G.R. No. 123050 January 20, 1999
SUICO INDUSTRIAL CORPORATION, SPS. ESMERALDO and ELIZABETH SUICO,
petitioners,
vs.
COURT OF APPEALS and DEVELOPMENT BANK INC., respondents.
MARTINEZ, J.:
On January 19, 1987, petitioner Suico Industrial Corporation, represented by Esmeraldo Suico, its president, secured a loan of P2,500,000.00 payable in five (5) years, from respondent Private Development Corporation of the Philippines (now PDCP Bank). As security thereof, petitioner spouses mortgaged their two (2) real estate properties situated at Mandaue City, Cebu covered by Transfer Certificate of Title (TCT) Nos. 18324 and 23116. Sometime in 1991, petitioners obtained a second loan of P2,000,000.00 payable in five, (5) years, and secured it with the same real properties, which was granted respondent PDCP Bank.
For failure to pay the balance of the loan amounting to P3,900,000.00 as of 1993, respondent PDCP Bank caused the extrajudicial foreclosure of the real estate mortgage. It was adjudged as the highest bidder and a Certificate of Sale dated February 29, 1993 was duly issued by the Sheriff of Mandaue in its favor. Petitioner failed to redeem the said properties. After expiration of the one (l) year redemption period, ownership over the properties were consolidated and Nos. 34988 and 34987 were correspondingly issued in the name of respondent PDCP Bank.
On November 16, 1994, respondent PDCP Bank filed with the Regional Trial Court (RTC) of Mandaue City, Branch 28 an "Ex Parte Motion for the Issuance of Writ of Possession" 1 which was granted in an order dated December 8, 1994. 2 On December 15, 1994, a writ of possession 3
was thereafter issued. However, the writ could not be enforced because on December 9, 1994, petitioners filed a "Complaint for Specific Performance, Injunction and Damages (with Prayer for Restraining Order)" 4
before the RTC of Mandaue City, Branch 56 seeking to enjoin respondent PDCP Bank from selling the mortgaged properties and from taking physical possession over the same during the pendency of the case.
On January 17, 1995, RTC Branch 56 issued an Orders 5 granting the injunction sought for by petitioners (therein plaintiffs). It likewise deferred resolution of the motion to dismiss petitioner' complaint filed by respondent PDCP (therein defendant). Pertinent portions of the order state that:
During the hearing of the plaintiffs' application for preliminary injunction, plaintiffs presented Esmeraldo Suico who testified that per arrangement with the certain Mae Siy and Fajardo, former officers of the Defendant Bank, Plaintiff were supposed to intentionally default in their payments and eventually consolidate title in Defendant. In exchange, Defendant was supposed to allow a repurchase of the property by plaintiffs or their recommendee at Five Million Pesos (P5,000, 000.00).
Also presented was Raul Perez, Asset Clerk of the Assessor's Office of Mandaue City, who testified that it was indeed herein Plaintiffs-spouses who facilitated the transfer of the lots to Defendant whose two representatives, even showed up to inquire if Plaintiffs had been at Perez' office.
After careful consideration of the evidence so far submitted, this Courts is convinced that there is indeed was an arrangement between herein plaintiffs defendant as adverted to by Plaintiffs. This conviction by the Court however will naturally be influenced by whatever evidence the parties will present in the course of the trial of this case.
The Court also realizes that a denial of the prayer for preliminary injunction will result in irreparable damage to plaintiffs as a consequence of the dislocation of their family and business and possible loss of the properties under litigation should Defendant decide to dispose of the same.
On the other hand, maintenance of status quo thru injunction will hardly prejudice the Defendant bank whose name the properties have been already titled. Furthermore, Defendant's interest will be amply protected not only by the injunction bond which the Court will issue but also because the passage of time will certainly enhance the value of the properties.
Foregoing considered, the Court in the interest of justice and equity, hereby GRANTS the injunction prayed for and accordingly orders the Defendant, its representatives and assigns (enjoined) from disposing of the properties covered by Transfer Certificate of Title Nos. 18324 and 23116 including improvements found therein or taking physical possession of the same until further orders from this Court.
Bond hereby fixed at fifty thousand Pesos (P50,000.00).
Resolution of Defendant's Motion to Dismiss is deferred pending further of evidence.
