GOVERNMENT SERVICE INSURANCE SYSTEM, PETITIONER, VS. HON. ALFREDO C. FLORENDO, PRESIDING JUDGE OF BRANCH XXXVI OF THE COURT OF FIRST INSTANCE OF MANILA, AND FELIPE T. ANG, RESPO…

This is a petition
for certiorari and prohibition, with prayer for the immediate issuance
of a restraining order and/or a
writ of preliminary injunction of the orders of respondent Judge Alfredo C.
Florendo dated June 2, June 16 and
June 30, 1978 in Civil Case No. 115669 of the Court of First Instance of Manila
(now Regional Trial Court), entitled “Felipe T. Ang, Plaintiff, v.
Government Service Insurance System, Defendant.”

The pertinent facts as culled from the petition are as follows:

As of August, 1965, private respondent Felipe T. Ang’s total
indebtedness to petitioner Government Service Insurance System (hereinafter
referred to as GSIS) has amounted to P7,175,000.00.  To secure its payment, Ang executed real
estate mortgage contracts in favor of GSIS covering, among other properties,
the lot and the building known as the House
International Building,
including all the improvements thereon.

Despite many repeated demands upon Ang to liquidate his then
increasing obligation to GSIS, he failed to make any payments, although he made
several promises to do so.

In October, 1971, GSIS finally initiated foreclosure proceedings
against Ang of the properties covered by the real estate mortgage
contracts.  At this time, Ang’s account
stood at P12,544,201.00.

On March 21, 1974,
the properties in Manila, including
those involved in the present controversy were sold to GSIS as the highest bidder in the public auction for
P19,695,369.00.

The period for redemption having expired, the titles to all the
properties in Manila were
registered in the name of GSIS on August
27, 1975.  On January 29, 1976, GSIS took-over the
possession of the properties.

On May 25, 1978, Ang filed
a complaint against GSIS which was docketed as Civil Case No. 115669 before the
Court of First Instance of Manila by reason of GSIS’ alleged unlawful takeover
of the House International Building and appropriation of personal properties
thereon which were not included in the real estate mortgage, praying for the
following (p. 54, Rollo);

“(a) to return
to plaintiff all the personal belongings owned by him and his family consisting
of furnitures, clothings and jewelries,
all valued at more than P100,000.00, in default thereof, to pay said amount to plaintiff, with interest thereon at  the legal rate from 23 January 1976 until fully paid;

“(b) to pay to plaintiff moral and exemplary damages in such amount
as he shall be able to prove at the trial of this case;

“(c) to return
to plaintiff all the personal
properties owned by him which he was then leasing to House International, Inc.,
consisting of air-conditioning units, telephone equipments, furnitures,
electrical and plumbing fixtures and other hotel paraphernalia, as well as the elevator facilities and centralized air-conditioning unit and
other equipments being used in the building, as afore-stated, and to pay
rentals for defendant’s use thereof at P25,000.00 per month from 23 January
1976; or in default of such return, to pay to plaintiff such fair market value
thereof as plaintiff shall prove at the trial of this case, with interest  thereon at the legal rate from 23 January 1976
until fully paid, plus said rentals;

“(d) to pay to
plaintiff the amount of P100,000.00, as and for attorney’s fees and expenses of
litigation; and

“(e) to pay the costs of suit.”

On June 2, 1978,
respondent Judge Alfredo C. Florendo
directed the issuance of a temporary restraining order, the relevant portion of
which reads (p. 45, Rollo):

“In the meantime, let a temporary restraining order be issued
directing the defendants, its agents, representatives or persons acting under
their title and/or authority and
commanding them, singly and collectively, to desist from using one centralized
air-conditioning system on the second floor of the House International Building
being leased by defendant to the Grand House Restaurant, furnitures, personal belongings owned by the plaintiff and
his family consisting of furnitures, clothings, pieces of jewelries, equipments and individual
air-conditioning units (window type), plumbing fixtures from the 9th to the 12th floors of the
building, until further orders from this court.”

