Case Summary (G.R. No. 193534)
Factual Background
In 1998, Goldstar and the Tios obtained various loans from Far East Bank and Trust Company, now known as BPI. To secure these loans, the Tios pledged properties, including their business and residence, via promissory notes and real estate mortgages. By June 2001, due to the Tios' and Goldstar's failure to meet repayment obligations totaling PHP 67,791,897.15, BPI initiated foreclosure proceedings. Goldstar and the Tios subsequently sought legal redress against BPI, filing a complaint that was assigned to the Regional Trial Court (RTC) of Cauayan City, Isabela.
RTC Ruling on Foreclosure Proceedings
BPI filed for a Writ of Possession related to the foreclosed properties, which led to an order from the RTC for possession on August 8, 2003. Unhappy with this development, the Tios sought a writ of certiorari from the Court of Appeals (CA) but were denied relief. They subsequently filed a petition to cancel the writ, which was also dismissed by the RTC in 2007. This prompted an appeal to the CA (docketed as CA-G.R. CV No. 92580).
RTC Ruling on Civil Case for Annulment
In a separate matter (Civil Case No. Br. 19-1083), the RTC ruled on July 4, 2006, in favor of the Tios, declaring the promissory notesnull and void, while ordering BPI to account for the loan obligations and compensate the Tios with damages. BPI sought reconsideration, which was denied, leading to an appeal to the CA (docketed as CA-G.R. CV No. 88638).
Ruling of the Court of Appeals on Tios' Petition
On April 28, 2010, the CA upheld the RTC's decisions, affirming the validity of the prior orders involving the writ of possession. The Tios filed a motion for reconsideration, which was subsequently denied; thus, they pursued a petition before the Supreme Court.
Ruling of the Court of Appeals on BPI's Appeal
In contrast, the CA ruled on April 29, 2010, in BPI's favor to a limited extent, affirming the RTC's ruling with modifications that acknowledged the validity of the promissory notes and real estate mortgages. BPI then sought a reconsideration of this decision, which was denied, prompting their appeal before the Supreme Court as well.
Compromise Agreement
Following consolidations of the two cases, a Compromise Agreement was entered into by the parties in February 2013. This agreement included BPI agreeing to sell certain foreclosed properties back to the Tios’ relatives for PHP 40,500,000, with specific terms for payments and conditions for prope
...continue readingCase Syllabus (G.R. No. 193534)
Consolidated Petitions for Review on Certiorari
- The case involves two consolidated petitions filed under Rule 45 of the Rules of Court.
- Petitioner spouses Manuel and Evelyn Tio contest the decisions of the Court of Appeals (CA) rendered on April 28, 2010, and August 26, 2010, in CA-G.R. CV No. 92580.
- Respondent Bank of the Philippine Islands (BPI) contests the decisions of the CA rendered on April 29, 2010, and October 5, 2010, in CA-G.R. CV No. 88638.
Factual Antecedents
- In 1998, Goldstar Milling Corporation (Goldstar), backed by spouses Tio as majority shareholders, secured loans (a Term Loan and an Omnibus Credit Line) from Far East Bank and Trust Company (now BPI).
- To secure these loans, spouses Tio executed multiple promissory notes and real estate mortgages on their business and residential properties.
- On June 18, 2001, BPI issued a demand letter to Goldstar and spouses Tio, requesting settlement of an outstanding obligation totaling PHP 67,791,897.15.
- Following repeated failures to pay, BPI initiated foreclosure proceedings against the mortgaged properties.
Initial Legal Actions
- On August 22, 2001, an action was filed by Goldstar and spouses Tio in the Regional Trial Court (RTC) of Cauayan City seeking annulment of the promissory notes, mortgages, and related foreclosure proceedings (Civil Case No. Br. 19-1083).
- Concurrently, in February 2003, BPI sought a Writ of Pos