SO ORDERED.6
On January 18, 1995, RTC Branch 56 issued the Writ of Preliminary Injunction, providing therein:
Whereas, on December 13, 1994, the Regional Trial Court, Branch 28 of Mandaue City, issued a Restraining Order in the above-entitled case, enjoining the defendant PDCP Bank, its attorneys, agents or its duly authorized officer or persons acting for and their behalf from selling the mortgaged properties described in the complaint to person not recommended by plaintiffs and from taking physical possession over the same pending resolution of the prayer for issuance of permanent injection.
Whereas, after hearing, this Court on January 17, 1995, issued an Order expanding the restraining order dated December 13, 1994, issued by RTC Branch 28 into an order for the issuance of a writ of preliminary injunction, upon plaintiffs' posting a bond in the amount of P50,000.00 conditioned for the payment of damages which the defendant may suffer by reason of the issuance of the injunction.
Whereas, the bond as required was duly filed and approved by the Court on January 18, 1995.
Whereas, you Private Development Corporation of the Philippines now known as PDCP Bank, your representative and assigns are hereby ordered not to dispose of the properties covered by Transfer Certificate of Title Nos. 18324 and 23116 including improvements found therein or take physical possession of the same until further orders from this Court. 7
The Motion for Reconsideration (of the Order dated January 17, 1995) and the Motion to Dismiss (petitioners' complaint) both filed by respondent PDCP bank were denied by RTC Branch 56 in an Order dated June 21, 1995. 8
In its petition for certiorari and mandamus with prayer for a writ of preliminary prohibitory injunction filed with the Court of Appeals on June 26, 1995, respondent PDCP Bank prayed that the Order dated January 17, 1995 granting the writ of preliminary injunction be set aside, declared void and without any further force and effect. It likewise prayed that the Sheriff of Mandaue City be ordered to implement the writ of possession.
On August 28, 1995, respondent Court of Appeals rendered the challenged decision 9 which ruled that RTC Branch 56 exceed its jurisdiction when issued the writ of injunction against the enforcement of the writ of possession granted by RTC Branch 28. It ratiocinated in this wise:
In a petition for Certiorari, the court must confine itself to the issue of whether or not the respondent court lacked of exceeded its jurisdiction or committed grave abuse of discretion (San Pedro vs. Court of Appeals, 235 SCRA 145). Here, the respondent Regional Trial Court exceeded its jurisdiction when it issued the writ of injunction complained of.
Well-settled is the rule that no courts has the power to interfere by injunction with the judgments or orders of another court of concurrent jurisdiction having the power to grant the relief sought by injunction. . . . (Rafael Aquino, Sr., et al. v. Judge Julito B. Valenciano, et al., A.M. No. MTJ-93-746, December 27, 1994, 239 SCRA 428; Prudential Bank v. Gapultos, No. 41835, 19 January 1990, 181 SCRA 159; Darwin v. Tokonaga, G.R. No. 54177, 27 May 1991, 197 SCRA 442; Santos v. Bayhon, G.R. No. 88643, July 1991, 199 SCRA 525).
Here, the respondent court issued an injunction against the enforcement of the writ of possession granted by the Regional Trial Court, Branch 28. This cannot be done. It was the ministerial duty of the trial court to grant such writ of possession.
Said the Supreme Court.
. . . With more reason, a purchaser can demand writ of possession after the expiration of the redemption period. Thus, in F. David Enterprises vs. Insular Bank of Asia & America, we held:
It is settled the buyer in a foreclosure sale becomes the absolute owner of the property purchased if it is not redeemed during the period of one year after the registration of the sale. As such, he is entitled to the possession of the property and can demand it at any time following the consolidation of ownership in his name and the issuance to him of a new transfer certificate of the title. The buyer can in fact demand possession of the land even during the redemption period except that he has to post a bond in accordance with Section 7 of Act 3135 as amended. No such bond is required after the redemption period if the property is not redeemed. Possession of the land then becomes an absolute right of the purchaser as confirmed owner. Upon proper application and proof of the title, the issuance of the writ of possession becomes a ministerial duty of the court.' (Aurora Gonzales Vda. de Zaballero, et al. v. Hon. Court of Appeals, et al G.R.No. 106958, February 9, 1994, 229 SCRA 810, F. David Enterprises vs. Insular Bank of Asia & America, 184 SCRA 294)
Much as We sympathize with the private respondents, it was clearly petitioner's right to ask for the writ and to acquire possession of subject properties and its improper for the respondent court to stay implementation of the said writ.
As to the other reasons advanced by petitioner, as stressed by private respondent, the same are questions of the fact better left for respondent court's determination, at this stage of the litigation below.
