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Heirs of Felino M. Timbol Vs PDF
Heirs of Felino M. Timbol Vs PDF
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SECOND DIVISION
DECISION
CARPIO, J.:
The Case
The Facts
Civil Case No. 00-946 stems from a Complaint5 for annulment of real
estate mortgage, foreclosure of mortgage, and auction sale; accounting and
1
Rollo, pp. 3-16.
2
Id. at 18-30. Penned by Associate Justice Ramon A. Cruz, with Associate Justices Romeo F. Barza and
Stephen C. Cruz concurring.
3
Id. at 32-33.
~
4
Id. at 34-46. Penned by Judge Reinato G. Quilala.
5
Records (Vol. I), pp. 1-15.
Decision 2 G.R. No. 207408
damages, with prayer for temporary restraining order and/or injunction filed
by Felino M. Timbol, Jr. and his wife Emmanuela R. Laguardia (Spouses
Timbol) against the Philippine National Bank (PNB), Atty. Ricardo M.
Espina, in his capacity as notary public of Makati, and the Register of Deeds
of Makati.
xxx
PNB was allegedly the highest bidder at the public auction sale
with a bid price of Thirty-Five Million Six Hundred Sixty-Nine Thousand
Pesos and 0/100 (PhP 35,669,000.00). Espina issued the corresponding
Certificate of Sale dated December 10, 1999.
the supposed auction sale. Meanwhile, the Makati City Register of Deeds
gave plaintiff Timbol a Certification that no December 11, 1996 Deed of
Mortgage in favor of PNB-IFL covering the transfer certificates of title in
question was located in the records. Nor had any certificate of sale been
registered on the titles. Plaintiffs thus prayed that the mortgage and
Promissory Notes, and the extra-judicial foreclosure, the foreclosure sale,
and any subsequent Certificate of Sale, be declared null and void; that the
mortgage liens annotated on the transfer certificates of title be cancelled;
that PNB be directed to render an accounting of plaintiffs true and actual
obligation; and that damages and attorneys fees be awarded. Plaintiffs
also prayed for preliminary and permanent injunctive relief to restrain
PNB from consolidating its title to and ownership over the real properties,
and to restrain the Makati City Registry of Deeds from canceling
plaintiffs titles and issuing new ones in lieu thereof.
For its part, PNB insisted that the Real Estate Mortgage contracts
had been already in printed form at the time Timbol signed the same,
and that it was not PNB-IFLs practice that these be signed in blank. PNB
also argued that the total amount of Timbol/KAE/KHLs obligation
already included interest at agreed-upon rates and that the foreclosure
proceedings had been proper and valid. Thus PNB asserted that any
damage that might result to plaintiffs were merely damnum absque
injuria. PNB added that the proceedings were governed by Act No. 3135,
not Administrative Order No. 3, as stipulated in the mortgage contracts
themselves. PNB moreover explained that the mortgage over seven (7)
properties covered by TCT Nos. 196111 thru 196117, all of the Register
of Deeds of Makati, altogether secured an obligation of only Thirteen
Million Fifty-Three Thousand Six Hundred Pesos and 0/100 (PhP
Decision 5 G.R. No. 207408
13,053,600.00), with each of the other mortgages over two (2) properties
securing obligations of only Two Million One Hundred Forty-Three
Thousand Seven Hundred Fifty Pesos and 0/100 (PhP 2,143,750.00) and
Seven Million Five Hundred Ninety-Eight Thousand Eight Hundred Fifty
Pesos and 0/100 (PhP 7,598,850.00), rendering plaintiffs computation
erroneous. PNB advanced counterclaims for actual, moral, and exemplary
damages as well as litigation expenses and attorneys fees.6
SO ORDERED.7
The RTC found that [t]he mortgage loan annotated at the back of the
titles did not reflect the actual amount of the loan obtained by the plaintiffs.
This, the RTC held, vitiated the subsequent foreclosure of the mortgage
initiated by the defendant bank.8
The RTC also held that there was an obviously deliberate act of the
defendant bank in refusing to furnish the plaintiff copies of the loan
documents which, the RTC stated strengthens the claim of the [Spouses
Timbol] that they were virtually led by the defendant bank to sign blank loan
documents by merely affixing their signatures thereto.9 Further, the RTC
interpreted PNBs actions as an attempt to hide the correct amount of the
obligation, confirming the Spouses Timbols claim that PNB bloated the
amount of their obligation.10
The RTC further held that PNB failed to show proof that when it
filed the petition for foreclosure with defendant notary public, [it] was duly
empowered by a board resolution, as evidenced by a secretarys certificate
x x x to foreclose the mortgage constituted over the subject properties.11
There was no evidence, the RTC said, that this subsidiary, obviously a
partnership entity, was duly authorized by a resolution that empowered it to
6
Rollo, pp. 19-22.
