INTERNATIONAL EXCHANGE BANK, PETITIONER, VS. HON. COURT OF APPEALS, THE HON. ANTONIO M. ESTEVES, IN HIS CAPACITY AS THE PRESIDING JUDGE OF RTC BRANCH V, BAGUIO CITY, AND AYALA L…

International Exchange Bank versus Court of Appeals

The Case

This is a petition filed by International Exchange Bank against the Court of Appeals, the presiding judge of the Regional Trial Court of Baguio City, and Ayala Land Incorporated. The bank asks the Supreme Court to annul the decision of the Court of Appeals, which had affirmed the trial court's orders denying the bank's motion to dismiss and granting Ayala Land's application for a writ of preliminary injunction in a case for quieting of title and removal of annotations. The case matters for the bar because it is a clean teaching vehicle on two points: the requisites for a writ of preliminary injunction, and the rule that the special civil action for certiorari cannot be used as a substitute for an appeal that a party has already lost.

Procedural History

Ayala Land filed before the Regional Trial Court of Baguio City, Branch Five, an action for quieting of title and removal of annotations, with a prayer for a writ of preliminary injunction, against International Exchange Bank, the Register of Deeds of Baguio City, and the Sheriff of the Makati Regional Trial Court. The bank moved to dismiss and opposed the injunction. The trial court denied the motion to dismiss and, in its order of 30 April 2003, enjoined the parties to maintain the status quo over the disputed properties. On reconsideration, in its order of 18 June 2003, the trial court denied the bank's motion and granted the writ of preliminary injunction upon posting of a bond of 2,000,000 pesos.

The bank then filed before the Court of Appeals a petition for certiorari, prohibition, and mandamus. The Court of Appeals dismissed the petition on 26 May 2004, and denied reconsideration on 13 August 2004. The bank received that denial on 19 August 2004. Instead of appealing within fifteen days, the bank waited fifty-five days and then filed before the Supreme Court a motion for extension of time to file a petition for certiorari. It then filed the present petition for certiorari, prohibition, and mandamus.

Facts

On 15 June 2000, Ayala Land bought from Corporate Investment Philippines, Incorporated two parcels of land in Baguio City covered by transfer certificates of title registered in the seller's name. The deed of absolute sale was not immediately registered. On 21 July 2000, the seller filed a petition for suspension of payments, which was later dismissed, followed by a petition for rehabilitation, also dismissed, and finally, on 26 February 2002, a petition for voluntary insolvency.

Meanwhile, in March 2001, International Exchange Bank sued the seller for a sum of money before the Makati Regional Trial Court, with an application for preliminary attachment. The Makati court issued a writ of preliminary attachment, and because the two parcels were still registered in the seller's name, the sheriff levied on them on 18 May 2001. On 8 March 2002, the seller was declared insolvent.

Six months later, on 6 September 2002, Ayala Land finally registered its deed of sale. New titles were issued in its name, but they carried over the annotation of the levy on attachment. Ayala Land then filed its action for quieting of title and caused the annotation of a notice of lis pendens. The trial court found that the lis pendens already protected Ayala Land, yet it still enjoined the parties to maintain the status quo, and later granted the writ of preliminary injunction.

Issues

• Whether or not the petition for certiorari is the proper remedy, the bank having failed to file a petition for review on certiorari within the fifteen-day reglementary period.
• Whether or not the Court of Appeals gravely abused its discretion in affirming the trial court's orders granting the writ of preliminary injunction.

Applicable Provisions

Rule 65 of the Rules of Court, as discussed in the decision, provides:

When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

This provision fixes the extraordinary character of certiorari: it lies only where there is no appeal nor plain, speedy, and adequate remedy in the ordinary course of law.

Ruling

On the first issue, the Court held that the petition must fail because it adopted the wrong mode of appeal. The bank received the resolution denying reconsideration on 19 August 2004, so its remedy was a petition for review on certiorari under Rule 45 within fifteen days, a period that expired on 3 September 2004. Instead, fifty-five days later, it sought an extension and filed a special civil action for certiorari. The Court stressed that certiorari cannot be allowed when a party fails to appeal despite the availability of that remedy, and that mere errors of judgment are not the proper subject of certiorari. The Court acknowledged its discretion to treat a certiorari petition as a petition for review, but declined to do so because the petition was filed beyond the reglementary period without any justifiable explanation.

On the second issue, the Court found no grave abuse of discretion. The trial court had evaluated the evidence and found the requisites of injunction present, and the Court of Appeals found nothing whimsical, arbitrary, or capricious in that ruling. The Court therefore sustained the injunction.

Doctrine

First, the special civil action for certiorari under Rule 65 is not a substitute for an appeal that a party has already lost. It lies only when there is no appeal nor plain, speedy, and adequate remedy in the ordinary course of law. Mere errors of judgment, as opposed to defects of jurisdiction, cannot be corrected by certiorari. Second, the Court may in its discretion treat a certiorari petition as a petition for review on certiorari, but only where it is filed within the reglementary period; a petition filed long after the period has lapsed, without justification, will not be given the benefit of a liberal application of the rules. Third, the grant of a writ of preliminary injunction rests on the trial court's evaluation of the evidence, and absent a showing of whimsical, arbitrary, or capricious action, the appellate courts will not disturb its findings.

Disposition

The Supreme Court dismissed the petition for certiorari, with costs, and the bank lost.

Remember This

Memorize the line: certiorari is not a substitute for a lost appeal. Examiners use this case to test whether a candidate can spot the wrong mode of appeal and the requisites for a writ of preliminary injunction.