1. Cortez-Estrada vs. Heirs of Domingo, 451 SCRA 275 [2005].

MA. CRISTINA CORTEZ-ESTRADA v.

HEIRS OF DOMINGO SAMUT/ ANTONIA SAMUT

451 SCRA 275 (2005), THIRD DIVISION

Emiliano Cortez (Emiliano), father of petitioner Ma. Cristina Cortez-Estrada (Cortez-Estrada), filed Free
Patent Application with the Bureau of Lands (Bureau) covering two parcels of land which was approved.
Domingo Samut (Samut) represented by Antonia Samut filed before the Bureau a protest claiming that he has
since the Second World War been in possession of the properties subject to Free Patent Application. Thus, an
investigation was conducted on the grant of Cortez-Estrada‘s patent.

After the death of Emiliano, a Transfer Certificate of Title (TCT) was issued in favor of his widow, Antonia.
Antonia subsequently died intestate and is survived by her children. Upon investigation on the grant of
Cortez-Estrada‘s patent and title inspired by Samut‘s assertion that such were obtained by fraud, the Bureau
cancelled the patent and title of Cortez-Estrada while directing the heirs of Samut to file the appropriate
public land application covering certain lots situated at Libertad Echague, Isabela. No appeal from the above
Order was filed.

The State represented by the Director of Lands, filed a complaint for Reversion of Land to Public Domain
before the Regional Trial Court (RTC) alleging that Cortez-Estarda deliberately made fraudulent
representation in her Free Patent Application, hence the patent and title granted to her should ipso
facto be cancelled. In her an swer with the Third Party Complaint, Cortez-Estrada averred that respondent
Samut cannot legally acquire the properties by possessory rights despite the alleged period of
occupation, for Cortez-Estarada and Joaquin Samut (Joaquin), son of Domingo Samut executed a
Contract of Lease.

Under the said contract, Joaquin as lessee, agreed to plant agricultural crops on the properties and deliver to
Cortez-Estrada, twenty percent of the crops harvested every year. Thus, Cortez-Estrada prayed for the
issuance of a temporary restraining order and/or writ of preliminary injunction to prevent Samut
from selling or cultivating the properties or introducing any improvements thereon. The RTC denied
Cortez-Estrada‘s plea. Subsequently, her Motion for Reconsideration was also denied. Cortez-Estrada filed a
petition for certiorari and a succeeding Motion for Reconsideration before the Court of Appeals which were
both denied. Hence, this petition for review on certiorari.

ISSUE:

Whether or not it is proper to grant the Cortez-Estrada‘s writ of preliminary injunction

HELD:

A preliminary injunction is a provisional remedy that a party may resort to in order to preserve and protect
certain rights and interests during the pendency of an action. Its sole objective is to preserve the status quo
until the merits of the case can be heard fully.

Status quo is defined as the last actual, peaceful, and uncontested status that precedes the actual controversy,
that which is existing at the time of the filing of the case. Indubitably, the trial court must not make use of its
injunctive power to alter such status.

To entitle a petitioner to the grant of a writ of preliminary injunction, he must establish the following
requisites: (a) the invasion of the right sought to be protected is material and substantial; (b) the right of the
complainant is clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ to
prevent serious damage.

Sine dubio the grant or denial of a writ of preliminary injunction in a pending case rests in the sound
discretion of the court taking cognizance of the case since the assessment and evaluation of evidence towards
that end involve findings of facts left to the said court for its conclusive determination. Hence, the exercise of
judicial discretion by a court in injunctive matters must not be interfered with except when there is grave
abuse of discretion.

In fine, a prayer for injunctive relief should not be granted for the purpose of taking the property, the
legal title to which is in dispute, out of the possession of one person and putting it into the hands of
another before the right of ownership is determined. The reason for this doctrine is that before the issue
of ownership is determined in light of the evidence presented, justice and equity demand that the parties be
maintained in their status quo so that no advantage may be given to one to the prejudice of the other.

It is with respect to Cortez-Estrada‘s prayer that Heirs of Samut be restrained from selling the properties or
portions thereof that the present petition assumes merit. For pending the final determination of the
ownership of the properties, private respondents can not exercise the attribute of ownership of jus
disponendi. For only the owner can transfer his ownership to another.

2. Bacolod City Water District vs. Labayen, 446 SCRA 110;

PAOLO CARLO B BRILLANTES BACOLOD CITY WATER DISTRICT vs. LABAYEN

G.R. No. 157494 December 10, 2004

FACTS: Respondent City opposed the Schedule of Automatic Water Rates Adjustments for the years 1999,
2000 and 2001published by the petitioner. It alleged that the proposed water rates would violate due process
as they were to be imposed without the public hearing. Hence, it prayed that before the hearing of the main
case, a temporary restraining order or a preliminary injunction be issued. On February 24, 2000. On the same
date requested, respondent court heard respondents application for temporary restraining order and issued
an Order commanding petitioner to stop, desist and refrain from implementing the proposed water rates. On
December 21, 2000, respondent court issued the assailed Decision granting the final injunction which
allegedly confirmed the previous preliminary injunction. Petitioner filed its Motion for Reconsideration of the
assailed Decision on January 11, 2001 asserting, among others, that the case was not yet ripe for decision
when the court granted the final injunction, the petitioner having had no opportunity to file its answer, avail
of the mandatory pre-trial conference and have the case tried on the merits.

Issue: A. Whether or not preliminary injunction had been issued

Ruling: No. The sequence of events and the proceedings that transpired in the trial court make a clear
conclusion that the Order issued was a temporary restraining order and not a preliminary injunction. Given
the previous undeviating references to it as a temporary restraining order, respondents cannot now consider
it as a preliminary injunction to justify the validity of the assailed Decision. The attendant facts and
circumstances clearly show that the respondent trial court issued a temporary restraining order.

Injunction is a judicial writ, process or proceeding whereby a party is ordered to do or refrain from doing a
certain act. It may be the main action or merely a provisional remedy for and as an incident in the main
action.] The main action for injunction is distinct from the provisional or ancillary remedy of preliminary
injunction which cannot exist except only as part or an incident of an independent action or proceeding. As a
matter of course, in an action for injunction, the auxiliary remedy of preliminary injunction, whether
prohibitory or mandatory, may issue. Under the law, the main action for injunction seeks a judgment
embodying a final injunction which is distinct from, and should not be confused with, the provisional remedy
of preliminary injunction, the sole object of which is to preserve the status quo until the merits can be heard.
A preliminary injunction is granted at any stage of an action or proceeding prior to the judgment or final
order. It persists until it is dissolved or until the termination of the action without the court issuing a final
injunction. A restraining order, on the other hand, is issued to preserve the status quo until the hearing of
the application for preliminary injunction which cannot be issued ex parte.

