It appearing that plaintiff Cristina Trinidad Romero y Zarate is the sole heir of the late Maria Corazon Zarate Romero[,] co-owner of the ½ pro[-]indiviso of the property covered by TCT No. 10070 which at present is carried in TCT No. 54142 in the name of DBP[,] and to avoid irreparable damage that may arise [from] the auction sale (public bidding) scheduled on November 25, 1998[,] this Court hereby issues a Temporary Restraining Order (TRO) AGAINST DEFENDANT Development Bank of the Philippines, Makati, Metro Manila from proceeding [with] the scheduled auction sale (public bidding) on November 25, 1998 at defendant's head office at SAM BCG for a period of twenty (20) days from receipt of this order.
SO ORDERED.7
To the honest evaluation of this Court what is unrestrainable is the right of government financial institutions to foreclose mandatorily all loans with arrearages including interest and charges amounting to at least twenty (20%) percent of the total outstanding obligation.
x x x x
To allay the fears of the plaintiff and to avoid any irreparable damage that may arise while the issues involved in the above case are still being resolved and determined by the Court in the light of the evidence so f[a]r presented, [considering that] there is a tendency on the part of the Development Bank of the Philippines of continuing the acts complained of (auction sale/Public bidding) and considering further [that] there [should] be no advantage ... given to one [party] to the prejudice of the other while this case is still pending in Court, it is hereby ordered that a WRIT of Preliminary Injunction be issued against defendant Development Bank of the Philippines from conducting any auction sale of the property involved in the above case (formerly covered by TCT No. 10070 and at [present] covered by TCT No. 54142), upon posting of a BOND by the plaintiff in the amount of P3 Million within five (5) days from receipt of this Order.12
(1) | TRO dated November 24, 1998 (received by DBP on November 24, 1998) issued against DBP enjoining it from proceeding with the scheduled auction sale of the disputed property; | |
(2) | Order dated December 14, 1998 (received by DBP on December 16, 1998) denying its motion to lift the TRO and granting the respondents' prayer for a writ of preliminary injunction; | |
(3) | Order dated March 8, 1999 (received by DBP on March 18, 1999) denying DBP's motion to dismiss and motion for reconsideration of the December 14, 1998 Order; and | |
(4) | Order dated April 20, 1999 (received by DBP on April 23, 1999) denying DBP's motion for reconsideration of the March 8, 1999 order. |
- WHETHER ... THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE ORDER OF THE COURT A QUO ... DENYING DBP'S MOTION TO DISMISS....
- WHETHER ... THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE ORDER OF THE COURT A QUO ... ISSUING THE TEMPORARY RESTRAINING ORDER AND THE PRELIMINARY INJUNCTION AGAINST PETITIONER DBP.
- WHETHER ... THE RULES OF PROCEDURE [SHOULD NOT] BE APPLIED IN A VERY RIGID AND TECHNICAL SENSE SO AS NOT TO FRUSTRATE THE PROMOTION OF SUBSTANTIAL JUSTICE.22
Section 1. It shall be mandatory for government financial institutions, after the lapse of sixty (60) days from the issuance of this Decree, to foreclose the collaterals and/or securities for any loan, credit, accommodation, and/or guarantees granted by them whenever the arrearages on such account, including accrued interest and other charges, amount to at least twenty percent (20%) of the total outstanding obligations, including interest and other charges, as appearing in the books of account and/or related records of the financial institution concerned. This shall be without prejudice to the exercise by the government financial institutions of such rights and/or remedies available to them under their respective contracts with their debtors, including the right to foreclose on loans, credits, accommodations and/or guarantees on which the arrearages are less than twenty percent (20%).
Sec. 2. No restraining order, temporary or permanent injunction shall be issued by the court against any government financial institution in any action taken by such institution in compliance with the mandatory foreclosure provided in Section 1 hereof, whether such restraining order, temporary or permanent injunction is sought by the borrower(s) or any third party or parties, except after due hearing in which it is established by the borrower and admitted by the government financial institution concerned that twenty percent (20%) of the outstanding arrearages has been paid after the filing of foreclosure proceedings.
x x x x
x x x x1.1 Plaintiff is the sole heir and successor-in-interest of the late Ma. Corazon Zarate-Romero, who died intestate on 6 March 1993.x x x x
3. During her lifetime, plaintiff's predecessor-in-interest was the erstwhile owner pro-indiviso of that parcel of land, together with improvements, located in Dagupan City, which property used to be covered by Transfer Certificate of Title (TCT) No. 10070 of the Registry of Deeds of Dagupan City....
4. In or about the year 1975, defendant Zarate, who was co-owner of the subject property, secured various personal loan obligations from the defendant DBP in the aggregate amount of P2,000,000.00.4.1 To secure such putative loan obligations of the defendant Zarate, the latter, who wielded moral ascendancy over his younger sister and herein plaintiff's predecessor-in-interest -- Ma. Corazon Zarate-Romero, cajoled and prevailed upon the latter to mortgage the entirety of the subject property in favor of defendant DBP, including her one-half (1/2) pro-indiviso share in the same.