On June 16, 1978,
the respondent judge, after hearing, issued
another order directing the issuance of a writ of preliminary, preventive and
mandatory injunction, the dispositive portion of which reads (p. 49, Rollo):

“WHEREFORE, premises considered, let a writ of preliminary,
preventive and mandatory injunction be issued restraining the defendant from
using the personal properties it is now using in its operation of the hotel
business in House International Building consisting of the individual
air-conditioning units, window-type, pieces of furniture, plumbing fixtures,
one centralized air-conditioning unit, personal belongings like clothings and
pieces of jewelry belonging to the plaintiff upon the filing of a bond in the
amount of P15,000.00.”

On June 22, 1978,
the writ of preliminary, preventive and mandatory injunction was issued.

On June 23, 1978,
GSIS immediately filed its Urgent Motion for Reconsideration.  On the same day, Ang filed an Urgent Ex-Parte Motion requesting
that the sheriff be duly authorized to use reasonable force within his
discretion in the implementation of the writ of injunction.

Notwithstanding the fact that the Urgent Motion for Reconsideration
filed by GSIS was still unresolved, on June
30, 1978, the respondent judge issued an order granting Ang’s motion, the dispositive portion
of which reads (p. 50, Rollo):

“WHEREFORE, premises considered, Deputy Sheriffs Mario Hizalan
and Adolfo Garcia are hereby authorized to use reasonable force within their
discretion for the purpose of opening any part of the premises where such
equipment and furnitures may be located in the implementation of the writ of
injunction.”

On July 7, 1978,
a hearing was conducted on the Urgent Motion for Reconsideration.  On that same day, Ang furnished GSIS a copy
of its Opposition to Motion for Reconsideration.  The respondent Judge required GSIS to file its reply thereto and the
hearing was reset to July 27, 1978.

On July 17, 1978,
the Sheriff broke the door leading to the centralized air-conditioning unit, cut-off its electrical
connections, and subsequently prevented its use by GSIS.

Hence, the present petition.

The issue to be resolved may be stated as follows:

Whether or not the respondent judge acted without or in excess of
his jurisdiction and/or with grave abuse of discretion amounting to lack of
jurisdiction when he issued the challenged orders dated June 2, 1978 directing
the issuance of a temporary restraining order; dated June 16, 1978 directing
the issuance of a writ of preliminary preventive and mandatory injunction; and
dated June 30, 1978 authorizing the use of reasonable force to implement the
writ of injunction.

On August 2, 1978,
this Court issued a temporary restraining order, restraining the respondents
from enforcing the writ of preliminary injunction.

GSIS alleges that the June
2, 1978 order which directed the issuance of a temporary
restraining order was issued without any hearing or evidence whatsoever.

A temporary restraining order is generally granted without notice
to the opposite party, and is intended only as a restraint on him until the
propriety of granting a temporary injunction can be determined, and it goes no
further than to preserve the status until that determination (The Revised Rules
of Court in the Philippines, Vol. IV-A by Vicente J. Francisco, 1971, pp.
184-185).  Its purpose is merely to
suspend proceedings until there may be an opportunity to inquire whether any
injunction should be granted, and it is not intended to operate as an
injunction pendente lite, and should not in effect determine the
issues involved before the parties can have their day in court, or give an
advantage to either party by proceeding in the acquisition or alteration of the
property the right to which is disputed while the hands of the other party are
tied (43 C.J.S. 415).

GSIS submits next that the June 16, 1978 order which directed the issuance of the writ
of preliminary, preventive and mandatory injunction directly asserted that the
questioned properties belonged to Ang. 
This runs counter to the evidence on record in view of the fact that
other than the allegations of the complaint and the evidence introduced by the
parties during the hearing on June 9,
1978, there is nothing which may be considered as evidence of Ang’s
title to the questioned properties. 
According to GSIS, the questioned properties were included in the real
estate mortgage except with reference to the personal belongings like clothings
and pieces of jewelry.  While these may
be considered as personal properties, there was no evidence whatsoever adduced
in Civil Case No. 115669 to show receipt by GSIS of such properties. 
Withal, there is a total
absence of any clear, specific and precise identification of the questioned
properties, making compliance with the writ of injunction a virtual
impossibility.  It contends further that
the June 30, 1978 order
which directed the use of force to implement the writ of injunction was issued
notwithstanding the fact that the June
16, 1978 order was then still the subject of a pending motion for
reconsideration of which respondent judge was officially cognizant.

