Republic of the
Supreme Court
|
|
|
G.R. No. 160113 |
|
CORPORATION, |
|
|
|
Petitioner, |
|
Present: |
|
|
|
|
|
|
|
YNARES-SANTIAGO, J., |
|
-
versus - |
|
Chairperson, |
|
|
|
AUSTRIA-MARTINEZ, |
|
|
|
CHICO-NAZARIO, |
|
TA FA INDUSTRIES,
INC., |
|
NACHURA, and |
|
J & H
INDUSTRIES, INC., |
|
REYES, JJ. |
|
and JEAN LONG |
|
|
|
INDUSTRIES, INC., |
|
Promulgated: |
|
Respondents. |
|
April 30, 2008 |
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - x
D E C I S I O N
AUSTRIA-MARTINEZ, J.:
This
resolves the Petition for Review on Certiorari under Rule 45 of the
Rules of Court filed by China Banking Corporation (petitioner), praying that the
Decision[1] of the
Court of Appeals (CA) dated
The undisputed
facts of the case as summarized by the CA are as follows:
On different
dates, private respondent Ta Fa Industries, Inc.,
through its authorized signatory, Hung Chen Chen, for
value received, signed and delivered in favor of petitioner bank:
|
Promissory Note |
Date |
Amount |
|
(a) MK-T-22165 |
|
|
|
(b) TS-25175 |
|
|
|
(c ) TS-29078-8 |
|
|
In
order to secure the payment of the aforesaid promissory notes, private
respondents respectively executed in favor of petitioner bank, the following
real estate mortgages, to wit:
|
Date of Mortgage |
Mortgagor |
Property Mortgaged |
|
(a)
Amended on July 10, 1995 |
Ta Fa Industries, Inc. Thru: Hung Chen Chen |
TCT No. 98056 |
|
(b) |
Jean Long Industries, Inc. Thru: Hung Chen Chen |
TCT No. PT-89703 TCT No. PT-89704 TCT No. PT-89705 |
|
(c) |
J & H Industries, Inc. Thru: Hung Chen Chen |
TCT No. PT-106315 |
For private respondents' failure
to pay the quarterly amortizations, petitioner Bank instituted a Petition for
Extra-judicial Foreclosure of Real Estate Mortgages with the Executive
Judge of the court a quo.
Acting upon the petition, the Notice of Auction Sale
by Notary Public was duly published and posted in accordance with the requirements of
the law, and a copy was duly served upon private respondents through Hung Chen Chen. The auction
sale was set on
On
On 22 November 2001, after
summary hearing, respondent Judge issued an Order granting private respondents' application for
temporary restraining order. And on
Aggrieved by the denial of its
Motion for Reconsideration by respondent Judge in an Order dated
On June 30, 2003, the CA promulgated its Decision
dismissing the petition for certiorari, concluding that the Regional Trial Court of Pasig
City, Branch 71 (RTC) did not commit any grave
abuse of discretion amounting to lack of jurisdiction in issuing the temporary
restraining order and, eventually, the writ of preliminary injunction, based
on the RTC’s
finding that petitioner
failed to refute respondents' claim that the loan proceeds had not
been released in full.
The dispositive portion of the CA Decision reads:
WHEREFORE, premises considered,
the Petition is DISMISSED for lack of merit and the assailed
SO ORDERED.[4]
Petitioner moved for reconsideration but the CA denied
said motion per Resolution dated
Hence, herein petition alleging that:
I
THE HONORABLE COURT OF
APPEALS' DECISION AFFIRMING THE TRIAL COURT'S IMPROVIDENT GRANT OF RESPONDENTS'
APPLICATION FOR WRIT OF PRELIMINARY INJUNCTION PROMOTED AN ERRONEOUS CONCLUSION
OF FACTS BASED ON PURE CONJECTURE AND NOT ON THE EVIDENCE ON RECORD, WHICH THE
TRIAL COURT EVEN UNFAIRLY CREATED IN FAVOR OF THE RESPONDENTS, IN CLEAR DISPLAY
OF PARTIALITY.
(a) Hence, the conclusion of facts that formed
the basis of the erroneous Decision (Annex “A”) would not attain conclusiveness and deserves to
be reviewed by this Honorable Court.
II
THE HONORABLE COURT OF
APPEALS' DECISION ERRONEOUSLY SANCTIONED THE TRIAL COURT'S DEPARTURE FROM THE
ESTABLISHED PROCEDURAL AND JURISPRUDENTIAL
The
Court finds the petition meritorious.
