Case Summary (G.R. No. 256924)
Initiation of Extrajudicial Foreclosure and Parallel Suit
After the petitioners defaulted, BDO filed an extrajudicial foreclosure petition (FRE No. 9302) in RTC Quezon City on October 10, 2012. Meanwhile, the Velosos filed a complaint for accounting and set-off in RTC Makati (Civil Case No. 12-1148) on November 23, 2012, challenging the legality of the loan documents as unconscionable.
Auction Sale, Certificate of Sale, and Redemption Notice
BDO became the highest bidder at the public auction on November 27, 2012. The Clerk of Court issued and the Registry of Deeds annotated a certificate of sale on December 27, 2012. On May 30, 2013, BDO served the Velosos a Notice to Redeem, informing them of their right to redeem the mortgaged properties.
Complaint for Nullity and Motion to Dismiss
On June 19, 2013, the Velosos filed in RTC Quezon City a complaint for declaration of nullity of the mortgage, extrajudicial foreclosure, certificate of sale, its registration, and all related entries, asserting unconscionability of stipulations. BDO moved to dismiss for lack of jurisdiction on June 5, 2018, contending the action was a real action without an alleged assessed value.
RTC and CA Rulings on Jurisdiction
Branch 97, RTC Quezon City, dismissed the complaint on March 18, 2019, holding that actions affecting title or interest in real property require the assessed value in the complaint. The CA, in Decision dated November 16, 2020, affirmed the dismissal and denied the Velosos’ motion for reconsideration on June 16, 2021.
Issue on Subject-Matter Jurisdiction
The sole issue before the Supreme Court was whether the RTC acquired jurisdiction over an action classified as affecting title to or interest in real property without an alleged assessed value in the complaint.
Supreme Court’s Analysis on Real vs. Personal Action
The Court reiterated that an action “affecting title to or possession of real property” is a real action under Section 19 of BP 129 (as amended), requiring the court’s jurisdiction to be determined by the assessed value of the property. Despite the Velosos’ characterization of a contract-nullity suit, the relief sought would necessarily restore their ownersh
...continue readingCase Syllabus (G.R. No. 256924)
Parties
- Petitioners: Spouses Fortunato G. Veloso and Adeline C. Veloso
- Respondents: Banco De Oro Unibank, Inc.; Clerk of Court and Ex-Officio Sheriff; John Doe
Facts
- Petitioners obtained various credit obligations from respondent BDO, including a P5,184,900.00 real estate loan, secured by a real estate mortgage over four condominium units in Quezon City.
- Upon default, BDO initiated an extrajudicial foreclosure petition (FRE No. 9302) on October 10, 2012.
- On November 27, 2012, BDO emerged as highest bidder at the public auction; a certificate of sale was issued and annotated on the Condominium Certificates of Title on December 27, 2012.
- BDO served petitioners with a Notice to Redeem on May 30, 2013, informing them of their right to redeem the foreclosed properties.
Antecedent Proceedings
- November 23, 2012: Petitioners filed Civil Case No. 12-1148 before RTC Makati for accounting and nullification of promissory notes and related documents, alleging unconscionable and illegal stipulations.
- June 19, 2013: Petitioners filed Civil Case No. 13-01126 before RTC Quezon City Branch 97, seeking declaration of nullity of the real estate mortgage, the extrajudicial foreclosure proceeding, the certificate of sale, its registration, and all related entries, plus damages and injunctive relief.
Motion to Dismiss and RTC Ruling
- June 5, 2018: Respondent BDO moved to dismiss for lack of jurisdiction, arguing the complaint was a real action requiring the assessed value of the property, which petitioners omitted.
- Petitioners opposed, contending it was a personal action aimed at annulling an allegedly unconscionable contract, not recovering possession.
- March 18, 2019: RTC Branch 97 dismissed the complaint for lack of jurisdi