Title
Borlongan vs. Banco de Oro
Case
G.R. No. 217617
Decision Date
Apr 5, 2017
In 2012, Eliseo Borlongan discovered his Pasig property was auctioned due to BDO's case against Tancho Corp., impleading his wife Carmelita. Summons were improperly served, violating due process. Eliseo filed to annul the sale, arguing the debt didn’t benefit the family. The Supreme Court ruled in his favor, upholding his right to file a separate action and emphasizing proper summons service.

Case Summary (G.R. No. 217617)

Key Dates

• 1976 – Acquisition of the subject property.
• July 2003 to February 2006 – Makati RTC issues orders for summons, attachment and publication; writ of attachment issued.
• November 29, 2007 – Makati RTC decision awarding BDO P32,543,856.33 plus interest and fees.
• October 6, 2009 – Subject property sold at auction to BDO.
• 2012–2013 – Eliseo files annulment complaint in Pasig RTC; case dismissed then reinstated.
• January 20, 2015 – Court of Appeals (CA) orders Pasig RTC to cease proceeding.
• April 5, 2017 – Supreme Court resolution consolidating and resolving petitions.

Applicable Law

• 1987 Constitution: Due process (Art. III, Sec. 1) and protection against deprivation of property (Art. III, Sec. 1).
• Rules of Court:
– Rule 14 (Modes of Service of Summons)
– Rule 19 (Intervention)
– Rule 39, Sec. 16 (Proceedings on Third‐Party Claim)
– Rule 58 (Preliminary Injunction)

Factual Background

In 1976 the Borlongans acquired a titled lot in Pasig City. In 2003 BDO sued Tancho Corporation for unpaid loans and impleaded Carmelita as surety based on four agreements totaling ₱13.5 million. After a failed personal service attempt at Fumakilla Compound (foreclosed and owned by BDO since 2001), the Makati RTC authorized summons by publication (October 2003), issued a writ of attachment (August 2004), and, following default, rendered judgment (November 2007). Execution was ordered in August 2008; despite further failed service attempts, the property was auctioned to BDO on October 6, 2009. The Borlongans discovered the sale in 2012.

Pasig RTC Proceedings

Eliseo filed for annulment of the surety agreements, attachment, levy and auction, alleging the subject property as conjugal and that Carmelita’s surety did not benefit the marriage. BDO moved to dismiss for lack of jurisdiction and res judicata. Pasig RTC initially dismissed for encroaching on Makati RTC’s jurisdiction but on reconsideration held Eliseo’s separate action permissible to contest levy on conjugal property—not to annul the surety contracts themselves.

Court of Appeals Proceedings

BDO petitioned the CA for certiorari (CA-G.R. SP No. 133994), contending that Pasig RTC wrongly entertained Eliseo’s suit. The CA granted relief (January 2015), directing Pasig RTC to cease proceedings. Separately, Carmelita sought annulment of the Makati RTC judgment (CA-G.R. SP No. 134664) with urgent prayer for TRO/WPI against BDO’s writ of possession and new title issuance; the CA denied relief and her motions for reconsideration. Both petitions were brought to the Supreme Court.

Issues

  1. Whether the CA erred in denying a TRO/WPI to enjoin BDO’s consolidation of ownership (G.R. No. 217617).
  2. Whether the Pasig RTC had jurisdiction over Eliseo’s independent annulment action (G.R. No. 218540).

Analysis: Provisional Relief and Due Process

Under Rule 58, Sec. 3, a preliminary injunction requires (a) clear right to protection and (b) urgency to prevent serious injury. The deprivation of property without proper service of process violates due process under the 1987 Constitution. A TRO/WPI to maintain the status quo pending resolution is not a prejudgment of the main action; it merely protects the litigant’s right to be heard and to prevent irreversible harm.

Analysis: Service of Summons Irregularities

Rule 14 prescribes personal service as preferred; substituted service requires diligent attempts; publication is permissible only when the defendant’s whereabouts are unknown. Here, BDO sought publication after a single failed personal service at a location already under bank ownership. No multiple attempts or inquiries were shown, nor was Carmelita’s address at Chicago Street pursued despite corporate filings. The presumption of regularity in official acts cannot stand against these procedural defects.

Analysis: Independent Action for Annulment of Levy

Under R

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