G.R. No. 169551 January 24, 2007
Spouses Orlando M. Lambino and Carmelita C. Lambino, Petitioners, vs. Hon. Presiding Judge, Regional Trial Court, Branch 172, Valenzuela City, and BPI Family Bank, Respondents.

FACTS

Petitioners obtained a P600,000.00 housing loan from respondent BPI Family Bank, secured by a mortgage. The loan proceeds were to be released in stages based on construction completion. Petitioners defaulted on their amortizations, prompting the bank to initiate extrajudicial foreclosure. Petitioners then filed a complaint to annul the mortgage and foreclosure, alleging the bank released only P555,047.19 of the loan and unilaterally increased amortizations. During pre-trial, petitioners discovered from the bank’s brief that the net proceeds were further reduced by various deductions, including advance interest and charges, which they claimed were unauthorized.
After the pre-trial was terminated and trial was set, petitioners filed a Motion to Admit a Supplemental Complaint nearly two years later. This new pleading sought to allege these newly discovered unauthorized deductions and the imposition of escalating interest rates, arguing these rendered the foreclosure void. The trial court denied the motion, ruling it was belated and would alter the cause of action. The Court of Appeals affirmed this denial.

ISSUE

Whether the Regional Trial Court committed grave abuse of discretion in denying the petitioners’ Motion to Admit Supplemental Complaint.

RULING

The Supreme Court denied the petition and affirmed the lower courts’ rulings. The denial of the motion to admit the supplemental complaint was proper and not a grave abuse of discretion. A supplemental complaint is governed by Section 6, Rule 10 of the Rules of Court, which permits a party to file a pleading setting forth transactions, occurrences, or events that have happened since the date of the original pleading. The Court emphasized that the supplemental facts must be subsequent to the original complaint.
The legal logic is clear: the alleged unauthorized deductions and interest charges, which petitioners claimed to have discovered during pre-trial, were not events that occurred after the filing of the original complaint in 1995. These deductions were made at the time of each loan release in 1994. Therefore, they constituted facts existing and transactions completed before the original suit was initiated. Alleging them does not qualify as a supplemental cause of action but rather seeks to introduce a new, distinct cause of action based on pre-existing facts, which is not the function of a supplemental pleading. The proper remedy would have been an amendment under Section 2, Rule 10, but the motion was filed too late, after pre-trial had been concluded. The trial court’s exercise of discretion in disallowing a pleading that would unduly delay the proceedings and change the theory of the case was judicious and correct.