WHEREFORE, in view of the foregoing, the Court, finding the application for the issuance of a writ of preliminary injunction to be not well-taken, hereby denies the same.
WHEREFORE, foregoing premises considered, this petition is DENIED DUE COURSE and, accordingly, DISMISSED.
The decision of the Court of Appeals [on] September 4, 2001 established that prior to January 15, 2000, the date when A.M. No. 99-10-05-0 took effect, extrajudial foreclosure sale of real property when conducted by a notary public pursuant to Act No. 3135 is exempted from (1) the payment of the filing fee prescribed in Sec. 7 (c) of Rule 141 of the New Rules of Court, (2) the raffle of the newspapers or publications prescribed in Sec. 2 of P.D. No. 1079 by the executive judge of the Court of First Instance, now the Regional Trial Court where the notice of sale is to be published for three (3) consecutive weeks before the actual sale;
[T]he order of the court a quo in SCA Civil Case No. 99-2139 denying the petitioner's application for the issuance of the writ of preliminary injunction rendered the issues of (1) accurate accounting of obligation by excluding the amount representing penalty on interest which is not stipulated in the promissory note (2) premature foreclosure and the damages caused by the illegal foreclosure moot and academic without the benefit of hearing in the trial court, in violation of both substantive and procedural laws (3) imposed additional obligation on the petitioner which is not included in the real estate mortgage contract.27
(3) If at any time the Mortgagor/Borrower shall fail or refuse to pay the obligations herein secured, or any of the amortization of such indebtedness when due, or to comply with any of the conditions and stipulations herein agreed, or shall, during the time this mortgage is in force, institute insolvency proceedings or be voluntarily declared insolvent or shall use the proceeds of this loan for purposes other than those specified herein or if this mortgage cannot be recorded in the corresponding Registry of Deeds, then all the obligations secured by this Mortgagee may, at its election, immediately foreclose this mortgage judicially in accordance with the Rules of Court, or extrajudicially in accordance with Act 3135, as amended. x x x28
9. In the meantime, however, defendant Metrobank graciously accommodated plaintiff's several requests for deferments of payments until and after the issue on the computation, particularly the eighteen (18%) percent penalty being charged or imputed on interest is settled.
10. Plaintiff was not contented with the deferments of payment without the issue on accounting being settled by the defendant Metrobank. On "November 6, 1998, plaintiff wrote defendant Metrobank two (2) letters, one letter contained plaintiff's proposal to restructure its loan and request for waiver of charges, while the second letter, reiterated plaintiff to review the statement of account referred to in paragraph 7 and citing reasons therefor.
11. Plaintiff, while awaiting response from the defendant Metrobank, requested the latter on "December 2, 1998 for another extension of ninety (90) days to pay its account in cash and in lieu thereof offered another property in its name consisting of TWENTY-EIGHT THOUSAND EIGHT HUNDRED FIFTY-EIGHT (28,858) SQ. METERS subdivided into FOUR HUNDRED (400) to FIVE HUNDRED (500) SQ. METERS each with individual titles in Tacloban City, with the option to buy back the same.
12. Defendant Metrobank, on January 12, 1999, approved plaintiff's request to restructure its loan account of PESOS FORTY MILLION (P40,000,000.00) for five (5) years inclusive of two (2) years grace period which plaintiff, in its "letter of January 21, 1999, politely declined because of the additional PESOS TEN MILLION THREE HUNDRED FIFTY-FOUR THOUSAND EIGHT HUNDRED EIGHTY-SIX AND SEVENTY-SEVEN CENTAVOS (P10,354,886.77) defendant Metrobank wanted to collect from plaintiff, bringing its total accountability to PESOS FIFTY MILLION THREE HUNDRED FIFTY-FOUR THOUSAND EIGHT HUNDRED EIGHTY-SIX & SEVENTY-SEVEN CENTAVOS (P50,354,886.77).
13. Defendant Metrobank, in its letter of February 1, 1999, informed plaintiff that it has approved another restructuring scheme in the amount of PESOS FORTY-SIX MILLION (P46,000,000.00) of which PESOS SIX MILLION (P6,000,000.00) was not yet matured which came from the defendant Metrobank's Tacloban branch discounting line, which plaintiff politely declined for the second time.
14. Plaintiff, on February 10, 1999, requested defendant Metrobank to appraise its Tacloban property and to reconsider its decision denying the acceptability of the said property by way of dacion en pago.
15. Plaintiff, upon learning of defendant Metrobank's final decision not accept its Tacloban property offered the latter to settle its obligation by way of full dacion en pago on its Dasmariñas property, on March 22, 1999.