Under Rule 58 of the Rules of Court, a judge may issue a temporary restraining order with a limited life of
twenty (20) days from date of issue. If before the expiration of the twenty (20)-day period the application for
preliminary injunction is denied, the temporary restraining order would be deemed automatically vacated. If
no action is taken by the judge on the application for preliminary injunction within the said twenty (20) days,
the temporary restraining order would automatically expire on the 20th day by the sheer force of law, no
judicial declaration to that effect being necessary.[47]

Hence, in the case at bar, since no preliminary injunction was issued, the temporary restraining order
granted automatically expired after twenty (20) days under the Rules. The fact that respondent court
merely ordered the respondent[,] its agents, representatives or any person acting in his behalf to stop, desist
and refrain from implementing in their billings the new water rate increase which will start on March 1, 2000
[48] without stating the period for the restraint does not convert the temporary restraining order to a
preliminary injunction. The rule against the non-extendibility of the twenty (20)-day limited period of
effectivity of a temporary restraining order is absolute if issued by a regional trial court. The failure of
respondent court to fix a period for the ordered restraint did not lend the temporary restraining order a
breath of semi-permanence which can only be characteristic of a preliminary injunction. The twenty (20)-day
period provided by the Rules of Court should be deemed incorporated in the Order where there is an
omission to do so. It is because of this rule on non-extendibility that respondent City was prompted to move
that hearings be set for its application of a preliminary injunction. Respondent City cannot take advantage of
this omission by respondent trial court.

3. James College of Paraňaque vs. EPCIB, GR No. 179441, 08/09/2010

The Facts

Petitioners-spouses Jaime (now deceased) and Myrna Torres owned and operated St. James College of
Parañ aque[3] (St. James College), a sole proprietorship educational institution. Sometime in 1995, the
Philippine Commercial and International Bank (PCIB) granted the Torres spouses and/or St. James
College a credit line facility of up to PhP 25,000,000. This accommodation or any of its extension or
renewal was secured by a real estate mortgage [4] (REM) over a parcel of land situated in Parañ aque covered
by Transfer Certificate of Title (TCT) No. 74598 [5] in the name of St. James College, particularly described as:

A parcel of Land (lot 2 of the cons. and subd. plan Pcs.-13-0008777, being a portion of the cons. of Lots 4654-
B and 5654-C Psd.-13-002266. L.R.C. Rec. No. N-21332), situated in the Bo. of San Dionisio, Mun. of
Parañ aque, Metro Manila.  x x x containing an area of NINETEEN THOUSAND TWO HUNDRED TWENTY FIVE
(19,225) SQ. METERS.

St. James College used to occupy the above lot.

PCIB eventually merged with Equitable Bank with the surviving bank known as Equitable PCI Bank (EPCIB)
(now Banco de Oro).  The credit line underwent several annual renewals, the last being effected in
2001. As petitioners had defaulted in the payment of the loan obtained from the secured credit
accommodation, their total unpaid loan obligation, as of September 2001, stood at PhP 18,300,000.

In a bid to settle its loan availment, petitioners first proposed to EPCIB that they be allowed to pay their
account in equal quarterly installments for five years. This payment scheme was apparently not acceptable to
EPCIB, as another written letter later followed, this time petitioners proposing that their outstanding credit
be converted into a long term loan payable in 10 equal annual installments.
EPCIB responded via a letter of January 9, 2003.[6] In it, EPCIB informed petitioners that it is denying their
request for the reinstatement of their credit line, but proposed a restructuring package with a soft payment
scheme for the outstanding loan balance of PhP 18,300,000. Under the counter-proposal, the bank would
book the accumulated past due loans to current status and charge interest at a fixed rate of 13.375% per
annum, payable in either of the ensuing modes and level, at petitioners' options:  payment of the PhP
18,300,000 principal either at a monthly rate of PhP 508,333.33; or equal annual amortizations of PhP
6,100,000 payable every May.  Petitioner Jaime Torres chose and agreed to the second option, i.e., the equal
annual amortizations of PhP 6,100,000 payable every May, by affixing his conforme signature at the bottom
portion of EPCIB's letter, writing the words "on annual amortization."[7]

May 2003 came, but petitioners failed to pay the stipulated annual amortization of PhP 6,100,000
agreed upon. Whereupon, EPCIB addressed to petitioners a demand letter dated June 6, 2003 requiring them
to settle their obligation.  On June 23, 2003, petitioners tendered, and EPCIB accepted, a partial payment of
PhP 2,521,609.62, broken down to cover the following items: PhP 1,000,000 principal, PhP 1,360,881.62
interest due on June 15, 2003, and PhP 160,728.00 insurance premium for the mortgaged property.  In the
covering June 23, 2003 letter,[8] which came with the tender, petitioners promised to make another payment
in October 2003 and that the account would be made current in June 2004.  They manifested, however, that
St. James College is not subject to the 10% value-added tax (VAT) which EPCIB assessed against the school in
its June 15, 2003 statement of account.  Petitioners accordingly requested the deletion of the VAT portion.

Vis-à -vis the PhP 2,521,609.62 payment to which it issued an  official receipt (OR)[9] dated June 30, 2003,
EPCIB made it abundantly clear on the OR that: "THE RECEIPT OF PAYMENT IS WITHOUT PREJUDICE TO
THE BANK'S RIGHT AND CLAIMS ARISING FROM THE FACT THE ACCOUNT IS OVERDUE. NOR SHALL IT
RENDER THE BANK LIABLE FOR ANY DAMAGE BY ITS ACCEPTANCE OF PAYMENT." And in answer to
petitioners' cover letter of June 23, 2003, EPCIB, through counsel, reminded and made it clear to petitioners
that their first partial payment did not detract from the past due character of their outstanding loan for which
reason it is demanding the remaining PhP 5,100,000 to complete the first PhP 6,100,000 principal payment. 
On August 27, 2003, EPCIB again sent another demand letter to petitioners, but to no avail.

On September 15, 2003, petitioners requested that the bank allow a partial payment of the May 2003
amortization balance of PhP 5,100,000. Two days later, EPCIB responded denying petitioners' request, but
nonetheless proposed a new repayment scheme to which petitioners were not amenable.

