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May 28, 2008

G.R. No. 153571, September 18, 2003

  • Credit Transactions: Real Estate Mortgage
  • Extra-judicial Foreclosure
  • Venue of Action


Benguet Management Corporation (BMC) and Keppel Bank Philippines Inc. (KBPI) entered into a Loan Agreement and Mortgage Trust Indenture. For the consideration of Php 190M, BMC mortgaged its properties located in Alaminos, Laguna and Iba, Zambales.

BMC defaulted so KBPI filed an application for extra-judicial foreclosure of real estate mortgage first with the Office of the Clerk of Court of the Regional Trial Court in Iba and later with the Office of the Clerk of Court of the Regional Trial Court in San Pablo City.

BMC contended that the application should be denied on grounds of wrong remedy and forum-shopping.

The trial court granted the foreclosure proceedings.


  • W/N KBPI violated the rule against forum-shopping in filing applications for extra-judicial foreclosure of real estate mortgage with both the RTCs in Iba and San Pablo City


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 venue of the extra-judicial foreclosure proceedings is the place where each of the mortgaged property is located.

The rationale of this rule is that an injunction order of the court is enforceable only within its territorial limits. Therefore, those properties subject to the same mortgage but are located in different provinces are outside the jurisdiction of the trial court. The remedy of the law is to allow the applicant to file separate injunction suits with another court which has jurisdiction over the latter properties.

BMC is not guilty of forum-shopping because the remedy provided by law is precisely to file separate injunction suits.


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