G.R. No. 167724 - BPI Family Savings Bank, Inc. vs. Vda. de Coscolluela

Respondent Margarita Coscolluela and her late husband obtained an agricultural sugar crop loan from Far East Bank & Trust Co. (FEBTC) for the crop years 1997 and 1998.
The loan account was treated as a single account amounting to P13,592,492.00, evidenced by 67 promissory notes executed between August 29, 1996, and January 23, 1998.
The promissory notes had varying maturity dates, with the first set maturing on February 9, 1998, and the second set on December 28, 1998.

On June 13, 1997, the Coscolluelas executed a real estate mortgage in favor of FEBTC over their property in Bacolod City, securing loans up to P7,000,000.00.
The mortgage stipulated that upon default, the entire outstanding amount would become due, allowing FEBTC to foreclose extrajudicially without court intervention.

Following the death of Oscar Coscolluela, FEBTC sent a final demand letter to Margarita on March 10, 1999, for payment of P19,482,168.31.
After the failure to settle the obligation, FEBTC initiated extrajudicial foreclosure proceedings on June 10, 1999, for a portion of the loan amounting to P4,687,006.68.

Concurrently, FEBTC filed a complaint in the Regional Trial Court (RTC) of Makati City against Margarita for the collection of P12,672,000.31, representing amounts from the remaining promissory notes.
Respondent raised the defense of litis pendentia, arguing that the complaint was barred due to the pending foreclosure proceedings.

FEBTC presented a loan officer as a witness, who testified that the loans were treated as a single account but each promissory note constituted a separate contract.
Respondent filed a demurrer to evidence, asserting that FEBTC had split its cause of action by filing both foreclosure and collection actions.

The RTC denied the demurrer, stating that the promissory notes represented distinct loans, allowing FEBTC to pursue separate actions for collection and foreclosure.
Respondent's motion for reconsideration was also denied, leading her to file a certiorari petition with the Court of Appeals (CA).

The CA granted the certiorari petition, ruling that the remedies of foreclosure and collection are alternative, not cumulative, and that pursuing both constituted a splitting of a single cause of action.
The CA set aside the RTC's orders, leading to a motion for reconsideration by FEBTC, which was subsequently denied.

The Supreme Court addressed whether the CA's grant of certiorari was appropriate and whether the RTC had committed grave abuse of discretion.
Petitioner argued that the RTC's order was interlocutory and not subject to certiorari, maintaining that each promissory note represented a separate cause of action.

The Court affirmed that an order denying a demurrer is generally interlocutory but can be challenged if it involves grave...continue reading