SPS. MIGUEL S. KHO AND JUANITA KHO, PETITIONERS, VS. COURT OF APPEALS AND BANCO FILIPINO, RESPONDENTS.

Petitioners are assailing the propriety of the lifting of the
writ of preliminary injunction by respondent Court of Appeals^[1]
which writ was issued by Branches IX and XIV of the Regional Trial Court of
Cebu City, alleging that in doing so, respondent Court acted with grave abuse
of discretion amounting to lack of jurisdiction^[2] and
virtually preempted the lower court from determining the merits of the issues
raised by the petitioners in Civil Case No. CEB-759 now pending before Branch
XIV of the Regional Trial Court of Cebu City.^[3]

The facts of the case are as follows: –

“On January 31, 1978, the spouses Kho (private respondents
herein) constituted in favor of herein petitioner Banco Filipino a real estate
mortgage over a parcel of land registered in the name of plaintiff Miguel Kho
and covered by Transfer Certificate of Title No. 63021 of the Register of Deeds
of Cebu City, located at Juan Luna St., Cebu City, with an area of 750.72 sq.
meters, more or less, to guarantee a loan granted them by petitioner bank. The real estate mortgage underwent
amendments on June 7, 1978, March 5, 1979 and finally, on September 24, 1980,
when it was made to secure private respondents’ obligation with the bank in the total amount of TWO MILLION
EIGHT HUNDRED SIXTY NINE THOUSAND PESOS (P2,869,000.00) Philippine Currency,
payable on or before September 29, 1995.

“After managing to pay the sum of P688,060.00, the Kho spouses
defaulted in the payment of some amortizations. Hence, on May 13, 1982, Banco Filipino extrajudicially foreclosed
the mortgage. As the sole and highest
bidder in the auction sale, the petitioner bank purchased the mortgaged
property for the sum of P4,153,865.47 covering the plaintiff’s obligations,
interests, penalties and attorney’s fees as agreed in the mortgage
contract. The certificate of sale was
then duly registered on June 17, 1982.”^[4]

Counting one year from June 17, 1982, the petitioners had until
June 17, 1983, within which to redeem the property. In the meantime, the foreclosed property was leased out to third
parties and the rentals (fruits thereof) were remitted monthly by petitioners
to respondent bank, being the purchaser in the extrajudicial foreclosure. The end of the redemption period was then
fast approaching but still petitioners had not made any move to redeem the
foreclosed property. Then just about
ten (10) days before the end of the redemption period, on June 7, 1983 to be
exact, petitioners filed with the Regional Trial Court of Cebu (raffled off to
Branch IX) a complaint for: “Annulment of Specific Performance with Preliminary Injunction,
etc.” against Banco Filipino, The Provincial Sheriff of Cebu and the Register
of Deeds of Cebu Province later docketed as Civil Case No. CEB-759 which action
was actually for the annulment of the extrajudicial foreclosure of
mortgage. The verified complaint of
petitioners specifically prayed for:

“x x x the Honorable Court before judgment and after hearing
to issue a writ of preliminary injunction restraining and enjoining the
defendants jointly and severally from obtaining a writ of possession or a final
deed of conveyance over plaintiffs’ land and restrain the defendants from
registering the same; as well as restraining and enjoining the defendants from
collecting any rentals of the properties of the plaintiffs.” (p. 129,
Rollo)

On November 4, 1983, Judge Candido C. Aguinaldo of Branch IX,
Regional Trial Court, Cebu, granted the prayer of petitioners to which
respondent bank strongly objected and in its Urgent Motion to Lift Injunction
prayed, to wit: –

“x x x to forthwith lift the order of injunction dated 4
November 1983, and require plaintiffs to turn over to defendant bank all the
income and rents they have received on the subject property during the
redemption period up to and including the date of their actual remittance of
the same.

‘It is likewise prayed   that
the scheduled pre-trial conference on 17 May 1983 at 8:30 a.m. be cancelled and
held in abeyance pending final determination of defendant bank’s motion to lift
injunction.” (pp. 144-145, Rollo)

In the meantime, present counsel of record for respondent bank
entered his appearance. Judge Aguinaldo
claimed some relationship with him. Hence, the reraffle of the case to another sala, Branch XIV – presided
over by Judge Juan Y. Reyes. After more
than 5 months’ series of extensions, particularly on October 26, 1984, the
petitioners finally submitted their Memorandum in support of their opposition
to the respondent bank’s aforestated Motion to Lift Injunction. On April 30, 1985, respondent bank’s motion
was denied and a motion for reconsideration was thereafter immediately
filed. While the motion for reconsideration was pending, Judge Reyes
retired and again there was a reraffle of the case which resulted in its being
assigned to Judge Meinrado P. Paredes, of RTC XIII who denied on April 29,
1987, respondent bank’s aforestated motion for reconsideration.

Finally the three (3) above mentioned orders of November 4, 1983 (granting writ of injunction);
April 30, 1985 (denying respondent bank’s motion to lift injunction), and April
29, 1987 (denying respondent bank’s motion for reconsideration) were all
reversed by respondent Court in its decision dated February 17, 1988.

Petitioners then filed a motion for reconsideration on February
29, 1988 which was denied thru a Court of Appeals resolution dated March 17,
1988, hence, this petition dated March 25, 1988 with the following prayer –

“WHEREFORE, petitioners most respect­fully pray that the
decision of respondent Court of Appeals dated February 17, 1988 be reversed and
the Orders of the lower court dated November 4, 1983 and April 30, 1985 be
restored and further, that preliminary restraining order and preliminary
injunction be issued restraining and enjoining the defendants jointly and
severally from obtaining a writ of possession or a final deed of conveyance
over petitioners’ land and to restrain the defendants from registering the same
as well as restraining and enjoining the defendants from collecting any rentals
of the properties of petitioners.” (pp. 21-22, Rollo)

This petition is completely without merit.

The law and jurisprudence are clear that both during and after
the period of redemption, the purchaser at the foreclosure sale is entitled as
of right to a writ of possession, regardless of whether or
not there is a pending suit for annulment of the mortgage or the foreclosure
itself (without prejudice of course to the eventual outcome of said case).
Hence, an injunction to prohibit the issuance of the writ of possession is
entirely out of place (See Act 3135).

WHEREFORE, the instant petition is DENIED for lack of
merit. The assailed decision of
respondent Court of Appeals lifting the writ of preliminary injunction is hereby
AFFIRMED. Let this case be REMANDED to
the Regional Trial Court of Cebu City, Branch XIV for further proceedings on
Civil Case CEB-759.

SO ORDERED.

Padilla and Regalado,
JJ., concur.

Melencio-Herrera, J., (Chairman), on
leave.

^[1]
Decision promulgated on February 17, 1988, penned by Associate Justice Alfredo
L. Benipayo and concurred in by Associate Justices Jose C. Campos, Jr. and
Ricardo J. Francisco.

^[2]
p. 9, Rollo

^[3]
p. 11, Rollo

^[4]
Decision of Court of Appeals dated February 17, 1988