PISO DEVELOPMENT BANK, REPRESENTED BY ITS LIQUIDATOR THE PHILIPPINE DEPOSIT INSURANCE CORPORATION, PETITIONER, VS. HON. IGNACIO M. CAPULONG AND LORENZANA FOOD CORPORATION, RESPO…

The respondent Lorenzana Food Corporation (or LFC) sued petitioner PISO Development Bank (_{or PISO Bank}) principally for specific performance and injunctive relief before the Regional Trial Court of Makati City (_{or RTC}). This was docketed as Civil Case No. 01-1312 and raffled to Branch 134 presided by the respondent Hon. Ignacio M. Capulong.

This petition is an offshoot of the said civil case in the course of which the application for writ of preliminary injunction of LFC was granted in the Resolution dated March 13, 2002. Asserting that this was issued with grave abuse of discretion, PISO Bank asks that this be nullified and set aside.

In 1981, LFC obtained a loan from PISO Bank. To secure this, LFC executed a Real Estate Mortgage over its properties located in Heroes Hills, Quezon City (_{or Heroes Hill property}) and Habay Bacoor Cavite (_{or Habay property}), embraced in TCT No. RT-7225 and TCT No. (T-87546) RT-19991.

LFC had made partial payments, unfortunately it soon experienced financial difficulties and so failed to pay the remaining installments. By then PISO Bank was also in financial distress, and LFC negotiated with it through its liquidator Philippine Deposit Insurance Corporation for the settlement of its unpaid obligations. Allegedly, a dacion en pago arrangement was initially agreed upon whereby LFC was to transfer to PISO Bank its Habay property as full settlement of its outstanding obligations. But PISO Bank later reneged on its commitment, and to top it all also imposed a higher interest rate.

PISO Bank filed a petition for extra-judicial foreclosure of the mortgage executed by LFC with the Office of the Sheriff of the Regional Trial Court of Makati City. A Notice of Sale was issued setting the Heroes Hills property for public auction on August 23, 2003 to satisfy the full amount of LFC’s indebtedness and the interest thereon.

To prevent this foreclosure sale from proceeding, LFC filed the said civil suit for specific performance with urgent motion for issuance of temporary restraining order. After an ex-parte hearing a temporary restraining order was issued providing that:

This Court, after considering the complaint and the allegations thereof supporting the prayer, as well as the evidence so far adduced, and without necessarily implying that plaintiff has a clear right for the relief prayed for, but solely to preserve the status quo between the parties, until after the writ of preliminary injunction shall been heard and resolved, the defendants, their agents, representatives, and all persons acting for and in their behalf, are hereby enjoined from continuing with the foreclosure proceedings and sale of the subject property at public auction on 23 August 2001 at 10:00 o’ clock in the morning.

This Temporary Restraining Order shall expire Twenty (20) days from today.

The Sheriff of this Branch is hereby directed to serve copies of this Order upon the defendants at their given addresses.

Let the hearing on the application for the writ of preliminary injunction be set on August 30, 2001 at 2:00 in the afternoon.

SO ORDERED.(_{pp. 81-82, rollo})

RESPONDENT JUDGE COMMITTED GRAVE AND FUNDAMENTAL ERRORS OF FACT AND/OR LAW TANTAMOUNT TO HAVING ACTED WITH GRAVE ABUSE OR PATENT ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT ISSUED THE ASSAILED RESOLUTION DESPITE (1) THE FAILURE OF THE RESPONDENT LFC TO ESTABLISH CLEAR AND UNMISTAKABLE RIGHT OVER THE FORECLOSED PROPERTY AS WOULD ENTITLE IT TO AN INJUNCTIVE RELIEF; (2) FAILURE OF RESPONDENT LFC TO CONVINCINGLY AND CLEARLY SHOW THAT PETITIONER HAS COMMITTED AN ACT IN VIOLATION OF RESPONDENT LFC’S SUBSTANTIVE RIGHTS; AND (3) THE ABSENCE OF IRREPARABLE INJURY TO RESPONDENT LFC, IF THE INJUNCTIVE WRIT IS NOT GRANTED. (_{p. 18, rollo})

This court will deal only with the questioned writ of preliminary injunction, though unavoidably and peripherally may touch upon the merits of the civil case which is still pending with the trial court.