4.2 Accordingly, defendant Zarate assured the plaintiff's predecessor-in-interest that the mortgage would be for a brief period only and that he (defendant Zarate) would forthwith pay and settle in full all his personal loan obligations with the defendant DBP to ensure that said mortgage is cancelled in the soonest time possible.
5. At some point in time during the effectivity of the mortgage, however, defendant Zarate apparently saw an opportunity to claim the entirety of the subject property for himself, to the exclusion of plaintiff's predecessor-in-interest.5.1 Emboldened by, and taking advantage of, the complete trust and confidence reposed upon him by the plaintiff's predecessor-in-interest anent the subject property, defendant Zarate conspired with the defendant DBP for the ostensible foreclosure of the subject property, with the end in view, however, of subsequently reacquiring the same for himself as sole owner.
6. Pursuant to such sinister plot hatched by defendants, defendant DBP foreclosed the subject property in September of 1983 and, thereafter, bought the same for itself in the sum of P2,253,101.00 during the auction sale conducted by the Deputy Sheriff of Pangasinan....
7. Significantly enough, and even before the lapse of the mortgagors' right of redemption over the subject property, the herein defendants entered into a Deed of Conditional Sale over the same, with the defendant DBP as seller, and the defendant Zarate as buyer....7.1 Needless to state, all the aforedescribed dealings, transactions and proceedings concerning the subject property -- from its fraudulent foreclosure up to the highly anomalous execution of the Deed of Conditional Sale over the same -- were concealed from plaintiff's predecessor-in-interest and even from the plaintiff herself after the death of her mother.x x x x23
Endnotes:
* Designated additional member per Raffle dated August 8, 2011 in lieu of Associate Justice Mariano C. Del Castillo who recused himself due to prior action in the Court of Appeals.
1 Rollo, pp. 36-46. Penned by Presiding Justice Cancio C. Garcia (now a retired member of this Court) with Associate Justices Eloy R. Bello, Jr. and Mariano C. Del Castillo (now a member of this Court) concurring.
2 CA rollo, pp. 69-72.
3 Id. at 105-117.
4 Id. at 118-119.
5 Id. at 57-68.
6 Id. at 38-41.
7 Id. at 41.
8 Sec. 2. No restraining order, temporary or permanent injunction shall be issued by the court against any government financial institution in any action taken by such institution in compliance with the mandatory foreclosure provided in Section 1 hereof, whether such restraining order, temporary or permanent injunction is sought by the borrower(s) or any third party or parties, except after due hearing in which it is established by the borrower and admitted by the government financial institution concerned that twenty percent (20%) of the outstanding arrearages has been paid after the filing of foreclosure proceedings.
In case a restraining order or injunction is issued, the borrower shall nevertheless be legally obligated to liquidate the remaining balance of the arrearages, paying ten percent (10%) of the arrearages outstanding as of the time of foreclosure, plus interest and other charges, on every succeeding thirtieth (30th) day after the issuance of such restraining order or injunction until the entire arrearages have been liquidated. These shall be in addition to the payment of amortizations currently maturing. The restraining order or injunction shall automatically be dissolved should the borrower fail to make any of the above-mentioned payments on due dates, and no restraining order or injunction shall be issued thereafter. This shall be without prejudice to the exercise by the government financial institutions of such rights and/or remedies available to them under their respective charters and their respective contracts with their debtors, nor should this provision be construed as restricting the government financial institutions concerned from approving, solely at its own discretion, any restructuring, recapitalization, or any other arrangement that would place the entire account on a current basis, provided, however, that at least twenty percent (20%) of the arrearages outstanding at the time of the foreclosure is paid.
All restraining orders and injunctions existing as of the date of this Decree on foreclosure proceedings filed by said government financial institutions shall be considered lifted unless finally resolved by the court within sixty (60) days from date hereof.
9 Requiring Government Financial Institutions to Foreclose Mandatorily All Loans with Arrearages, Including Interest and Charges, Amounting to at least Twenty Percent (20%) of the Total Outstanding Obligation.
10 CA rollo, pp. 93-104.
11 Id. at 42-53.
12 Id. at 49, 53.
13 Id. at 139-150.
14 Id. at 130-136.
15 Id. at 137-138.
16 Id. at 54-55.
17 Id. at 169-176.
18 Id. at 177-182.
19 Id. at 183-184.
20 Id. at 56.
21 Id. at 12-37.
22 Rollo, p. 286.
23 CA rollo, pp. 57-60.
24 Section 2, Rule 2, 1997 Rules of Civil Procedure, as amended.
25 See Heirs of Loreto C. Maramag v. Maramag, G.R. No. 181132, June 5, 2009, 588 SCRA 774, 784 and Bank of America NT & SA v. Court of Appeals, G.R. No. 120135, March 31, 2003, 400 SCRA 156, 167.