Petitioners made a second check remittance, this time in the amount of PhP 921,535.42, [10] the PhP 500,000
portion of which represented payment of the principal and PhP 421,535.42 for interest due on October 15,
2003. By letter dated November 5, 2003, EPCIB again reminded petitioners that its receipt of the check
payment for the amount of the PhP 921,535.42 is without prejudice to the bank's rights considering the
overdue nature of petitioners' loan.[11]

On November 6, 2003, petitioners issued a Stop Payment Order [12] for their PhP 921,535.42 check.  And in a
November 8, 2003 letter, petitioner Jaime, adverting to EPCIB's November 5, 2003 letter, told the bank, "You
cannot just unilaterally decide/announce that you did not approve our proposal/request for restructuring of
our loan after receiving our payment, which was based on said proposal/request." [13]

On November 10, 2003, EPCIB, through counsel, demanded full settlement of petitioners' loan obligation in
the total amount of PhP 24,719,461.48. Appended to the demand letter which went unheeded was a
statement of account showing detailed principal obligation, interest, and penalties as well as payments
petitioners made and how they were applied.

On November 27, 2003, EPCIB filed before the Office of the Clerk of Court and Ex-Officio Sheriff of the
RTC in Parañaque City its Petition for Sale[14] to extra-judicially foreclose the mortgaged property
covered by TCT No. 74598. After due publication, the foreclosure sale of the mortgaged property was
set for January 9 and 16, 2004.
On December 8, 2003, in the RTC, Branch 266 in Pasig City, petitioners instituted against EPCIB a
complaint for Declaratory Relief, Injunction and Damages, with application for a temporary restraining
order (TRO) and/or writ of preliminary injunction,[15] docketed as SCA No. 2569.

On the very day of the scheduled foreclosure sale, January 9, 2004, the Pasig City RTC issued a TRO,
[16]
 enjoining EPCIB from proceeding with the scheduled foreclosure sale, and set a date for the
hearing on the application for a writ of preliminary injunction.

After the scheduled hearing on January 15, 2004, the trial court required the parties to file their respective
memoranda. EPCIB filed a motion praying for an additional time to file its memorandum which the RTC
eventually denied.

On March 10, 2004, the RTC issued an Order granting a writ of preliminary injunction in favor of petitioners,
as plaintiffs a quo, thus effectively staying the rescheduled foreclosure sale of St. James College's mortgaged
property. The dispositive portion of the RTC Order reads:

WHEREFORE, premises considered, finding plaintiffs' application for writ of preliminary injunction to be
well-taken and legally justified, the same is hereby GRANTED.

Accordingly, in the interest of substantial justice, let therefore a writ of preliminary injunction be issued
enjoining the defendant EPCIB and/or any of its representative/s or any person acting in its behalf to
foreclose the mortgaged property of the plaintiffs until final order of the Court.  Plaintiffs are directed to post
an injunction bond in the amount of ONE MILLION PESOS (PhP1,000,000.00) to answer for whatever
damages that said defendant may suffer in the event that it is finally determined by the Court that plaintiffs
are not entitled to the same.

SO ORDERED.[17]

By Order[18] of July 6, 2004, the RTC denied EPCIB's Extremely Urgent Motion for Reconsideration. [19]

Aggrieved, EPCIB went to the CA on certiorari to nullify the RTC Orders dated March 10, 2004 and July 6,
2004, and necessarily to assail the propriety of the writ of preliminary injunction thus granted.

Meanwhile, petitioner Jaime passed away and was substituted by petitioner James Kenley M. Torres.

The Ruling of the CA

On January 17, 2007, the appellate court--while making short shrift of the jurisdictional challenge raised by
EPCIB, but finding that grave abuse of discretion attended the issuance of the assailed writ of preliminary
injunction--rendered the assailed decision nullifying and setting aside the RTC orders, disposing as follows:

WHEREFORE, premises considered, the instant petition for certiorari is GRANTED.  Accordingly, the March
10, 2004 and July 6, 2004 Orders of the Regional Trial Court of Pasig City, Branch 266, are hereby REVERSED
and SET ASIDE.

SO ORDERED.[20]

Their Motion for Reconsideration (Of the Decision dated 17 January 2007) [21] having been denied in the
equally assailed resolution of August 28, 2007, petitioners interposed the instant recourse.

The Court, through its Resolution of December 12, 2007, issued a TRO, [22] enjoining the Office of the Clerk of
Court and Ex-Officio Sheriff of the Parañ aque City RTC, and EPCIB, their agents or representatives, from
enforcing the appealed decision and resolution of the CA, conditioned upon the posting by petitioners of a
PhP 1,000,000 surety bond. On January 29, 2008, petitioners submitted the necessary surety bond.

The Issues
I.  x x x IN RULING THAT THE PETITIONERS (PRIVATE RESPONDENTS IN CA-G.R. SP NO. 86587) FAILED TO
ESTABLISH THE ELEMENTS FOR THE ISSUANCE OF THE INJUNCTIVE WRIT CONTRARY TO THE FINDINGS
OF THE COURT A QUO BY MISAPPLYING THE CASE OF TOYOTA MOTOR PHILIPPINES CORPORATION
WORKERS' ASSOCIATION VS COURT OF APPEALS, 412 SCRA 69.
The Court's Ruling

The petition is unmeritorious.

Propriety of the Grant of Injunctive Writ

We now come to the main issue in this case--the propriety of the issuance of the preliminary injunctive
writ.

Basically, petitioners fault the appellate court for citing and relying on Toyota Motor Philippines Corporation
Workers' Association v. Court of Appeals (Toyota)[31] and Estares v. Court of Appeals[32] in support of its
disposition on their non-entitlement to a preliminary injunctive writ. Pursuing this point, petitioners posit the
inapplicability of Toyota, as that case involved the issuance of a writ of preliminary mandatory injunction,
not a writ of preliminary prohibitory injunction, as here.  And Estares, they argue, was cast against and
revolved around a different factual issue, for the debtors Estares spouses in Estares, unlike petitioners, did
not question the statement of account given them by the lending institution and failed to establish their
entitlement to the injunctive writ.

Moreover, petitioners invite attention to the fact respecting the mortgaged lot being the site of St. James
College. As such, petitioners add, public interest demands that said educational institution be protected from
an undue operational disruption which would result in damages, in case of a foreclosure sale, that are not
only incapable of pecuniary estimation, but also well-nigh irreparable, affecting the employment of
the teaching staff and other school personnel and the displacement of thousands of students.

We are not persuaded.

Requisites for issuance of an injunctive writ

A writ of preliminary injunction issues to:

prevent threatened or continuous irremediable injury to some of the parties before their claims can be
thoroughly studied and adjudicated.  Its sole office is to preserve the status quo until the merits of the case
can be heard fully.  Thus, its issuance is conditioned upon a showing of a clear and unmistakable right
that is violated.  Moreover, an urgent necessity for its issuance must be shown by the applicant.
[33]
 (Emphasis supplied.)

