G.R. No.

157163, June 25, 2014

BANK OF THE PHILIPPINE ISLANDS,

Petitioner, v. HON. JUDGE AGAPITO L. HONTANOSAS, JR., REGIONAL TRIAL COURT, BRANCH 16, CEBU
CITY, SILVERIO BORBON, SPOUSES XERXES AND ERLINDA FACULTAD, AND XM FACULTAD &
DEVELOPMENT CORPORATION, Respondents.

FACTS:

 Spouses Silverio and Zosima Borbon, Spouses Xerxes and Erlinda Facultad, and XM Facultad and
Development Corporation obtained a loan from BPI.
 They executed promissory notes, constituted real estate mortgages on several parcels of land
and a chattel mortgage on their Mitsubishi Pajero and signed a continuing surety agreement as
security for the payment of the loan.
 Obligation to BPI had reached P17, 983,191.49 but the Spouses Borbon, Facultad and the
Corporation had only been able to pay P13 Million.
 Civil Case No. CEB-26468 Commenced by Spouses Boron, Facultad and the Corporation, seeks
the declaration of the nullity of the promissory notes, real estate and chattel mortgages and
continuing surety agreement they had executed in favor of BPI.
 Likewise prayed for is temporary restraining order (TRO) or writ of preliminary injunction to
prevent BPI from foreclosing on the against their properties mortgages.

ISSUE:

 May a writ of preliminary injunction lie to stop a bank from instituting foreclosure proceedings
against a defaulting creditor?

RULINGS

 No. An injunction will not issue to protect a right not in actual existence, or a right which is
merely contingent and may never arise; or to restrain an act which does not give rise to a cause
of action. Respondents were not entitled to the writ of preliminary injunction. The RT's issuance
of the writ of preliminary injunction to enjoin the petitioner from proceeding with the
foreclosure of the mortgages was plainly erroneous and unwarranted.
 Wherefore, the Court partially grants the petition for review on certiorari; modifies the decision
promulgated on July 9, 2002 by annulling and setting aside the writ of preliminary injunction in
Civil Case. No. CEB-26468 issued by the Regional Trial Court, Branch 16, in Cebu City for being
devoid of factual and legal bases.