7
Id. at 46.
8
Id. at 44.
9
Id.
10
Id. at 45.
11
Id.
Decision 6 G.R. No. 207408
assign all its rights and interest in the mortgage in favor of defendant
bank.12
Lastly, the RTC found no basis to grant the claim for damages and
attorneys fees.13
SO ORDERED.16
The Court of Appeals held that factual issues raised by PNB have
been definitively laid to rest by this Courts decision in PNB v. Timbol17
where it was found that respondents never denied that they defaulted in the
payment of the obligation.18 In the same decision, this Court upheld PNBs
argument that Supreme Court Administrative Order No. 3 does not apply,
the extrajudicial foreclosure having been conducted by a notary public to
which mode of foreclosure respondents agreed in the REMs, hence, proper.
As to the allegation that PNB bloated the amount of the obligation, the
same decision found as follows:
x x x the 7 titles collectively secured the amount of P13,053,600.00. Such
claim despite respondent Timbols admission in his October 27, 1999
letter to petitioners counsel that he and his companys outstanding
obligation was P33,000,000.00 is grossly misleading and is a gross
[mis]representation.19
12
Id.
13
Id.
14
CA rollo, pp. 122-124.
15
Id. at 130-131.
16
Rollo, p. 28.
17
491 Phil. 352 (2005).
18
Id. at 367.
19
Rollo, p. 26.
Decision 7 G.R. No. 207408
The Court of Appeals also found that the Real Estate Mortgage
contracts themselves amply provide for x x x PNBs authority to foreclose
the mortgage as PNB-IFLs agent and attorney-in-fact.22 Moreover, the
Court of Appeals said that Spouses Timbol never disputed the authority of
x x x PNB in instituting foreclosure proceedings. This implicit admission
binds them.23
Finally, as to the claim for moral and exemplary damages, the Court
of Appeals denied the same for lack of basis.24
Petitioners Arguments
The court a quo erred in not dismissing the appeal outright because PNB
did not even bother filing a motion for reconsideration of the RTC
Decision.
B.
The court a quo erred in applying the Decision of the Honorable [Court] in
G.R. No. 157535 as the issue on that case is on the injunction only.
20
Id.
21
Id.
22
Id. at 26-27.
23
Id. at 27.
24
Id. at 28.
Decision 8 G.R. No. 207408
C.
The court a quo erred in not holding that PNB deliberately did not provide
Felino M. Timbol, Jr. with copies of the loan and mortgage documents.
D.
The court a quo erred in not sustaining the factual findings of the RTC that
PNB deliberately failed to provide Timbol with the documents.
E.
The court a quo erred in not holding that there was an absence of a proper
authority coming from PNB-IFL as to the assignment of its rights and
interest in favor of PNB.25
Petitioners contend that [PNB] should have first filed a motion for
reconsideration of the RTC Decision before interposing its appeal.26
Respondents Arguments
PNB, in its Comment, counters that the petition for review must be
dismissed for failing to show special and important reasons warranting the
exercise of this Honorable Courts discretionary reviewing power.30 PNB
points out that petitioners are raising factual issues that have already been
exhaustively discussed and resolved by this Court in PNB v. Timbol.31
PNB also argues that the Court of Appeals correctly cited the Courts
decision in PNB v. Timbol.32
25
Id. at 6.
26
Id. at 7.
27
Supra note 17.
28
Rollo, p. 8.
29
Id. at 9-11.
30
Id. at 68.
31
Id. at 69.
32
Id. at 70.
Decision 9 G.R. No. 207408
Moreover, PNB argues that the Court of Appeals did not commit
reversible error when it found that the PNB did not bloat the loan
obligations of petitioners and as such, had no reason to refuse petitioners
request that they be furnished copies of the loan documents.33 As further
proof, PNB notes that petitioners, in the proceedings at the RTC, expressly
admitted the genuineness and due execution of the [real estate mortgage]
and the subject Promissory Notes.34
Next, PNB asserts that it did not err in filing a Notice of Appeal
without first filing a motion for reconsideration of the RTCs decision. PNB
argues that [t]here is absolutely nothing in the 1997 Rules of Civil
Procedure that requires a party-litigant to first file a motion for
reconsideration of an adverse decision before it can file a Notice of Appeal.
