G.R. No. 235604 , May 03, 2021
SPOUSES LEONARDO AND MARILYN ANGELES, FOR THEMSELVES AND AS ATTORNEY-IN-FACT OF OLYMPIA C. BERNABE, AURORA ANGELES, PETER A. CARTAGENA, FRANCISCO A. CARTAGENA III, AND MANY PLACES, INC., PETITIONERS, VS. TRADERS ROYAL BANK (NOW KNOWN AS BANK OF COMMERCE), RESPONDENT.

FACTS

On February 21, 1984, Marilyn Angeles and Olympia Bernabe obtained a P2,000,000.00 loan from Traders Royal Bank, secured by a real estate mortgage on several parcels of land in Angeles City registered in the names of various family members. The loan was increased to P3,200,000.00 on December 15, 1987. From May 17, 1988 to October 14, 1997, the parties entered into six more loan agreements, with the total loan amount reaching P26,430,000.00, all annotated on the mortgaged titles. Following the eruption of Mt. Pinatubo in 1991, the bank lost its records, but the borrowers continued making payments as advised. On August 7, 1998, Marilyn and Bernabe executed two promissory notes for P26,430,000.00 and P5,451,456.85 in favor of the bank. After the borrowers defaulted, Bank of Commerce (which had purchased Traders Royal Bank) filed a petition for extrajudicial foreclosure on March 22, 2004. The bank emerged as the highest bidder at the auction sale, and a certificate of sale was annotated on September 20, 2005. During the redemption period, Bernabe redeemed three properties for P4,900,000.00, but the rest were not redeemed. Consequently, on November 17, 2006, Bank of Commerce consolidated ownership of the remaining properties. In 2008, the Angeles Family filed a Complaint for Annulment of the Consolidation of Ownership and Cancellation of Titles and Damages against the bank. The Regional Trial Court dismissed the complaint, a decision affirmed by the Court of Appeals. The petitioners then filed a Petition for Review on Certiorari before the Supreme Court.

ISSUE

Whether the Court of Appeals erred in affirming the Regional Trial Court’s dismissal of the complaint for annulment of the consolidation of ownership and cancellation of titles, which raised questions regarding the validity of the foreclosure, the accounting of the loan obligation, the effect of a Stay Order from a corporate rehabilitation proceeding, and the claim of novation.

RULING

The Supreme Court denied the petition. The Court held that the petition raised questions of fact, not law, and the petitioners failed to demonstrate that their case fell under any exception to the rule that only questions of law are reviewable in a Rule 45 petition. The factual findings of the lower courts—that the petitioners failed to substantiate their claims of full payment, novation, or irregularity in the foreclosure proceedings—were conclusive and binding. The Court found no merit in the petitioners’ arguments. It upheld the lower courts’ findings that the mortgaged properties were individually owned and not assets of Many Places, Inc., and thus were not covered by the Stay Order from the corporate rehabilitation proceeding. Furthermore, the foreclosure proceedings preceded the Stay Order, so the order could not annul the consolidation of ownership. The petitioners’ new claim regarding the recomputation of the loan obligation was raised too late, only on appeal. The Supreme Court affirmed the Court of Appeals’ Decision and Resolution.