United Coconut Planters Bank v. Lumbo
REITERATIONFacts
The Antecedents: Respondents Christopher and Milagros Lumbo obtained loans totaling P12,000,000.00 from petitioner United Coconut Planters Bank (UCPB), secured by a real estate mortgage on their Boracay property. Upon their failure to repay, UCPB initiated an extrajudicial foreclosure of the mortgage. UCPB emerged as the highest bidder at the foreclosure sale held on January 12, 1999. Subsequently, UCPB registered the sale on February 18, 1999, and consolidated ownership of the property in its name after the respondents failed to exercise their right of redemption. Procedural History: On January 7, 2000, the respondents filed a civil action (Civil Case No. 5920) seeking the annulment of the foreclosure, accounting, injunction against title consolidation, and damages. While this case was pending, UCPB filed an ex parte petition for a writ of possession (Special Proceedings No. 5884). The Regional Trial Court (RTC) granted UCPB's petition and issued a writ of possession on December 4, 2001. The respondents then filed a petition to cancel the writ of possession and set aside the foreclosure sale, including an application for a writ of preliminary injunction, on February 14, 2002. The RTC denied this application on March 19, 2002. The respondents challenged this denial via a petition for certiorari and/or mandamus before the Court of Appeals (CA). The CA, on November 27, 2003, reversed the RTC's order, set aside the denial, and enjoined the RTC from implementing the writ of possession pending the final disposition of the cancellation petition and annulment suit. UCPB's motion for reconsideration was denied by the CA on March 8, 2004. The Petition: UCPB filed a petition for review on certiorari with the Supreme Court, arguing that the CA erred in granting the certiorari petition and enjoining the writ of possession. UCPB contended that the respondents were not entitled to an injunctive writ, that no bond was posted to cover potential damages to UCPB, that the CA's decision amounted to a pre-judgment of the main case, and that the respondents were illegally attempting to retain possession. The respondents countered that the rule against prohibiting the implementation of a writ of possession was not absolute and that UCPB's petition raised mixed questions of fact and law.
Issue(s)
Whether the Court of Appeals erred in granting the respondents’ petition for certiorari and enjoining the implementation of the writ of possession issued by the RTC in favor of UCPB. Whether the respondents were entitled to the issuance of an injunctive writ. Whether the CA’s decision and resolution constituted a pre-judgment of the respondents’ petition to cancel the writ of possession. Whether the respondents were illegally attempting to wrest away UCPB’s possession of the property.
Ruling
The Supreme Court GRANTED the petition for review on certiorari, REVERSED the decision and resolution of the Court of Appeals, DISMISSED the petition in C.A.-G.R. SP. No. 70261 for lack of factual and legal merits, DECLARED that there is now no obstacle to the implementation of the writ of possession issued in favor of UCPB, and ORDERED the respondents to pay the costs of suit.
Ratio Decidendi
On the propriety of the Court of Appeals' grant of injunctive relief: The Court held that the CA grossly erred in granting the respondents’ petition for certiorari and enjoining the RTC from implementing the writ of possession. The issuance of a writ of possession to a purchaser in an extrajudicial foreclosure sale, after the consolidation of title in the purchaser's name due to the mortgagor's failure to redeem, is a ministerial act and a matter of right. The RTC committed no grave abuse of discretion in denying the respondents' application for an injunctive writ because UCPB, as the registered owner, was entitled to the writ of possession. The pendency of an action for annulment of the mortgage or foreclosure sale does not legally prevent the implementation of a writ of possession. On the entitlement of respondents to an injunctive writ: The Court found that the respondents were not entitled to an injunctive relief because they failed to show a right in esse to be protected. Their failure to redeem the property within the redemption period, which is reckoned from the registration of the sale, resulted in the consolidation of title in UCPB's name and the loss of their rights to the property, including possession. An injunction will not issue to protect a right that is merely contingent or may never arise, or to restrain an act that does not give rise to a cause of action. On the CA's decision and resolution constituting a pre-judgment: The CA’s decision and resolution, by enjoining the implementation of the writ of possession pending the final disposition of the cancellation petition and annulment of the foreclosure sale, effectively granted the respondents' application for an injunctive writ. This was deemed an error as it disregarded the respondents' lack of a right in esse and the established jurisprudence regarding writs of possession. Furthermore, the Court found that the CA committed a serious error in reversing the RTC’s denial of the respondents’ application for an injunctive writ. The CA ignored the essential requirements for the grant of such a writ and disregarded the patent fact that the respondents held no right to be protected. The CA's action effectively granted the respondents' application for an injunctive writ, which was improper given the circumstances. On the nature of the RTC's error and the attempt to wrest away possession: Assuming the RTC erred in denying the injunction, such error was one of judgment, not of jurisdiction. The RTC had jurisdiction over the cases, and its denial of the application, in the absence of a clear showing of capricious or whimsical action, did not constitute grave abuse of discretion. The CA should have reviewed the denial through an appeal, not through a writ of certiorari. The respondents were essentially attempting to wrest away UCPB’s possession of the property through improper means.
Main Doctrine
The implementation of a writ of possession issued pursuant to Act No. 3135 at the instance of the purchaser at the foreclosure sale, in whose name the title has been consolidated, cannot be prevented by an injunctive writ, as the purchaser's right to possession becomes a matter of right upon consolidation of title.