BENGUET MANAGEMENT CORPORATION, v.
venue of the extra-judicial foreclosure proceedings is the
COURT OF APPEALS, KEPPEL BANK PHILIPPINES, INC. place where each of the mortgaged property is located.
G.R. No. 153571. September 18, 2003
The rationale of this rule is that an injunction order of the
court is enforceable only within its territorial limits.
FACTS: Therefore, those properties subject to the same
mortgage but are located in different provinces are
Benguet Management Corporation (BMC) and Keppel outside the jurisdiction of the trial court. The remedy of
Bank Philippines Inc. (KBPI) entered into a Loan the law is to allow the applicant to file separate
Agreement and Mortgage Trust Indenture. For the injunction suits with another court which has jurisdiction
consideration of Php 190M, BMC mortgaged its over the latter properties.
properties located in Alaminos, Laguna and Iba,
Zambales. In the case at bar, BMC is not guilty of forum shopping
precisely because the remedy available to them under
BMC defaulted so KBPI filed an application for extra- the law was the filing of separate injunction suits. It is
judicial foreclosure of real estate mortgage first with the mandated to file only one case for a single cause of
Office of the Clerk of Court of the Regional Trial Court in action, e.g., breach of mortgage contract, yet, it cannot
Iba and later with the Office of the Clerk of Court of the enforce any injunctive writ issued by the court to protect
Regional Trial Court in San Pablo City. its properties situated outside the jurisdiction of said
court. Besides, BMC was honest enough to inform the
BMC contended that the application should be denied on Zambales court in the certification of its complaint that it
grounds of wrong remedy and forum-shopping. The trial has a pending request not to give due course to the
court granted the foreclosure proceedings. foreclosure proceedings with the San Pablo court, in the
same manner that its petition for certiorari with the
BMC also claimed, among others, that Section 47 of the Court of Appeals notified the appellate court of the
General Banking Act (Republic Act No. 8791), which pendency of its complaint with the Zambales court. It
reduced the period of redemption for extra-judicially would therefore be unfair to dismiss the cases filed by
foreclosed properties of juridical persons from one year BMC on the ground of forum shopping where under the
to — "until, but not after, the registration of the circumstances the law gives it no other remedy.
certificate of foreclosure sale . . . which in no case shall be
more than three (3) months after foreclosure, whichever 2. No, the constitutionality of a law may be passed upon
is earlier," is unduly discriminatory and therefore by the Court, where there is an actual case and that the
unconstitutional. resolution of the constitutional question must be
necessary in deciding the controversy.
ISSUES:
In this case, the resolution of the constitutionality of
1.Did BMC violate the rule against forum-shopping in Section 47 of the General Banking Act (Republic Act No.
filing injunction against the applications for extra-judicial 8791) which reduced the period of redemption of extra-
foreclosure of real estate mortgage with both the RTCs judicially foreclosed properties of juridical persons is not
in Iba and San Pablo City. the very lis mota of the controversy. BMC is not asserting
a legal right for which it is entitled to a judicial
2.Is the new law (GENERAL BANKING LAW OF 2000) determination at this time inasmuch as it may not even
abrogating the right to one year redemption period of be entitled to redeem the foreclosed properties. Until an
corporate mortgagors is unconstitutional? actual controversy is brought to test the constitutionality
of Republic Act No. 8791, the presumption of validity,
Ruling: which inheres in every statute, must be accorded to it.
1. NO, Under the Procedure for Extra-Judicial
Foreclosure of Mortgage, an extra-judicial foreclosure
covering several properties located in different provinces
but covering only one indebtedness requires the
applicant to pay only one filing fee. This is regardless of
the number of properties to be foreclosed. However, the
