Case Digest (G.R. No. 106654)
Facts:
In Sps. Nestor and Ma. Nona Borromeo vs. Hon. Court of Appeals and Equitable Savings Bank (G.R. No. 169846, March 28, 2008), petitioners Spouses Borromeo applied in mid-1999 for a ₱4,000,000.00 housing loan under EPCIB’s Own-a-Home Program. They signed blank loan documents, including a Real Estate Mortgage (REM) over their 303 sqm property in Loyola Grand Villas, Quezon City (TCT No. N-203923). From April 2001 to September 2002, EPCIB released ₱3,600,000.00 in four tranches, but petitioners drew only ₱3.6M, leaving ₱400,000.00 undrawn. They began monthly amortizations on April 21, 2001. Repeated requests for copies of the loan papers went unheeded until October 3, 2003. When finally produced, these documents named Equitable Savings Bank (ESB)—a subsidiary of EPCIB—as mortgagee, while the promissory notes bore EPCIB as lender. Petitioners also discovered interest rates ranging from 9% to 17%, despite an alleged agreement at 8%–10%. In protest, they refused further payments. ESB tCase Digest (G.R. No. 106654)
Facts:
- Parties and Loan Transaction
- Petitioners Spouses Nestor and Ma. Nona Borromeo were long‐time depositors (12+ years) of Equitable PCI Bank (EPCIB). In mid-1999 they applied under EPCIB’s “Own-a-Home Loan Program” for a ₱4,000,000 loan. In early 2000 they signed blank loan documents (Loan Agreement, Promissory Notes, Real Estate Mortgage (REM), Disclosure Statements) to secure land (303 sqm, Loyola Grand Villas, QC) and the house to be built thereon.
- From April 2001 to September 2002, respondent Equitable Savings Bank (ESB), then a subsidiary of EPCIB, released ₱3,600,000 in four tranches; ₱400,000 remained undrawn. Petitioners paid amortizations from 21 April 2001 until they stopped in protest of alleged excessive interest (charged 14–17% vs agreed 8–11.5%) and EPCIB’s failure to furnish loan document copies.
- Demand and Extrajudicial Foreclosure
- Petitioners repeatedly requested their loan documents. On 6 August 2003 they formally complained about non-delivery and high interest. EPCIB replied (27 August 2003) that originals issue only upon full loan release and that interest rates depended on release dates (9.5–16%). Meanwhile ESB demanded payment of ~₱4,097,261 by 30 September 2003 or it would initiate foreclosure.
- ESB’s counsel secured an Ex-Officio Sheriff’s Notice of Extrajudicial Sale (16 October 2003) fixing the debt at ₱5,114,601. The sale was set for 26 November 2003 (postponed due to holiday) and re-scheduled to 14 January 2004.
- Judicial Proceedings
- RTC, QC Branch 215: Petitioners filed for TRO, preliminary injunction, and annulment of mortgage (Civil Case No. Q-03-51184) on 20 November 2003. The RTC denied TRO but on reconsideration (3 March 2004) granted preliminary injunction upon petitioners’ posting of a ₱3,500,000 bond. ESB’s reconsideration motion was denied on 29 April 2004.
- Court of Appeals: ESB filed certiorari (CA-G.R. SP No. 85114). On 29 April 2005 the CA annulled and set aside the RTC orders, denying the injunction; its denial of reconsideration followed on 16 September 2005.
Issues:
- Whether ESB is the real party-in-interest (creditor-mortgagee) entitled to foreclose.
- Whether petitioners are entitled to preliminary injunction to enjoin foreclosure pending resolution of their annulment suit, on grounds of probable injustice.
- Whether the RTC correctly granted the writ of preliminary injunction, satisfying all requisites under Rule 58, Sec. 3.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)