G.R. No. 194104 - Novateknika Land Corp. vs. Philippine National Bank

Petitioner Novateknika Land Corporation (NLC), along with co-borrowers including Kenstar Industrial Corporation (KIC), Plastic City Corporation (PCC), Recovery Real Estate Corporation, Rexlon Realty Group, Inc., Pacific Plastic Corporation, Inland Container Corporation, Kennex Container Corporation, Rexlon Industrial Corporation, and MPC Plastic Corporation, executed a Credit Agreement with respondent Philippine National Bank (PNB) on December 13, 1993.
Under the Credit Agreement, the borrowers agreed to be jointly and severally liable, empowering PNB to demand full payment and performance from any one of them.

Simultaneously with the Credit Agreement, the borrowers executed a Real Estate and Chattel Mortgage covering 21 properties, which included four parcels of land in the name of NLC.
Subsequent agreements, namely the Renewal and Conversion Agreement (executed on January 2, 1996) and the Second Renewal Agreement (dated March 17, 1997), extended and modified the terms of the omnibus line of credit.
Several drawdowns by KIC and PCC, evidenced by promissory notes and trust receipts, brought the total outstanding obligation to P593,449,464.79.

Despite repeated demands by PNB, the loan remained unpaid, prompting the bank to initiate extrajudicial foreclosure proceedings over the properties secured by the mortgage.
On March 8, 2010, the Regional Trial Court (RTC) issued a Notice of Extrajudicial Sale for the foreclosure and public auction of NLC’s properties.

NLC, fearing the loss of its properties, filed an action for injunction requesting a temporary restraining order (TRO) and/or a writ of preliminary injunction (WPI) on May 5, 2010.
The RTC initially granted a TRO on May 20, 2010, to forestall the foreclosure and subsequent public sale.
On June 22, 2010, the RTC reversed its stance by denying the prayer for a WPI. The RTC found that:

The mortgage action had not prescribed due to the receipt of demand letters by co-borrowers, KIC and PCC.
NLC’s argument of being merely a “third-party mortgagor” was not tenable since the Credit Agreement explicitly provided that PNB could demand payment from any borrower.
The claim that the mortgage execution was unauthorized by NLC’s stockholders was also dismissed.

Dissatisfied with the RTC’s ruling, NLC elevated the case to the Court of Appeals (CA) via a petition for certiorari under Rule 65 of the Rules of Court.
On July 19, 2010, the CA dismissed NLC’s petition for failing to file the required motion for reconsideration before the RTC, emphasizing that such a motion is a prerequisite for a special civil action for certiorari.
NLC argued that extreme urgency justified bypassing the motion for reconsideration, contending that any delay would prejudice its right to redeem the foreclosed properties under Section 47 of the General Banking Law.

Whether the CA erred in refusing to entertain NLC’s petition for certiorari under Rule 65 on the ground that NLC did not file the requisite motion for reconsideration before the RTC.

This raises the issue of whether any exceptions to the filing of a motion for reconsideration apply in cases of alleged extreme urgency.

Whether the purported extreme urgency justified NLC’s direct petition to the CA to annul the RTC’s Order dated June 22, 2010, without first seeking reconsideration at the trial level.