A writ of preliminary injunction, as an ancillary or preventive remedy, may only be resorted to by a
litigant to protect or preserve his rights or interests and for no other
purpose during the pendency of the principal action (Calo, et al. v. Roldan, et
al., 76 Phil. 445; Commissioner of Customs v. Cloribel, et al., 19 SCRA 234; Bengzon v. Court of
Appeals, 161 SCRA 745).  Before a writ of preliminary injunction may
be issued, there must be a clear showing by the complaint that there exists a
right to be protected and that the acts
against which the writ is to be directed are violative of the said right
(National Power Corporation v. Vera, etc., et al., G.R. No. 83558, February 27,
1989).

In directing the issuance of the writ of injunction, the
respondent judge made the following findings (pp. 47-49, Rollo):

“The principal issues, therefore, in this application for the
issuance of a writ of mandatory injunction is whether or not (1) the properties
sought by the plaintiff in his complaint are personal properties or immovables
and (2) the real estate mortgage already foreclosed included the aforementioned
properties.

“At the outset, the Court cannot subscribe to the idea that
the properties in question (air-conditioning units, pieces of furniture,
clothings, pieces of jewelry, individual air-conditioning units, window type,
plumbing fixtures from the ninth to the twelfth floors of the building) are
immobilized by destination as provided for under Art. 415, No. 5 of the Civil
Code.  In Mindanao Bus Co. vs. City Assessor
and Treasurer, 6 SCRA, p. 197 citing the case of B.H. Berkenkotter vs. Cu
Unjieng, 61 Phil. 663, the Supreme Court held that so that movable equipments
to be immobilized in contemplation
of the law must first be ‘essential and principal elements’ of an industry or
works without which such industry or works would be unable to function or carry
on the industrial purpose for which it was established’.

“In the instant case, the Court considers that these
properties in question are merely incidentals not essential and principal
elements to carry on the business.  The
hotel and restaurant business can continue or carry on their functions without
these equipments.  To the mind of the
Court, these properties mentioned above are like cash registers, typewriters,
etc. usually found and used in hotels, restaurants, theaters, etc. and as held
in the aforecited case of Mindanao Bus Co. vs. City Assessor and Treasurer,
‘they are merely incidentals and are not and should not be considered
immobilized by destination for these businesses can continue or carry on their
functions without these equipments’. 
With regards (sic) to the elevators, there is no controversy in view of
the manifestation of plaintiff in open court that he is excluding these
equipments from his prayer for injunction.

“Now, are these personal properties included in the real
estate mortgage executed by plaintiff in favor of defendant?  Defendant claims that they are included.  Defendant relies very much on Exhibit ‘3-A’
which reads as follows:

‘That the first monthly amortization on this loan shall become due
and payable one month after the completion of the proposed building and
installation of the elevators and air?conditioning equipments offered as
collateral for this loan x x x.’

