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G.R. No. 181485

FIRST DIVISION

[ G.R. No. 181485, February 15, 2012 ]

PHILIPPINE NATIONAL BANK, PETITIONER, VS. GATEWAY PROPERTY HOLDINGS, INC., RESPONDENT.

D E C I S I O N

LEONARDO-DE CASTRO, J.:

Submitted for our consideration is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court, which seeks the reversal of the Decision[2] dated September 28, 2007 and the Resolution[3] dated January 24, 2008 of the Court of Appeals in CA-G.R. CV No. 75108.  The appellate court’s decision set aside the Order[4] dated December 20, 2001 of the Regional Trial Court (RTC) of Trece Martires City, Branch 23, in Civil Case No. TM-1108; while the appellate court’s resolution denied the motion for reconsideration of said court’s September 28, 2007 decision.

The antecedents of the case are as follows:

Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage)

On July 27, 2000, herein respondent Gateway Property Holdings, Inc. (GPHI) filed a Complaint with Application for the Issuance of a Writ of Preliminary Injunction[5] against herein petitioner Philippine National Bank (PNB).  The case was docketed as Civil Case No. TM-1022 in the RTC of Trece Martires City, Branch 23.

According to the complaint, GPHI was a subsidiary company of Gateway Electronics Company (GEC).  In 1995 and 1996, GEC obtained long term loans from the Land Bank of the Philippines (LBP) in the amount of P600,000,000.00.  The loans were secured by mortgages executed by GEC over its various properties.  Subsequently, LBP offered to provide additional funds to GEC by inviting other banking institutions to lend money therefor.  LBP allegedly agreed to submit the properties mortgaged to it by GEC as part of the latter’s assets that will be covered by a Mortgage Trust Indenture (MTI), ensuring that “all participating banks in the loan syndicate will have equal security position.”[6]  Before the formal execution of an MTI, LBP and a consortium of banks entered into a Memorandum of Understanding (MOU), whereby LBP agreed to release the mortgaged properties to the consortium of banks on the basis of an MTI.  Relying on the said undertaking, the participating banks released funds in favor of GEC.  PNB later became part of this consortium of creditor banks.[7]

Thereafter, GEC allegedly encountered difficulties in paying its obligations to the banks, including those owed to PNB.  GEC then requested PNB to convert its long-term loans into a Convertible Omnibus Credit Line.  In a letter[8] dated August 13, 1997 addressed to Israel F. Maducdoc, the Senior Vice President of GEC, PNB approved such a conversion subject to certain conditions.  As part of the requirements of PNB, GPHI was made a co-borrower in the agreement and was obligated to execute in favor of PNB a real estate mortgage over two parcels of land covered by Transfer Certificates of Title (TCT) Nos. T-636816 and T-636817.[9]  The letter likewise provided that PNB shall hold physical possession of the said titles until GPHI shall have made the assignment of the sales proceeds of the aforementioned real properties, up to a minimum of P112 million, to be applied towards the repayment of GEC’s outstanding obligations with PNB.  Furthermore, the letter stated that the real estate mortgage “shall be registered with the Registry of Deeds in an event of default.”[10]

In March 1998, LBP allegedly refused to abide by its undertaking to share the mortgaged properties of GEC with the consortium of creditor banks.  GEC, thus, filed a complaint for specific performance against LBP, which was docketed as Civil Case No. 98-782.

On or about June 19, 2000, PNB purportedly demanded from GEC the full payment of the latter’s obligations.  Thereafter, GPHI learned of PNB’s supposedly underhanded registration of the real estate mortgage with intent to foreclose the same.

GPHI principally alleged in its complaint that “[t]he understanding between GEC and PNB is that the GPHI properties would stand merely as a ‘temporary security’ pending the outcome of Civil Case No. 98-782 which was filed by GEC against LBP.  The GPHI Property was never contemplated at any time as a collateral for GEC’s loan obligations to PNB.”[11]  Also, GPHI argued that “[t]he execution of a Real Estate Mortgage in favor of [PNB] over the GPHI Property did not reflect the true intention of the parties thereto, GEC and PNB.  The documents attached as Annexes to [the complaint] clearly show the interim or temporary nature of the mortgage arrangement.”[12]  GPHI contended that PNB had no legal right to effect the foreclosure of the mortgaged properties.

