THIRD DIVISION
G.R. No. 144499 February 19, 2002
FIRST GLOBAL REALTY AND DEVELOPMENT CORPORATION, petitioner,
vs.
CHRISTOPHER SAN AGUSTIN, respondent.
D E C I S I O N
PANGANIBAN, J.:
A writ of preliminary injunction is issued pendente lite to preserve the status quo. To be entitled to one, the applicant must show a prima facie right to the relief demanded in the complaint. In the present case, the applicant has sufficiently demonstrated that, indeed, he has such right and that grave and irreparable injury would befall him and his family, unless the injunctive relief is granted while the main case pends in the trial court.
Statement of the Case
Before us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, challenging the April 28, 2000 Decision2 of the Court of Appeals3 (CA) in CA-GR SP No. 49083 and the August 10, 2000 CA Resolution4 denying reconsideration. The dispositive portion of the assailed Decision reads as follows:
"WHEREFORE, the order dated May 21, 1998 and June 26, 1998 of the court a quo are SET ASIDE and the petition is hereby GRANTED. FGRDC is hereby enjoined from taking possession of the subject property until Civil Case No. 97-2678, which is pending before the court a quo has been heard and finally resolved."5
The Facts
The undisputed facts of the case are summarized by the Court of Appeals in this wise:
"The subject matter of the instant controversy is a parcel of land, including the house built thereon, located at No. 3491 Honda St., Bo. Pinagkaisahan, Makati City (‘subject property’). The subject property was previously covered by TCT No. 180235, dated January 27, 1967, which was issued in the name of [herein respondent’s] mother, Lilian Sales-San Agustin. [Respondent], together with his parents, brothers and sisters have been in possession of the subject property since 1967 up to the present.
x x x x x x x x x
"The conflict leading to the instant petition began when the subject property was sold to spouses Enrique and Angelina Camacho (spouses Camacho) in 1994 for the amount of ₱2.5 million pesos, ‘net of capital gains tax, documentary stamp tax, transfer taxes and the remaining balance of the petitioner’s loan with DBP.
"The records show that spouses Camacho succeeded in convincing petitioner to accept a partial payment of ₱100,000.00 pesos upon the execution of a deed of absolute sale in their favor over the subject property. The balance of ₱2.4 million pesos would be paid once the title over the same was transferred in the name of spouses Camacho. The latter agreement came about because spouses Camacho would use the subject property to raise the amount of ₱2.4 million pesos, that is to say, they would secure a loan from a bank or financial institution with the subject property as collateral.
"On May 24, 1994, DBP released the subject property to petitioner upon full payment of the latter’s outstanding loan. Thereafter, [respondent] executed a deed of sale in favor of spouses Camacho, who in turn paid respondent] the amount of ₱100,000.00 pesos. On May 26, 1994, TCT No. 194868 was issued in the name spouses Camacho.
"It appeared that First Global Realty Development Corporation (FGRDC), [herein petitioner], granted spouses Camacho’s loan application with the subject property as collateral, in the amount of P1.190 million. However, despite receipt of the loan and petitioner’s demand to pay the balance of the purchase price of the subject property, spouses Camacho did not pay the same.
"Sensing that [respondent’s] demand to pay fell on deaf ears, he filed a criminal complaint for estafa against spouses Camacho. Unfortunately, the case did not prosper because the spouses Camacho could not be located for the proper service of the warrant of arrest.
"In the ensuing period, [respondent] discovered that FGRDC filed a special civil action for the foreclosure of the subject property inasmuch as spouses Camacho defaulted in the payment of their loan obligation. The case was assigned to the Regional Trial Court, Branch 143, Makati City (Branch 143), and docketed as Civil Case No. 95-697.
"On June 28, 1996, Branch 143 rendered a decision ordering the foreclosure of the subject property and the subsequent sale thereof at public auction. Spouses Camacho did not file a motion for reconsideration of the said decision. Consequently, FGRDC filed a motion for execution which was granted on February 7, 1997.
