G.R. No. 259282 - SPOUSES ANTONIO AND MONETTE PRIETO, VS. BANK OF THE PHILIPPINE ISLANDS [AS SUCCESSOR-IN-INTEREST OF FAR EAST BANK AND TRUST COMPANY] SUBSTITUTED BY PHILIPPINE ASSET INVESTMENT [SPV-AMC], AS FURTHER SUBSTITUTED BY PHILIPPINE INVESTMENT ONE [SPV-AMC], INC..D E C I S I O N - Supreme C

Ruling

WHEREFORE, in view of all the foregoing, it is respectfully prayed of this Honorable Court, that after due notice and hearing, judgment be rendered ordering [petitioners] Spouses Antonio and Monette Prieto to pay jointly and severally the plaintiff Bank of the Philippine Islands the following amounts: [P]13,268,303.02 plus the stipulated interest and penalty charges or liquidated damages from September 30, 2001 until fully paid; Attorney's fees in the amount of [P]100,000.00; and The costs of suit. Other reliefs as may be deemed just and equitable in the premises are likewise prayed. [14] (Emphasis and underscoring omitted) In sum, BPI alleged that petitioners failed to pay their loans upon maturity, and thus, FEBTC extrajudicially foreclosed the real estate mortgage over TCT No. 13062 on November 10, 1997, in the amount of P4,000.00 in favor of FEBTC as the lone bidder; and that the real estate mortgage over TCT No. 40223 was likewise foreclosed on April 23, 2001, in the amount of P2,603,405.00 in favor of BPI. [15] The RTC issued an undated summons, but the summons was lost. Hence, it issued an alias summons on November 30, 2004. The alias summons was personally served upon petitioners through Monette Prieto on February 11, 2005. The records were temporarily sent to the archives but was subsequently reinstated into the active docket upon BPI's request. [16] On November 11, 2005, BPI was substituted by Philippine Asset Investments, Inc. (SPV-AMC). [17] On November 25, 2005, the RTC declared petitioners in default. [18] Upon motion of SPV-AMC, the RTC temporarily archived the case on April 25, 2006, due to difficulty in collating evidence . [19] On July 9, 2015, SPV-AMC was further substituted by Philippine Investment One [SPV-AMC], Inc. (SPV-AMC, Inc.). [20] The Ruling of the RTC Initially, specifically on December 19, 2016, the RTC dismissed the case for lack of interest to prosecute. Upon SPV-AMC, Inc.'s motion for reconsideration, however, the court a quo reversed its order of dismissal on March 7, 2017. Thus, SPV-AMC, Inc.'s ex-parte presentation of evidence proceeded on May 2, 2017. [21] On May 4, 2017, SPV-AMC, Inc. filed its Formal Offer of Evidence, [22] which the RTC admitted on even date. [23] For reference, the pertinent documentary evidence submitted by SPV-AMC, Inc. in support of its deficiency claim against petitioners were as follows: Promissory Note with PN No. 2-055-960005 dated January 18, 1996 in the amount of P1,000,000.00; Promissory Note with PN No. 2-055-960049 dated February 7, 1996 in the amount of P3,500,000.00; Promissory Note with PN No. 2-055-960681 dated December 3, 1996 in the amount of P500,000.00; Demand letter dated September 28, 2001, from BENEDICTO VERZOSA GEALOGO & BURKLEY Law Offices to petitioners; Deed of Assignment dated January 5, 2005 between BPI and SPV-AMC; Deed of Assignment dated May 11, 2007, between SPV-AMC and SPV-AMC, Inc.; SPV-AMC, Inc.'s Demand Letter dated August 12, 2011, addressed to petiti