WHEREFORE, the petition is hereby GRANTED and the questioned Order of January 17, 1995 is SET ASIDE. Cost against private respondents.
SO ORDERED10
The motion for reconsideration having been in a Resolution dated December 12, 1995 11 petitioners filed this instant certiorari petition praying that the writ of preliminary injunction issued by RTC Branch 56 be upheld so that a trial on the merits of the case may ensure.
The focal point of inquiry is whether or not RTC Branch, 56 can enjoin the enforcement of the writ of possession issued by RTC Branch 28.
Petitioners alleged in their complaint for specific performance, injunction and damages filed before RTC Branch 56 that they had agreed on a plan with respondent PDCP Bank to intentionally default in their payments so that a foreclosure of mortgage can be effected and title to the parcels of land would eventually be consolidated in the name of respondent PDCP Bank. Thereafter, respondent PDCP Bank was supposed to allow them to purchase the properties for P5,000,000.00 thru the latter's recommended buyer. The recommendees of petitioners rejected by respondent PDCP Bank. The Selling price thereof was increased thereby preventing petitioners from redeeming the properties. In this regard, petitioners sought to enjoin the respondent PDCP Bank from selling the said mortgaged properties to persons not recommended petitioners and from taking physical possession thereof during the pendency of the case.
Thus, petitioners now seek to uphold the propriety of the writ of injunction issued by RTC Branch 56 enjoining the enforcement of the writ of possession granted by RTC Branch 28.
The petition does not deserve merit.
First. RTC Branch 56 acted with grave abuse of discretion for having issued the writ of injunction which prevented the implementation of the writ of possession issued by RTC Branch 28. The issuance of the writ of injunction was not proper in the absence of any legal right on the part of petitioners to enjoin the enforcement of the writ of possession in favor of respondent PDCP Bank.
We espoused in Arcega v. Court of Appeals 12 that:
For the issuance of the writ·of preliminary injunction to be proper, it must be shown that the invasion of the right sought to be protected is material and substantial, that the right of complainant is clear and unmistakable and that there is an urgent and paramount necessity for the writ to prevent serious damage. 13
In the absence of a clear legal right, the issuance of the injunctive writ constitutes grave abuse of discretion. 14 Injunction is not designed to protect contingent or future rights. Where the complainants right or title is doubtful or disputed, injunction is not proper. 15 The possibility of irreparable damage without proof of actual existing right is no ground for an injunction. 16
When petitioners failed to pay the balance of the loan and thereafter failed to redeem the properties, title to the property had already been transferred to respondent PDCP Bank. Respondent PDCP Bank's right to possess the property is clear and is based on its right of ownership as a purchaser of the properties in the foreclosure sale to whom title has been conveyed. l7 Under Section 7 of Act No. 3135 and Section 35 of Rule 39, the purchaser in a foreclosure sale is entitled to possession of the property. 18 Respondent PDCP Bank has a better right to possess the subject property because of its title over the same. 19
Furthermore, petitioners undertook a procedural misstep when it filed a suit for specific performance injunction and damages before RTC Branch 56 instead of a petition to set aside the sale and cancellation of the writ of possession as provided under Section 8 Act 3135:
Sec. 8. The debtor may, in the proceedings: in which possession was requested, but not later than thirty days after the purchaser was given possession, petitioner that the sale be set aside and the writ of possession canceled, specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in accordance with the provisions hereof, and the court shall take cognizance of this petition in accordance with the summary procedure provided for in section one hundred and twelve of Act Number Four hundred and ninety six, and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person who obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen of Act Numbered Four hundred and ninety six; but the order of the possession shall continue in effect during the pendency of the
appeal. 20
Second. Indeed, it is the ministerial duty of the trial court to grant such writ of possession.
In Sulit v. Court of Appeals, 21 the rule was applied in this manner:
No discretion appears to be left to the Court. Any question regarding the regularity and validity of the sale, as well as the consequent cancellation of the writ is to be determined in a subsequent proceeding as outlined in Section 8, and it cannot be raised as a justification for opposing the issuance of the writ of possession since, under the Act, the proceeding for this is ex parte. 22 Such recourse is available to a mortgage, who effects the extrajudicial foreclosure of the mortgage even before the expiration of the period of redemption provided by law and the Rules of Court. 23
This is stated also in A. G. Development Corporation v. Court of Appeals: 24
A writ of possession is generally understood to be an order whereby the sheriff is commanded to place a person in possession of a real or personal property, 25 such as when a property is extrajudicially foreclosed. 26 In this regard, the issuance of a writ of possession to a purchaser in an extrajudicial foreclosure is merely a ministerial function. 27 As such, the Court neither exercises its official discretion nor judgment. 28
Third. The statute books are replete with jurisprudence to the effect that trial courts have no power to interfere by injunction with the orders or judgments issued by another court of concurrent or coordinate jurisdiction. 29 In this regard, RTC Branch 56 therefore has no power nor authority to nullify or enjoin the enforcement of the writ of possession issued by RTC Branch 28.
