G.R. No. 127682 - Komatsu Industries , Inc. vs. Court of Appeals

Petitioner, Komatsu Industries (Phils.) Inc., filed its pleading on March 4, 1998, titled “Motion for Leave to File Incorporated Second Motion for Reconsideration” of the resolution dated September 10, 1997.
The case involves a review on certiorari of the decision rendered by the Court of Appeals, which was denied due to the petitioner’s failure to demonstrate reversible error in the lower court’s ruling.
Subsequent pleadings included extensive motions, replies, and joint rejoinders by both petitioner and respondents, covering all aspects of the case, even raising and dissecting non-issues.

Petitioner alleged that the lower courts’ resolutions reflect errors and irregularities in handling the case, with particular accusations of misconduct against counsel for a respondent private corporation and against retired Justice Teodoro Padilla.
The petitioner contended that additional memoranda should have been allowed, arguing that its extensive pleadings had not been given due consideration.
There was an insinuation that the petition for review should be granted simply because the case had advanced to the rejoinder stage, despite the premises being already addressed in prior decisions.

In 1975, the National Investment and Development Corporation (NIDC) granted Komatsu Industries a direct loan of ₱8,000,000 and a ₱2,000,000 guarantee to secure financing from the Philippine National Bank (PNB).
As security for these obligations, a Deed of Real Estate Mortgage covering a parcel of land (TCT No. 469737) was executed on April 24, 1975.
At PNB’s instance and with NIDC’s concurrence, an Amendment of Mortgage Deed dated June 21, 1978 was executed to secure a deferred letter of credit amounting to US$1,564,826.
Full payment of certain obligations led NIDC to execute a Deed of Release and Cancellation of Mortgage on January 7, 1981, which released the mortgage covering the land in question for the obligations with NIDC but not for the separate obligation directly owed to PNB.
Subsequent correspondences, including letters from PNB requesting the return of title documents and other evidentiary matter, indicated that PNB did not consent to the release of its mortgage, as it maintained its interests secured by the deferred letter of credit.

Respondent PNB initiated extrajudicial foreclosure proceedings under Act No. 3135, with the filing of a verified petition for extrajudicial foreclosure and subsequent issuance of sale notices.
The trial court and later the appellate court examined documents such as the Petition for Correction of Entry and Action for Sale under Act No. 3135, which led to the extrajudicial foreclosure of the foreclosed property (the Pasong Tamo property).
The foreclosure was implemented and supported by documentary evidence, including notices of sheriff’s sale, certificates of sale, and the subsequent registration of the foreclosure sale.

Petitioner, in its second motion for reconsideration, alleged that the minute resolutions employed by the courts violated Section 14, Article VIII of the Constitution, contending that the absence of a full-blown decision amounted to a constitutional infringement.
Petitioner further argued that the disposition of the case indicated judicial irregularities and even hinted at potential impeachment proceedings for alleged judicial misconduct.
Despite these assertions, both the trial court and the appellate court emphasized that the procedural disposition (via minute resolution) is well within the judicial prerogative and does not violate constitutional mandates provided a legal basis is stated.

Whether the Deed of Release and Cancellation of Mortgage executed on January 7, 1981 by NIDC effectively released the real estate mortgage in favor of the Philippine National Bank as embodied in the Amendment of Mortgage Deed dated June 21, 1978.

Consideration of the contractual principle that a contract binds only the parties who executed it, and whether PNB, not being a signatory to the release, could be bound thereby.
Assessment of the evidence showing that PNB, through its correspondence, objected to the cancellation of the mortgage on its behalf.

Whether the extrajudicial foreclosure of the Pasong Tamo property, conducted on May 17, 1984, is valid given the mortgage’s indivisible nature and the pari-passu arrangement between PNB and NIDC.
Whether the foreclosure should extend only to the proportionate credit of PNB as opposed to the entire mortgaged property.

Whether the loss allegedly suffered by Komatsu Industries, arising from the foreclosure, constitutes a legally redressable wrong capable of supporting an award of damages.
Evaluation of the principle that a loss which does not represent a violation of a legal right (damnum absque injuria) does not entitle the aggrieved party to damages.