Case Digest (I.P.I. No. 15-227-CA-J)
Facts:
In Sps. Expedito Zepeda and Alice D. Zepeda v. China Banking Corporation (G.R. No. 172175, October 9, 2006), petitioners Spouses Expedito and Alice D. Zepeda secured on June 28, 1995 a ₱5,800,000.00 loan from respondent China Banking Corporation, evidenced by a Promissory Note and Real Estate Mortgage over TCT No. T-23136. After experiencing repayment difficulties, the Zepedas requested and allegedly received loan restructuring, which they contend was understood to suspend any foreclosure. Despite this, on October 9, 2001 Chinabank conducted an extrajudicial foreclosure, emerged as highest bidder, obtained a Provisional Certificate of Sale, and later consolidated title when petitioners failed to redeem. On February 18, 2003, the Zepedas filed a complaint for nullification of foreclosure proceedings and loan documents with damages before the Regional Trial Court of San Jose, Camarines Sur (Branch 30, Civil Case No. T-947), alleging non-compliance with posting and publication requCase Digest (I.P.I. No. 15-227-CA-J)
Facts:
- Initiation of the Case
- On February 18, 2003, Spouses Expedito and Alice Zepeda filed Civil Case No. T-947 before the RTC of San Jose, Camarines Sur, Branch 30, seeking nullification of foreclosure proceedings and loan documents, and claiming damages against China Banking Corporation (Chinabank).
- They alleged that on June 28, 1995, they obtained a ₱5,800,000 loan from Chinabank secured by a real estate mortgage on TCT No. T-23136.
- Default, Restructuring and Foreclosure
- Petitioners encountered payment difficulties and requested loan restructuring, which they claimed Chinabank approved, leading them to believe foreclosure would be suspended.
- Despite this, Chinabank extrajudicially foreclosed the mortgaged property on October 9, 2001, emerged as highest bidder, obtained a Provisional Certificate of Sale, and consolidated ownership upon petitioners’ failure to redeem.
- Procedural History in the Trial Court and CA
- Chinabank’s motion to dismiss was denied; it answered with affirmative defenses, counterclaims, and served 20 written interrogatories.
- The RTC issued Orders on April 1, 2004 and October 22, 2004 denying Chinabank’s affirmative defenses and motion to expunge the complaint, and directed pre-trial setting. Chinabank filed a Rule 65 petition in the CA, which granted certiorari, annulled the RTC Orders, and dismissed the complaint for lack of cause of action and failure to answer interrogatories.
- Petitioners’ motion for reconsideration was denied on March 31, 2006, prompting this Rule 45 petition to the Supreme Court.
Issues:
- Whether the complaint states a cause of action for nullification of the extrajudicial foreclosure.
- Whether the complaint should be dismissed for petitioners’ failure to answer Chinabank’s written interrogatories under Section 3(c), Rule 29.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)