G.R. No. 144413 - REPUBLIC GLASS CORPORATION AND GERVEL, INC., VS. LAWRENCE C. QUA.

Ruling

Accordingly, RTC-Branch 149 dismissed the case against RGC and Gervel, leaving Ladtek and Qua as defendants. [10] In a letter dated 7 November 1988, RGC and Gervels counsel, Atty. Antonio C. Pastelero, demanded that Qua pay P 3,860,646, or 42.22% of P 8,730,543.55, [11] as reimbursement of the total amount RGC and Gervel paid to Metrobank and PDCP. Qua refused to reimburse the amount to RGC and Gervel. Subsequently, RGC and Gervel furnished Qua with notices of foreclosure of Quas pledged shares. Qua filed a complaint for injunction and damages with application for a temporary restraining order, docketed as Civil Case No. 88-2643 (Foreclosure Case No. 88-2643), with RTC-Branch 63 to prevent RGC and Gervel from foreclosing the pledged shares. Although it issued a temporary restraining order on 9 December 1988, RTC-Branch 63 denied on 2 January 1989 Quas Urgent Petition to Suspend Foreclosure Sale. RGC and Gervel eventually foreclosed all the pledged shares of stock at public auction. Thus, Quas application for the issuance of a preliminary injunction became moot. [12] Trial in Foreclosure Case No. 88-2643 ensued. RGC and Gervel offered Quas Motion to Dismiss [13] in Collection Case No. 8364 as basis for the foreclosure of Quas pledged shares. Quas Motion to Dismiss states: 8. The foregoing facts show that the payment of defendants Republic Glass Corporation and Gervel, Inc. was for the entire obligation covered by the Continuing Surety Agreements which were Annexes B and C of the Complaint, and that the same naturally redound[ed] to the benefit of defendant Qua herein, as provided for by law, specifically Article 1217 of the Civil Code, which states that: xxx 10. It is very clear that the payment of defendants Republic Glass Corporation and Gervel, Inc. was much more than the amount stipulated in the Continuing Surety Agreement which is the basis for the action against them and defendant Qua, which was just SIX MILLION TWO HUNDRED [THOUSAND] PESOS ( P 6,200,000.00), hence, logically the said alleged obligation must now be considered as fully paid and extinguished. RGC and Gervel likewise offered as evidence in Foreclosure Case No. 88-2643 the Order dismissing Collection Case No. 8364, [14] which RTC-Branch 149 subsequently reversed on Metrobanks motion for reconsideration. Thus, RTC-Branch 149 reinstated Collection Case No. 8364 against Qua. On 12 January 1996, RTC-Branch 63 rendered a Decision in Foreclosure Case No. 88-2643 (12 January 1996 Decision) ordering RGC and Gervel to return the foreclosed shares of stock to Qua. The dispositive portion of the 12 January 1996 Decision reads: WHEREFORE, premises considered, this Court hereby renders judgment ordering defendants jointly and severally liable to return to plaintiff the 1,892,360 shares of common stock of General Milling Corporation which they foreclosed on December 9, 1988, or should the return of these shares be no longer possible then to pay to plaintiff the amount of P 3