WHEREFORE, the petition is DENIED. The Decision dated August 28, 1995 and the Resolution dated December 12, 1995 of respondent Court of Appeals are hereby AFFIRMED. Costs against petitioners.1âwphi1.nęt
SO ORDERED.
Davide, Jr., C.J., Melo, Kapunan and Buena, JJ., concur.
Footnotes
1 Docketed as GLRO-Rec. No. 4030 LRC Case No. 3, entitled "IN THE MATTER OF THE PETITION FOR THE ISSUANCE OF WRIT OF POSESSION, PRIVATE DEVELOPEMENT CORPORATION OF THE PHILIPPINES (NOW PDCP BANK), petitioner-movant vs. SUICO INDUSTRIAL CORPORATION AND SPOUSES ESMERALDO AND ELIZABETH SUICO. Oppositors."
2 Per Judge Mercedes Gozo-Dadole.
3 Issued by Bonifacio Co Virtudes in his capacity as Clerk of Court VI, Ex-Officio Provicial Sheriff of RTC Branch 28, Mandaue City; Annex "D" of Petition; Rollo, p. 44.
4 Docketed as Civil Case No. MAN-2321, entitled "SUICO INDUSTRIAL CORPORATION, SPS PHILIPPINES, now known as PDCP Bank," Annex "E" of Petition: Rollo , pp. 45-52.
5 Per by Judge Augustine A. Vestil.
6 Annex "F" of Petition; Rollo, pp. 55-56.
7 Annex "G" of Petition; Rollo, pp. 57-58.
8 Annex "H" of Petition; Rollo, pp. 59-60.
9 Penned by Associate Justice Fidel P. Purisima (now Associate Justice of the Supreme Court), Chairman and concurred in by Associate Justices Eubulo G. Verzola and Godardo A. Jacinto, Special Second Division; Annex "A" of Petition, Rollo, pp. 30-38.
10 Rollo, pp. 36-38.
11 Annex "B" of Petition; Rollo, pp. 39-40.
12 275 SCRA 176, 180 [1997].
13 Citing Syndicated Media Access Corporation v. CA. 219 SCRA 797 [1993].
14 Citing Vinzons-Chato v. Natividad, 244 SCRA 787 [1995].
15 Citing China Banking Corporation, et al. v. CA, 365 SCRA 327 [1996].
16 Citing Ulang v. CA, 225 SCRA 642 [1993] citing Talisay-Silay Milling Co., Inc. v. CFI Negros Occidental, 42 SCRA 577; Prado v. Veridiano II, 204 SCRA 654 [1991].
17 Arcega v. Court of Appeals, v. Supra, citing Philippine National Bank v. CA, 118 SCRA 110 [1982].
18 Ibid., citing Javelosa v. CA, 265 SCRA 493 [1996].
19 Ibid., citing Pangilinan v. Aguilar, 43 SCRA 136 [1972].
20 Cited in Sulit v. Court of Appeals, 268 SCRA 441, 450 [1997].
21 268 SCRA 441, 450-451 [1997].
22 Citing United Coconut Planters Bank v. Reyes, etc., 193 SCRA 756 [1991] Ong v. Court of Appeals. 209 SCRA 350 [1992].
23 Veloso, et al. v. Intermediate Appellate Court, et al., 205 SCRA 277 [1992].
24 281 SCRA 155, 159 [1997].
25 As defined in Moreno, Philippine Law Dictionary, 1972.
26 Sec. 7 of Act 3135, as amended.
27 Citing Vaca v. Court of Appeals, 234 SCRA 146 [1994] F. David Enterprises v. Insular Bank of America, 191 SCRA 516 [1990].
28 Citing Lamb v. Philipps, 22 Phil. 456 [1912].
29 Buan v. Court of Appeals, 235 SCRA 424, 434 [1994], citing Republic v. Reyes, 155 SCRA 313 [1987]; Mariano v. Court of Appeals, 174 SCRA 59 [1989]; Prudential Bank v. Gapultos 181 SCRA 159 [1990].
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