SPS Daisy and Socrates Arevalo v.

Planters Development Bank (2012)

Sereno, ​J.

FACTS:

SPS Daisy and Socrates Arevalo (PET) executed a loan agreement secured, with mortgage on their property in
Muntinlupa City, with Planters Development Bank (RESP). This amounts to P2.1M. PET failed to pay the amount,
so RESP undertook to extra-judicially foreclose the mortgage. The Clerk of Court issued a Notice of Sheriff’s sale
and set the auction sale on April 21 and 28, 2009.

PET thereafter filed the ​First Complaint asking for the nullification of interests, penalties and other charges, as well
as for specific performance with an application for a temporary restraining order and writ of preliminary injunction
to enjoin the impending auction sale of their Muntinlupa property.​ PET alleged that RESP breached its obligations
under the loan agreement; and that the auction sale was premature, arbitrary, and confiscatory, as their inability to
pay the loan was caused and aggravated by RESP’s illegal schemes.

During the hearing of PET’s application for preliminary injunction, trial court directed them to pay 12% per annum
interest on the principal obligation as stated in the application for foreclosure sale. Without this payment, the writ
shall not issue. Trial court further ruled that the evidence in support of the application was evidentiary in nature
and should be presented during trial.

PET sought to clarify the above order with regards to the payment of 12% interest. They argued that this rule is
applicable only when the applicant alleges that the interest rate is unconscionable, and PET claimed that nowhere
in the Complaint did they allege such statement. Instead, what they were raising was that RESP deliberately
withhold loan releases on various pretexts and the propriety of the acts of the RESP charging them with interest and
penalties due to the delay caused by RESP itself. ​RTC affirmed its ruling.

PET moved for MR but was denied. They also didn’t pay the required interest of writ of preliminary injunction;
thus, no writ was issued. ​PET then filed a Rule 65 petition with CA to assail trial court’s orders involving the
non-issuance of writ.

Meanwhile, proceedings for the First Complaint ensued at the trial court. RESP filed a Motion to Dismiss for the
lack of cause of action; it was granted by the trial court. PET appealed to the CA regarding such dismissal.​ Record
doesn’t reveal the status of the case.

Regarding the Rule 65 Petition on the non-issuance of writ, RESP filed its comment. CA then ruled that RTC was
correct in refusing to issue the writ due to the failure of PET in paying the accrued interest at 12% per annum. CA
held that the words used by the PET in their First Complaint such as “manifestly unjust”, “purely potestative
condition”, “void ab initio”, “clearly contravenes morals, good customs and public policy,” “whimsical”, “capricious
violation of the legal and inherent principles of mutuality of contracts,” “illegal, invalid, unilateral impositions” all
of which pertained to interest imposed by the Bank undeniably meant that petitioners were challenging the interest
for being unconscionable, while opting to use other words of similar import.

PET filed an MR, but CA denied. Thus, this Rule 45 petition to assail the CA decision affirming the non-issuance of
the writ.

Note: ​Apparently, PET also filed on November 12, 2010, a Second Complaint with the RTC, praying for the
nullification of the real estate mortgage, the extra-judicial foreclosure sale, and the subsequent proceedings, with a
prayer for preliminary injunction and TRO.

There are 2 cases arising from similar facts and circumstances in this case: (1) Rule 45 petition, and (2) appeal of
the dismissal of the main case with the CA.

On the Rule 45 Petition

PET: ​assail the decision and resolution of the CA based on the grounds:

They were deprived of the opportunity to present evidence on their application of the writ; and

The CA erred when it required them to pay the 12% interest per annum, when the core of their First Complaint was
not the excessiveness of the interest but RESP’s supposed breach of their obligations in the loan agreement.

RESP: ​countered the above grounds:

PET were not denied due process since they were given several opportunities to be heard;

The requirement to pay the 12% is proper; and

PET were guilty of forum shopping when they find the Second Complaint

ISSUE:

W/N the requirement to pay 12% interest per annum before the issuance of an injunctive writ to enjoin an
impending foreclosure sale is applicable to the instant case. ​MOOT

W/N PET are guilty of forum-shopping and should consequently be punished for contempt. ​YES, PET are guilty
of forum-shopping.

RATIONALE:

First Issue

SC ruled that upon dismissal of the First Complaint, this issue on the writ of injunction has become moot.

A writ of preliminary injunction is a provisional remedy. It is auxiliary to, an adjunct of, and subject to the outcome
of the main case. Thus, a writ of preliminary injunction is deemed lifted upon dismissal of the main case, any appeal
therefrom notwithstanding. It constitutes a temporary measure availed during the pendency of the action and it is
ancillary because it is a mere incident in and is dependent upon the result of the main action.

The purpose of such writ is to preserve the status quo until the merits of the case can be heard. Since the First
Complaint was in fact dismissed, there is nothing left to enjoin.

Second Issue - Forum Shopping

PET committed 2 acts of forum shopping in this case: (1) they wilfully and deliberately went to different courts to
avail themselves of multiple judicial remedies founded on similar facts and raising substantially similar reliefs, and
(2) they did not comply with their undertaking to report the filing of the Second Complaint (w/in 5 days from its
filing)

PET were guilty of willful and deliberate forum-shopping when they filed the Second Complaint. RESP argues that
the rights asserted and the reliefs sought are the same in both complaints.

A comparison of the reliefs sought by petitioners in the instant Petition and in their Second Complaint confirms
that they are substantially similar on two points: (1) revocation and cancellation of the Certificate of Sale and (2)
permanent injunction on any transfer and/or consolidation of title in favor of respondent Bank.

PET did not report that they filed their Second Complaint within 5 days of filing. Every litigant is required to notify
the court of the filing or pendency of any other action or such other proceeding involving the same or similar action
or claim within 5 days of learning of that fact. PET said that this is only due to inadvertence.

As previously established, petitioners have violated two (2) components of forum-shopping, more particularly: (1)
petitioners willfully and deliberately went to different courts to avail themselves of multiple judicial remedies
founded on similar facts and raising substantially similar reliefs, an act which may be punishable as direct
contempt; and (2) they did not comply with their undertaking to report the filing of the Second Complaint within
five days from its filing. The latter action may also possibly be construed as a separate count for indirect contempt.

DISPOSITIVE: ​WHEREFORE, the instant Petition for Review is hereby DENIED. Decision and resolution of the
CA are AFFIRMED. PET are quired to SHOW CAUSE within 15 days why they should not be held in contempt.