Under Section 3, Rule 58 of the Rules of Court, an application for a writ of preliminary injunction may be
granted if the following grounds are established, thus:

(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in
restraining the commission or continuance of the act or acts complained of, or in requiring the performance
of an act or acts, either for a limited period or perpetually;

(b) That the commission, continuance or non-performance of the act or acts complained of during the
litigation would probably work injustice to the applicant; or

(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or
suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the
subject of the action or proceeding, and tending to render the judgment ineffectual.

And following jurisprudence, these requisites must be proved before a writ of preliminary injunction, be
it mandatory or prohibitory, will issue:

(1) The applicant must have a clear and unmistakable right to be protected, that is a right in esse;

(2) There is a material and substantial invasion of such right;

(3) There is an urgent need for the writ to prevent irreparable injury to the applicant; and

(4) No other ordinary, speedy, and adequate remedy exists to prevent the infliction of irreparable injury. [34]

Thus, the question of applicability of Toyota as regards the requisites of a preliminary injunction is of no
moment, for there is no distinction in the requisites for either a mandatory or prohibitory injunctive writ.

Requisites for injunctive writ not present

A circumspect review of the parties' pleadings and other records of the case readily yields the conclusion that
the minimum legal requisites for the issuance of a preliminary prohibitory injunction have not been satisfied. 
Hence, the appellate court neither committed manifest error nor gravely abused its discretion in setting aside
the grant by the trial court of a writ of preliminary injunction in favor of petitioners.

For sure, the Court is aware that the matter of the propriety of the issuance of a writ of preliminary injunction
is addressed to the sound discretion of the trial court. It bears to stress, however, that the injunctive writ
is conditioned on the existence of a clear and positive right of the applicant which should be
protected, the writ being the strong arm of equity, an extraordinary peremptory remedy which can be
availed of only upon the existence of well-defined circumstances.  Be that as it may, the writ must be used
with extreme caution, affecting as it does the respective rights of the parties. [35]  In fine, the writ should be
granted only when the court is fully satisfied that the law permits it and the emergency demands it, [36] for the
very foundation of the jurisdiction to issue writ of injunction rests in the existence of a cause of
action, probability of irreparable injury, inadequacy of pecuniary compensation, and the prevention of
the multiplicity of suits.  Where facts are not shown to bring the case within these conditions, the relief of
injunction should be refused.[37]

Petitioners failed to show a right in esse to be protected

We join the CA in its findings that the petitioners have not shown a right in esse to be protected. Indeed,
the Rules requires that the applicant's right must be clear or unmistakable, that is, a right that is actual, clear,
and positive especially calling for judicial protection. [38]  An injunction will not issue to protect a right not in
esse and which may never arise, or to restrain an act which does not give rise to a cause of action.

An application for a preliminary injunction is a mere adjunct to the main action. While the instant proceeding
is only for the purpose of determining whether grave abuse of discretion indeed attended the issuance by the
RTC of the writ in question, as the CA has determined positively, it is inevitable that our pronouncements may
have some unintended bearing on the main suit for declaratory relief. Nonetheless, it behooves the Court to
resolve the matter in keeping with the requirements of justice and fair play.

A judicious review of the records shows petitioners applying for and EPCIB granting the former credit
facilities and for which a bona fide REM over the St. James College lot had been constituted.  EPCIB has shown
documentary evidence of how petitioners agreed to the credit line accomodation with a limit of PhP
25,000,000. Moreover, the late petitioner Jaime indeed agreed to the January 9, 2003 counter-proposal of
EPCIB for the payment of the PhP 18,300,000 outstanding loan, by signing his conforme on the counter-
proposal and voluntarily opting to pay the loan on equal annual payments of PhP 6,100,000 every May for
three years.

It bears stressing that the original renewable credit line was granted sometime in 1995, while the REM over
the land covered by TCT No. 74598 was executed on November 8, 1994.  The records show that the credit line
was last renewed in 2001. There can be no quibbling that in September 2001, petitioners were already in
default, their overdue loan having an unpaid balance of PhP 18,300,000. The fact of default was admitted by
petitioners when they twice proposed ways of settling their account.

Verily, the January 9, 2003 counter-proposal of EPCIB was a gesture of liberality on its part, inasmuch as, by
that simple act, it deferred exercising its rights as REM-secured creditor, by affording petitioners the
opportunity to restructure their loan by make making the outstanding balance of PhP 18,300,000 current. As
events turned out, however, petitioners still breached the terms of the counter-proposal by which they
voluntarily agreed to abide.

We note that EPCIB did not immediately exercise its right to foreclose when the opportunity first presented
itself. From September 27, 2001, when petitioners were already in arrears, until November 27, 2003, or for
more than two years, EPCIB let that opportunity pass by.  The new terms of payment pursuant to the January
9, 2003 agreement gave petitioners a fresh start to meet their obligation.

We further note that petitioners saw fit to commence SCA No. 2569 for declaratory relief only on December 8,
2003 or after EPCIB filed its petition for sale to extra-judicially foreclose the subject mortgaged property. 
With the view we take of things, petitioner instituted SCA No. 2569 as an afterthought and a measure to
thwart and forestall the imminent extrajudicial foreclosure proceedings.

Given the foregoing perspective, EPCIB has clearly established its status as unpaid mortgagee-creditor
entitled to foreclose the mortgage, a remedy provided by law[39] and the mortgage contract itself. On the other
hand, petitioners can hardly claim a right, much less a clear and unmistakable one, which the intended
foreclosure sale would violate if not enjoined. Surely, the foreclosure of mortgage does not by itself constitute
a violation of the rights of a defaulting mortgagor.

The main purpose of the subsidiary contract of REM is to secure the principal obligation. Withal, when the
mortgagors-debtors has defaulted in the amortization payments of their loans, the superior legal right of the
secured unpaid creditors to exercise foreclosure proceedings on the mortgage property to answer for the
principal obligation arises. So it must be in this case.

Contrary to what the RTC wrote, there was no urgent necessity to issue the writ to protect the rights and
interest of petitioners as owners.  First, they could participate in the foreclosure sale and get their property
back unencumbered by the payment of the obligations that they acknowledged in the first place. Second, a
foreclosure sale does not ipso facto pass title to the winning bidder over the mortgaged property. Petitioners
continue to own the mortgaged property sold in an auction sale until the expiration of the redemption
period.  Third, petitioners have one year from the auction sale to redeem the mortgaged property.  The one-
year redemption period is another grace period accorded petitioners to pay the outstanding debt, which
would be converted to the proceeds of the forced sale pursuant to the requisites under Sec. 6 of Republic Act
No. 3135, as amended, for the redemption of a property sold in an extrajudicial sale, also in accordance with
Sec. 78 of the General Banking Act, as amended by Presidential Decree No. 1828. [40]  It is only upon the
expiration of the redemption period, without the judgment debtors having made use of their right of
redemption, does ownership of the land sold become consolidated in the purchaser or winning bidder. [41]

Petitioners contend that the proposed foreclosure sale would likely cause unemployment in, as well as the
displacement of thousands of students of, St. James College. Petitioners' thesis of unemployment and
displacement provides a practical, not a legal reason, for the issuance of an injunctive writ. What they
conveniently refrained from saying is that it is within their power and to their interest to prevent the
occurrence of any of the two eventualities.
Finally, petitioners point to the fact that the mortgaged property has a value of over PhP 1 billion which is
many times over their unpaid loan obligation.

