191 EQUITABLE PCI BANK, INC., Petitioner, vs.

OJ
MARK TRADING, INC. and SPOUSES OSCAR AND
EVANGELINEMARTINEZ,Respondents.
[G.R.No.165950;August11,2010]
TOPIC:FAMILYHOME,FC152162[excludeFC157,161,
162]
PONENTE:VILLARAMA,JR.,J.

AUTHOR:
NOTES:(ifapplicable)

FACTS:(chronologicalorder)

1.

RespondentspousesOscarandEvangelineMartinezobtainedloansfrompetitionerEquitablePCIBank,Inc.intheaggregate
amountofFourMillionFortyEightThousandEightHundredPesos(P4,048,800.00).Assecurityforthesaidamount,aReal
EstateMortgage(REM)wasexecutedoveracondominiumunitinSanMiguelCourt,ValleVerde5,PasigCity,MetroManila
wherethespousesareresiding.
2. RespondentOscarMartinezsignedtheREMbothasprincipaldebtorandasPresidentoftheregisteredownerandthirdparty
mortgagor,respondentOJMarkTrading,Inc.TheREMwasannotatedonCondominiumCertificateofTitleNo.PT21363ofthe
RegistryofDeedsofPasigCity.2
3. TheSpousesdefaultedinthepaymentoftheiroutstandingloanobligation
4. Inaletter,theyofferedtosettletheirindebtednesswiththeassignmenttotheBankofacommerciallotofcorrespondingvalue
andalsorequestedforrecomputationatalowerinterestrateandcondonationofpenalties
5. WhiletheBanksofficersheldameetingwithMr.Martinez,hefailedtosubmittherequireddocumentssuchascertificatesoftitle
andtaxdeclarationssothatthebankcanevaluatehisproposaltopaythemortgagedebtviadacionenpago.
6. Consequently,theBankinitiatedtheextrajudicialforeclosureoftherealestateMortgage.
7. TheSpousesfiledacivilactionforTemporaryRestrainingOrder(TRO),InjunctionandAnnulmentofExtrajudicial
ForeclosureSaleintheRTCofPasigCity,whichtheRTCgrantedbyissuingaTROfor20days.
8. IntheirComplaintWithApplicationforTemporaryRestrainingOrder,7respondentssoughttoenjointheimpendingforeclosure
saleallegingthatthesamewashasty,premature,unreasonableandunwarranted,andalsoclaimingdefectsintheexecutionofthe
REM.Respondentsimputedbadfaithonthepartofpetitionerwhodidnotofficiallyinformthemofthedenialordisapprovalof
theirproposaltosettletheloanobligationby"dacionviaassignmentofacommercialproperty."Respondentsmaintainedthat
asidefromtheREMbeingillegallynotarized,incompleteandunenforceable,theobligationsubjectthereofhadbeenextinguished
bythedacionproposalconsideringthatthevalueofthepropertyofferedwasmorethansufficienttopayforthemortgagedebt.It
wasfurtheraverredthatthesubjectpropertyisbeingusedandoccupiedbyrespondentspousesasafamilyhome.
9. TheSpousesontheotherhandclaimsthatthesaidunitbeingaFamilyHomeisexemptfromforeclosureasprovided
underArt.153oftheFamilyCodeandthatiftheinjunctivereliefwouldnotbegranted,theywillsufferanirreparable
injury,aswellastheirchildren.
10. ItisallegedbythepetitionerEquitableBankthatwhilethecondominiumunitissupposedlyafamilyhome,itisadmittedly
ownedbythecorporationandnotbytheconjugalpartnershiporabsolutecommunityoftheSpousesandthateven
assumingthatOJMarkTrading,Inc.isafamilycorporation,theSpousesstancecontravenestheestablishedrulethat
propertiesregisteredinthenameofthecorporationareownedbyitasanentityseparateanddistinctfromitsmembersor
stockholders.
11. TheRTCgrantedtheapplicationforawritofpreliminaryinjunction.
12. TheCAaffirmed.
ISSUE(S):Whetherornottherespondentshaveshownaclearlegalrighttoenjointheforeclosureandpublicauctionofthethirdparty
mortgagorsproperty(whichisbeingusedasfamilyhome)whilethecaseforannulmentofREMonsaidpropertyisbeingtried.
HELD:NO.
RATIO:
TheclaimofexemptionunderArticle153oftheFamilyCode,therebyraisingissueonthemortgagedcondominiumunitbeing
afamilyhomeandnotcorporateproperty,isentirelyinconsistentwiththeclearcontractualagreementoftheREM.Assuming
arguendothat the mortgaged condominium unit constitutes respondents family home, the same will not exempt itfrom
foreclosureasArticle155(3)ofthesameCodeallowstheexecutionorforcedsaleofafamilyhomefordebtssecuredby
mortgagesonthepremisesbeforeoraftersuchconstitution.

TheSpousesfailedtoshowthattheyhavearighttobeprotectedandthattheactsagainstwhichthewritistobedirectedare
violativeoftheirrightsunderArt.153oftheFamilyCode
Inarealestatemortgagewhentheprincipalobligationisnotpaidwhendue,themortgageehastherighttoforeclosethemortgageand
tohavethepropertyseizedandsoldwiththeviewofapplyingtheproceedstothepaymentoftheobligation
TheCourtnotesthattheclaimofexemptionunderArt.153oftheFamilyCode,therebyraisingissueonthemortgagedcondominium
unitbeingafamilyhomeandnotcorporateproperty,isentirelyinconsistentwiththeclearcontractualagreementoftheREM.
Assumingarguendothatthemortgagedcondominiumunitconstitutesrespondentsfamilyhome,thesamewillnotexemptitfrom
foreclosureasArticle155(3)ofthesameCodeallowstheexecutionorforcedsaleofafamilyhomefordebtssecuredbymortgages
onthepremisesbeforeoraftersuchconstitution.TheSpousesthusfailedtoshowanostensiblerightthatneedsprotectionofthe
injunctivewrit.Clearly,theappellatecourtseriouslyerredinsustainingthetrialcourtsordersgrantingtheSpousesapplicationfor
preliminaryinjunction
Anentthegraveandirreparableinjurywhichrespondentsallegedtheywillsufferif
nopreliminaryinjunctionisissued,thisCourthaspreviouslydeclaredthatallisnotlostfordefaultingmortgagorswhoseproperties
wereforeclosedbycreditorsmortgagees,viz:
Inanycase,petitionerswillnotbedeprivedoutrightlyoftheirproperty.PursuanttoSection47oftheGeneralBankingLawof2000,
mortgagorswhohavejudiciallyorextrajudiciallysoldtheirrealpropertyforthefullorpartialpaymentoftheirobligationhavethe
righttoredeemthepropertywithinoneyearafterthesale.Theycanredeemtheirrealestatebypayingtheamountdue,withinterest
ratespecified,underthemortgagedeed;aswellasallthecostsandexpensesincurredbythebank
Moreover,inextrajudicialforeclosures,petitionershavetherighttoreceiveanysurplusinthesellingprice.Thisrightwasrecognizedin
Sulitv.CA,inwhichtheCourtheldthatifthemortgageeisretainingmoreoftheproceedsofthesalethanheisentitledto,thisfact
alonewillnotaffectthevalidityofthesalebutsimplygivesthemortgagoracauseofactiontorecoversuchsurplus
CASELAW/DOCTRINE:
DISSENTING/CONCURRINGOPINION(S):