Case Summary (G.R. No. 194104)
Factual Background
On December 13, 1993, NLC and several other corporations entered into a Credit Agreement with PNB for an omnibus line of credit amounting to P500,000,000. The borrowers guaranteed their obligations jointly and severally and provided real estate and chattel mortgage covering 21 properties, including four parcels owned by NLC. Over the years, the loan underwent renewals and subsequently became overdue, prompting PNB to file for extrajudicial foreclosure.
Procedural Developments
The RTC of Manila set the auction sale of NLC's properties for May 5, 2010. NLC, asserting claims of prescription of PNB’s mortgage action and questioning the mortgage's authorization by its stockholders, filed an action for injunction on the same day. Although the RTC issued a TRO to temporarily halt the foreclosure, it later denied NLC's request for a writ of preliminary injunction, finding that the petition failed to demonstrate a clear right and that the mortgage action had not prescribed.
Legal Issues Raised
NLC appealed to the Court of Appeals (CA), which dismissed the petition outright for lack of jurisdiction, citing NLC’s failure to file a motion for reconsideration before the RTC—a procedural requirement under Rule 65 of the Rules of Court. NLC argued that urgency justified bypassing this requirement, as the properties at stake were subject to imminent sale. This appeal culminated in two pivotal issues: (1) whether the CA erred by dismissing the petition for lack of a motion for reconsideration, and (2) whether there was sufficient urgency to excuse this procedural step.
Court's Analysis and Ruling
The Supreme Court held that a motion for reconsideration is a precondition to filing a certiorari petition, enforcing the established principle that litigants must first seek correction from the lower court. The Court found no compelling circumstances that warranted an exemption for NLC. The claim of urgency was deemed insufficient since such exigency should not override procedural safeguards intended for thorough adjudication.
Conclusion on the Motion for Reconsideration
The Court emphasized that potential harm from foreclosure did not automatically indicate extreme urgency justifying non-compliance with procedural rules. Furthermore, previous rulings underscored that the burden lies on the moving party to demonstrate compelling reasons to bypass established procedures, which NLC failed to do. Thus, the CA’s dismissal of NLC’s certiorari petition was affirmed.
Findings on Lack of Grave Abuse of Discretion
Even if the procedural misstep were overlooked, NLC’s claims would still falter; the RTC had not committed grave abuse of d
...continue readingCase Syllabus (G.R. No. 194104)
Case Overview
- The case involves a Petition for Review on Certiorari filed by Novateknika Land Corporation (NLC) against the Philippine National Bank (PNB) and the Register of Deeds of Manila City.
- The petition seeks to challenge the July 19, 2010, and October 6, 2010, Resolutions of the Court of Appeals (CA) in CA-G.R. SP No. 114674.
- The legal framework for the petition is under Rule 45 of the 1997 Revised Rules of Civil Procedure.
Factual Background
- On December 13, 1993, NLC, along with several other corporations, entered into a Credit Agreement with PNB for a principal loan of P500,000,000.00.
- The loan agreement stipulated that all borrowers were jointly and severally liable for the obligations incurred.
- NLC mortgaged four parcels of land as collateral for the loan.
- Loan renewals were executed in the subsequent years, with the final renewal extending the repayment period to December 18, 1997.
- Despite drawdowns by other borrowers, the total outstanding obligation rose to P593,449,464.79, which remained unpaid, prompting PNB to initiate extrajudicial foreclosure proceedings.
- A Notice of Extrajudicial Sale was issued, leading to the scheduled auction of NLC's properties on May 5, 2010.
Procedural History
- NLC filed an action for injunction on May 5, 2010, seeking to prevent the foreclosure, asserting that:
- The right to foreclose had prescribed due to delays.
- NLC was merely a third-party mortgagor and did not benefit from the loan.
- The mortgage execution lacked proper authorization from