The disparity between what the mortgaged lot is worth and petitioners' unpaid debt of PhP 24 million is not,
standing alone, a ground to enjoin a foreclosure sale. Neither would petitioners, as mortgagors, be placed at a
disadvantage by such state of things.  The CA, citing decisional law, explains why:

Second, the fact that the outstanding obligation is only P24 million while the value of the mortgaged property
could be more than one billion pesos is not sufficient to enjoin the foreclosure sale of the said property.   We
agree with [EPCIB] that the value of the mortgaged property has no bearing on the propriety of the auction
sale provided that the same is regularly and honestly conducted.  This is because in a foreclosure sale where
there is a right to redeem, inadequacy of the bid price is of no moment for the reason that the judgment
debtor has always the chance to redeem and reacquire the property.  In fact, the property may be sold for less
than its fair market value precisely because the lesser the price, the easier for the owner to effect a
redemption.[42]

Application for injunctive relief construed strictly

In all then, the preliminary evidence presented by petitioners and the allegations in their complaint did not
clearly make out any entitlement to the injunctive relief prayed for.  Consequently, the RTC gravely abused its
discretion in granting the writ of preliminary injunction.  Trial courts are reminded to see to it that
applications for preliminary injunction clearly allege facts and circumstances showing the existence of the
requisites.[43]  We need not stress that an application for injunctive relief is construed strictly against the
pleader.[44]  Here, petitioners have not sufficiently shown the presence of the requisites for their entitlement
to the writ.  Perforce, the injunctive writ issued by the trial court must be recalled.

On the issue of petitioners' contention on the alleged VAT imposed on the principal obligation, such can be
fully ventilated in the main action before the trial court.

One final word. The institution by petitioners of a suit for declaratory relief--after the petition for
extrajudicial petition has already been filed; and hoping in the process to block the bank's legitimate effort to
collect an overdue account and demandable debt--is but a crude attempt to evade complying with their just
obligation. It cannot be countenanced. The antecedent facts in this case are quite simple: petitioners opened a
credit line secured by a REM. After drawing much from that line, they failed to pay, even after the bank bent
backwards in the matter of terms of payments. As a matter of justice and good conscience, the bank's right to
a forced sale of the mortgaged property pursuant to the REM must be upheld absent other weightier reasons.

WHEREFORE, the instant petition is hereby DENIED for lack of merit, and the Court of Appeals Decision
dated January 17, 2007 and Resolution dated August 28, 2007 in CA-G.R. SP No. 86587 are AFFIRMED. The
temporary restraining order issued by the Court pursuant to its Resolution of December 12, 2007 is
accordingly LIFTED.

Costs against petitioners.

4. Bro. Bernard Oca vs. Custodio, GR No. 174996

On July 9, 1973, petitioner St. Francis School of General Trias Cavite, Inc. (School) was organized and
established as a non-stock and non-profit educational institution. The organization and establishment of the
school was accomplished through the assistance of the

La Salle Brothers without any formal agreement with the School. Thus, the incorporators of the School consist
of the following persons: private respondent Custodio, petitioner Cirila Mojica (Mojica), petitioner Josefina
Pascual (Pascual), Rev. Msgr. Feliz Perez, Bro. Vernon
Poore, FSC. The five original incorporators served as the School's Members and Board of Trustees until the
deaths of Bro. Poore and Msgr. Perez.

On July 9, 1973, petitioner St. Francis School of General Trias Cavite, Inc. (School) was organized and
established as a non-stock and non-profit educational institution. The organization and establishment of the
school was accomplished through the assistance of the La Salle Brothers without any formal agreement with
the School. Thus, the incorporators of the School consist of the following persons: private respondent
Custodio, petitioner Cirila Mojica (Mojica), petitioner Josefina Pascual (Pascual), Rev. Msgr. Feliz Perez, Bro.
Vernon.

Poore, FSC. The five original incorporators served as the School's Members and Board of Trustees until the
deaths of Bro. Poore and Msgr. Perez.

On July 9, 1973, petitioner St. Francis School of General Trias Cavite, Inc. (School) was organized and
established as a non-stock and non-profit educational institution. The organization and establishment of the
school was accomplished through the assistance of the

La Salle Brothers without any formal agreement with the School. Thus, the incorporators of the School consist
of the following persons: private respondent Custodio, petitioner Cirila Mojica (Mojica), petitioner Josefina
Pascual (Pascual), Rev. Msgr. Feliz Perez, Bro. Vernon

Poore, FSC. The five original incorporators served as the School's Members and Board of Trustees until the
deaths of Bro. Poore and Msgr. Perez.

In September 8, 1988, to formalize the relationship between the De La Salle Greenhills (DLSG) and the School,
a Memorandum of Agreement (MOA) wa

On September 8, 1988, to formalize the relationship between the De La Salle Greenhills (DLSG) and the
School, a Memorandum of Agreement (MOA) was executed.

This agreement permitted DLSG to exercise supervisory powers over the School's academic affairs. Pursuant
to the terms of... the MOA, DLSG appointed supervisors who sit in the meetings of the Board of Trustees
without any voting rights. The first such supervisor was Bro. Victor Franco. Later on, Bro. Franco also became
a member of the Board of Trustees and President of the School. Then, on September

8, 1998, petitioner Bro. Bernard Oca joined Bro. Franco as DLSG supervisor. In a while, Bro. Oca also served as
a member of the Board of Trustees and President of the School. Bro. Dennis Magbanua also joined Bro. Franco
and Bro. Oca as DLSG supervisor and also as a Treasurer of... the School.

etitioners declare that the membership of the DLSG Brothers in the Board of Trustee[s] as its officers was
valid since an election was conducted to that effect.

Pet

On the other hand, Custodio challenges the validity of the membership of the DLSG Brothers and their
purported election as officers of the School. The legality of the membership and election of the DLSG Brothers
is the main issue of the case in the lower court.

