TOPIC Preliminary injunction

CASE NO. Oct. 6 2010

CASE NAME Spouses Ngo v. Allied bank
MEMBER Jop

DOCTRINE
1.) The issuance of a writ of preliminary mandatory injunction is justified only in a clear case, free from doubt
or dispute. When the complainant's right is doubtful or disputed, he does not have a clear legal right and,
therefore, the issuance of a writ of preliminary mandatory injunction is improper
2.) While it is not required that the right claimed by applicant, as basis for seeking injunctive relief, be
conclusively established, it is still necessary to show, at least tentatively, that the right exists and is not
vitiated by any substantial challenge or contradiction

RECIT-READY DIGEST

Petitioners alleged that Allied Bank refused to release the real estate mortgages over their properties despite full
payment of their loan. They filed a complaint for Damages with a prayer for the issuance of a preliminary mandatory
injunction against Allied Bank. The Bank claimed that the mortgage still secures a debt for which Anthony Ngo is a
surety. RTC ordered the issuance of the writ but the CA annulled such order upon finding that petitioners failed to
establish a clear and unmistakable right to warrant the issuance of the provisional injunctive writ against Allied Bank.

Issue: W/N CA erred in annulling the RTC’s orders – NO

The SC affirmed the CA. Under Section 3, Rule 58 of the 1977 Rules of Civil Procedure, a writ of preliminary injunction,
whether mandatory or prohibitory, may be granted if the following requisites are met:
(1) The applicant must have a clear and unmistakable right, that is a right in esse;
(2) There is a material and substantial invasion of such right;
(3) There is an urgent need to issue the writ in order to prevent irreparable injury to the applicant; and
(4) No other ordinary, speedy, and adequate remedy exists to prevent the infliction of irreparable injury.

FACTS

● Petitioners Sps. Ngo filed a Complaint for Damages with Prayer for the Issuance of a Preliminary Mandatory
Injunction against Allied Bank, alleging that the latter unlawfully and unjustifiably refused to discharge/release the real
estate mortgage constituted on the two lots of spouses, and withheld the Owner's Duplicate Copy of the TCT of the said
lots, despite spouses their full payment of the P12 million loan secured by the mortgage.
● The Bank admitted to the satisfaction of the P12 million loan but clarified that the mortgage on the lots still
secures the unpaid P42.9 million loan of Civic Merchandising Inc for which Anthony Ngo stands as surety. As evidence,
the Bank presented a Continuing Guaranty/Comprehensive Surety Agreement signed by Anthony Ngo.
● After hearing the parties, the RTC ordered the issuance of a writ of preliminary injunction, directing Allied Bank
to discharge the real estate mortgage over the properties and release to the petitioners the TCTs of the lots.
● After its MR was denied, Allied Bank elevated the case to the CA by way of special civil action for certiorari.
● The Ca annulled the RTC’s orders upon finding that petitioners failed to establish a clear and unmistakable right
to warrant the issuance of the provisional injunctive writ against Allied Bank.

ISSUE/S and HELD

1
1.) W/N CA erred in annulling the RTC’s orders – NO

RATIO

1.) W/N CA erred in annulling the RTC’s orders – NO

• Under Section 3, Rule 58 of the 1977 Rules of Civil Procedure, a writ of preliminary injunction, whether mandatory
or prohibitory, may be granted if the following requisites are met:
1) The applicant must have a clear and unmistakable right, that is a right in esse;
2) There is a material and substantial invasion of such right;
3) There is an urgent need to issue the writ in order to prevent irreparable injury to the applicant; and
4) No other ordinary, speedy, and adequate remedy exists to prevent the infliction of irreparable injury.
• A preliminary mandatory injunction is more cautiously regarded than a mere prohibitive injunction since, more
than its function of preserving the status quo between the parties, it also commands the performance of an act.
• The issuance of a writ of preliminary mandatory injunction is justified only in a clear case, free from doubt or
dispute. When the complainant's right is doubtful or disputed, he does not have a clear legal right and, therefore,
the issuance of a writ of preliminary mandatory injunction is improper.
• While it is not required that the right claimed by applicant, as basis for seeking injunctive relief, be conclusively
established, it is still necessary to show, at least tentatively, that the right exists and is not vitiated by any
substantial challenge or contradiction.
• Petitioners anchored their right on a Payment Slip issued by the bank evidencing their full payment of the P12
million loan. However, the Bank presented provisions of the real estate mortgage as well as a Continuing
Guaranty/Comprehensive Surety Agreement signed by Anthony Ngo which stated that the mortgage also
covered the subsisting P42.9 million loan.
• The mere fact of payment of the P12 million loan is a scant justification for the issuance of the writ. The RTC
accorded too much weight thereon and deliberately ignored other relevant facts alleged in the pleadings and
shown in the annexes submitted by the parties which pose a substantial challenge against the rights claimed by
the petitioners.
• The credit accommodation given to Civic Merchandising Inc casts a cloud over the rights claimed by petitioners.
Such rights are less than clear and far from being unmistakable. Consequently, without such unequivocal right,
the possibility of irreparable damage would not justify injunctive relief in petitioner's favor.
• Further, in issuing the preliminary mandatory injunction, which was the main prayer in the complaint, the RTC
effectively concluded the main case without proper hearing on the merits as there was practically nothing left to
be determined except petitioner-spouses' claim for damages.
• Settled is the rule that courts should avoid issuing a writ of preliminary injunction which would in effect dispose
of the main case without trial.

DISPOSTIVE PORTION

WHEREFORE, premises considered, the Petition is hereby DENIED and the assailed April 19, 2006 Decision and the April
2, 2007 Resolution of the Court of Appeals are AFFIRMED. SO ORDERED.