“A careful perusal of said exhibit, however, shows that the installation
of the elevators and air-conditioning equipments is mentioned merely to
indicate when the first monthly amortization on the loan shall be due and
payable.  What is offered as collateral
is the proposed building.  This is
obvious considering that the word ‘collateral’ is singular.  Exhibit ‘4-B’ is a portion of the Memorandum
for the Board of Directors of
defendant GSIS by the manager of the Real Estate Department, GSIS.  It is clear that the plaintiff is not a party
to this document, hence, he is not bound by it. 
Exhibit (sic) ‘2’ and ‘6-A’ have reference to buildings and
improvements.  Since the Court has
already ruled that the properties in question are not immobilized by
destination in contemplation of Article 415, No. 5 of the Civil Code, it is
obvious that they cannot be considered included in the Deed of Real Estate
Mortgage.  Exhibits ‘A’ and ‘B’, on the
other hand, clearly show that what defendant acquired by virtue of the auction
sale are only the parcels of land and the buildings erected thereon.  Absolutely, nothing was mentioned about these
properties in question.  Moreover,
Exhibit ‘D’ shows that the defendant has given its consent to the plaintiff to
constitute a chattel mortgage on the properties in question.  This is, therefore, a clear indication that
defendant did not consider said properties mortgaged to it.  Thus, on the strength of Exhibit ‘D’, the
plaintiff constituted a Deed of Chattel Mortgage of these personal properties
with the General Bank and Trust Company as shown by Exhibit ‘E’ and in the
Inventory of Properties Mortgaged shown by Exhibits ‘F’ to ‘F-5’.  These evidence adduced clearly show that the
properties in question were not included in the Real Estate Mortgage executed
by plaintiff in favor of the defendant. 
The other contention of the defendant that the value of the personal
properties in question should already be set-off against the real estate taxes in arrears and water
bills to the Metropolitan Waterworks and Sewerage System paid by the defendant
is not tenable.  In the first place, no
evidence was adduced showing that these obligations were really outstanding to
the plaintiff and neither were there evidence showing that they were actually
paid by the defendant.

“Under these circumstances, the right of the plaintiff is
clear and unmistakable on the law and facts. 
That there exists an urgent and paramount necessity for the issuance of
the writ inorder to prevent extreme or rather serious damage which ensues from
withholding it.”

It is evident that nowhere in the aforequoted decision did the
respondent judge make any categorical statement that the questioned properties
are owned by Ang or that he is entitled to the possession thereof, on the basis
of the evidence presented.  Furthermore,
contrary to the observation made by the respondent judge that Exhibit
“D” shows that GSIS has
given its consent to Ang to constitute a chattel mortgage on the questioned
properties, the document itself belies this statement because the personal
properties that may be subjected to the chattel mortgage were not identified,
to wit (p. 132, Rollo):

“In reply to your letter dated December 20, 1966 requesting this
office to give its consent to the assignment of a portion of the rental income of the House
International Building,
please be informed that the same is granted. 
It is understood that the amount assignable by you in favor of the
General Bank & Trust Company is P31,000.00 only and that any loan
accommodation that you are getting will be secured by properties other than the
Real Estate properties mortgaged with the System as securities for your loan of
P7,700,000.00.  Specifically, your
personal properties may be mortgaged but not your Real Estate properties
mortgaged with the System.”

In Emilia v. Bado, G.R. No. L-23685, April 25, 1968, 23 SCRA 183, We ruled:

“The remedy of injunction has been the subject of numerous
judicial pronouncements.  The court
cannot now afford to depart from the well-ingrained precept that injunctions
are not available to take property out of possession or control of one party
and place it into that of another whose title has not clearly been
established.”

And since the legal title of the questioned properties is in
dispute, with GSIS (the one in possession)
asserting ownership in itself, with more reason that the writ of injunction
should not have issued.  In the earlier
case of Rodulfa v. Alfonso, etc., et al., 76 Phil. 225, We held:

“The rule that a court should not, by any means of a
preliminary injunction, transfer property in litigation from the possession of
one party to another, is more particularly applicable where the legal title is
in dispute and the party having possession asserts ownership in himself
(Gordillo and Martinez v. Del Rosario, 39 Phil. 829).”

The rule is predicated on the proposition that the ownership as
well as the possession of the (properties) in dispute are the main issue and
that the relief was prayed for before the issue had been decided on the
merits.  The philosophy of the rule seems
to be that before the issue is determined in the 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, and so it was ruled that unless there is a
clear pronouncement regarding ownership and possession of the land, or unless
the land is covered by a torrens title pointing to one of the parties as the
undisputed owner, a writ of preliminary injunction should not issue to take the
(properties) out of possession of one party to place it in the hands of another
(The Revised Rules of Court in the Philippines, Vol. IV-A, by Vicente J.
Francisco, 1971, p. 226, citing Villadores v. Encarnacion, 95 Phil. 913).

