G.R. No. 191388 - ASIA UNITED BANK, CHRISTINE T. CHAN, AND FLORANTE C. DEL MUNDO, VS. GOODLAND COMPANY, INC..D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, the appeal is GRANTED and the appealed Order dated March 15, 2007 is REVERSED and SET ASIDE . In lieu thereof, another is entered ordering the DENIAL of appellee bank's motion to dismiss and directing the REINSTATEMENT of appellant's complaint as well as the REMAND of the case to the trial court for further proceedings. SO ORDERED . [4] Factual Antecedents Respondent Goodland Company, Inc. (Goodland) executed a Third Party Real Estate Mortgage (REM) over two parcels of land located in the Municipality of Sta. Rosa, Laguna and covered by Transfer Certificates of Title (TCT) Nos. 321672 [5] and 321673 [6] in favor of petitioner Asia United Bank (AUB). The mortgage secured the obligation amounting to P250 million of Radiomarine Network, Inc. (RMNI), doing business as Smartnet Philippines, to AUB. The REM was duly registered on March 8, 2001 in the Registry of Deeds of Calamba, Laguna. [7] Goodland then filed a Complaint [8] docketed as Civil Case No. B-6242 before Branch 25 of the Regional Trial Court (RTC) of Biñan, Laguna for the annulment of the REM on the ground that the same was falsified and done in contravention of the parties' verbal agreement (Annulment Case). While the Annulment Case was pending, RMNI defaulted in the payment of its obligation to AUB, prompting the latter to exercise its right under the REM to extrajudicially foreclose the mortgage. It filed its Application for Extrajudicial Foreclosure of Real Estate Mortgage under Act No. 3135, as amended with the Office of the Executive Judge of the RTC of Biñan, Laguna on October 19, 2006. [9] The mortgaged properties were sold in public auction to AUB as the highest bidder. It was issued a Certificate of Sale, which was registered with the Registry of Deeds of Calamba on November 23, 2006. Before AUB could consolidate its title, Goodland filed on November 28, 2006 another Complaint [10] docketed as Civil Case No. B-7110 before Branch 25 of the RTC of Biñan, Laguna, against AUB and its officers, petitioners Christine Chan and Florante del Mundo. This Complaint sought to annul the foreclosure sale and to enjoin the consolidation of title in favor of AUB (Injunction Case). Goodland asserted the alleged falsified nature of the REM as basis for its prayer for injunction. A few days later, AUB consolidated its ownership over the foreclosed properties and obtained new titles, TCT Nos. T-657031 [11] and 657032, [12] in its name from the Registry of Deeds of Calamba. Petitioners then filed on December 11, 2006 a Motion to Dismiss with Opposition to a Temporary Restraining Order in the Injunction Case. [13] They brought to the trial court's attention Goodland's forum shopping given the pendency of the Annulment Case. They argued that the two cases both rely on the alleged falsification of the real estate mortgage as basis for the reliefs sought. Ruling of the Regional Trial Court (Injunction Case) On March 15, 2007, the trial court acted favorably on petitioners' motion and dismissed