GPHI, thus, prayed that upon receipt of the complaint by the trial court, a temporary restraining order (TRO) be issued to enjoin PNB from foreclosing on the properties of GPHI covered by TCT Nos. T-636816 and T-636817, as well as from registering the fact of foreclosure or performing any act that would deprive GPHI of its ownership of the said properties.  GPHI likewise prayed that, after trial on the merits, judgment be issued declaring that: (1) the real estate mortgage involving the properties of GPHI and executed in favor of PNB is null and void; (2) PNB be enjoined from foreclosing on the aforementioned properties of GPHI and from registering the same; and (3) PNB be ordered to pay to GPHI the amount of P500,000.00 as attorney’s fees and litigation expenses.[13]

It appears that the RTC did not issue a TRO in favor of GPHI in the above case such that, on May 3, 2001, PNB initiated extrajudicial foreclosure proceedings on the properties covered by TCT Nos. T-636816 and T-636817.[14]  The properties were sold at a public auction on June 20, 2001.  According to the Minutes of Public Auction Sale[15] executed by the RTC Deputy Sheriff of Cavite, PNB was the sole bidder and it thereby acquired the properties for a sale bid price of P168,000,000.00.

Civil Case No. TM-1108 (Annulment of the Foreclosure Sale)

On August 14, 2001, GPHI filed a Petition for Annulment of Foreclosure of Mortgage with Application for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction.[16]  Docketed as Civil Case No. TM-1108, the petition was also raffled in Branch 23 of the RTC of Trece Martires City.

GPHI argued that, in conducting the foreclosure proceedings, the sheriff failed to observe the requirement of Section 4 of Act No. 3135 that the “sale shall be made at public auction.”  The entries in the minutes of the foreclosure sale allegedly did not indicate that a valid public auction was carried out in keeping with the requirements of the law.  More importantly, among its causes of action, GPHI contended that:

17.  [PNB] should not have proceeded in registering as well as in foreclosing [GPHI’s] mortgaged assets since the latter cannot yet be considered in default in accordance with the Amendment to Credit Agreement executed by [GEC], petitioner GPHI and respondent PNB on November 28, 1997.  Moreover, [PNB] knows all along that the subject real properties was never intended to be used as permanent collateral for GEC, but one which was simply used as an unregistered security until [GPHI] incurs in default if sold and the proceeds of which should be used in payment for the obligation of GEC.

Section 5.(5.01) of said Amendment to Credit Agreement states that:

“5.01. Undertaking to Sell and Assignment.  The borrowers hereby undertake to sell the Mortgaged Properties to third parties and apply the proceeds thereof to the payment of the Seven-Year Term Loan up to the extent of PESOS: ONE HUNDRED TWELVE MILLION (P112,000,000.00).  Any shortfall in such amount shall be funded by GEC.  For this purpose, the Borrowers hereby assign, transfer and convey unto and in favor of the Bank the said amount of P112,000,000.00 out of the proceeds of the sale of the Mortgaged Properties.

The Borrowers’ failure to remit to the Bank the amount of P112,000,000.00 within three (3) banking days reckoned from the sale of the Mortgaged Properties shall be considered an Event of Default (as such term is hereinafter defined) and shall be subject to the consequences herein provided.”

x x x x

19.  Moreover, it was clearly provided in [PNB’s] letter dated August 13, 1997 that the [real estate mortgage] shall be unregistered and will be registered with the Registry of Deeds only “in an event of default.”  It is also clear in the said letter that [PNB] shall only hold physical possession of said TCT Nos. 636817 and 636816 x x x until the condition of assigning the sales proceeds of the mentioned real properties up to a minimum of US$ equivalent of PhP112,000,000.00 to [PNB] is complied with.[17]

GPHI, thereafter, sought for a judgment: (1) perpetually prohibiting PNB from divesting GPHI of its possession and ownership of the mortgaged properties, as well as taking possession, administration and ownership thereof; (2) declaring the foreclosure sale conducted on June 20, 2001 as null and void; (3) ordering PNB to pay GPHI P2,000,000.00 as moral damages, P1,000,000.00 as exemplary damages, P500,000.00 as attorney’s fees and costs of suit.

On September 11, 2001, PNB filed a Motion to Dismiss[18] the above petition, and contended that there was another action pending between the same parties for the same cause of action.  Essentially, PNB argued that GPHI resorted to a splitting of a cause of action by first filing a complaint for the annulment of the contract of real estate mortgage and then filing a petition for the annulment of the subsequent foreclosure of the mortgage.  PNB further alleged that the subsequent petition of GPHI failed to state a cause of action.

