Suico Industrial Corporation v. Court of Appeals
REITERATIONFacts
1. The Antecedents: Petitioners Suico Industrial Corporation and spouses Esmeraldo and Elizabeth Suico obtained two loans from respondent PDCP Bank, secured by a mortgage on their real estate properties. For failure to pay the outstanding balance of P3,900,000.00 as of 1993, PDCP Bank initiated an extrajudicial foreclosure of the mortgaged properties. PDCP Bank emerged as the highest bidder, and after the redemption period expired without redemption, ownership was consolidated in PDCP Bank's name. 2. Procedural History: Following the consolidation of ownership, PDCP Bank filed an ex parte motion with the Regional Trial Court (RTC) of Mandaue City, Branch 28, for a writ of possession, which was granted. However, before the writ of possession could be enforced, petitioners filed a complaint with RTC Branch 56 for specific performance, injunction, and damages, seeking to prevent PDCP Bank from selling the properties and taking possession. RTC Branch 56 issued a temporary restraining order and subsequently a writ of preliminary injunction, enjoining PDCP Bank from disposing of or taking possession of the properties. PDCP Bank then filed a petition for certiorari and mandamus with the Court of Appeals, seeking to set aside the injunction order issued by RTC Branch 56. The Court of Appeals granted the petition, ruling that RTC Branch 56 exceeded its jurisdiction by issuing an injunction against the enforcement of the writ of possession granted by RTC Branch 28. 3. The Petition: Petitioners are before this Court via a petition for certiorari, seeking to uphold the writ of preliminary injunction issued by RTC Branch 56. They argue that the injunction was necessary to allow a trial on the merits of their claim that they had an agreement with PDCP Bank to intentionally default on their loan payments to facilitate a foreclosure and subsequent repurchase of the properties. They contend that the Court of Appeals erred in ruling that RTC Branch 56 acted with grave abuse of discretion in issuing the injunction, which they believe was crucial to prevent irreparable damage and to allow for the determination of their alleged agreement with the bank.
Issue(s)
Whether RTC Branch 56 acted with grave abuse of discretion in issuing a writ of injunction to prevent the enforcement of a writ of possession issued by RTC Branch 28. Whether petitioners have a clear legal right to enjoin the enforcement of the writ of possession.
Ruling
The petition is denied. The Decision dated August 28, 1995, and the Resolution dated December 12, 1995, of the respondent Court of Appeals are affirmed.
Ratio Decidendi
On whether RTC Branch 56 acted with grave abuse of discretion in issuing a writ of injunction to prevent the enforcement of a writ of possession issued by RTC Branch 28: The Court held that RTC Branch 56 acted with grave abuse of discretion. For the issuance of a 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 the complainant is clear and unmistakable, and that there is an urgent and paramount necessity for the writ to prevent serious damage. In the absence of a clear legal right, the issuance of an injunctive writ constitutes grave abuse of discretion. Injunction is not designed to protect contingent or future rights, and where a complainant's right or title is doubtful or disputed, injunction is not proper. The possibility of irreparable damage without proof of an actual existing right is no ground for an injunction. 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. 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, and respondent PDCP Bank has a better right to possess the subject property because of its title over the same. Furthermore, petitioners undertook a procedural misstep by filing 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 of Act 3135. On whether petitioners have a clear legal right to enjoin the enforcement of the writ of possession: The Court found that petitioners do not have a clear legal right. It is the ministerial duty of the trial court to grant a writ of possession. In Sulit v. Court of Appeals, it was held that 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. This is also stated in A. G. Development Corporation v. Court of Appeals, where a writ of possession to a purchaser in an extrajudicial foreclosure is merely a ministerial function, and the Court neither exercises its official discretion nor judgment. Moreover, trial courts have no power to interfere by injunction with the orders or judgments issued by another court of concurrent or coordinate jurisdiction. Therefore, RTC Branch 56 had no power nor authority to nullify or enjoin the enforcement of the writ of possession issued by RTC Branch 28.
Main Doctrine
A court commits grave abuse of discretion when it issues a writ of injunction to prevent the enforcement of a writ of possession granted by another court of concurrent jurisdiction, as the issuance of a writ of possession after foreclosure is a ministerial duty of the court.