SECOND
DIVISION
SPOUSES
RAFAEL Y. ARCEGA
and
TERESITA F. ARCEGA,
Petitioners,
G. R. No. 122206
July 7, 1997
-versus-
THE
COURT OF APPEALS [17th Division]
and
RIZAL COMMERCIAL BANKING CORPORATION,
Respondents.
D
E C I S I O N
ROMERO, J.:
In June 1988,
petitioners herein, the spouses
Rafael and Teresita Arcega, obtained two loans amounting to P900,000.00
from respondent Rizal Commercial Banking Corporation [RCBC]. Said loan
was secured by a real estate mortgage executed by the parties on April
10, 1989 on a 561 square-meter property with improvements covered
by Transfer Certificate of Title No. 377692.[1]
Petitioners paid a total of about P300,000.00 but later defaulted on
their
loan obligations.
The bank
foreclosed the mortgage on petitioners'
property and acquired the property at the public auction held on May
21,
1990 with the highest bid of P984,361.08. The Sheriff's Certificate of
Sale issued on the same day was duly registered with the Quezon City
Register
of Deeds on May 25, 1990. The spouses Arcega repeatedly communicated
with
respondent bank's Assistant Vice-President Emily Sibulo Hayudini in
connection
with the status of the foreclosed property.[2]
On May 23, 1991, two days before the expiration of the redemption
period,
Rafael Arcega wrote the bank for an extension of three weeks and
informing
it that he has applied for a housing loan[3]
to refinance his loan account with RCBC. On May 25, 1991, petitioners'
counsel wrote respondent bank for a four-week extension within which to
redeem the property. Four days later, respondent bank informed
petitioners
that their request for a three-week extension, until June 14, 1991, was
granted. During all this time, petitioners raised no question regarding
the regularity of the foreclosure sale and proceedings.cralaw:red
On June 14, 1991,
Assistant Vice-President Hayudini
inquired through the telephone from Mr. Ching Hoe, Benefits Specialist
of the Asian Development Bank about the status of Rafael Arcega's loan.
Mr. Hoe informed her that said loan application was canceled because
Arcega
was going to file a court case. Surprised at this development, after
the
expiration of the extended redemption period, respondent bank's
officers
executed an Affidavit of Consolidation on June 17, 1991 to secure a new
title in the name of Rizal Commercial Banking Corporation. T.C.T. No.
40782
was later issued in the bank's name.cralaw:red
It appears that
on June 11, 1991, petitioners
filed Civil Case No. 91-9055 against respondent bank for annulment of
foreclosure
and/or auction sale with restraining order/preliminary
injunction/damages
before the Regional Trial Court of Quezon City, Branch 104. In said
complaint,
petitioners averred that they were not aware of the auction sale, that
there was no notice of posting or prior publication thereof in a
newspaper
of general circulation as required by law and that they registered the
bank's action pertinent to the foreclosure to no avail. The Notice of
Lis
Pendens was annotated on the title of the subject property on July 16,
1991.cralaw:red
On November 23,
1993, the bank filed "In re: Petition
for Issuance of Writ of Possession" [LRC No. Q-6483(93)] with the
Regional
Trial Court of Quezon City.cralaw:red
On February 3,
1994, petitioners sought the issuance
of a writ of preliminary injunction and/or restraining order to prevent
respondent bank and Sheriff from transferring the subject property to
third
persons in the case at bar. After hearing and due consideration of the
evidence submitted by the parties, on June 21, 1994, the Regional Trial
Court issued its questioned Order granting the writ of
preliminary
injunction. Respondent bank's motion for reconsideration was denied by
the trial court on August 1, 1994.cralaw:red
On August 24,
1994, RCBC sought relief in the
Court of Appeals by way of a petition for certiorari seeking the
nullification
of the trial court's Orders dated June 21, 1994 and August 1, 1994.