On December 20, 2001, the RTC ordered the dismissal of Civil Case No. TM-1108.  The trial court elucidated thus:

Prior to the filing of the above-entitled case, [GPHI] filed against [PNB] an action for annulment of Mortgage with Application for Temporary Restraining Order and Writ of Preliminary Injunction docketed as Civil Case No. TM-1022.  While the first action was filed on July 27, 2001, above-entitled case was filed on August 14, 2001 because there was no Temporary Restraining Order or Writ of Preliminary Injunction issued in the first case, the foreclosure sale of the [mortgage] sought to be enjoined by [GPHI] as against [PNB] from this Court, proceeded in the ordinary course of law and a certificate of sale was issued in favor of the bank.  Not obtaining the relief desired, [GPHI] endeavored the remedy of filing this case; Annulment of Foreclosure of Mortgage with Application for the issuance of a Temporary Restraining Order [and/or] writ of Preliminary Injunction thinking it to be the right resources instead of pursuing to attack [PNB] in the first case thus filed.

Both cases, Civil Case No. TM-1022 and TM-1108 practically involved the same parties, substantially identical causes of action and reliefs prayed for, the reliefs being founded on the same facts.  Ironically, these cases are now both filed in this Court.

Considering the foregoing circumstances where a single cause of action has been split and pursuant to Rule 16, Section 1(e) of the 1997 Rules on Civil Procedure, the Motion to Dismiss filed by [PNB] through counsel, on the ground that there is another action pending between the same parties for the same cause, or [litis pendentia], is proper.

Suffice to state that the Court deemed no longer necessary to discuss the second ground relied upon in [PNB’s] pleading.

ACCORDINGLY, this case is DISMISSED. [19]  (Emphasis ours.)

GPHI filed a Motion for Reconsideration[20] of the above ruling, but the trial court denied the motion in an Order[21] dated March 14, 2002.  GPHI, thus, filed a Notice of Appeal,[22] which was given due course by the trial court.[23]

In the interregnum, after the parties presented their respective evidence in Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage), GPHI filed a Motion for Leave to Amend Complaint to Conform to the Evidence[24] on November 24, 2006.  In the Amended Complaint[25] attached therein, GPHI made mention of the foreclosure sale conducted on June 20, 2001 and the fact that the mortgaged properties were sold to PNB for P168 million.  Since GPHI’s liability was allegedly limited only to P112 million in accordance with the letter of PNB dated August 13, 1997 and the Amendment to the Credit Agreement between GEC, GPHI and PNB, GPHI claimed that it should be refunded the amount of P56 million.  GPHI then prayed for a judgment declaring the real estate mortgage, the foreclosure and the sale of the mortgaged properties null and void; or, alternatively, for a judgment ordering PNB to return to GPHI the amount of P56 million, plus interest.[26]

The Judgment of the Court of Appeals

GPHI’s appeal in Civil Case No. TM-1108 (Annulment of the Foreclosure Sale) was docketed in the Court of Appeals as CA-G.R. CV No. 75108.  GPHI primarily argued that the causes of action in the two cases filed before the RTC were separate and distinct such that a decision in one case would not necessarily be determinative of the issue in the other case.

On September 28, 2007, the Court of Appeals rendered the assailed decision granting the appeal of GPHI.  The relevant portions of the appellate court’s ruling stated:

For litis pendentia to be a ground for the dismissal of an action, the following requisites must concur: (a) identity of parties; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity in the two cases should be such that the judgment that may be rendered in one would, regardless of which party is successful, amount to res adjudicata to the other.

While it is true that there is an identity of parties and subject matter, the third requisite of litis pendentia is not present.  x x x x

The former suit is for the annulment of the real estate mortgage while the present case is one for the annulment of the foreclosure of the mortgage.  It may be conceded that if the final judgment in the former action is for the annulment of the mortgage, such an adjudication will deny the right of the bank to foreclose on the properties.  Following the above doctrine, the immediate question would thus be: Will a decree holding the mortgage contract valid prevent a party from challenging the propriety of the foreclosure and the conduct of its proceedings?

