mortgage at the Pasig RTC.
- Metrobank was the highest bidder at foreclosure sale; Certificate of Sale was issued and registered, canceling petitioners' TCT and issuing a new title under Metrobank.
- Metrobank filed an Ex Parte Petition for Issuance of a Writ of Possession.
- Petitioners filed an action to annul the foreclosure sale, claiming absence of basis due to lack of accounting.
- Pasig RTC consolidated these cases.
- Decisions and Appeals
- Marikina RTC ruled in favor of petitioners in Accounting case; ordered full accounting from Metrobank.
- Metrobank appealed to the Court of Appeals (CA).
- Pasig RTC initially nullified the extrajudicial foreclosure and denied writ of possession, citing absence of proof of default.
- CA affirmed Marikina RTC decision on accounting and remanded for further proceedings.
- CA reversed Pasig RTC decision in consolidated cases, ordered issuance of writ of possession to Metrobank conditioned on bond payment.
- Petitioners sought Supreme Court review.
Issues:
- Whether Metrobank prematurely foreclosed the mortgage pending the accounting of petitioners’ total payments.
- Whether the foreclosure sale and writ of possession issued in favor of Metrobank should be annulled.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)