Case Summary (G.R. No. 236572)
Factual Background
The case arose from a credit agreement between the petitioner bank and the respondent spouses, who executed a Real Estate Mortgage (REM) on August 26, 1994, to secure a loan of PHP 10,000,000.00. The value of the loans increased over several years, eventually totaling an aggregate obligation of PHP 26,700,000.00. Respondent spouses defaulted, prompting the bank to initiate extrajudicial foreclosure proceedings, culminating in a sale conducted on October 23, 2002, where the petitioner purchased the mortgaged property as the highest bidder.
Procedural History
After the foreclosure, on November 11, 2003, the respondent spouses filed a complaint seeking to nullify the foreclosure sale and promissory notes, citing prematurity of the sale, bad faith, exorbitant interest rates, and irregularities. The Regional Trial Court (RTC) rendered a decision on August 5, 2014, nullifying the auction sale and ordered reinstatement of the original title to the respondents. The RTC noted that the respondents were in bad faith, having requested multiple postponements of the auction sale.
RTC's Reversal
Upon motion for reconsideration from the petitioner, the RTC reversed its earlier decision on December 22, 2014, dismissing the complaint based on judicial admissions made by the respondents concerning their requests for postponement. The RTC concluded that the respondents were estopped from questioning the auction's validity because they had sought and been granted multiple postponements without republication.
Court of Appeals Review
The spouses appealed, and the Court of Appeals (CA) issued a decision on September 28, 2016, reversing the RTC's order, and found the foreclosure sale void due to the failure of the petitioner to comply with the necessary requirements for republication of the auction date. The CA affirmed that the auction sale was improper, leading to its nullification.
Petition for Review
The petitioner sought a review from the Supreme Court, arguing that the spouses had not paid the correct docket fees required for their action against the bank, which the petitioner claimed invalidated the RTC’s jurisdiction. The Court ruled that although the respondents were allowed to pay their fees late, such payment was valid as long as it was made before the prescriptive period expired.
Supreme Court's Decision
The Supreme Court favored the petitioner, stating that the spouses, who prompted the postponement of the sale, were indeed estopped from
...continue readingCase Syllabus (G.R. No. 236572)
Case Background
- This case involves a petition for review on certiorari filed by Security Bank Corporation against spouses Jose V. Martel and Olga S. Martel.
- The petition contests the September 28, 2016 Decision and the January 8, 2018 Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 104629.
- The CA's decision reversed the Regional Trial Court (RTC) of Makati City's Order dated December 22, 2014, which dismissed the spouses' complaint for nullification of foreclosure proceedings, promissory notes, and damages.
- The RTC's original ruling on August 5, 2014, declared the auction sale null and void and reinstated the spouses' title to the property.
Factual Antecedents
- On August 26, 1994, the Martel spouses executed a Real Estate Mortgage (REM) with Security Bank as security for a loan of ₱10,000,000.00.
- The REM was over their residential property located in Makati City, documented by Transfer Certificate of Title (TCT) No. 146489.
- Between April 12, 1995, and March 22, 1999, the spouses executed multiple REMs, increasing their loan obligations to ₱26,700,000.00.
- They later executed four Promissory Notes totaling ₱25,000,000.00 over their obligations, but defaulted on payments, prompting Security Bank to initiate extrajudicial foreclosure.
Foreclosure Proceedings
- Security Bank issued a demand letter on May 15, 2002, stating the spouses owed ₱33,009,745.43 as of May 8, 2002.
- A Notice of Sheriff’s Sale scheduled the auction for September 6, 2002, which was duly posted and published.
- The Martel spouses requested to postpone the auction sale multiple tim