16. Defendant Metrobank, however, in its letter of April 21, 1999, informed plaintiff that it was still agreeable to restructure plaintiff's loan account of PESOS FORTY MILLION EIGHT HUNDRED FIFTY THOUSAND (P40.850M) by way of dacion en pago of plaintiff's Dasmariñas property only in the amount of PESOS TWENTY-SIX MILLION (P26,000,000.00) and the remaining amount of PESOS FOURTEEN MILLION EIGHT HUNDRED FIFTY THOUSAND (P14,850,000.00) plus other charges, i.e., interest, past due interest and penalty shall be booked under term loan for five (5) years.
Anent the second issue, we find that petitioners are entitled to foreclose the mortgages. In their complaint for accounting with damages pending with the trial court, private respondents averred that:8. Up to and until February, 1993, PLAINTIFF-CORPORATION had paid to the DEFENDANT-BANK, the amount of THREE HUNDRED FIFTY THOUSAND (P350,000.00) Pesos, Philippine Currency, and was willing to pay the balance in installments of FOUR HUNDRED THOUSAND (P400,000.00) Pesos, Philippine Currency, every month, in the meantime, but the DEFENDANT-BANK refused to accept, demanding instead SEVEN HUNDRED MILLION (P7,000,000.00) Pesos, Philippine Currency, a month.
9. In spite of the expressed willingness and commitment of plaintiffs to pay their obligation in a manner which they could afford, on March 11, 1993, MORTGAGORS and DEFENDANT-CORPORATIONS, each received a Letter of Demand from DEFENDANT-BANK, for the payment of P28,775,615.14 exclusive of interest and penalty evidenced by 11 promissory notes enclosed therein x x x.
10. Upon receipt of the letter, PLAINTIFF-CORPORATION through its President pleaded with the Chairman of the Board of the DEFENDANT-BANK, through whom Defendant-Corporation was transacting business with, to accept its offer of payment of FOUR HUNDRED THOUSAND (P400,000.00) Pesos, Philippine Currency, a month, in the meantime, which was again refused by the said Chairman.
which allegations are a clear admission that they were unable to settle to the fullest their obligation. Foreclosure is valid where the debtors, as in this case, are in default in the payment of their obligation.31 The essence of a contract of mortgage indebtedness is that a property has been identified or set apart from the mass of the property of the debtor-mortgagor as security for the payment of money or the fulfillment of an obligation to answer the amount of indebtedness, in case of default of payment.32 It is a settled rule that in a real estate mortgage when the obligation is not paid when due, the mortgagee has the right to foreclose the mortgage and to have the property seized and sold in view of applying the proceeds to the payment of the obligation.33
Sec. 2. The executive judge of the court of first instance (Regional Trial Court) shall designate a regular working day and a definite time each week during which the said judicial notices or advertisements shall be distributed personally by him for publication to qualified newspapers or periodicals as defined in the preceding section, which distribution shall be done by raffle: Provided, That should the circumstances require that another day be set for the purpose, he shall notify in writing the editors and publishers concerned at least three (3) days in advance of the designated date: Provided, further, That the distribution of the said notices by raffle shall be dispensed with in case only one newspaper or periodical is in operation in a particular province or city.
1 Rollo, pp. 26.
2 Penned by Associate Justice Mercedes Gozo-Dadole, with then Presiding Justice Ma. Alicia Austria-Martinez and Associate Justice Portia Aliño-Hormachuelos, concurring; id. at 35-41.
3 Id. at 43-44.
4 CA rollo, p. 154.
5 Id. at 156-159.
6 Covered by TCT No. 202513 containing an area of 1,021 sq. m.; id. at 160-162.
7 Per statement of account, id. at 177.
8 CA rollo, pp. 54-57.
9 Id. at 118-119.
10 Id. at 180-181.
11 Id. at 182-183.
12 Id. at 43-53.
13 RTC of Makati City, Branch 147 and docketed as Civil Case No. 99-2139.
14 CA rollo, pp. 34-42.
15 Id. at 2-30.
16 Id. at 122-123.
17 Id. at 124-139.
18 Id. at 216-217.
19 Id. at 329-335.
20 Id. at 339-353.
21 Id. at 416-417.
22 Rollo, p. 45.
23 Id. at 46-55.
24 Id. at 55.
25 Id. at 59-63.
26 Id. at 84.
27 Id. at 13, 19.
28 CA rollo, p. 195.
29 G.R. No. 121158, December 5, 1996, 265 SCRA 327.
30 Id. at 340.
31 Cortes v. Intermediate Appellate Court, G.R. No. 73678, July 21, 1989, 175 SCRA 545, 548.
32 Fiestan v. Court of Appeals, G.R. No. 81552, May 28, 1990, 185 SCRA 751, 757.
33 State Investment House, Inc. v. Court of Appeals, G.R. No. 99308, November 13, 1992, 215 SCRA 734, 744, citing Commodity Financing Co., Inc. v. Jimenez, 91 SCRA 57 (1979).