108 OG No. 34, 4266 (August 20, 2012)
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.DBP moved to lift the TRO arguing that it violates Section 2[8] of Presidential Decree (P.D.) No. 385[9] which prohibits the issuance of a restraining order, temporary or permanent, against government financing institutions like DBP to enjoin any action taken pursuant to the mandatory foreclosure clause of the decree.[10]
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.On even date, DBP moved to reconsider[13] the December 14, 1998 Order and at the same time sought the dismissal of respondent's complaint on the sole ground that the same states no cause of action.[14]
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. |
DBP insists that it is evident from the face of the complaint that respondent failed to state a cause of action. DBP contends that respondent's allegation of conspiracy between DBP and Gonzalo is bare and has no factual basis to stand on. Further, DBP claims that respondent has no legal right over the subject property as she did not inherit the same in the first place. At the time of death of respondent's mother, the property was not anymore owned by the latter and therefore not part of her estate. Thus, respondent has no legal right over the property and has no cause of action against DBP. And because she had no right to the property, the issuance of the TRO and injunctive writ were likewise improper. DBP also points to the following provisions of P.D. No. 385 that were allegedly violated with the issuance of the TRO and injunctive writ:
- 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%).Respondent, for her part, counters that the CA was correct in dismissing the petition for certiorari for having been filed beyond the sixty (60)-day reglementary period. Also, respondent contends that the provisions of P.D. No. 385 relating to the proscription against the issuance of injunctive writs enjoining foreclosure sales are not applicable in the instant case. She points out that what the RTC enjoined is not an auction sale arising from the foreclosure of mortgage as the subject property had long been foreclosed and title thereto consolidated in the name of DBP. Rather, what the RTC enjoined was DBP's sale of the subject property through ordinary public bidding which is not within the ambit of P.D. No. 385.
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
A cause of action is the act or omission by which a party violates a right of another.[24] A complaint states a cause of action when it contains three essential elements: (1) a right in favor of the plaintiff by whatever means and whatever law it arises; (2) the correlative obligation of the defendant to respect such right; and (3) the act or omission of the defendant violates the right of the plaintiff. If any of these elements is absent, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action.[25]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.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.
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.5.1 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 x[23]