Verily, an adjudication holding the real estate mortgage valid does not preclude an action predicated on or involving an issue questioning the validity of the foreclosure.  In this respect, the test of identity fails.  The answer being in the negative, the judgment in Civil Case No. TM-1022 would not be a bar to the prosecution of the present action.

WHEREFORE, the appeal is GRANTED and the assailed order is hereby REVERSED and SET ASIDE.  The case is ordered REMANDED to the court a quo for further proceedings.[27] (Emphases ours.)


PNB moved for the reconsideration[28] of the above decision but the Court of Appeals denied the same in the assailed Resolution dated January 24, 2008.

PNB, thus, instituted the instant petition.

The Ruling of the Court

In its Memorandum before this Court, PNB averred that “[t]he central issue in this case is whether or not the requisites of litis pendentia exist to warrant the dismissal of Civil Case No. TM-1108 [Annulment of the Foreclosure Sale].  Stated otherwise, the primary issue is whether or not there is an identity of parties and causes of action in the two subject cases, such that judgment that may be rendered in one would amount to res judicata to the other.”[29]

PNB asserts that the validity of the extra-judicial foreclosure proceedings and the incidents thereto were primary issues tried in Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage).  PNB points out that GPHI even filed a Motion for Leave to Amend Complaint to Conform to the Evidence[30] dated November 23, 2006 to incorporate the issue of the validity of the foreclosure proceedings.  Also, one of the reliefs prayed for in the amended complaint of GPHI in Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage) is for the declaration of the nullity of the foreclosure sale.  PNB insists that the validity of the foreclosure sale was squarely put in issue during the trial of Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage) wherein GPHI prayed for the nullity of both the real estate mortgage and the subsequent foreclosure sale and the certificate of sale issued in favor of PNB.

For its part, GPHI counters that the causes of action in the two cases filed before the court a quo are not the same.  GPHI explains that it filed Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage) inasmuch as the real estate mortgage executed in favor of PNB did not reflect the true intention of the parties thereto.  GPHI reiterates that the properties covered by TCT Nos. T-636816 and T-636817 merely served as temporary securities for the loan of GEC from PNB.  On the other hand, GPHI maintains that it filed Civil Case No. TM-1108 (Annulment of the Foreclosure Sale) in view of the failure of the sheriff to comply with the requirement of Section 4 of Act No. 3135 that foreclosure proceedings shall be conducted through a public auction.

GPHI further elaborates that should the RTC grant the prayer in Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage), it would follow that the subsequent foreclosure proceedings involving the mortgaged properties will likewise be rendered null and void.  Even so, GPHI opines that if the trial court declares the validity of the real estate mortgage in Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage), the same will not automatically render valid the ensuing foreclosure proceedings.

We grant the petition of PNB.

As a ground for a motion to dismiss a complaint or any other pleading asserting a claim, litis pendentia is provided for under Section 1(e), Rule 16 of the Rules of Court, which reads:

Section 1. Grounds. - Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:

x x x x

(e) That there is another action pending between the same parties for the same cause.

As we held in Dotmatrix Trading v. Legaspi,[31] “[l]itis pendentia is a Latin term, which literally means ‘a pending suit’ and is variously referred to in some decisions as lis pendens and auter action pendant.  As a ground for the dismissal of a civil action, it refers to the situation where two actions are pending between the same parties for the same cause of action, so that one of them becomes unnecessary and vexatious.”[32]

We further emphasized in Guevara v. BPI Securities Corporation[33] that “[t]here is litis pendentia or another action pendente lite if the following requisites are present: (a) identity of parties, or at least such parties as represent the same interests in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two preceding particulars is such that any judgment rendered in the other action, will, regardless of which party is successful, amount to res judicata in the action under consideration.”[34]

With respect to the first requirement of litis pendentia, the same is undisputedly present in this case.  GPHI is the plaintiff in both Civil Case Nos. TM-1022 and TM-1108, while PNB is the party against whom GPHI is asserting a claim.  That the Registry of Deeds for the Province of Cavite was named as an additional respondent in Civil Case No. TM-1108 (Annulment of the Foreclosure Sale) bears little significance.  The Court has clarified in Villarica Pawnshop, Inc. v. Gernale[35] that “identity of parties does not mean total identity of parties in both cases.  It is enough that there is substantial identity of parties.  The inclusion of new parties in the second action does not remove the case from the operation of the rule of litis pendentia.”[36]

The crux of the controversy in the instant case is whether there is an identity of causes of action in Civil Case Nos. TM-1022 and TM-1108.

