Case Digest (G.R. No. 177050)
Facts:
In Carlos Lim, Consolacion Lim, Edmundo Lim, Carlito Lim, Shirley Leodadia Dizon, and Arleen Lim Fernandez v. Development Bank of the Philippines, G.R. No. 177050, July 01, 2013, the Supreme Court Second Division, Del Castillo, J., writing for the Court, resolved a dispute over loan obligations, a cancelled restructuring agreement, and an extrajudicial foreclosure sale.Petitioners (the Lims and co-obligors) obtained two loans from Development Bank of the Philippines (DBP): a P40,000 loan on November 24, 1969 (Lim Account) and a P960,000 loan on December 30, 1970 (Diamond L Ranch Account). Both loans were secured by a mortgage over multiple titled parcels. The loans matured in the 1970s; after unrest in Mindanao caused abandonment of the ranch, petitioners defaulted. They made a partial payment of P902,800 in 1978 but no further payments until they sought account statements in 1989.
From 1989 to 1994 petitioners negotiated with DBP for restructuring. DBP produced varying statements of account, sought additional conditions through its Regional Credit Committee, accepted a downpayment of P362,271.75 but later required larger payments and higher interest; petitioners failed to meet the revised conditions and DBP cancelled the proposed Restructuring Agreement. Notices of impending foreclosure were sent at times, and on July 11, 1994 an extrajudicial auction under Act 3135 was held; DBP was the highest bidder and a Sheriff’s Certificate of Extra-Judicial Sale issued July 13, 1994.
On July 28, 1995 petitioners sued in the Regional Trial Court (RTC) of General Santos City for annulment of foreclosure, damages, and injunctive relief; the RTC issued a TRO and later a preliminary injunction (bond required) and, on December 10, 1996, rendered judgment declaring the obligations extinguished, nullifying the foreclosure sale, ordering return of the properties and awarding damages and attorneys’ fees. DBP appealed to the Court of Appeals (CA), which, in a February 22, 2007 Decision in CA-G.R. CV No. 59275 (pened by Associate Justice Teresita Dy-Liacco Flores), reversed t...(Pro-only)
Issues:
- Did DBP’s alleged wanton, reckless or oppressive acts and omissions prevent petitioners from paying their loan obligations?
- If so, should petitioners’ obligations be deemed fully complied with and extinguished under the doctrine of constructive fulfillment?
- Does returning the mortgaged properties to petitioners free from mortgage liens constitute unjust enrichment?
- Was the low bid by DBP at the foreclosure sale so grossly inadequate as to void the sale?
- Did the proposed Restructuring Agreement, as negotiated, novate and extinguish petitioners’ obligations under the Promissory Notes?
- Are petitioners entitled to actual, temperate, moral...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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