G.R. No. 196864 - SPOUSES VICTOR P. DULNUAN AND JACQUELINE C. DULNUAN, VS. METROPOLITAN BANK & TRUST COMPANY.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE , the petition is GRANTED . The Order dated December 3, 2008 of the Regional Trial Court, Branch 63 of La Trinidad, Benguet in Civil Case No. 08-CV-2470 which granted [the Spouses Dulnuans] application for writ of preliminary injunction and the RTCs Order dated March 24, 2009, which denied [Metropolitan Bank and Trust Companys] motion for reconsideration, are hereby REVERSED and SET ASIDE . [4] The Facts On several occasions, the Spouses Dulnuan obtained loans from Metropolitan Bank and Trust Company (Metrobank), the total of which reached the sum P3,200,000.00, as evidenced by promissory notes executed by them. [5] As a security for the loan obligations, the Spouses Dulnuan executed a Real Estate Mortgage (REM) over a parcel of land covered by TCT No. 46390 registered under their names and located at La Trinidad, Benguet with an area of 392 square meters (subject property). [6] Subsequently, however, the Spouses Dulnuan incurred default and therefore the loan obligations became due and demandable. On 22 April 2008, Metrobank filed an application for extra-judicial foreclosure proceedings over the subject property before the RTC of La Trinidad, Benguet. After due notice and publication, the mortgaged property was sold at a public auction where Metrobank was declared as the highest bidder after tendering the bid of P6,189,000.00, as shown in the Certificate of Sale. [7] In order to validly effect the foreclosure, a copy of the said Notice of Public Auction Sale was posted on the bulletin boards of Barangay Betag, Municipal Hall of La Trinidad, Benguet, Provincial Capitol Benguet. [8] Before the expiration of the one-year redemption period allowed by law, Metrobank filed a Petition for the Issuance of Writ of Possession docketed as LRC Case No. 08-60 which was raffled before Branch 63 of the RTC. [9] On 30 September 2008, the Spouses Dulnuan instituted a Complaint seeking the issuance of a temporary restraining order and preliminary and final injunction and, for the annulment of extra-judicial foreclosure and real estate mortgage before the RTC of La Trinidad, Benguet, Branch 10, which case was docketed as Civil Case No. 08-CV-2470. The complaint alleged that the mortgage constituted over the property is null and void because at the time the agreement was entered on 18 October 2000, no contract of loan was yet executed by the parties. It was only on 19 December 2003 that they received the proceeds of the loan, as evidenced by the Promissory Note. In other words, there is no principal obligation upon which the ancillary contract of mortgage was attached to. Upon motion of the Spouses Dulnuan, Civil Case No. 08-CV-2470 was consolidated before Branch 63 of the RTC wherein the LRC Case No. 08-60 was pending. After summary hearing, the court a quo in an Order dated 5 November 2008, issued a Temporary Restraining Order and set the hearing for the issuance of Writ of Preliminary Injunction. Both parties proceeded to adduce evidence for and ag