Case Digest (G.R. No. 167434)
Facts:
On November 26, 2002, Equitable PCI Bank, Inc. (“Bank”) filed an extrajudicial foreclosure petition before the Ex-Officio Sheriff of the Regional Trial Court (RTC) of Makati City to satisfy the spouses Ramon M. Nisce and A. Natividad Paras-Nisce’s outstanding obligations totaling ₱34,087,725.76 under Promissory Note Nos. 1042793 and BD-150369, secured by multiple real estate mortgages over two parcels covered by TCT Nos. S-83466 and S-83467. The mortgages dated February 26, 1974; September 27, 1978; June 3, 1996; and an amendment dated February 28, 2000, together with a suretyship agreement executed by Natividad, were invoked. The Sheriff initially set the auction for January 14, 2003. On January 28, 2003, the Nisce spouses filed before the RTC a complaint for nullity of the suretyship, damages, legal compensation and injunctive relief, alleging (a) their right to offset the peso equivalent of Natividad’s US dollar deposit (Certificate of Deposit No. 01612 and Passbook No. 83-30Case Digest (G.R. No. 167434)
Facts:
- Mortgage and foreclosure proceedings
- On November 26, 2002, Equitable PCI Bank (formerly PCIB and Equitable Banking Corp.) filed an extrajudicial foreclosure petition in the RTC Makati to satisfy spouses Ramon and Natividad Nisce’s obligations under:
- Promissory Note No. BD-150369 (₱20,000,000.00, 16.731% p.a.) secured by mortgages dated Feb. 26, 1974; Sept. 27, 1978; June 3, 1996; amendment Feb. 28, 2000.
- Promissory Note No. 1042793 (₱13,089,936.90, 13.9869% p.a.), secured by mortgage Feb. 28, 2000.
- A suretyship agreement by Natividad covering US$57,306.59 and ₱16,665,439.77.
- Total obligation claimed: ₱34,087,725.76 (spouses ₱17,422,285.99; surety ₱16,665,439.77 + US$57,306.59). The sheriff set public auction initially on Jan. 14, 2003, reset to Jan. 30, 2003, then later to March 5 and 27, 2003.
- Spouses Nisce’s complaint and injunctive relief
- January 28, 2003: spouses filed before RTC Makati a complaint to annul the suretyship agreement, for damages, legal compensation (setoff of Natividad’s US$‐denominated deposit), and injunctive relief. They alleged:
- They had a US$ account (Certificate of Deposit No. 01612; Passbook No. 83-3041) with PCI Capital Asia (Hong Kong), a PCI Bank subsidiary, with estimated balance US$51,000.42 (Dec. 1991) and at least ₱9 million (Dec. 2002).
- They offered setoff, accepted by the Bank, but the Bank foreclosed without deducting the dollar deposit or alleged ₱4.6 million partial payments.
- Prayers included a TRO, preliminary injunction, permanent injunction, setoff order, nullity of suretyship, exclusion of surety amounts, damages (moral ₱3 million, exemplary ₱1.5 million, attorney’s fees ₱500,000) and costs.
- Lower court and appellate proceedings
- March 24, 2003: RTC granted preliminary injunction upon ₱10 million bond, enjoining the Bank from auctioning TCT Nos. 437678 and 437679.
- Bank filed certiorari under Rule 65 before the CA, alleging: lack of jurisdiction, failure to prove injunction requisites, no basis for legal compensation (different corporate entities), and lack of irreparable injury.
- December 22, 2004: CA granted the petition, nullified the RTC order. The CA held:
- Motion for reconsideration before certiorari not required (pure question of law).
- RTC committed grave abuse in issuing injunction without plausible reason.
- No mutual debtor‐creditor relationship between Bank and PCI Capital, thus no compensation.
- ₱4.6 million uncredited payments not pleaded.
- Petition to the Supreme Court
- Spouses Nisce moved for reconsideration in CA; denied.
- March 2005: Spouses filed petition for review raising:
- CA erred in entertaining certiorari without prior motion for reconsideration.
- CA prematurely ruled on the merits.
- CA erred in finding grave abuse in the injunction issuance.
Issues:
- Procedural
- May a petition for certiorari under Rule 65 proceed without a prior motion for reconsideration in the lower court?
- Jurisdictional
- Did the RTC commit grave abuse of discretion amounting to lack or excess of jurisdiction in issuing a preliminary injunction?
- Substantive
- Were the spouses entitled to legal compensation by setoff of Natividad’s US$ time deposit against their peso‐denominated loan obligations with the Bank?
- Were the alleged ₱4.6 million partial payments uncredited by the Bank so as to justify injunctive relief?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)