"The sale of the subject property at public auction was, nevertheless, thrust aside in view of the dacion en pago which spouses Camacho executed in favor of FGRDC. On April 29, 1997, the dacion en pago was registered before the Register of Deeds of Makati City, which paved the way for the issuance of TCT No. 209050 in the name of FGRDC.
"Accordingly, on September 8, 1997, FGRDC demanded rentals from [respondent], specifically [from] his mother, for the latter’s use of the subject property. When FGRDC’s demand was unheeded by [respondent], it filed a motion for issuance of a writ of possession before Branch 143.
"Apparently, on November 20, 1997, [respondent] filed a motion for intervention before Branch 143, wherein he asked for the rescission of the deed of absolute sale/mortgage, dacion en pago and cancellation of FGRDC’s title over the subject property.
"However, finding the motion for intervention to be a futile undertaking, [respondent] filed a separate complaint for ‘rescission of the deed of absolute sale, annulment of the dacion en pago and cancellation of title and issuance of a new title with prayer for the issuance of a temporary restraining order and/or a writ of injunction’ against FGRDC, seeking to enjoin the latter from taking possession of the subject property. The case was raffled to Branch 141 (court a quo), where public respondent is the presiding judge, and docketed as Civil Case No. 97-2673.
"On May 21, 1998, the court a quo issued an order denying [respondent’s] prayer for issuance of a writ of preliminary injunction. Petitioner filed a motion for reconsideration but [it] was denied in an order dated June 26, 1998 for lack of merit."6
Order of the Trial Court
In its Order7 dated May 21, 1998, the RTC denied the application of respondent for a preliminary injunction to prevent petitioner from evicting him from the subject property. The trial court held that under the facts alleged in the Complaint, respondent had sold the property to the Camacho spouses for ₱2,500,000. The spouses initially gave him ₱100,000, with the balance to be paid after they would have secured a loan using the property as collateral. The lower court added that cause of action of respondent was to demand payment of the balance from the Camachos. The former’s Motion for Reconsideration of the Order was denied by the RTC in its June 26, 1998 Order.
Ruling of the Court of Appeals
The Court of Appeals reversed the RTC and granted the injunctive relief prayed for by respondent. It held that petitioner should not be given possession of the property pendente lite, because it knew of the agreement between respondent and the Camachos. Moreover, the fact that the property remained in the possession of respondent’s mother at the time the couple sold it to petitioner should have warned it of a defect in its claims.
Aggrieved by the CA Decision, petitioner lodged the present recourse.8
Issues
In its Memorandum, petitioner raises the following issues for our consideration:
"1. Whether or not the factual findings of the Honorable Court of Appeals upon which it issued the April 28, 2000 Decision and the August 10, 2000 Resolution are devoid of support by the evidence or the same are based on a misapprehension of facts; and
2. Whether or not petitioner is a purchaser in good faith and for value; hence, entitled to the possession of the litigated property."9
The foregoing points really boil down to the gut issue of whether respondent is entitled to the possession of the property while the main case for rescission is pending in the RTC.
The Court’s Ruling
The Petition has no merit.
Principal Issue:
Possession Pendente Lite
Petitioner seeks to dispossess respondent of the subject property on the strength of a dacion en pago executed in its favor by the Camacho spouses who, in turn, had purportedly bought it from herein respondent.
Respondent, on the other hand, claims that petitioner failed to show a clear right to possess it. To dispossess him pendente lite would be clearly unjust. We agree.
Section 3 of Rule 58 of the Rules of Court enumerates various grounds for the issuance of a preliminary injunction, as follows:
"SEC. 3. Grounds for issuance of preliminary injunction. - A preliminary injunction may be granted when it is established:
"(a) That the applicant is entitled to the relief demanded, and the whole or part relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually;
"(b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or
"(c) That a party, court, agency or a person is doing, threatening or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual."
