PHILIPPINE SUPREME
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Republic of the
Philippines
SUPREME COURT
Manila
FIRST
DIVISION
SUICO INDUSTRIAL
CORPORATION,
SPS. ESMERALDO AND
ELIZABETH SUICO,
Petitioners,
G. R. No. 123050
January
20, 1999
-versus-
COURT OF APPEALS
AND PDCP DEVELOPMENT BANK, INC.,
Respondents.
D E C I S I
O N
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, form
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 Ciy, 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 by 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 adjudge 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
[1]-year
redemption period, ownership over the properties were consolidated and
TCT Nos. 34988 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 Order[5]
granting the injunction sought for by petitioners [therein plaintiffs].
It likewise deferred resolution of the motion to dismiss petitioners’
complaint
filed by respondent PDCP Bank [therein defendant]. Pertinent portions
of
the order state that:
"During the hearing
on Plaintiffs’ application for preliminary injunction, Plaintiffs
presented
Esmeraldo Suico who testified that per arrangement with a certain Mae
Siy
and Fajardo , former officers of Defendant bank, Plaintiffs 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 Court convinced that there
indeed
was an arrangement between herein Plaintiffs and 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 in 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
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 is hereby
fixed
at Fifty Thousand Thousand Pesos (P50,000.00).
"Resolution of
Defendant’s
Motion to Dismiss is deferred pending further reception 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 in their behalf from selling the mortgaged properties described
in the complaint to persons not recommended by plaintiffs and from
taking
physical possession over the same pending resolution of the prayer for
issuance of permanent injunction.
"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
of 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
representatives 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 to 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 exceeded its jurisdiction when it issued
the writ of injunction against the enforcement 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 continue itself to the issue of whether or
not
the respondent court lacked or 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 court 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. x x x
[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.
L-41835,
19 January 1990, 181 SCRA 159; Darwin v. Takonaga, G.R. No. 54177, 27
May
1991, 197 SCRA 442; Santos v. Bayhon, G.R. No. 88643, 23 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:
‘x
x
x With more reason, a purchaser can demand a 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 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
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 becoming
an
absolute right of the purchaser as confirmed owner. Upon proper
application
and proof of 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 private respondents, it was clearly petitioner’s right to ask for
the writ and to acquire possession of subject properties and it is
improper
for the respondent court to stay implementation of said writ.
As to the other
reasons
advanced by petitioner, as stressed by private respondents, the same
are
questions of 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. Costs against private respondents.
SO ORDERED."[10]
The motion for
reconsideration
having been denied 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 ensue.
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
were
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 respondents PDCP Bank from selling the
said mortgaged properties to persons not recommended by 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 the
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 there is an
urgent and paramount necessity for the clear writ to prevent serious
damage."[13]
"In the absence
of a
clear legal right, the issuance of the injunctive writ constitute 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.[17]
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 the RTC Branch 56 instead of a petition
to
set aside the sale and cancellation of the writ of possession as
provided
under Section 8 of 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, petition
that
the sale be set aside and the writ of possession cancelled, 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 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 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 of the mortgagee, 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, 2995 and the resolution dated
December 12, 1995 of respondent Court of Appeals are hereby affirmed.
Costs
against petitioners.
SO ORDERED.
Davide C.J. [Chairman],
Melo, Kapunan and Pardo, JJ., concur.
_______________________________
Endnotes:
[1]
Docketed as GLRO-Rec. No. 4030 LRC Case No. 3 entitled "In the Matter
of
the Petition for the Issuance of Writ of Possession, Private
Development
Corporation of the Philippines (now PDCP Bank) petitioner-movant vs.
Suico
Industrial Corporation and Spouses Esmeeraldo 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-Oficio
Provincial 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. Esmeraldo and Elizabeth Suico vs. Private Development Corporation
of the 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, 265 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
654 (1991).
[17]
Arcega v. Court of Appeals, 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 227
(1992).
[24]
281 SCRA 155, 159 (1997).
[25]
As defined in Moreno, Philippine Law Dictionary, 1972.
[26]
Section 7 of Act 3135, as amended.
[27]
Citing Vaca v. Court of Appeal, 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).