Respondent
appellate court granted the petition on August 17, 1995 in a decision
with
the following dispositive portion:
WHEREFORE, the instant petition is hereby
GRANTED
by this Court. The questioned Orders dated June 21, 1994 and August 1,
1994 of the respondent court, granting the issuance of the writ of
preliminary
injunction, and denying its reconsideration in Civil Case No. Q-91-9055
are declared null and void.
On October 12,
1995, the motion for reconsideration
filed by the Arcegas was denied by respondent court. Hence, the instant
petition for review was filed seeking the annulment of the Court of
Appeals'
decision for lack of legal basis and for having been issued with grave
abuse of discretion. On the sole question of whether or not the writ of
preliminary injunction was issued with grave abuse of discretion, We
affirm
respondent court's decision and deny the instant petition.
The issuance of
the writ was unjustified, the
spouses Arcega not having any legal right that merits protection by the
court. 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.[4]
In the absence of a clear legal right, the issuance of the injunctive
writ
constitutes grave abuse of discretion.[5]
Injunction is not designed to protect contingent or future rights.
Where
the complainant's right or title is doubtful or disputed, injunction is
not proper.[6]
The possibility of irreparable damage without proof of actual existing
right is no ground for an injunction.[7]
The circumstances
in the case at bar show that
the Arcegas did not possess a clear legal right sought to be protected
by said writ. Petitioners defaulted on their loan and failed to redeem
the subject property during the extended period granted by the bank. It
was only three days prior to the redemption period that petitioners
added
to question the foreclosure proceedings, giving the impression that the
case at bar is an afterthought or a last-ditch effort to save their
property.
Title to the property had already been transferred to the bank which
now
possesses a certificate of title in its name.cralaw:red
Respondent 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.[8]
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.[9]
The bank in this case has a better right to possess the subject
property
because of its title over the same.[10]
Respondent
appellate court added:
[I]t was highly irregular for the
respondent
court to issue the questioned writ based merely on the document of
sheriff's
certificate of posting. No other evidence, oral or documentary, was
ever
presented by the private respondents to fully substantiate their prayer
for the injunctive relief. It is well-settled that a foreclosure
proceeding
enjoys the presumption of regularity in its conduct being an official
business,
and it is the defendants, herein private respondents, who have the
burden
of showing by convincing proof that the foreclosure proceeding is
tainted
with irregularity for them to be entitled to the writ prayed for.[11]
WHEREFORE, the
instant petition is hereby DENIED.
The Regional Trial Court of Quezon City, Branch 104, where Civil Case
No.
91-9055 is pending is directed to continue with the proceedings of said
case and resolve the same with dispatch. Costs against petitioner.
SO ORDERED.cralaw:red
Regalado and
Mendoza, JJ., concur.
Puno and Torres, Jr., JJ., are on
leave.cralaw:red
__________________________________
Endnotes
[1]
The bank charged 19.5% per annum as interest rate on the loans which
were
payable in ten years.
[2]
As of October 15, 1990, the Statement of Account amounted to
P1,232,479.94,
which amount included 33% interest for 143 days, attorney's fees,
sheriff's
fee, documentary stamps, etc.
[3]
With the Asian Development Bank, where petitioner Rafael Arcega was
employed.
[4]
Syndicated Media Access Corporation v. CA, 219 SCRA 797 [March
11,
1993].
[5]
Vinzons-Chato v. Natividad, 244 SCRA 787 [June 2, 1995].
[6]
China Banking Corporation et. al. v. CA, G. R. No. 121158 [December 5,
1996].
[7]
Ulang v. CA, 225 SCRA 642 [August 29, 1993] citing Talisay-Silay
Milling
Co., Inc. v. CFI Negros Occidental, 42 SCRA 577; Prado v. Veridiano II,
204 SCRA 654 [December 6, 1991].
[8]
Philippine National Bank v. CA, 118 SCRA 110 [November 2, 1982].
[9]
Javelosa v. CA, G. R. No. 124292, December 10, 1996.
[10]
Persons with Torrens title over land are entitled to possession
thereof.
Pangilinan v. Aguilar, 43 SCRA 136 [1972].
[11]
Rollo, p. 38. |