Custodio alleges that sometime in 1992, Bro. Franco was invited by Mrs. Mojica to act as President of the
School. This is because there was only the Tres Marias (referring to the original incorporators, Pascual, Mojica
and Custodio) who [were] left to manage the affairs of the... school. Bro. Franco accepted the invitation.
However, while Bro. Franco acted as President and presided over meetings of the Tres Marias, he never
participated in the operation of the School and never exercised voting rights.
Custodio further alleges that on September 8, 1998, during one of the informal meetings held at the School,
Bro. Franco unilaterally declared the said meeting as the Board of Trustees' Meeting and at the same time an
Annual Meeting of the Members of the Corporation. During the... meeting, Bro. Franco declared that the
corporation is composed of the Tres Marias and their husbands, Dr.

Castaneda and himself (Bro. Franco) as members. On the other hand, the Board of Trustees was declared to
be composed of Bro. Oca, the Tres Marias and himself (Bro.

Franco).

According to Custodio, when Bro. Franco eventually left and became inactive in the School, Bro. Oca assumed
his position as President and Chairman of the Board of Trustees, without being formally admitted as member
of the School and without the benefit of an actual... election.

Custodio further states that on December 6, 2000, Bro. Magbanua was introduced to the original
incorporators for the first time. Automatically, he was declared as Member of the School and at the same time,
Treasurer by Bro. Oca, also without any formal admission into the... corporate membership and without the
benefit of an actual election.

Custodio alleges that clearly the composition of the membership of the School had no basis there being no
formal admission as members nor election as officers.

It appears that the legality of the membership and assumption as officers of the DLSG Brothers was
questioned by Custodio following a disagreement regarding a proposed MOA that would replace the existing
MOA with the DLSG Brothers and her removal as Curriculum Administrator... through the Board of Trustee[s].

Under the proposed MOA, DLSG will supervise and control not only the academic affairs of the School but also
the matters of the finance, administration and operations of the latter. Custodio vigorously opposed the
proposed MOA. Consequently, unable to convince Custodio and the... academic populace to accept the MOA,
the DLSG brothers withdrew [their] academic support from the School. A day after the rejection of the
proposed MOA, Mojica and Pascual retired as Administrators for Finance and Physical Resource Development
(PRD), respectively. However, they... maintained their positions as Members and Trustees of the School.

Custodio contends that while Pascual and Mojica remained to be Members and Trustees of the School, upon
retirement, they stopped reporting for work. Mr. Al Mojica, son of Mrs. Mojica, who was then the school
cashier, also stopped reporting for work. Thus, Custodio avers that... being the only remaining Administrator,
she served as the Over-all Director of the School. Being the Over-all Director, Custodio made appointments to
fill in the vacuum created by the sudden retirement of Pascual and Mojica. Hence, she appointed Mr. Joseph
Custodio as OIC both... for Finance and PRD and [Ms. Herminia] Reynante as Cashier.

Upon the appointment of Joseph Custodio and Reynante, a special meeting was called by Bro. Oca in which
the petitioners alleged that the prior organizational structure was restored, and the retirement of Pascual and
Mojica disapproved by proper corporate action. It was agreed to... in the meeting that the school was going to
revert to the three-man co-equal structure with Pascual as PRD head, Mojica as Finance head and Custodio as
Curriculum Administrator.

In the same meeting, petitioners alleged that Custodio admitted to having opened an account with the Luzon
Development Bank in her own name for the alleged purpose of depositing funds for and in behalf of the
School. Petitioners alleged that a directive was issued for the... immediate closing of this account. Still,
Custodio refused to close such account.

Subsequently, on January 31, 2002, Mojica and Pascual formally resigned from their administrative posts. As
such as a replacement, Atty. Eleuterio A. Pascual and Mr. Florante N. Mojica[,] Jr. were appointed by the Board
of Trustees as PRD Administrator and Finance Administrator... respectively.
According to petitioners, due to the repeated refusal of Custodio to close the account she opened in her own
name with the Luzon Development Bank, the Board of Trustees, in a meeting held on March 7, 2002,
approved a resolution to file a case against the latter. Consequently,... the Board of Trustees also approved
resolutions to the effect that Custodio, Mr. Joseph Custodio and Reynante be stopped from performing their
functions in the School.

On June 7, 2002, Custodio filed a Complaint in the RTC of Trece Martirez City, questioning the legality of the
Board of the School. The case was docketed as Civil Case No. TMCV-0033-02, entitled Laurita Custodio v. Bro.
Bernard Oca, et al. Custodio prayed for the issuance of a... temporary restraining order and/or writ of
preliminary injunction for the purpose of preventing Bro. Oca as President of the corporation, from calling a
special membership meeting to remove Custodio as Member of the School and the Board of Trustees. The
case was dismissed on

July 4, 2002.

Issues:
A

WHETHER OR NOT THE COURT OF APPEALS, CONTRARY TO LAW AND JURISPRUDENCE, COMMITTED
REVERSIBLE ERROR IN RULING THAT THE TRIAL COURT HAD NOT DEPRIVED PETITIONERS OF DUE
PROCESS IN ISSUING ITS ORDERS OF 5 AUGUST 2003, 21 AUGUST 2003 AND 8 OCTOBER 2003.

B.

HETHER OR NOT THE COURT OF APPEALS, CONTRARY TO LAW AND JURISPRUDENCE, COMMITTED
REVERSIBLE ERROR IN RULING THAT THE TRI

WHETHER OR NOT THE COURT OF APPEALS, CONTRARY TO LAW AND JURISPRUDENCE, COMMITTED
REVERSIBLE ERROR IN RULING THAT THE TRIAL COURT DID NOT GRAVELY ABUSE ITS DISCRETION IN
DISREGARDING THE PROVISIONS OF THE INTERIM RULES OF PROCEDURE FOR INTRA-CORPORATE
CONTROVERSIES PERTAINING TO

THE ISSUANCE OF A STATUS QUO ORDER AND THE REQUIREMENTS THEREOF

Ruling:
In fine, the sole issue in this case is whether or not the trial court committed grave abuse of discretion in
issuing the assailed Orders dated August 5, 2003, August 21, 2003 and October 8, 2003.

Petitioners argue that the Court of Appeals, in its assailed September 16, 2005 Decision, failed to consider
that no adequate proceedings had been accorded to the petitioners by the trial court for the exercise of its
right to be heard on the matters subject of the... questioned Orders. Furthermore, petitioners point out that
the Court of Appeals erroneously gave its imprimatur to the trial court's issuance of the assailed Status Quo
Order dated August 21, 2003 without first requiring and accepting from respondent the... requisite bond that
is required under the Interim Rules of Procedure for Intra-Corporate Controversies.

