G.R. No. 187262 - ENGINEERING GEOSCIENCE, INC., V. PHILIPPINE SAVINGS BANK.

Ruling

Accordingly, the CA reinstated the trial court's Decision dated 12 January 1993. [6] The Facts The present case has been before the CA twice. The CA summarized the events which occurred before PSBank filed a petition for certiorari and prohibition before it: The present action stemmed from a Complaint With Prayer For Writ Of Preliminary Injunction And Restraining Order instituted by private respondent Engineering Geoscience, Inc. (EGI) against petitioner [PSBank] together with Metropolitan Bank & Trust Co., Inc. (MBTC), Manuela F. Lorenzo, Marino V. Cachero and Silverio P. Bernas, which seeks the annulment of its loan contract with [PSBank]. It appears that EGI obtained a loan from [PSBank] in the principal amount of Twenty Four Million Sixty Four Thousand (Php24,064,000.00) Pesos as evidenced by a Promissory Note dated February 14, 1990. To secure the loan, EGI, through its President, Jose Rolando Santos, executed a Real Estate Mortgage on February 13, 1990 in favor of [PSBank] over two parcels of land, more particularly described and covered by Transfer Certificate of Title Nos. 292874 and 249866. As agreed by the parties, the schedule of payment for said loan shall be as follows: (a) Php1,443,840.00 representing interest for two (2) quarters commencing on May 14, 1990 and three months thereafter; (b) Php1,850,626.00 (Principal and interest) quarterly for twenty six (26) quarters starting November 14, 1990 and every three (3) months thereafter. EGI was only able to make partial payments on its loan as it fell due based on the above schedule of payment, and after paying a total amount of only Php3,223,192.91 or only half of the amortizations due amounting to Php6,588,932.00, EGI made no further payments to [PSBank] after its last payment made on November 29, 1990 in the amount of Php 160,000.00. Thus, [PSBank] invoked the acceleration clause under the promissory note and sent a demand letter dated February 11, 1991 demanding full payment of its loan obligation. [PSBank's] demand letter went unheeded, prompting [PSBank] to file a petition for extra-judicial foreclosure of mortgage under Act No. 135 on May 21, 1991, with the Office of the Ex-Officio Sheriff, Regional Trial Court of Quezon City. The foreclosure sale was set on June 26, 1991 but the same did not push through on account of the Complaint With Prayer For Writ Of Preliminary Injunction and Restraining Order filed by EGI before the [trial court]. The [trial court] issued an Order dated August 26, 1991 granting EGI's prayer for issuance of writ of preliminary injunction and effectively enjoined [PSBank] from proceeding with the foreclosure sale. Before the case materialized into a full-blown trial, [PSBank] and EGI submitted a Joint Motion For Approval Of Compromise Agreement dated December 29, 1992, which was approved by the [trial court) in a Decision dated January 12, 1993 , whereby the parties agreed as follows: 1). Plaintiff (EGI) expressly and unconditionally acknowledges its loan o