A preliminary injunction is a provisional remedy that a party may resort to in order to preserve and protect certain rights and interests during the pendency of an action. It is issued to preserve the status quo ante -- the last actual, peaceful, and uncontested status that preceded the actual controversy.10 In Saulog v. CA, the Supreme Court ruled thus:
"A preliminary injunction is an order granted at any stage of an action prior to final judgment, requiring a person to refrain from a particular act. It may be granted at any time after the commencement of the action and before final judgment, when it is established that the plaintiff is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the acts complained of, or in the performance of an act or acts, either for a limited period or perpetually; that the commission or continuance of some act complained of during the litigation or the non-performance thereof would probably work injustice to the plaintiff; or that the defendant is doing, threatens, or is about to do, or is procuring or suffering to be done, some act probably in violation of the plaintiff's rights respecting the subject of the action, and tending to render the judgment ineffectual.
"A preliminary injunction, as the term itself suggests, is merely temporary, subject to the final disposition of the principal action and its purpose is to preserve the status quo of the things subject of the action and/or the relation between the parties, in order to protect the right of the plaintiff respecting the subject of the action during the pendency of the suit. Otherwise or if no preliminary injunction were issued, the defendant may, before final judgment, do or continue the doing of the act which the plaintiff asks the court to restrain, and thus make ineffectual the final judgment rendered afterwards granting the relief sought by the plaintiff. Its issuance rests entirely within the discretion of the court taking cognizance of the case and is generally not interfered with except in cases of manifest abuse."11
Likewise, in Paramount Insurance v. CA, this Court held that "[i]njunction is an extraordinary remedy calculated to preserve the status quo of things and to prevent actual or threatened acts violative of the rules of equity and good conscience as would consequently afford an injured party a cause of action resulting from the failure of the law to provide for an adequate or complete relief x x x. Its sole purpose is not to correct a wrong of the past, in the sense of redress for injury already sustained, but to prevent further injury."12
The purpose of a preliminary injunction, then, is "to prevent threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly studied and adjudicated. Its sole aim is to preserve the status quo until the merits of the case can be heard fully."13 Thus, it will be issued only upon a showing of a clear and unmistakable right that is violated. Moreover, an urgent and permanent necessity for its issuance must be shown by the applicant.14
In the present case, the status quo that is sought to be preserved is the possession of the property by respondent and his right to use it as his dwelling, pending determination of whether or not he had indeed sold it to the Camachos and, consequently, whether the latter’s transfer of its ownership to petitioner via dacion en pago should be upheld.
Prima Facie
Right to Possess
Respondent’s Complaint in the trial court seeks the following: the rescission of the Deed of Absolute Sale between himself and the Camacho spouses, the annulment of the dacion en pago executed by the latter in favor of petitioner, and the cancellation of petitioner’s certificate of title to it as well as the issuance of a new one in favor of respondent.
The factual findings of both the trial and the appellate courts show that respondent intended to sell the subject property to the Camacho spouses for the sum of ₱2,500,000. The couple initially paid ₱100,000, with the agreement that the balance would be paid when they would have secured a loan using the subject property as collateral. To facilitate their procurement of a loan, the title to the property was transferred to them.
Using the subject property as collateral, the Camachos were able to obtain a loan of ₱1,190,000 from petitioner. Upon the former’s failure to pay the loan, the latter sought to foreclose the mortgage over it. However, before the property could be foreclosed, petitioner and the couple allegedly agreed on a dacion en pago, in which the latter ceded ownership of the property in favor of the former in consideration of the payment of the loan. Respondent contends that when petitioner conducted an on-site investigation of the property in connection with the couple’s application for a loan, the latter learned that the former was living in the subject premises and was thus in actual possession of it. The CA found, in fact, that petitioner was aware that respondent -- the previous owner -- remained an unpaid seller.
