Icon Development Corporation v. National Life Insurance Company of the Philippines , G.R. No. 220686, 09 March 2020, Inting, J.

Icon Development Corporation v. National Life Insurance Company of the Philippines

G.R. No. 220686

09 March 2020

Inting, J.:

Second Division

 

Nature of the Action: This is a petition for review assailing the Court of Appeals’ Decision and Resolution which reversed and set aside the Regional Trial Court’s orders.

Facts:

Icon Development Corporation obtained several loans from National Life Insurance Company of the Philippines secured by several properties of the former. The Petitioner made several payments until 2008 but suddenly refused to make further payments despite repeated demands from the Respondent.

When the Petitioner defaulted in the payment of its obligation, the Respondent files a petition for the Extrajudicial Foreclosure of the mortgaged properties. Then the provincial Sheriff issued a notice of Extra Judicial Sale setting the auction of the mortgage properties.

However, the petitioner instituted a complaint for the Discharge of Obligation/or determination of Actual Indebtedness and Declaration of Nullity with Temporary Restraining Order before the RTC. The RTC then granted the TRO and enjoined the Sheriff and the Respondent from conducting the auction sale. The RTC found that the petitioner made an overpayment to the Respondent. Thus, it would be unfair for the Respondent to foreclose the mortgaged properties.

On appeal, the Court of Appeals highlighted that the RTC gravely abused its discretion when it failed to apply the guidelines in extrajudicial and judicial foreclosure of real estate mortgage. The petitioner moved for reconsideration but was CA denied the same.

Hence, the instant petition.

Issue:

Whether the petitioner had paid its obligation to the respondent and made an overpayment thus the Respondent will be unjustly enriched if it will be allowed to foreclose the mortgaged properties.

Ruling:

The petition must fail.

A.M. No. 99-10-05-0 was not observed.

It is clear that a WPI or TRO cannot be issued against extrajudicial foreclosure of real estate mortgage on a mere allegation that the debt secured by mortgage has been paid or is not delinquent unless the debtor presents an evidence of payment. Even an allegation of unconscionable interest being imposed on the loan by the mortgage shall no longer be a ground to apply for WPI. In addition, the rule prohibits the issuance of TRO or WPI unless the debtor pays the mortgagee at least 12 % per annum interest on the principal obligation as stated in the application for the foreclosure sale which shall be updated monthly while the case is pending. Likewise, it is mandated that all the requirements and restrictions prescribed for the issuance of a TRO and WPI, such as the posting of a bond, which shall be equal to the amount of the outstanding debt, and the time limitation for its effectivity, shall apply.

In the present case, the trial Court finds that the trial court judge erred in issuing the TRO and WPI based simply on petitioner’s allegations of payment, overpayment and the respondent’s imposition of unconscionable interest. It must be emphasized that the petitioner did not present a single evidence of overpayment of the obligation or even proof of payment thereof. Evidently, the RTC’s order enjoining the foreclosure proceedings is a patent circumvention of the guidelines outlined in A.M. No. 99-10-05-0.

The petitioner’s allegation of unjust enrichment in the instant petition is premised on its assertion before the trial court that there was payment and overpayment made to the respondent. The petitioner insists that it was able to present proof of payment and overpayment before the trial court. This Court disagrees.

The principle of unjust enrichment is found in Article 22 of the Civil Code, to wit:

 Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. (Italics supplied)

Clearly, there is unjust enrichment when: (1) A person is unjustly benefited; and (2) such benefit is derived at the expense of or with damages to another.

After a judicious scrutiny of the factual background and circumstances of the instant case, the Court finds that the petitioner failed to forward an evidence of payment and overpayment. It must always be remembered that a mere allegation is not a proof and the burden of evidence lies with the party who asserts the affirmative of an issue. The petitioner only based this assertion of unjust enrichment on bare allegation, without any other evidence to substantiate it. 

Therefore, the respondent was not unjustly benefited at the petitioner’s expense.