Far Eastern University INSTITUTE OF LAW Manila Problem No.

2 in Legal Forms SUMMARY FOR THE PLAINTIFF As security for the payment of a P14,000,000.00 loan from the Bank of the Philippine Islands, the Spouses Felix and Mary Cruz executed a Real Estate Mortgage (REM) on September 27, 1995, covering the following properties: 1. Transfer Certificate of Title No. T-500, located at Poblacion, Batangas City, measuring 271 square meters; 2. Transfer Certificate of Title No. T-501, located at Poblacion, Batangas City, measuring 143 square meters; and 3. Transfer Certificate of Title No. T-502, located at Poblacion, Batangas City, measuring 360 square meters. When the loan was not paid when it became due, the mortgage was extrajudicially foreclosed in accordance with the provisions of Act No. 3135, as amended, and at the auction sale on April 14, 1999, the mortgaged properties were sold to BPI as the highest bidder. On the same day, the Sheriff of the Regional Trial Court of Batangas City issued a Certificate of Sale to BPI. The period of redemption expired without the mortgagors exercising their right of redemption. Consequently, BPI executed an Affidavit of Consolidation on May 29, 2000. Thereafter, new Transfer Certificates of Title (TCT Nos. T-400 [canceling T-500], T-401 [canceling T-501] and T-402 [canceling T-502]) were issued over the subject properties in the name of BPI. On September 12, 2000, BPI filed with the Regional Trial Court of Batangas City an ExParte Petition for Writ of Possession. During the trial, BPI presented two bank employees. The first witness, Gil Mark, testified that he was employed by BPI Lipa City and he knew the Spouses Cruz. He presented and identified the Real Estate Mortgage and the Promissory Notes executed by them. He testified that after collection efforts by the bank failed, BPI availed of its remedies under the law, i.e., foreclosure of the mortgaged properties. Lastly, he testified that the Spouses Cruz did not redeem the properties during the redemption period. Next, BPI's Assistant Manager, Philip Padilla, testified that he knew the Spouses Cruz because he personally handled their account with the bank. The loan was approved upon the given security in the form of a Real Estate Mortgage. He testified that the Spouses Cruz personally went to see him to process and follow-up the proceeds of the loan, signing all the promissory notes and the real estate mortgage in his presence.

SUMMARY FOR THE DEFENDANTS On November 8, 2000, the Spouses Cruz filed a joint Opposition to BPI's ex-parte petition for issuance of writ of possession, wherein they alleged that (1) they did not execute a real estate mortgage in favor of BPI; (2) the foreclosure sale of the properties and all subsequent legal proceedings thereto are illegal, null and void; and (3) the new transfer certificates of title issued in the name of BPI with respect to the foreclosed properties should be canceled for being null and void. During the trial, Felix Cruz testified that he is a businessman and engaged in the resort business in Lemery, Batangas. He denied that he borrowed money from BPI, nor did he execute a real estate mortgage. When shown the promissory notes, real estate mortgage and the letters purportedly sent by him to BPI, he said that his signatures therein are not his. He also denied knowledge about the foreclosure sale and the issuance by the Sheriff of the Certificate of Sale in favor of BPI. On the other hand, when she testified, Mary Cruz presented her Senior Citizen identification card with a signature which she claimed is different from the signature appearing in the mortgage document.

Instructions: Prepare the following sections of a Legal Memo: 1. Statement of Facts 2. Questions Presented