Likewise, a writ of injunction should never issue when an action
for damages would adequately compensate the injuries caused.  The very foundation of the jurisdiction to
issue the writ of injunction rests in the
probability of irreparable injury, inadequacy of pecuniary compensation and the
prevention of the multiplicity of suits, and where facts are not shown to bring
the case within these conditions, the relief of injunction should be
refused.  (Golding v. Balatbat, et al.,
36 Phil. 941).

In the order dated June
16, 1978, the respondent judge declared the questioned properties as movable
properties not included in the real estate mortgage contract, which are the
main issues raised by Ang in his complaint. 
Equally pertinent is the rule that courts should avoid issuing a writ of
preliminary injunction which, in effect, would dispose of the main case without
trial (or would result in) a prejudgment of the main case and a reversal of the
rule on the burden of proof since it would assume the proposition which the petitioner is inceptively duty bound to prove (National Power
Corporation v. Vera, etc., et
al., supra).

Besides, the questioned
properties were not properly identified in the writ of injunction but were merely generalized, to wit:  centralized air?conditioning units,
individual window-type air?conditioning units, pieces of furniture,
plumbing fixtures, clothings and pieces
of jewelry.  We agree with GSIS that any order of this
nature will surely place its execution at the mercy of the whim and caprice of
the sheriffs or any other court officers. 
The issuance of a blanket and all encompassing injunction surely cannot
be upheld.

The issuance of a writ of preliminary injunction in the present
case, as in any other case, is addressed to the sound discretion of the court, conditioned
on the existence of a clear and positive right of the movant which should be
protected.  It is an extraordinary
peremptory remedy available only on the grounds expressly provided by law,
specifically Section 3 of Rule 58 of the Rules of Court.* (Valley
Trading Co., Inc. v. Court of First Instance of Isabela, et al., G.R. No.
L-49529, March 31, 1989).  In the issuance thereof, the courts are given
sufficient discretion to determine the necessity for the grant of the relief
prayed for as it affects the respective rights of the parties, with the caveat
that extreme caution be observed in the exercise of such discretion (Bataclan,
et al. v. Court of Appeals, et al., G.R. No. 78148, July 31, 1989).  It is also a settled rule that the issuance of the writ of preliminary
injunction as an ancillary or preventive remedy to secure the rights of a party in a pending case is entirely
within the discretion of the court taking cognizance of the case, the only
limitation being that this discretion should be exercised based upon the
grounds and in the manner provided by law. 
The exercise of sound judicial discretion by the lower court in
injunctive matters should not be interfered with except in cases of manifest
abuse (Detective and Protective Bureau, Inc. v. Cloribel, G.R. No. L-23428, Nov. 29, 1968, 26 SCRA 255).

With these principles in mind, and after a careful consideration
of the undisputed facts and the arguments of the parties, the Court finds that
the respondent judge acted with grave abuse of discretion in having issued the
order dated June 16, 1978.  The respondent judge also committed a grave
abuse of discretion when he issued the order dated June 30, 1978, notwithstanding the fact that the
Urgent Motion for Reconsideration of the June 16, 1978 order filed by GSIS was still unresolved.

ACCORDINGLY, the petition is hereby GRANTED and the orders
dated June 16 and 30, 1978 are hereby SET ASIDE.  The temporary restraining order dated August 2, 1978 is made permanent.  The respondent judge is directed to proceed with dispatch in the trial
of Civil Case No. 115669.

SO ORDERED.

Narvasa, (Chairman), Cruz, Gancayco, and Griño-Aquino, JJ., concur.

* Section 3, Rule 58 of the Rules
of Court provides:

SEC. 3. Grounds for issuance of
preliminary injunction. – A preliminary injunction may be granted at any time
after the commencement of the action and before judgment, when it is
established:

(a) 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;

(b) 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

(c) 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.