On the other hand, respondent maintains that the manner of the issuance of the assailed Orders of the trial
court did not violate the due process rights of petitioners. Respondent also claims that a valid ground for the
issuance of the assailed Status Quo Order... dated August 21, 2003 did exist and that the alleged failure of the
trial court to require the posting of a bond prior to the issuance of a status quo order was mooted by the
assailed Order dated October 8, 2003 which required respondent and Reynante to file a bond in the... amount
of P300,000.00 each.

petition to be partly meritorious.

arcia v. Executive Secretary,[30] we reiterated what grave abuse of discretion means in this jurisdiction, to
wit:

Grave abuse of discretion means such capricious and whimsical exercise of judgment as is equivalent to lack
of jurisdiction. Mere abuse of discretion is not enough. It must be grave abuse of discretion, as when the
power is exercised in an arbitrary or despotic... manner by reason of passion or personal hostility, and must
be so patent and so gross as to amoun... nt to an evasion of a positive duty or to a virtual refusal to perform
the duty enjoined or to act at all in contemplation of law.

be

With regard to the right to due process, we have emphasized in jurisprudence that while it is true that the
right to due process safeguards the opportunity to be heard and to submit any evidence one may have in
support of his claim or defense, the Court has time and again held... that where the opportunity to be heard,
either through verbal arguments or pleadings, is accorded, and the party can "present its side" or defend its
"interest in due course," there is no denial of due process because what the law proscribes is the lack of
opportunity to be... heard.[31]

In the case at bar, we find that petitioners were not denied due process by the trial court when it issued the
assailed Orders dated August 5, 2003, August 21, 2003 and October 8, 2003. The records would show that
petitioners were given the opportunity to ventilate their... arguments through pleadings and that the same
pleadings were acknowledged in the text of the questioned rulings. Thus, petitioners cannot claim grave
abuse of discretion on the part of the trial court on the basis of denial of due process.

However, with respect to the assailed Status Quo Order dated August 21, 2003, we find that the trial
court has failed to comply with the pertinent procedural rules regarding the issuance of a status quo
order.

Jurisprudence tells us that a status quo order is merely intended to maintain the last, actual, peaceable and
uncontested state of things which preceded the controversy. It further states that, unlike a temporary
restraining order or a preliminary injunction, a... status quo order is more in the nature of a cease and desist
order, since it neither directs the doing or undoing of acts as in the case of prohibitory or mandatory
injunctive relief.[32]

Pertinently, the manner of the issuance of a status quo order in an intra-corporate suit such as the case at bar
is governed by Section 1, Rule 10 of the Interim Rules of Procedure for Intra-Corporate Controversies which
reads:

In the case before us, the trial court's August 21, 2003 Status Quo Order conflicted with the rules and
jurisprudence in the following manner:

First, the directive to reinstate respondent to her former position as school director and curriculum
administrator is a command directing the undoing of an act already consummated which is the exclusive
province of prohibitory or mandatory injunctive relief and not of a status... quo order which is limited only to
maintaining the last, actual, peaceable and uncontested state of things which immediately preceded the
controversy. It must be remembered that respondent was already removed as trustee, member of the
corporation and curriculum... administrator by the Board of Trustees of St. Francis School of General Trias,
Cavite, Inc. months prior to her filing of the present case in the trial court.

Second, the trial court's omission of not requiring respondent to file a bond before the issuance of the Status
Quo Order dated August 21, 2003 is in contravention with the express instruction of Section 1, Rule 10 of the
Interim Rules of Procedure for Intra-Corporate
Controversies. Even the subsequent order to post a bond as indicated in the assailed October 8, 2003 Order
did not cure this defect because a careful reading of the nature and purpose of the bond would reveal that it
was meant by the trial court as security solely for the... teachers' retirement fund, the possession of which was
given by the trial court to respondent and Reynante. It was never intended and can never be considered as
the requisite security, in compliance with the express directive of procedural law, for the assailed Status Quo

Order dated August 21, 2003. In any event, there is nothing on record to indicate that respondent had
complied with the posting of the bond as directed in the October 8, 2003 Order except for the respondent's
unsubstantiated claim to the contrary as asserted in her

Memorandum.

Third, it is settled in jurisprudence that an application for a status quo order which in fact seeks injunctive
relief must comply with Section 4, Rule 58 of the Rules of Court: i.e., the application must be verified aside
from the posting of the requisite bond.[34] In the present case, the Manifestation and Motion, through which
respondent applied for injunctive relief or in the alternative a status quo order, was merely signed by her
counsel and was unverified.

In conclusion, we rule that no grave abuse of discretion was present in the issuance of the assailed August 5,
2003 and October 8, 2003 Orders of the trial court. However, we find that the issuance of the assailed August
21, 2003 Status Quo Order was unwarranted for... non-compliance with the rules. Therefore, the said status
quo order must be set aside.

At this point, the Court finds it apropos to note that the Status Quo Order on its face states that the same is
effective until the application for the issuance of a temporary restraining order is resolved. However,
respondent's prayer for a temporary... restraining order or a writ of preliminary injunction in her Complaint
still appears to be pending before the trial court. For this reason, the Court deems it necessary to direct the
trial court to resolve the same at the soonest possible time.

WHEREFORE, premises considered, the petition is PARTLY GRANTED. The assailed Decision dated
September 16, 2005 and the Resolution dated October 9, 2006 of the Court of Appeals in CA-G.R. SP No.
79791 are hereby AFFIRMED in part insofar as they upheld... the assailed August 5, 2003 and October 8, 2003
Orders of the trial court. They are REVERSED with respect to the assailed August 21, 2003 Status Quo Order
which is hereby SET ASIDE for having been issued with grave abuse of discretion. The trial court... is further
DIRECTED to resolve respondent's application for injunctive relief with dispatch.

SO ORDERED.

