Friday, December 16, 2011

Equitable PCI Bank v. Martinez, G.R. No. 165950, August 11, 2010

Facts: Respondent-spouses Oscar and Evangeline Martinez obtained a loan from petitioner Equitable PCI Bank secured by a real estate mortgage over a condominium unit in San Miguel Court, Valle Verde 5, Pasig City, Metro Manila, where the spouses are residing.

The mortgage was signed by respondent Oscar Martinez both as a principal debtor and as a president of the registered owner and third-party mortgagor, respondent OJ-Mark Trading, Inc.

Pursuant to respondent-spouses failure to settle the obligation, petitioner initiated the extrajudicial foreclosure of the real estate mortgage by filing an ex parte petition before the Regional Trial Court (RTC).

Respondent spouses filed a civil case or “Temporary Restraining Order (‘TRO’), Injunction and Annulment of Extrajudicial Foreclosure Sale” seeking to enjoin the impending foreclosure sale. One of the contentions raised by respondent-spouses was that that the extrajudicial foreclosure will cause grave injustice and irreparable injury to respondent-spouses and their four (4) young children because their family home, in which they were residing since 1997, at least insofar as the unencumbered area in excess of 180.750 sq. m., is exempt from forced sale or execution under Article 155 of the Family Code. Petitioner, on the other hand, will not suffer any loss if the foreclosure will not proceed.

The trial court granted the issuance of preliminary injunction. Hence, this appeal.

Issue: Whether or not respondent-spouses have shown a clear legal right to enjoin the foreclosure and public auction of the third-party mortgagor’s property while the case for annulment of REM on said property is being tried?

Ruling: No. Respondent-spouses’ alleged “proprietary right” in the mortgaged condominium unit appears to be based merely on respondents’ averment that respondent OJ-Mark Trading, Inc. is a family corporation. However, there is neither allegation nor evidence to show prima facie that such purported right, whether as majority stockholder or creditor, was superior to that of petitioner as creditor-mortgagee. The rule requires that in order for a preliminary injunction to issue, the application should clearly allege facts and circumstances showing the existence of the requisites. It must be emphasized that an application for injunctive relief is construed strictly against the pleader. 

Rationale: The court ruled that the claim of exemption under Art. 153 of the Family Code, thereby raising issue on the mortgaged condominium unit being a family home and not corporate property, is entirely inconsistent with the clear contractual agreement of the real estate mortgage. Assuming arguendo that the mortgaged condominium unit constitutes respondents’ family home, the same will not exempt it from foreclosure as Article 155 (3) of the same Code allows the execution or forced sale of a family home “for debts secured by mortgages on the premises before or after such constitution.” Respondents thus failed to show an ostensible right that needs protection of the injunctive writ. Clearly, the appellate court seriously erred in sustaining the trial court’s orders granting respondents’ application for preliminary injunction.

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