Yap v. International Exchange Bank
REITERATIONFacts
The Antecedents: Respondent International Exchange Bank (iBank) filed a collection suit against Alberto Looyuko and Jimmy T. Go, obtaining a favorable judgment for P96,000,000.00 plus penalty. Following a writ of execution against Mr. Go, Sheriff Renato C. Flora issued a notice of sale for several real properties allegedly owned by Mr. Go. Petitioners, Spouses Alfredo and Shirley Yap, intervened, claiming ownership of these properties by virtue of Deeds of Absolute Sale executed by Jimmy Go in their favor prior to the sheriff's sale. Despite their claims and an affidavit of adverse claim, further sheriff's sales were scheduled. Procedural History: The petitioners' initial attempt to halt the sheriff's sale by filing a complaint for injunction with the RTC of Pasig City, Branch 158, was denied. Subsequently, a sheriff's auction sale proceeded, resulting in a Certificate of Sale issued in favor of iBank, subject to the petitioners' third-party claims. The petitioners then filed a new case with the RTC of Pasig City, Branch 264, for the annulment of the sheriff's auction sale and certificate of sale, which included a prayer for a writ of preliminary injunction. The trial court initially granted the injunction, which was later affirmed by the Court of Appeals. However, this Court dismissed a subsequent petition for certiorari filed by respondents, ruling it was the wrong remedy and lacked sufficient showing of grave abuse of discretion. Despite this, respondents filed an omnibus motion with the trial court to resolve their motion to dismiss and/or dissolve the injunction. The trial court then issued an order recalling and dissolving the writ of preliminary injunction, conditioned upon the posting of a counter-bond by the respondents. Petitioners challenged this dissolution order via a petition for certiorari with the Court of Appeals, which dismissed it for failure to file a motion for reconsideration. Petitioners' subsequent motion for reconsideration was also denied. The Petition: This Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure seeks to set aside the Court of Appeals' Resolution dismissing the petitioners' petition for certiorari, which had challenged the trial court's order recalling and dissolving the writ of preliminary injunction. Petitioners argue that the trial court gravely abused its discretion in dissolving the injunction, especially after previous rulings by the Court of Appeals and the Supreme Court affirming its propriety. They also contend that the trial court erred in fixing a counter-bond for damages that are incapable of pecuniary estimation. Furthermore, petitioners assert that the Court of Appeals erred in outrightly dismissing their petition for certiorari for failure to file a motion for reconsideration, arguing that exceptions to this rule apply when the controverted act is patently illegal or performed without or in excess of jurisdiction.
Issue(s)
Whether the trial court gravely abused its discretion tantamount to lack or excess of jurisdiction in dissolving the Writ of Preliminary Injunction despite previous rulings by the Court of Appeals and the Supreme Court affirming its propriety. Whether the trial court gravely abused its discretion in fixing the ₱10,000,000.00 counter-bond, considering the alleged irreparable damage to petitioners which is incapable of pecuniary estimation. Whether the Court of Appeals erred and gravely abused its discretion in outrightly dismissing the Petition for Certiorari for failure to file a motion for reconsideration, considering the exceptions to the rule.
Ruling
The Supreme Court denied the Petition for Review on Certiorari, affirming the Resolutions of the Court of Appeals and the Order of the trial court dissolving the Writ of Preliminary Injunction, conditioned upon the posting of the counter-bond.
Ratio Decidendi
On the issue of the trial court's authority to dissolve the injunction: The Court held that a trial court may still order the dissolution of a preliminary injunction it previously issued, notwithstanding prior rulings by appellate courts that its issuance was not tainted with grave abuse of discretion. The Court distinguished between the issuance and dissolution of an injunction, noting that Section 6 of Rule 58 of the Rules of Court provides grounds for dissolution. The trial court's Order of dissolution was based on the finding that the continuance of the injunction would cause irreparable damage to the respondents (enjoined party) while the petitioners (applicant) could be fully compensated, and that respondents were willing to post a counter-bond. This aligns with the conditions set forth in Section 6, Rule 58, which allows for dissolution if the enjoined party files a sufficient counter-bond to cover damages. On the propriety of the counter-bond: The Court found no grave abuse of discretion in the trial court's fixing of the ₱10,000,000.00 counter-bond. The trial court's Order explicitly stated that the dissolution was conditioned upon the filing and approval of this counter-bond, which was intended to cover damages petitioners might incur. The Court reiterated that the matter of issuing or recalling a preliminary injunction is an interlocutory matter within the control of the court, and the trial court acted within its authority under Section 6, Rule 58, by allowing dissolution upon the posting of a counter-bond. On the Court of Appeals' dismissal of the Petition for Certiorari for failure to file a motion for reconsideration: The Court affirmed the Court of Appeals' dismissal, reiterating the general rule that a motion for reconsideration is a sine qua non to the filing of a special civil action for certiorari. The Court emphasized that this rule is intended to give the trial court an opportunity to correct errors. Petitioners' failure to file a motion for reconsideration deprived the trial court of this opportunity. The Court found that petitioners' invocation of exceptions to the rule (e.g., patent illegality or lack of jurisdiction) was belatedly made and should have been raised in their Petition for Certiorari before the Court of Appeals, not after its dismissal. The Court clarified that the "plain" and "adequate remedy" referred to in Rule 65 includes a motion for reconsideration, and its mere allegation of absence of such remedy does not qualify as an exception.
Main Doctrine
A trial court may recall and dissolve a preliminary injunction it previously issued, even if its issuance was not tainted with grave abuse of discretion, provided that the grounds for dissolution under Section 6, Rule 58 of the Rules of Court are met, specifically, that the continuance of the injunction would cause irreparable damage to the enjoined party while the applicant can be fully compensated, and the enjoined party files a counter-bond.