Case Summary (G.R. No. 187917)
Relevant Facts
On August 27, 1996, the respondents secured a loan of PHP 4,000,000. This amount was subsequently increased to PHP 5,000,000, followed by additional loans of PHP 1,000,000 each on December 3, 1996, and May 8, 1997, all of which were secured by real estate mortgages over properties in Santiago City, Isabela. Due to financial difficulties, the respondents requested an extension and restructuring of their loans, which Metrobank granted. However, after failing to meet payment obligations, Metrobank initiated the extrajudicial foreclosure of the mortgaged properties.
Legal Proceedings
The respondents contested the validity of the foreclosure through a complaint for nullification of the foreclosure proceedings and damages, citing non-compliance with legal requirements, particularly the publication requirement as dictated by Presidential Decree No. 1079 and Act No. 3135. They also alleged manipulation of their loan documents by being made to sign blank promissory notes and that the loan terms provided were misleading.
Regional Trial Court Decision
On June 16, 2006, the Regional Trial Court (RTC) invalidated Metrobank's foreclosure, ruling that there was no proof of publication of the foreclosure notice, thus rendering the auction sale invalid. The RTC further determined that the respondents had overpaid interest and that their loan was still outstanding at the time of the foreclosure, constituting a basis for nullification. The court ordered the annulment of the Sheriff’s Certificate of Sale and the restoration of the respondents’ titles.
Appeals and Findings
Metrobank's subsequent appeal to the Court of Appeals (CA) focused on disputing the RTC's findings regarding publication compliance and the alleged overpayment of interest. The CA affirmed the RTC's decision, emphasizing that factual findings regarding compliance with notice requirements are generally binding and cannot be re-evaluated unless significant grounds are presented.
Supreme Court Review
Upon further petition to the Supreme Court, Metrobank argued for the presumption of regularity in the foreclosure process. However, the Court upheld the lower courts' findings, reinforcing that the burden of proof rested on Metrobank to demonstrate compliance with the publication requirements, which it failed to do. The Cou
...continue readingCase Syllabus (G.R. No. 187917)
Case Background
- The appeal arises from the June 30, 2008 Decision of the Court of Appeals (CA) affirming the June 16, 2006 Decision of the Regional Trial Court (RTC) of Santiago City, Branch 35.
- The case involves a credit accommodation obtained by the respondents, spouses Edmundo Miranda and Julie Miranda, from the petitioner, Metropolitan Bank & Trust Company (Metrobank).
- Respondents initially secured a loan of ₱4,000,000.00 on August 27, 1996, which was later increased to ₱5,000,000.00.
- They subsequently took out additional loans totaling ₱2,000,000.00, secured by mortgages on several parcels of land.
Loan Restructuring and Foreclosure
- Respondents faced difficulty in repaying their loans and requested a restructuring, which was granted by Metrobank.
- They signed two Promissory Notes (PNs) for ₱6,400,000.00 and ₱950,000.00, with an interest rate of 17.250% per annum, due on February 24, 2002.
- Due to continued non-payment, Metrobank issued a demand letter on August 25, 2000, for an overdue amount of ₱8,512,380.15, threatening legal proceedings if not settled.
- Failing to comply, Metrobank executed an extrajudicial foreclosure and auctioned the properties on November 16, 2000, selling them to itself for ₱9,284,452.00.
Respondents' Legal Action
- Respondents filed a complaint to nullify the foreclosure proceedings, claiming non-compliance with the publication requi