5. FIRST GLOBAL REALTY v. CHRISTOPHER SAN AGUSTIN, GR No. 144499, 2002-02-

19
Facts:
The subject matter of the instant controversy is a parcel of land, including the house built
thereon... which was issued in the name of [herein respondent's] mother, Lilian Sales-San
Agustin. [Respondent], together with his parents, brothers and sisters have been in
possession of the subject property since 1967 up to the present.
the subject property was sold to spouses Enrique and Angelina Camacho (spouses
Camacho) in 1994... for the amount of P2.5 million pesos, 'net of capital gains tax,
documentary stamp tax, transfer taxes and the remaining... balance of the petitioner's loan
with DBP.
The records show that spouses Camacho succeeded in convincing petitioner to accept a
partial payment of P100,000.00 pesos upon the execution of a deed of absolute sale in their
favor over the subject property. The balance of... would be paid once the title over... the
same was transferred in the name of spouses Camacho. The latter agreement came about
because spouses Camacho would use the subject property to raise the amount of P2.4
million pesos, that is to say, they would secure a loan from a bank or financial institution
with the... subject property as collateral.
DBP released the subject property to petitioner upon full payment of the latter's outstanding
loan. Thereafter, [respondent] executed a deed of sale in favor of spouses Camacho...
respondent's... filed a criminal complaint for estafa against spouses Camacho.
Unfortunately, the case did not prosper because the spouses Camacho could not be
located for the proper service of the warrant of arrest.
respondent] discovered that FGRDC filed a special civil action for the foreclosure of the
subject property inasmuch as spouses Camacho defaulted in the payment of their loan
obligation
Regional Trial Court, Branch 143,... Makati City
On June 28, 1996... rendered a decision ordering the foreclosure of the subject property
and the subsequent sale thereof at public auction. Spouses Camacho did not file a motion
for reconsideration of the said decision. Consequently, FGRDC filed a motion for
execution... which was granted on February 7, 1997.
The sale of the subject property at public auction was, nevertheless, thrust aside in view of
the dacion en pago which spouses Camacho executed in favor of FGRDC.
April 29, 1997, the dacion en pago was registered before the Register of Deeds of Makati
City, which paved the way for the issuance of TCT No. 209050 in the name of FGRDC.
on September 8, 1997, FGRDC demanded rentals from [respondent], specifically [from] his
mother, for the latter's use of the subject property. When FGRDC's demand was unheeded
by [respondent], it filed a motion for issuance of a writ of possession... on November 20,
1997, [respondent] filed a motion for intervention... wherein he asked for the rescission of
the deed of absolute sale/mortgage, dacion en pago and cancellation of FGRDC's title over
the subject property.
However, finding the motion for intervention to be a futile undertaking, [respondent] filed a
separate complaint for 'rescission of the deed of absolute sale, annulment of the dacion en
pago and cancellation of title and issuance of a new title with prayer for the... issuance of a
temporary restraining order and/or a writ of injunction' against FGRDC
The case was raffled to Branch 141... where public respondent is the presiding judge,... the
court a quo issued an order denying [respondent's] prayer for issuance of a writ of
preliminary injunction. Petitioner filed a motion for reconsideration but [it] was denied in an
order dated June 26, 1998 for lack of merit.
May 21, 1998, the RTC denied the application of respondent for a preliminary injunction to
prevent petitioner from evicting him from the subject property
The trial court held that under the facts alleged in the Complaint, respondent... had sold the
property to the Camacho spouses
The lower court added that cause of action of respondent was to demand payment... of the
balance from the Camachos
The Court of Appeals reversed the RTC and granted the injunctive relief prayed for by
respondent
It held that petitioner should not be given possession of the property pendente lite, because
it knew of the agreement between respondent and the Camachos. Moreover, the fact... that
the property remained in the possession of respondent's mother at the time the couple sold
it to petitioner should have warned it of a defect in its claims.
Issues:
whether respondent is entitled to the possession of the property while the main case for
rescission is pending in the RTC.
Ruling:
The Petition has no merit.
Respondent... claims that petitioner failed to show a clear right to possess it. To dispossess
him pendente lite would be clearly unjust. We agree.
Section 3 of Rule 58 of the Rules of Court enumerates various grounds for the issuance of a
preliminary injunction... injunction, as follows:
"SEC. 3. Grounds for issuance of preliminary injunction.  - A preliminary injunction
may be granted when it is established:
"(a) That the applicant is entitled to the relief demanded, and the whole or part relief
consists in restraining the commission or continuance of the act or acts complained
of, or in requiring the performance of an act or acts, either for a limited period or
perpetually;
"(b) That the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the applicant; or
"(c) That a party, court, agency or a person is doing, threatening or is attempting to
do, or is procuring or suffering to be done, some act or acts probably in violation of
the rights of the applicant respecting the subject of the action or proceeding, and
tending
In Saulog v. CA, the Supreme Court ruled thus:
A preliminary injunction is an order granted at any stage of an action prior to final judgment,
requiring a person to refrain from a particular act. It may be granted at any time after the
commencement of the action and before final judgment, when it is established... that the
plaintiff is entitled to the relief demanded, and the whole or part of such relief consists in
restraining the commission or continuance of the acts complained of, or in the performance
of an act or acts, either for a limited period or perpetually; that the commission... or
continuance of some act complained of during the litigation or the non-performance thereof
would probably work injustice to the plaintiff; or that the defendant is doing, threatens, or is
about to do, or is procuring or suffering to be done, some act probably in violation of... the
plaintiff's rights respecting the subject of the action, and tending to render the judgment
ineffectual.
The purpose of a preliminary injunction, then, is "to prevent threatened or continuous
irremediable injury to some of the parties before their claims can be thoroughly studied and
adjudicated. Its sole aim is to preserve the status quo until the merits of the case can be
heard... fully."... it will be issued only upon a showing of a clear and unmistakable right that
is violated. Moreover, an urgent and permanent necessity for its issuance must be shown
by the applicant.
the status quo that is sought to be preserved is the possession of the property by
respondent and his right to use it as his dwelling, pending determination of whether or not
he had indeed sold it to the Camachos and, consequently, whether the latter's... transfer of
its ownership to petitioner via dacion en pago should be upheld.
Indeed, the records show that the dacion en pago signed in 1994 was registered only in
1997. It was executed in lieu of the foreclosure of the property when the Camachos failed to
pay their loan obligations. The amount stated in the dacion as consideration was the
P1,190,000 loan that they had obtained from petitioner. It is therefore strange that the
couple would buy a parcel of land for P2,500,000, obtain a loan to help finance payment for
the same, and finally cede the same property for an amount much lower than that for which
they... purchased it. Moreover, by executing a dacion, the sellers effectively waived the
redemption period normally given a mortgagor.
In sum, we hold that respondent was able to show a prima facie right to the relief demanded
in his Complaint. The Camachos' nonpayment of the purchase price agreed upon and the
irregularities surrounding the dacion en pago are serious enough to allow him to possess
the... property pendente lite.
In addition, respondent has shown that to allow petitioner to take immediate possession of
the property would result in grave injustice. As we have stated above, the ownership of the
property, the validity of the sale between respondent and the Camachos and the legitimacy
of the... dacion en pago executed by the latter in favor of petitioner are still subject to
determination in the court
By selling their family home to the Camachos for P2,500,000, the respondent hoped to
improve the plight of his family. By a strange turn of events, he will now find himself
homeless with only the sum of P100,000 to purchase a new dwelling for himself and his
relatives. Indeed,... justice and equity dictate that he should remain in possession of the
property pendente lite.
WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs
against petitioner.
Principles:
preliminary injunction is a provisional remedy that a party may resort to in order to
preserve and protect certain rights and interests during the pendency of an action. It
is issued to preserve the status quo ante -- the last actual, peaceful, and uncontested
status... that preceded the actual controversy
6.