SEARTH COMMODITIES CORPORATION, ARACELI CAMACHO, PROSPERO CASTRO and MANUEL TARROJA, vs. COURT OF APPEALS and DEVELOPMENT BANK OF THE PHILIPPINES.
- G.R. Number: G.R. No. 64220
- Promulgated: 1992-03-31
- Ponente: Gutierrez, Jr., J.
Doctrine
Extraordinary relief in the form of injunctions against government financial institutions' mandatory foreclosure actions is barred unless the borrower proves, after due hearing, payment of 20% of outstanding arrearages made after filing of foreclosure proceedings.
An application for preliminary injunction to restrain a sale pending resolution of disputed loan balances raises matters primarily for determination in the main action for cancellation/collection.
Facts
Searth borrowed P370,000 from DBP on 17 May 1972 to finance a hybrid tomato plantation in Tubao, La Union.
DBP proceeded with foreclosure and sale proceedings; petitioners sought a preliminary injunction to stop sale of three residential properties.
Account computations in the record show a principal of P370,000, interest to Dec. 31, 1972, credits for expropriation and chattel sale, yielding a small balance in one computation (P17,858.99), while DBP claimed a much larger balance (P1,178,557.99) as of 1982.
Petitioners asserted willingness to pay the balance to prevent deprivation of their residences; the precise escalation of the loan balance was for determination in the main cancellation case, Civil Case No. 39128.
Issues
Whether the Court should direct issuance of a writ of injunction to stop the sale of the three residential properties.
Whether a restraining order or preliminary injunction may be issued against a government financial institution acting in compliance with mandatory foreclosure provisions.
Ruling
The only question before the Court is whether to direct issuance of an injunction stopping sale of three residential properties; the petition challenges the Court of Appeals' denial of a preliminary injunction in Civil Case No. 39128.
A court shall not issue a restraining order, temporary or permanent injunction against any government financial institution acting in compliance with mandatory foreclosure provisions, except after due hearing and upon establishment that 20% of outstanding arrearages was paid after foreclosure proceedings were filed.
Keywords
G.R. No. 64220, preliminary injunction, Civil Case No. 39128, real estate and chattel mortgages, Presidential Decree (P.D.) No. 27, annulment of real estate mortgages and foreclosure sale, usurious interest, oversecured loan, Presidential Decree (P.D.) No. 385, government financial institution, mandatory foreclosure, restraining order, temporary or permanent injunction, writ of preliminary injunction, notice of lis pendens, equitable relief of injunction, nullity of the foreclosure, petitioners, rollo, appellate