Idolor v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Teresita V. Idolor executed a Deed of Real Estate Mortgage with private respondent Gumersindo De Guzman to secure a loan of P520,000.00, with a redemption period on or before September 20, 1994. The mortgaged property is a 200-square meter lot with improvements. On September 21, 1996, a "Kasunduang Pag-aayos" was executed before the Barangay Captain, wherein Idolor acknowledged a debt of P520,000.00 as of September 20, 1994, secured by TCT No. 25659, and requested a 90-day grace period to settle the amount, with a total amount due of P1,233,288.23 inclusive of interest. Failure to settle by December 21, 1996, would result in Idolor executing a deed of sale with a right to repurchase within one year without interest. Idolor failed to comply with this agreement. Procedural History: On March 21, 1997, Gumersindo De Guzman filed an extra-judicial foreclosure of the real estate mortgage. The property was sold at public auction on May 23, 1997, to Gumersindo as the highest bidder, and the Sheriff's Certificate of Sale was registered on June 23, 1997. On June 25, 1998, Idolor filed a complaint for annulment of the Sheriff's Certificate of Sale with a prayer for a TRO and writ of preliminary injunction. A TRO was issued, and subsequently, on July 28, 1998, the Regional Trial Court (RTC) issued a writ of preliminary injunction enjoining the issuance of a final deed of sale and consolidation of ownership. The RTC denied the motion for reconsideration. The Spouses De Guzman filed a petition for certiorari with the Court of Appeals (CA), which annulled the writ of preliminary injunction on September 28, 1999. Idolor's motion for reconsideration was denied on February 4, 2000. The Petition: Petitioner Teresita V. Idolor filed a petition for review on certiorari, questioning the CA's ruling that she had no more proprietary right to the injunction, that the "Kasunduang Pag-aayos" did not novate the mortgage, that it was merely a promissory note, and that the writ of preliminary injunction was issued with grave abuse of discretion.
Issue(s)
Whether the respondent Court of Appeals erred in ruling that petitioner has no more proprietary right to the issuance of the writ of injunction. Whether the respondent Court of Appeals erred in ruling that the "Kasunduang Pag-aayos" did not ipso facto result in the novation of the real estate mortgage. Whether the respondent Court of Appeals erred in ruling on the nature of the "Kasunduang Pag-aayos" as a promissory note and its effect on the extra-judicial foreclosure. Whether the respondent Court of Appeals erred in ruling that the questioned writ of preliminary injunction was issued with grave abuse of discretion.
Ruling
The petition is DENIED. The decision of the respondent Court of Appeals dated September 28, 1999, is AFFIRMED.
Ratio Decidendi
On the proprietary right to the writ of injunction: The Court affirmed the respondent Court's finding that the petitioner has no more proprietary right over the foreclosed property to entitle her to an injunction. The mortgaged property was sold at public auction on May 23, 1997, and the Sheriff's Certificate of Sale was registered on June 23, 1997. Petitioner had one year from the registration to redeem the property, which expired on June 23, 1998. Her complaint for annulment of the sheriff's sale and prayer for injunction was filed on June 25, 1998, two days after her right of redemption had expired. The Court reiterated that injunction is a preservative remedy aimed at protecting substantive rights, and the existence of a right in esse is a prerequisite. Failure to establish a clear and positive right that should be judicially protected is a ground for denying an injunction. Injunction is not designed to protect contingent or future rights, and the possibility of irreparable damage without proof of an actual existing right is not a ground for an injunction. The petitioner failed to show sufficient interest or title in the property sought to be protected as her right of redemption had already expired. On the novation of the real estate mortgage by the "Kasunduang Pag-aayos": The Court held that the "Kasunduang Pag-aayos" did not novate the real estate mortgage. Novation is never presumed and requires an express agreement to abrogate the old contract in favor of a new one, or the incompatibility of the old and new contracts in all points. In this case, the "Kasunduang Pag-aayos" did not contain an express abrogation of the original undertaking. Instead, it gave life to the overdue mortgage contract by acknowledging the total indebtedness, including interest, and setting a new deadline for liquidation. The agreement was intended to facilitate compliance with the mortgage obligation and was not incompatible with the original mortgage contract. The Court cited Huibonhua v. CA and Rillo v. Court of Appeals to support the principle that a compromise agreement clarifying the total sum owed, with the view of facilitating compliance, does not novate the original contract. The parties expressly recognized the continuing existence and validity of the old obligation. On the "Kasunduang Pag-aayos" as a promissory note and its effect on the extra-judicial foreclosure: The Court did not directly rule on whether it was a promissory note but rather focused on its effect in relation to the mortgage. It noted that the "Kasunduang Pag-aayos" was entered into before the Lupon Tagapamayapa, giving it the force and effect of a final judgment, as provided by Sections 416 and 417 of the New Local Government Code of 1991. However, the Court clarified that the enforcement of this settlement is governed by Act No. 3135, as amended, concerning extra-judicial foreclosure, not Section 417 of the Local Government Code which pertains to enforcement by the lupon within six months. The Court found that the provision regarding the execution of a deed of sale with a right to repurchase within one year had the same effect as the extra-judicial foreclosure, where failure to redeem within the period entitles the purchaser to possession. The Court concluded that the "Kasunduang Pag-aayos" did not alter the essence of the original obligation and that the petitioner's failure to comply with her undertaking effectively delayed the private respondents' right to extra-judicially foreclose the mortgage. On the issuance of the writ of preliminary injunction: This issue is addressed implicitly in the discussion of the petitioner's lack of proprietary right. Since the petitioner had no existing right to protect due to the lapse of the redemption period, the Court of Appeals did not err in ruling that the writ of preliminary injunction was issued with grave abuse of discretion. The lack of a clear legal right to be protected justifies the denial of the injunction.
Main Doctrine
A writ of preliminary injunction is a preservative remedy aimed at protecting substantive rights and interests; thus, the existence of a right in esse or the existence of a right to be protected is a prerequisite for its issuance. Failure to establish either the existence of a clear and positive right or that the defendant has committed or attempted to commit any act which has endangered or tends to endanger the existence of said right, is a sufficient ground for denying the injunction. Injunction is not designed to protect contingent or future rights.