PNB claims that the provisions in the Rules of Civil Procedure on motions
for reconsideration are merely directory, and not mandatory.35
Thus, PNB concludes that the petition must be dismissed for failure of
petitioners to present a valid and legitimate question of law x x x that
would warrant the exercise of [the Courts] discretionary power of review.38
33
Id. at 72.
34
Id. at 72-73.
35
Id. at 73.
36
Id. at 74.
37
Id. at 75.
38
Id.
Decision 10 G.R. No. 207408
Within the same period, the aggrieved party may also move for
reconsideration upon the grounds that the damages awarded are
excessive, that the evidence is insufficient to justify the decision or final
order, or that the decision or final order is contrary to law. (Emphasis
supplied)
The use of the term may in the provision means that the same is
permissive and not mandatory. As such, a party aggrieved by the trial courts
decision may either move for reconsideration or appeal to the Court of
Appeals.
This means that, within 15 days from notice of judgment, a party may
file either an appeal or a motion for reconsideration.
Decision 11 G.R. No. 207408
The Court of Appeals correctly applied the law of the case doctrine.
The Court found that the Spouses Timbol never denied that they
defaulted in the payment of the obligation.48 In fact, they even
acknowledged that they had an outstanding obligation with PNB, and
simply requested for more time to pay.
The Court also held that the extrajudicial foreclosure of the mortgage
was proper, since it was done in accordance with the terms of the Real Estate
39
Chua Giok Ong v. Court of Appeals, 233 Phil. 110, 116 (1987).
40
CA rollo, pp. 106, 110.
41
Id. at 104.
42
Id. at 111.
43
Id. at 117.
44
Id. at 157-160.
45
Id. at 159.
46
Supra note 17.
47
Supra note 17, at 369.
48
Supra note 17, at 367.
Decision 12 G.R. No. 207408
Mortgage, which was also the Courts basis in finding that Supreme Court
Administrative Order No. 3 does not apply in that case.49
The Court also found that the Spouses Timbols claim that PNB
bloated the amount of their obligation was grossly misleading and a gross
misinterpretation by the Spouses Timbol. The Court noted the Spouses
Timbols letter to PNB50 that acknowledged they had an outstanding
obligation to PNB, as well as affirmed that they received the demand letter
directing them to pay, contrary to their claim. Thus, the Court in PNB v.
Timbol concluded that the RTC committed grave abuse of discretion when it
issued a writ of preliminary injunction.
The term law of the case has been held to mean that whatever is once
irrevocably established as the controlling legal rule or decision between the
same parties in the same case continues to be the law of the case, whether
correct on general principles or not, so long as the facts on which such
decision was predicated continue to be the facts of the case before the court.
As a general rule, a decision on a prior appeal of the same case is held to be
the law of the case whether that question is right or wrong, the remedy of
the party deeming himself aggrieved being to seek a rehearing.51
The Court is bound by its earlier ruling in PNB v. Timbol finding the
extrajudicial foreclosure to be proper. The Court therein thoroughly and
thoughtfully examined the validity of the extrajudicial foreclosure in order to
determine whether the writ of preliminary injunction was proper. To allow a
reexamination of this conclusion will disturb what has already been settled
and only create confusion if the Court now makes a contrary finding.
Other Issues
Further, the Court of Appeals itself found ample reason to reverse and
set aside the RTCs decision. These findings, the Court now finds, are
supported by the evidence on record.
The Court cannot sustain the claim that the Spouses Timbol were kept
in the dark by PNB on the real terms of the contract the Spouses Timbol
signed.
The terms of the contract are clear and should end any further
discussion on this issue.
It is now too late for petitioners to raise these issues before the Court.
It is noteworthy that all these could have been ventilated in the proceedings
before the Court of Appeals had petitioners not neglected to file their
Appellees Brief.
SO ORDERED.
oz=-~
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
a Associate Justice
,;If
~v
ARIANO C. DEL CASTILLO NDOZA
Associate Justice
Associate Justice
Decision 16 G.R. No. 207408
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.
ANTONIO T. CA
Associate Justice
Chairperson
CERTIFICATION