Bank Of The Philippine Islands v. Reyes

LEONARDO-DE CASTRO, J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure of the Decision1 dated April 30, 2008 of the Court of Appeals in CA-G.R. CV No. 88004, entitled "Bank of the Philippine Islands, as successor-in-interest of Far East Bank & Trust Company vs. Cynthia L. Reyes" which reversed the Decision2 dated November 3, 2005 of the Regional Trial Court (RTC) of Makati City, Branch 148 in Civil Case No. 03-180. The background facts of this case, as summed by the trial court, follow: This is an action for sum of money filed [b]y [p]laintiff Bank of the Philippine Islands, hereinafter referred to as BPI, as successor-in-interest of Far East Bank & Trust Company, referred hereto as Far East Bank, against defendant Cynthia L. Reyes, hereinafter referred to as defendant Reyes.

As alleged in the Complaint, defendant Reyes borrowed, renewed and received from Far East Bank the principal of Twenty Million Nine Hundred Thousand Pesos [sic] (₱20,950,000.00). In support of such allegation, four promissory notes were presented during the course of the trial of the case. As security for the obligation, defendant Reyes executed Real Estate Mortgage Agreements involving twenty[-]two (22) parcels of land.

When the debt became due and demandable, the defendant failed to settle her obligation and the plaintiff was constrained to foreclose the properties. As alleged, after due publication, the mortgaged properties were sold at public auction on December 20, 2001 by the Office of the Clerk of Court & Ex-Officio Sheriff of the Regional Trial Court of Malolos, Bulacan. At the public auction, the mortgaged properties were awarded to BPI in consideration of its highest bid price amounting to Nine Million Thirty[-]Two Thousand Nine Hundred Sixty Pesos (₱9,032,960.00).

On said date, the obligation already reached Thirty Million Forty (sic) Hundred Twenty Thousand Forty[-]One & 67/100 Pesos (₱30,420,041.67), inclusive of interest but excluding attorney's fees, publication and other charges. After applying the proceeds of the public auction to the outstanding obligation, there remains to be a deficiency and defendant Reyes is still indebted, as of January 20, 2003, to the plaintiff in the amount of ₱24,545,094.67, broken down as follows: Principal ₱19,700,000.00 Unsatisfied Interest 2,244,694.67 Interest 2,383,700.00 Penalty 216,700.00