Case Digest (G.R. No. 182371)
Facts:
The present case is a consolidation of two petitions involving the Philippine Development and Industrial Corporation (PDIC) against various respondents, including Banco De Oro Unibank, Inc. (formerly Equitable PCI Bank), the Register of Deeds of Manila, and M.N. Amor B. Dait, Sheriff IV of the Regional Trial Court of Manila. The petitions are docketed as G.R. No. 231545 and G.R. No. 242868, with the Supreme Court's decision being rendered on April 28, 2021. The factual background reveals that PDIC entered into a credit line agreement with EPCIB in 1996, which included a secured credit line and a clean credit line, each valued at P100,000,000, aimed at financing its Sta. Ana Villas Condominium Project. To secure this credit line, PDIC executed a Real Estate Mortgage (REM) on the parcel of land earmarked for the condominium project.In 1997 and 2000, PDIC requested additional funds from EPCIB but faced delays and refusals due to the bank's evaluations of PDIC's financial
Case Digest (G.R. No. 182371)
Facts:
- Consolidation of Cases
- Two petitions were consolidated:
- G.R. No. 231545 – A Petition for Certiorari under Rule 65 challenging the Court of Appeals’ resolutions denying PDIC’s application for a Temporary Restraining Order (TRO) and Preliminary Injunction pending its appeal.
- G.R. No. 242868 – A Petition for Review on Certiorari under Rule 45 seeking reversal of the CA’s decision affirming the RTC’s ruling on the foreclosure sale and the validity of the Real Estate Mortgages (REMs).
- The consolidation was pursued by the petitioner, Philippine Development and Industrial Corporation (PDIC), against respondents including Equitable PCI Bank (now Banco de Oro Unibank, Inc.), the Register of Deeds of Manila, and M.N. Amor B. Dait, Sheriff of the RTC of Manila.
- Parties Involved and Background
- Petitioner: Philippine Development and Industrial Corporation (PDIC) – a domestic corporation engaged in a condominium project (Sta. Ana Villas Condominium Project) in Manila.
- Respondents:
- Equitable PCI Bank (EPCIB), now known as Banco de Oro Unibank, Inc. – a commercial bank that extended credit facilities to PDIC.
- The Register of Deeds of Manila.
- M.N. Amor B. Dait, acting as Sheriff of the RTC, Manila.
- In 1996, PDIC secured a credit line from EPCIB consisting of a secured credit facility and a clean credit line, each amounting to ₱100,000,000.
- The credit was intended to finance the condominium project constructed on a parcel of land covered by Transfer Certificate of Title (TCT) No. 230861, with the original Rem executed on that title serving as security.
- Transaction and Execution of Mortgage Agreements
- PDIC availed itself of the ₱100,000,000 clean credit line and later requested funds from the secured credit line in January 1997, which were eventually denied by EPCIB due to prevailing market conditions.
- To address its payment obligations when amounts previously drawn became past due, PDIC and EPCIB entered into a Repayment Agreement in June 2000.
- PDIC acknowledged outstanding indebtedness totaling ₱26,222,098.23 and US$2,777,686.69 as of November 30, 1999.
- Under the agreement, PDIC executed new REMs on June 8, 2000 covering 29 condominium units and a property in Bulacan; in exchange, EPCIB released the original mortgage on TCT No. 230861.
- Default, Foreclosure, and Subsequent Legal Proceedings
- PDIC defaulted on its loan obligations under the Repayment Agreement, prompting EPCIB to demand payment via a letter dated September 4, 2002.
- After negotiations for settlement (including an offer of dacion en pago) failed, EPCIB initiated foreclosure proceedings.
- An extrajudicial foreclosure sale was scheduled for April 21, 2003, with notice served to PDIC on March 3, 2003.
- PDIC filed several legal actions:
- A complaint before the RTC of Makati City for cancellation of the mortgage, restitution of titles, and damages (later dismissed for lack of jurisdiction).
- An amended complaint shifting the focus to mortgage release and damages.
- A complaint before the RTC of Manila, Branch 36, for annulment of mortgage and foreclosure sale with an application for TRO and preliminary injunction against EPCIB, the Register of Deeds, and Sheriff Dait.
- The RTC of Manila issued a 72‑hour TRO followed by an extended TRO and later granted a writ of preliminary injunction, though PDIC later limited its cause of action to damages as foreclosure proceeded.
- PDIC appealed the RTC decision, but the Court of Appeals (CA) denied its application for a TRO and preliminary injunction (via resolutions dated August 5, 2016 and March 21, 2017) and affirmed the RTC’s decision validating the foreclosure sale conducted on April 21, 2003.
- Claims and Contentions Raised
- PDIC contended that the new REMs executed on June 8, 2000, were done under duress (alleging intimidation and undue influence by EPCIB) and should be declared null and void.
- PDIC argued it retained a clear legal right to the properties until a final judgment, citing its uninterrupted possession and peaceful custody of the subject properties.
- EPCIB asserted that PDIC voluntarily entered into both the Repayment Agreement and new REMs and that the foreclosure was a natural consequence of PDIC’s default on its obligations.
- EPCIB maintained that PDIC failed to prove any grave and irreparable injury that would warrant the issuance of an injunctive writ.
Issues:
- Abuse of Judicial Discretion
- Whether the CA committed a grave abuse of discretion—in excess or deficiency of jurisdiction—in denying PDIC’s application for a TRO and/or Preliminary Injunction.
- Whether the CA erred in sustaining the RTC Manila’s decision that validated the foreclosure sale and upheld the new REMs.
- Consent and Validity of the Mortgage
- Whether PDIC’s consent in executing the REMs was vitiated by undue influence or whether it was voluntarily and knowingly executed as part of a negotiated Repayment Agreement.
- Appropriateness of Injunctive Relief
- Whether PDIC was entitled to injunctive relief given that it failed to demonstrate a clear and unmistakable right to restrain the foreclosure and prevent the consolidation of title by EPCIB.
- Whether PDIC’s alleged damages were sufficiently grave and irreparable to justify the issuance of a TRO or Preliminary Injunction.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)