CIRCULAR
NO. 13 [1984]
TO: THE
JUSTICES OF THE INTERMEDIATE APPELLATE COURT, JUDGES OF THE REGIONAL
TRIAL
COURTS, METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS AND MUNICIPAL
CIRCUIT TRIAL COURTS
In view of information
received by the undersigned to the effect that at times there had been
less than strict observance of the provisions of Batas Pambansa Blg.
224
as well as certain Presidential Decrees, the attention of the Presiding
Justice and Associate Justices of the Intermediate Appellate Court and
the Judges of the other inferior courts is invited to Presidential
Decree
No. 385 entitled "Requiring Government Financial Institutions to
Foreclose
Mandatorily All Loans with Arrearages, Including Interest and Charges
Amounting
to at Least Twenty Percent (20%) of the Total Outstanding Obligation,"
and Presidential Decree No. 1818 entitled "Prohibiting Courts from
Issuing
Restraining Orders or Preliminary Injunctions in Cases Involving
Infrastructure
and Natural Resource Development Projects of, and Public Utilities
Operated
by, the Government; "and to Batas Pambansa 224 entitled "An Act
Regulating the Issuance of Restraining Orders, Amending for the Purpose
of Section Five of Rule Fifty-Eight of the Rules of Court."
The pertinent sections
of Presidential Decree No. 385 provide:chanroblesvirtuallawlibrary
"SECTION
1. It
shall be mandatory for government financial institutions, after the
lapse
of sixty [60] days from the issuance of this Decree, to foreclose the
collaterals
and/or guarantees granted by them whether the arrearages on such
account,
including accrued interest and other charges, amount to at least twenty
percent [20%] of the total outstanding obligations, including interest
and other charges, as appearing in the books of account and/or related
records of the financial institution concerned. This shall be without
prejudice
to the exercise by the government financial institutions of such rights
and/or remedies available to them under their respective contracts with
their debtors, including the right to foreclosure on loans, credits,
accommodations
and/or guarantees on which the arrearages are less than twenty percent
[20%].
"SECTION 2. No
restraining
order, temporary or permanent injunction shall be issued by the Court
against
any government financial institution in any action taken by such
institution
in compliance with the mandatory foreclosure provided in Section 1
hereof,
whether such restraining order, temporary or permanent injunction is
sought
by the borrower(s) or any third party or parties, except after due
hearing
in which it is established by the borrower and admitted by the
government
financial institution concerned that twenty percent [20%] of the
outstanding
arrearages has been paid after the filing of foreclosure proceedings.
"In case a
restraining
order or injunction is issued, the borrower shall nevertheless be
legally
obligated to liquidate the remaining balance of the arrearages, paying
ten percent [10%] of the arrearages outstanding as of the time of
foreclosure,
plus interest and other charges, on every succeeding thirtieth [30th]
day
after the issuance of such restraining order or injunction until the
entire
arrearages have been liquidated. These shall be in addition to the
payment
of amortizations currently maturing. The restraining order or
injunction
shall automatically be dissolved should the borrower fail to make any
of
the above-mentioned payments on due dates, and no restraining order or
injunction shall be issued thereafter.
"All
restraining orders
and injunctions existing as of the date of this Decree on foreclosure
proceedings
filed by said government financial institutions, shall be considered
lifted
unless finally resolved by the Court within sixty [60] days from date
hereof."Section 1 of
Presidential
Decree No. 1818 reads:chanroblesvirtuallawlibrary
"SECTION
1. No
Court in the Philippines shall have jurisdiction to issue any
restraining
order, preliminary injunction, or preliminary mandatory injunction in
any
case, dispute, or controversy involving an infrastructure project, or a
mining, fishery, forest or other natural resource development project
of
the government, or any public utility operated by the government,
including
among others public utilities for the transport of the goods or
commodities,
stevedoring and arrastre contracts, to prohibit any person or persons;
entity or government official from proceeding with, or continuing the
execution
or implementation of any such project, or the operation of such public
utility, or pursuing any lawful activity necessary for such execution,
implementation or operation."The entire
text of Batas
Pambansa Blg. 224 follows:chanroblesvirtuallawlibrary
"SECTION
1. Section
five of Rule fifty-eight of the Rules of Court in the Philippines is
hereby
amended to read as follows:chanroblesvirtuallawlibrary
'SECTION
5. Preliminary
injunction not granted without notice; issuance of restraining order.
- No preliminary injunction shall be granted without notice to the
defendant.
If it shall appear from the facts shown by affidavits or by the
verified
complaint that great or irreparable injury would result to the
applicant
before the matter can be heard on notice, the judge to whom the
application
for preliminary injunction was made, may issue a restraining order to
be
effective only for a period of twenty days from date of its issuance.
Within
the said twenty-day period, the judge must cause an order to be served
on the defendant, requiring him to show cause at a specified time and
place,
why the injunction should not be granted, and determine within the same
period whether or not the preliminary injunction shall be granted, and
shall accordingly issue the corresponding order. In the event that the
application for preliminary injunction is denied, the restraining order
is deemed automatically vacated.
"Nothing
herein contained
shall be construed to impair, affect or modify in any way any rights
granted
by, or rules pertaining to injunctions contained in, existing agrarian,
labor or social legislation.
"SECTION 2.
Any
provision of law, decree or resolution inconsistent with the provisions
of this Act is hereby deemed repealed, superseded or modified
accordingly.
"SECTION 3.
This
Act shall take effect upon its approval.cralaw:red
"Approved,
April
16, 1982. [B. P. No. 293]."
Strict
compliance is
herewith enjoined.
May 17, 1984.
[Sgd.]
ENRIQUE
M. FERNANDOChief
Justice
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