Indeed, a clear showing of the right claimed is necessary for the issuance of a writ of injunction. Its existence, however, need not be conclusively established. In fact, the evidence required to justify the issuance of a writ of preliminary injunction in the hearing need not be conclusive or complete. The evidence need only to be “sampling” intended merely to give the court an idea of the case on the merits (_{Los Baños Rural Bank vs. Africa, G. R. No. 143994, July 11, 2002, 384 SCRA 535}). Thus, to be entitled to the writ, LFC was only required to show that they have the ostensible right to the final relief prayed for in their complaint.

There is ample justification for the issuance of a writ of injunction. As ratiocinated in the assailed Resolution:

. . . there are sufficient legal and factual bases to issue the writ of injunction prayed for.

On the part of the plaintiff, it is claiming right over the subject property as its lawful owner that needs to be protected from the threatened foreclosure sale, such that if not enjoined in the meantime, it will naturally cause to the loss, if not great prejudice, to its right as lawful owner thereof. The Court believes that the plaintiff’s right to property will be put to naught and it will suffer irreparable damage that cannot be quantified if the defendants will be allowed to proceed with their threatening act of permanently dispossessing and disallowing the plaintiff to exercise the attributes of an owner over its property, without finding as to whether its obligations has been substantially or fully satisfied by the execution of the Dacion en Pago. Finally, this Court takes note of the damages that may be incurred by the plaintiff should the writ of injunction be not granted, and the relative damages to defendants if they are allowed to proceed with the foreclosure sale of the subject property. Compared with the loss of the damage that the plaintiff may suffer by reason of the immediate transfer if lawful ownership of the subject property to the purchaser in an auction sale, it is obvious that it is far-flung greater than the damage to the defendants. Any mode of computation is no longer necessary to determine the weigh the relative damages that may be suffered by the parties. Thus, this Court is called upon to favor the fate of plaintiff in this incident. (_{pp. 36-37, rollo})

Stated differently, the writ of injunction was issued to preserve the status quo of the thing subject of the action and/or the relation between the parties, in order to protect the right of LFC during the pendency of the suit. It is issued precisely to prevent threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly studied or adjudicated. Denial of the application for the writ may make the complaint of the respondents moot and academic. Furthermore, it would render ineffectual a final judgment in their favor or at the very least, compel them to litigate needlessly with third persons who may have acquired interest in the property. Such situation cannot be countenanced _{(Los Baños Rural Bank vs. Africa, G. R. No. 143994, July 11, 2002)}. The RTC cannot therefore be considered to have acted on caprice or whimsy in granting the injunctive relief prayed for by LFC.

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 (_{Bustamante vs. Court of Appeals, G. R. No. 126371, April 17, 2002}). In this case, the RTC found sufficient basis to conclude that the issuance of a writ of preliminary injunction was necessary and proper. PISO Bank on the other hand failed to show that the RTC acted without or in excess of jurisdiction, meaning having been clothed with power to determine the case, it overstepped its authority as determined by law, or that it committed grave abuse of its discretion or acted in capricious, whimsical, arbitrary or despotic manner in the exercise of its discretion as to be equivalent to lack of jurisdiction _{(Rivera vs. Palattao, G. R. No. 157824, January 17, 2005, 448 SCRA 623).}

It has been consistently held that there is no grave abuse of discretion in the issuance of a writ of preliminary injunction where a party was not deprived of its day in court, as it was heard and had exhaustively presented all its arguments and defenses. Hence where contending parties were both given ample opportunity to present their respective evidence and arguments in support of their opposing contentions, as in this case, no grave abuse of discretion can be attributed to the trial court which issued the writ of preliminary injunction, as it is given a generous latitude in this regard pursuant to Section 4, Rule 58 of the Rules of Civil Procedure, as amended _{(Land Bank of the Philippines vs. Continental Watchman Agency, Inc., G. R. No. 136114, January 22, 2004)}. As no grave abuse of discretion, as the term is understood, was committed in the assailed Resolution –

WHEREFORE, the petition is DENIED DUE COURSE and DISMISSED.

SO ORDERED.

Guariña III, and Tagle, JJ., concur.