Section 2, Rule 2 of the Rules of Court defines a cause of action as “the act or omission by which a party violates a right of another.”  Section 3 of Rule 2 provides that “[a] party may not institute more than one suit for a single cause of action.”  Anent the act of splitting a single cause of action, Section 4 of Rule 2 explicitly states that “[i]f two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for the dismissal of the others.”

Apropos, Carlet v. Court of Appeals[37] states that:

As regards identity of causes of action, the test often used in determining whether causes of action are identical is to ascertain whether the same evidence which is necessary to sustain the second action would have been sufficient to authorize a recovery in the first, even if the forms or nature of the two actions be different.  If the same facts or evidence would sustain both actions, the two actions are considered the same within the rule that the judgment in the former is a bar to the subsequent action; otherwise, it is not.[38]

In the case at bar, a perusal of the allegations in Civil Case Nos. TM-1022 (Annulment of the Real Estate Mortgage) and TM-1108 (Annulment of the Foreclosure Sale) reveal that the said cases invoke the same fundamental issue, i.e., the temporary nature of the security that was to be provided by the mortgaged properties of GPHI.

To repeat, in the original complaint in Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage), GPHI’s main argument was that the agreement between GEC and PNB was that the mortgaged properties of GPHI would merely stand as temporary securities pending the outcome of Civil Case No. 98-782, the case filed by GEC against LBP.  The mortgaged properties were never contemplated to stand as bona fide collateral for the loan obligations of GEC to PNB.  Also, GPHI claimed that the execution of the real estate mortgage over the properties of GPHI did not reflect the true intention of GEC and PNB.  As such, GPHI concluded that PNB had no legal right to pursue the remedy of foreclosure of the mortgaged properties in light of the inability of GEC to pay its loan obligations to PNB.

On the other hand, in its petition in Civil Case No. TM-1108 (Annulment of the Foreclosure Sale), GPHI asserted that PNB knew that the mortgaged properties were “never intended to be used as permanent collateral for GEC, but one which was simply used as an unregistered security until [GPHI] incurs in default if sold and the proceeds of which should be used in payment for the obligation of GEC.”[39]  In addition, GPHI argued that the letter of PNB dated August 13, 1997 was clear in that the real estate mortgage was to remain unregistered until an “event of default” occurs and PNB shall possess the titles covering the properties “until the condition of assigning the sales proceeds of the mentioned real properties up to a minimum of US$ equivalent of PhP112,000,000.00 to [PNB] is complied with.”[40]

Therefore, in essence, the cause of action of GPHI in both cases is the alleged act of PNB of reneging on a prior agreement or understanding with GEC and GPHI vis-à-vis the constitution, purpose and consequences of the real estate mortgage over the properties of GPHI.  While the reliefs sought in Civil Case Nos. TM-1022 (Annulment of the Real Estate Mortgage) and TM-1108 (Annulment of the Foreclosure Sale) are seemingly different, the ultimate question that the trial court would have to resolve in both cases is whether the real estate mortgage over the properties of GPHI was actually intended to secure the loan obligations of GEC to PNB so much so that PNB can legally foreclose on the mortgaged properties should GEC fail to settle its loan obligations.  In this regard, GPHI made reference to the letter of PNB dated August 13, 1997 and the Amendment to the Credit Agreement between GEC, GPHI and PNB as the primary documents upon which GPHI based its arguments regarding the supposed intention of the parties in both Civil Case Nos. TM-1022 (Annulment of the Real Estate Mortgage) and TM-1108 (Annulment of the Foreclosure Sale).[41]  Thus, the same documentary evidence would necessarily sustain both cases.

