[G.R. No. 152126. June 26, 2006]

SPS. FELIX T. TAN AND CHRISTINE A. TAN v. METROPOLITAN BANK AND TRUST CO. AND ATTY. ORLANDO J. CORUŅA

First Division

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated JUNE 26, 2006

G.R. No. 152126 (Sps. Felix T. Tan and Christine A. Tan v. Metropolitan Bank and Trust Co. and Atty. Orlando J. Coruņa)

The present Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court seeks to reverse the Resolutions of the Court of Appeals (CA) in CA-GR SP No. 66959, denying petitioners' Application for a Temporary Restraining Order (TRO).

On November 12, 1993, respondent bank granted petitioners an Omnibus Credit line worth P5 million, which was later increased to P10 million on January 16, 1995.[2]  Petitioners executed two real estate mortgages over their lot in Quezon City, covered by Transfer Certificate of Title No. 9224, as security.[3]

From this credit line, petitioners obtained three loans from respondent in the total sum of P6.5 million.  It appears that these loans were repeatedly renewed by the bank.[4]

On July 1, 1997, respondent increased petitioners' credit line to P25 million.  The purpose of the increase was allegedly for the accommodation of the P12 million loan of Civic Merchandising, Inc., a company in which Petitioner Felix Tan was a major stockholder and director.[5]

On March 12, 2001, petitioners filed an action for Specific Performance, Injunction and Damages, with Preliminary Injunction or Temporary Restraining Order, with the Regional Trial Court (RTC) of Quezon City, Branch 224.  The case, docketed as Civil Case No. Q-01-43615, was filed to restrain and enjoin respondents from proceeding with the extra-judicial foreclosure of the property, scheduled for March 21, 2001.[6]

On March 20, 2001, the RTC issued an Order granting the issuance of a TRO.[7]  After the submission by the parties of their Memoranda, the trial court then issued its April 10, 2001 Order granting a Writ of Preliminary Injunction.[8]  Upon motion for reconsideration of respondent, however, the RTC issued an Order on June 19, 2001, reversing itself.[9]

Petitioners filed a Petition for Certiorari[10] with the CA, questioning the setting aside of the preliminary injunction and praying for the issuance of a TRO to enjoin respondents from proceeding with the foreclosure of the property.

On December 21, 2001, the CA rendered the assailed Resolution, which disposed thus:

"Finding that the alleged injury petitioner would suffer if this Court would not issue a Temporary Restraining Order (TRO), is not what the law contemplates as irreparable, the prayer for the issuance of TRO is hereby DENIED for lack of merit."[11]

Aggrieved, petitioners now ask this Court[12] (1) to issue a TRO to enjoin the enforcement of the CA Resolutions that in effect sustained the Order of the RTC; (2) to annul the June 19, 2001 RTC Order and reinstate the earlier one that granted the preliminary injunction; and (3) after giving due course to this Petition, to issue a writ of preliminary injunction barring respondents from proceeding with the foreclosure sale of the subject property.[13]

At the outset, we note that the Petition has become moot, considering that on August 30, 2001, a public auction had already been conducted for the property in question.[14]  Well-entrenched is the rule that consummated acts can no longer be restrained by injunction, the sole objective of which is to preserve the status quo until the merits of the case can be fully heard.[15]

In any event, the Petition has no merit.  Before an injunctive writ can be issued, the following requisites must be shown: (1) that there is a right in esse, or a clear and unmistakable right to be protected; (2)  that the act against which an injunction is to be directed is a violation of that right; and (3) that there is an urgent and permanent act and an urgent necessity for the writ to prevent serious damage.[16]  On the one seeking the relief lies the onus probandi to show that there is a need to protect a right that is directly threatened by the act sought to be enjoined.  Where a complainant's right is doubtful or disputed, injunction is not proper.[17]  Moreover, it must be shown that the invasion of the right is material and substantial, and that there is an urgent and paramount necessity for the writ to prevent serious damage.[18]

Clearly, the trial court found insufficient basis to conclude that there was a necessity for the issuance of a writ of preliminary injunction in favor of petitioners.  The issuance of a writ of preliminary injunction as an ancillary or preventive remedy to secure the right of a party in a pending case rests upon the sound discretion of the trial court.  Rule 58 of Section 7[19] of the Rules of Court gives trial courts wide latitude in this regard, because conflicting claims in an application for a provisional writ generally involve a factual determination.  Hence, absent any manifest abuse, the trial court's exercise of judicial discretion in injunctive matters will not be interfered with.[20]  The instant Petition fails to provide strong and cogent reasons why this Court should overturn the findings of the RTC as affirmed by the CA.

WHEREFORE, the Petition is DENIED.  Costs against petitioners.

SO ORDERED.

Very truly yours,

(Sgd.) ENRIQUETA ESGUERRA-VIDAL

Clerk of Court

First Division


[1] Rollo, pp. 3-28.

[2] Petitioners' Memorandum; rollo, p. 305.

[3] Respondents' Memorandum, p. 7; rollo, p. 152.

[4] Petitioners' Memorandum; rollo, pp. 305-306.

[5] Id. at 306.

[6] Complaint dated March 8, 2001, Annex "C" of the Petition; rollo, pp. 35-46.

[7] Annex "D" of the Petition; rollo, p. 47.

[8] Annex "E" of the Petition; rollo, pp. 48-49.

[9] Annex "H" of the Petition; rollo, pp. 58-60.

[10] Annex "L" of the Petition; rollo, pp. 76-99.

[11] CA Resolution, Twelfth Division; rollo, p. 30.

[12] To resolve old cases, the Court created the Committee on Zero Backlog of Cases on January 26, 2006.  Consequently, the Court resolved to prioritize the adjudication of long-pending cases by redistributing them among all the justices.  This case is being decided pursuant to that project.

[13] Petition; rollo, pp. 25-26.

[14] Certificate of Sale; rollo, pp. 247-248.

[15] Los Baņos Rural Bank, Inc. v. Africa, 433 Phil. 930, July 11, 2002.

[16] Light Rail Transit Authority v. CA, 444 SCRA 125, November 25, 2004; Medina v. Greenfield Dev't. Corp., 443 SCRA 150, November 19, 2004.

[17] MIAA v. Rivera Village Lessee Homeowners Association, Inc., GR No. 143870, September 30, 2005.

[18] Gustilo v. Real, 353 SCRA 1, February 28, 2001.

[19] RULES OF COURT, Rule 58, Sec. 7, provides:

    "SEC. 7. Service of copies of bonds; effect of disapproval of same. - The party filing a bond in accordance with the provisions of this Rule shall forthwith serve a copy of such bond on the other party, who may except to the sufficiency of the bond, or of the surety or sureties thereon.  If the applicant's bond is found to be insufficient in amount, or if the surety or sureties thereon fail to justify, and a bond sufficient in amount with sufficient sureties approved after justification is not filed forthwith, the injunction shall be dissolved.  If the bond of the adverse party is found to be insufficient in amount, or the surety or sureties thereon fail to justify a bond sufficient in amount with sufficient sureties approved after justification is not filed forthwith, the injunction shall be granted or restored, as the case may be."

[20] Urbanes v. Court of Appeals, 355 SCRA 537, March 28, 2001; Detective & Protective Bureau, Inc. v. Cloribel, 135 Phil. 258, November 29,1968.