The
grounds for the issuance of a writ of preliminary injunction
are enumerated in Rule 58, Section 3 of the Revised Rules of Court, which reads
as follows:
Sec. 3. Grounds for
issuance of preliminary injunction. – A
preliminary injunction may be granted when it
is established;
(a) That the applicant is entitled to the relief demanded, and the whole or
part of such relief consists in restraining the commission or continuance of
the act or acts complained of, or in requiring the performance of an act or
acts, either for a limited period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the
applicant; or
(c) That a party, court, agency or a person is doing, threatening, or is
attempting to do, or is procuring or suffering to be done, some act or acts
probably in violation of the rights of the applicant respecting the subject of
the action or proceeding, and tending to render the judgment ineffectual.
Under the rule, it is
incumbent upon respondents to prove that they are entitled to the relief of
having the public auction sale of their properties restrained. Petitioner claims that respondents failed to
adduce proof that they are entitled to a writ of preliminary injunction; hence, the trial court
gravely abused its discretion in granting the application for said writ.
Petitioner’s allegation that the factual findings of the
trial court, as affirmed by the CA, are based on conjecture, misapprehension and
misinterpretation of respondents’ evidence, are borne out by the records. Indubitably,
it is a clear exception to the general rule that findings of
fact of the CA are conclusive upon this Court.[6]
The CA conclusion that there was no grave abuse of
discretion committed by the RTC is based mainly on its finding that “petitioner
is silent as to the factual finding of the trial court that it (petitioner)
failed to remit in full the considerations for the real estate mortgages. Thus, it renders such findings conclusive
against petitioner.”[7] However, an
examination of the records reveals that in petitioner’s motion for reconsideration of the
RTC Order dated January 21, 2002 granting the application for a writ of
preliminary injunction, and again in its petition for certiorari before the
CA, petitioner had consistently assailed the RTC finding that there was no full
remittance of the consideration for the real estate mortgages. Thus, the CA
seriously erred in ruling that the trial court’s factual
finding that petitioner failed to release the loan proceeds in full to
respondent Ta Fa Industries, Inc. (Ta Fa) is conclusive on petitioner.
Moreover, petitioner has a valid
ground for questioning the sufficiency of the evidence presented by
respondents to support their application for a writ of preliminary
injunction. Section 1, Rule
131 of the Rules of Court provides, thus:
Sec.
1. Burden of proof.
– Burden of proof is the
duty of a party to present evidence on the facts in issue necessary to
establish his claim or defense by the amount of evidence required by law.
Here, the burden of proof rests with respondents to
establish their claim that they have a legal right that should be protected by a writ of preliminary injunction. In L.C. Ordoñez Construction v. Nicdao,[8]
the Court reiterated the ruling that “the burden of proof is on the part of the
party who makes the allegations – ei incumbit probatio, qui dicit, non qui negat. If he claims a right granted by law, he
must prove his claim by competent evidence, relying on the strength of his own
evidence and not upon the weakness of that of his opponent.” (Emphasis
ours)
Respondents failed to discharge said burden of
proof. They do not dispute petitioner’s claim that
the main evidence in support of their application for the writ of preliminary injunction is
the testimony of Atty. Jesus S. Silo. We note the salient points of his testimony, to wit:
Atty. Tomacruz:
Q Under subparagraph A of paragraph 3
it is alleged that plaintiffs have not received in full the consideration for
the real estate mortgages being foreclosed.
What can you say to that?
A That is true. That is the reason why, because it is a
little complicated, I advised the plaintiffs herein to consult directly with a
lawyer who’s very knowledgeable on the details on this.
Q When you said that is true, will you
explain a little further?
A I mean when I gone through the
records, from just a cursory observation of the documents, the companies itself
on the plaintiffs herein have not received yet the full amount of the loan from
the bank.
x x x x
Q When you say balance, to which
amount are you referring, balance of what?
A Balance of the loan being obtained
by the plaintiffs.
Q Which according to you has not yet
been given to the plaintiffs?
A That’s right, Sir.
Q Do you know how much balance has not yet been
given to the plaintiffs?
A I’m sorry, I would not be
able to tell you the amount. The exact
amount because as I said this is complicated and the details of this I have not
gone through.
Q Is it substantial?
A It is substantial. I know it is ranging to millions.
x x x x
COURT:
Q You mean the loan amounted to 67
Million?
A That is the demand of the bank,
your Honor.
Q No, I’m asking you how much is the
loan obtained by the plaintiffs from defendant bank?
A I would not know exactly the amount,
your Honor, because I came to know about this one only when the letter already
was shown to me by the plaintiffs.
Q How can you say that there is still
a balance?
A Because in the records, I’ve seen
in the documents there is still in the documents.
Q More or less how much is the
balance?
A I would not remember exactly, your
Honor.
x x x x [9]
On cross-examination, the same witness gave the following answers:
Q Would you know in how many times or in how many
branches were the loan proceeds released to the
plaintiffs corporation?
