A bill filed in the Senate seeks to prohibit courts from issuing temporary restraining orders (TROs) or preliminary injunctions in certain cases involving extra-judicial and judicial foreclosure of real estate mortgages.
Senate Bill 1394, filed by Sen. Nancy Binay, seeks to ensure the implementation of the Supreme Court Resolution 99-10-05-0 issued on February 20, 2007 adopting rules with respect to extra-judicial and judicial foreclosure of real estate mortgages.
The SC resolution provided that no restraining order or writ of preliminary injunction shall be granted in certain instances unless the applicant presents evidence in support of the application for the restraining order or the writ.
“The intention of the Supreme Court Resolution intends to discourage party- litigants from delaying foreclosure proceedings by filing applications for restraining order or writ of preliminary injunction which are groundless and unjustified,” Binay stated in her bill.
“However, despite the specific mandate of the Supreme Court, there are instances when courts grant the restraining order or writ notwithstanding the absence of evidence in support of the application. Thus, foreclosure proceedings are unduly delayed and, consequently, impair legitimate commercial interests,” she said.
She said public policy dictates that “legitimate commercial interests must be protected from unscrupulous litigants who abuse the judicial system.”
This is consistent with the policy of the state enshrined in Section 20, Article II of the Constitution, which provides that the State recognizes the indispensable role of the private sector, encourage private enterprise, and provides incentives to needed investments.
“It is therefore being proposed, consistent with the provisions of the Supreme Court Resolution, that foreclosure proceedings involving real estate mortgage, whether extra-judicial or judicial, may not be restrained or enjoined without the presentation of evidence in support of the application for the restraining order or writ of preliminary injunction,” Binay said.
Among the relevant provisions of the SC resolution are as follows: “No temporary restraining order or writ of preliminary injunction against the extrajudicial foreclosure of real estate mortgage shall be issued on the allegation that the loan secured by the mortgage has been paid or is not delinquent unless the application is verified and supported by evidence of payment;”
“No temporary restraining order or writ of preliminary injunction against the extrajudicial foreclosure of real estate mortgage shall be issued on the allegation that the interest on the loan is unconscionable, unless the debtor pays the mortgagee at least twelve percent per annum interest on the principal obligation as stated in the application for foreclosure sale, which shall be updated monthly while the case is pending;” and
“Where a writ of preliminary injunction has been issued against a foreclosure of mortgage, the disposition of the case shall be speedily resolved.”
The courts concerned shall submit to the SC, through the Office of the Court Administrator, quarterly reports on the progress of the cases involving P10 million and above, the resolution ordered.
Under SB 1394, no court in the Philippines shall have jurisdiction to issue any TRO, preliminary injunction, or preliminary mandatory injunction against extrajudicial foreclosure of real estate mortgage in the following instances: An allegation that the loan secured by the mortgage has been paid or is not delinquent, unless the application for the restraining order and/or preliminary injunction or preliminary mandatory injunction is verified and duly supported by evidence of payment of the loan; and
An allegation that the interest on the loan is usurious or unconscionable, unless the debtor pays the mortgagee at least twelve percent per annum interest on the principal obligation as stated in the application for foreclosure sale, which shall be updated monthly while the case is pending. In case of failure by the debtor to update payment of the twelve percent per annum interest, the preliminary injunction or preliminary mandatory injunction may be lifted.
