G.R. No. 173036 - AGOO RICE MILL CORPORATION (REPRESENTED BY ITS PRESIDENT, KAM BIAK Y. CHAN, JR.), VS. LAND BANK OF THE PHILIPPINES.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, in a letter [16] dated March 12, 1997, ARMC requested the LBP to restructure its STLLs. It suggested a payment arrangement of P5,000,000.00 every six (6) months, until the whole loan of P15,000,000.00 was paid in full. [17] The LBP deferred the ARMCs proposal and advised it to first secure a waiver of its penalty charges prior to the loans restructuring. [18] In a letter [19] dated November 3, 1997, the LBP informed the ARMC that the banks Domestic Banking Loan Committee has agreed to require an additional collateral from the ARMC, which must be offered on or before November 7, 1997; otherwise, the LBP would be forced to pursue legal action. In another letter [20] dated November 10, 1997, the LBP informed ARMC that its existing collateral was short of P3,400,000.00, based on its outstanding P15,000,000.00 loan, and reiterated that ARMC needed to offer additional collateral and to submit the necessary documents; ARMC was given up to November 14, 1997 to comply, but this was extended to November 25, 1997. [21] ARMC responded by asking for a reappraisal of its properties, but the LBP denied the request, insisting that the valuation made by its Property Assessors was fair and reasonable. [22] On April 15, 1998, the LBP wrote to the ARMC regarding the latters failure to comply with the LBPs required offer of an additional collateral or to pay its due obligations. The LBP informed the ARMC that non-compliance on or before April 30, 1998 would result in the referral of the matter to the banks Legal Office for appropriate action. [23] In a letter [24] dated May 22, 1998, the LBP informed the ARMC that its requested loan restructuring was under evaluation with the banks Loan Approving Authorities; in the meantime, the bank reminded ARMC of its payment for the month, which must be paid on or before May 29, 1998. Application for Extrajudicial Foreclosure On July 8, 1998, the LBP sent the ARMC a Final Notice of Payment, [25] informing the ARMC that it had filed, on the same date, an application for the extrajudicial foreclosure of ARMCs mortgaged properties with the Office of the Ex-Officio Sheriff of San Fernando City, La Union. [26] In its application for extrajudicial foreclosure, [27] the LBP alleged, among others, that: (1) despite repeated demands, the ARMC failed to pay its overdue obligations, in violation of the terms and conditions of the Real and Chattel Mortgage; (2) as of July 8, 1998, the ARMCs total unpaid obligation amounted to P23,473,320.83, broken down as follows - principal amount of P15,000,000.00, interests amounting to P7,363,320.83, and penalties amounting to P1,110,000.00; and (3) the ARMC had been duly notified, through a letter-notice dated July 8, 1998, of the foreclosure proceedings and of the time, date and place of public auction. The extrajudicial foreclosure was set for August 26, 1998 at nine oclock in the morning. [28] Complaint for Injunction On August 24, 1998, ARMC, through its President, filed wit