Moreover, respondent argues that the dacion en pago is riddled with a number of irregularities. He maintains that the Camachos executed it way back in 1994 when they were still applying for a loan, not immediately prior to the supposed foreclosure in 1997. At the same time, they also executed a promissory note and mortgage for the same amount. As respondent points out, a dacion en pago that cedes property in favor of the creditor is not compatible with a mortgage wherein property is foreclosed in case of failure to pay the principal loan.
Indeed, the records show that the dacion en pago signed in 1994 was registered only in 1997.1âwphi1 It was executed in lieu of the foreclosure of the property when the Camachos failed to pay their loan obligations. The amount stated in the dacion as consideration was the ₱1,190,000 loan that they had obtained from petitioner. It is therefore strange that the couple would buy a parcel of land for ₱2,500,000, obtain a loan to help finance payment for the same, and finally cede the same property for an amount much lower than that for which they purchased it. Moreover, by executing a dacion, the sellers effectively waived the redemption period normally given a mortgagor.
In sum, we hold that respondent was able to show a prima facie right to the relief demanded in his Complaint. The Camachos’ nonpayment of the purchase price agreed upon and the irregularities surrounding the dacion en pago are serious enough to allow him to possess the property pendente lite.
Grave Injustice in a
Transfer of Possession
In addition, respondent has shown that to allow petitioner to take immediate possession of the property would result in grave injustice. As we have stated above, the ownership of the property, the validity of the sale between respondent and the Camachos and the legitimacy of the dacion en pago executed by the latter in favor of petitioner are still subject to determination in the court below. Furthermore, there is no question that respondent has been in possession of the premises during all this time -- prior to and during the institution of the Complaint. He and his family have long owned, possessed and occupied it as their family home since 1967. To dispossess him of it now would definitely alter the status quo to their detriment.
Ineffectual Judgment
By selling their family home to the Camachos for ₱2,500,000, the respondent hoped to improve the plight of his family. By a strange turn of events, he will now find himself homeless with only the sum of ₱100,000 to purchase a new dwelling for himself and his relatives. Indeed, justice and equity dictate that he should remain in possession of the property pendente lite.
WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner.
SO ORDERED.
Melo, (Chairman), Vitug, Sandoval-Gutierrez, and Carpio, JJ., concur.
Footnotes
1 Rollo, pp. 10-22; Petition was signed by Alfredo R. Cabeza, counsel for petitioner.
2 Rollo, pp. 29-36.
3 Special First Division. Written by J. Eriberto U. Rosario Jr.; concurred in by JJ Eubulo G. Verzola (Division chairman) and Roberto A. Barrios (member).
4 Rollo, p. 52.
5 Assailed Decision, p. 8; rollo, p. 36.
6 Assailed Decision, pp. 1-5; rollo, pp. 29-33.
7 Written by Judge Manuel D. Victorio (Branch 141, Makati City); records, pp. 21-23.
8 This case was deemed submitted for resolution on July 30, 2001, upon receipt by this Court of respondent’s Memorandum signed by Atty. Glenn Nelson Macavinta of Macavinta & Sta. Ana. Petitioner’s Memorandum, signed by Atty. Alfredo R. Cabeza of Cabeza & Associates, was received by this Court on July 21, 2001.
9 Petitioner’s Memorandum p. 4; rollo, p. 92.
10 Rosete v. CA, 264 SCRA 147, 159, November 14, 1996, per Kapunan, J.
11 262 SCRA 51, 58-59, September 18, 1996, per Hermosisima Jr., J.1
12 310 SCRA 377, 385, July 19, 1999, per Ynares-Santiago, J.
13 Republic of the Philippines v. Silerio, 272 SCRA 280, 287, May 6, 1997, per Romero, J.
14 Sps. Virgilio and Glynna F. Crysta v. Cebu International School, GR No. 135433, pp. 1-2, April 4, 2001, per Panganiban, J.
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