That GPHI put forward additional grounds in Civil Case No. TM-1108 (Annulment of the Foreclosure Sale), i.e., that the auction sale was not conducted at a public place in contravention of the requirement of Section 4 of Act No. 3135 and that the foreclosure was prematurely resorted to given that GPHI cannot yet be considered in default, does not alter the fact that there exists an identity of causes of action in the two cases.  In Asia United Bank v. Goodland Company, Inc.,[42] the Court held that “[t]he well-entrenched rule is that ‘a party cannot, by varying the form of action, or adopting a different method of presenting his case, escape the operation of the principle that one and the same cause of action shall not be twice litigated.’”[43]

Be that as it may, while the appeal of the dismissal of Civil Case No. TM-1108 (Annulment of the Foreclosure Sale) was still pending with the Court of Appeals, GPHI filed on November 23, 2006 a Motion for Leave to Amend Complaint to Conform to the Evidence in Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage).  GPHI stated therein that after the parties presented their evidence, the fact of foreclosure and the acquisition of the mortgaged properties by PNB were duly established.[44]  In the accompanying Amended Complaint in Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage), GPHI prayed, inter alia, for the declaration of the nullity of the foreclosure and auction sale of the mortgaged properties.  As a consequence of such an action, the two cases that GPHI filed before the court a quo henceforth contained an identity of rights asserted and reliefs prayed for, the relief being founded on the same factual allegations.  Thus, any doubt as to the act of GPHI of splitting its cause of action has since been removed.

WHEREFORE, the petition is GRANTED.  The Decision dated September 28, 2007 and the Resolution dated January 24, 2008 of the Court of Appeals in CA-G.R. CV No. 75108 are hereby REVERSED and SET ASIDE.  The Order dated December 20, 2001 of the Regional Trial Court of Trece Martires City, Branch 23, in Civil Case No. TM-1108 is hereby REINSTATED.  No costs.

SO ORDERED.

Corona, C.J., (Chairperson), Bersamin, Del Castillo, and Villarama, Jr., JJ., concur.



[1] Rollo, pp. 22-41.

[2] Id. at 43-49; penned by Associate Justice Ricardo R. Rosario with Associate Justices Rebecca de Guia-Salvador and Magdangal M. de Leon, concurring.

[3] Id. at 51.

[4] Id. at 52-54; penned by Executive Judge Aurelio G. Icasiano, Jr.

[5] CA rollo, pp. 45-55.

[6] Rollo, pp. 60-61.

[7] Id. at 61-62.

[8] Records, pp. 37-38.

[9] Id. at 14-17.

[10] Id. at 37.

[11] CA rollo, p. 50.

[12] Id.

[13] Id. at 53-54.

[14] Records, pp. 18-21.

[15] Id. at 23.

[16] Id. at 1-13.

[17] Id. at 5-6.

[18] Id. at 40-47.

[19] Id. at 69-70.

[20] Id. at 71-80.

[21] Id. at 88.

[22] Id. at 93-94.

[23] Id. at 97.

[24] Rollo, pp. 55-58.

[25] Id. at 59-72.

[26] On March 14, 2008, the RTC rendered a Decision in Civil Case No. TM-1022 (Annulment of the Real Estate Mortgage) the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, this Court hereby orders the annulment of the Real Estate Mortgage.  The parties shall restore to each other the things which have been the subject matter of the contract, with their fruits, and the price with its interest, except in cases provided by law.

GEC is hereby ordered to fulfill its loan obligation with PNB and the latter to exhaust the properties of GEC until full satisfaction of the loan.

The foreclosure sale as well as the Certificate of Sale be declared null and void.

The Transfer Certificate of Title Nos. 1016921 and 1016920 issued in the name of PNB be cancelled and the Transfer of Certificate of Title Nos. 636817 and 636816 which [were] originally issued in the name of GPHI be reinstated.  (Rollo, p. 150.)

PNB moved for a reconsideration of the above judgment, but the same was denied in an Order dated July 30, 2008.  (Id. at 152-156.)  GPHI thereafter filed an appeal to the Court of Appeals.  (Id. at 177)  The records of this case do not indicate whether or not the case has already been decided by the appellate court.

[27] Rollo, pp. 47-48.

[28] CA rollo, pp. 133-138A.

[29] Rollo, pp. 29-30.

[30] Id. at 55-58.

[31] G.R. No. 155622, October 26, 2009, 604 SCRA 431.

[32] Id. at 436.

[33] G.R. No. 159786, August 15, 2006, 498 SCRA 613.

[34] Id. at 629-630.

[35] G.R. No. 163344, March 20, 2009, 582 SCRA 67.

[36] Id. at 79.

[37] 341 Phil. 99 (1997).

[38] Id. at 110.

[39] Records, p. 5.

[40] Id. at 6.

[41] CA rollo, p. 48; records, pp. 5-6.

[42] G.R. No. 191388, March 9, 2011, 645 SCRA 205.

[43] Id. at 217.

[44] Rollo, p. 55.

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