A These are money matter, I did not participate in this.
x x x x
Q My question is,
do you know how many promissory notes were executed to evidence the loan?
A The exact number of
promissory notes I would not know.
Q And you
would not even know also the actual status of the loan before a demand letter
was sent to the plaintiffs corporations, is it not?
A I was informed by the companies
itself, that we have not received the full amount of the loans.
Q Okay we go to the point. What evidence can you show to this Honorable
Court that not all of the proceeds of the loan were not released to plaintiffs corporations?
A I do not have documents to show
right now, Sir.
x x x x
Q We’re
just curious Compañero
because if you are claiming that there was no full release of the loan, you
would not even know how many promissory notes were executed, the nature of the
loan you would not know even, how can you say now that full amount of the loan
were not yet released to the plaintiffs corporations?
A I
just based it on the records of the corporation.
Q Precisely,
I’m asking you again the question. What
records are these or evidence are these which you can show to this Honorable
Court that the loans were not released fully to the plaintiffs corporations?
A I
do not have the documents right now.
Q Can
you be specific what documents is that if you don’t have it with you now?
A As
I was telling you I just gone a cursory look over the records, the details I
said, this is a complicated thing which I think you should approach a lawyer
who is familiar with all these things.
x
x x x
Q You
declared Mr. Witness that the balance of the loan being paid by the plaintiffs
are not yet due and demandable, what is your basis in saying so?
A As
I said, I saw a figure there of 67 Million in the demand letter itself and a
demand of the same type, interest and other charges. I told the treasurer of the companies
involved. As I said this is a
complicated matter, on interest, etc. I
think you better consult or refer it to a lawyer more familiar with this.
x
x x x
Q One final question Mr. Witness. Would
you know, if you are claiming that the loan were not fully released to
plaintiffs corporations, would you know how much if any were released to
plaintiffs corporation?
A
If I am not mistaken, Your Honor, I answered it earlier that I do not know the
exact figure on how much the balance of the loan.
COURT:
Q More or less how many millions?
A Frankly,
Your Honor, when it comes to money computation, etc., I do not want to . . .
Q And
you are not the accountant?
A Yes,
Your Honor, and I want to avoid that.
x
x x x[10] (Emphasis supplied)
A
simple perusal of the testimony of respondents’ witness readily reveals that he
admitted that he does not participate in money matters of respondents; that he
does not know the alleged amount that had not been released to respondents, or
the balance of the loan. Verily, the
foregoing testimony glaringly shows that the witness is incompetent to shed any
light on the transactions involved in this case, much less establish that
respondents, as plaintiffs, do have a clear and unmistakable right that should
be judicially protected through the issuance of a writ of preliminary
injunction.
The oft-repeated rule, as stated in Republic of the Philippines v. Caguioa,[11] is that:
For a writ of preliminary
injunction to issue, the plaintiff must be able to establish that (1)
there is a clear and unmistakable right to be protected, (2) the
invasion of the right sought to be protected is material and substantial, and
(3) there is an urgent and paramount necessity for the writ to prevent serious
damage.
Conversely, failure to establish
either the existence of a clear and positive right which should be judicially
protected through the writ of injunction, or of the acts or
attempts to commit any act which endangers or tends to endanger the existence
of said right, or of the urgent need to prevent serious damage, is a sufficient ground
for denying the preliminary injunction.[12] (Emphasis supplied)
Furthermore, in Ocampo v. Vda. de Fernandez,[13] the
Court emphasized thus:
It is worthy to reiterate herein the ruling of this
Court in Almeida v. Court of Appeals
–
In general, a trial
court’s decision to grant or to deny injunctive relief will not be set aside on
appeal unless the court abused its discretion. In granting or denying injunctive relief,
a court abuses its discretion when it lacks jurisdiction, fails to consider and make a
record of the factors relevant to its determination, relies on clearly
erroneous factual findings, considers clearly irrelevant or improper factors,
clearly gives too much weight to one factor, relies on erroneous conclusions of
law or equity, or misapplies its factual or legal conclusions. In the absence
of a clear legal right, the issuance of the injunctive writ constitutes grave
abuse of discretion. As the Court had the occasion to state in Olalia v. Hizon:
It has been consistently held that there is no power the
exercise of which is more delicate, which requires greater caution,
deliberation and sound discretion, or more dangerous in a doubtful case, than
the issuance of an injunction.
It is the strong arm of equity that should never be extended unless to cases of
great injury, where courts of law cannot afford an adequate or commensurate
remedy in damages.
Every court should remember that an injunction
is a limitation upon the freedom of action of the defendant and should not be
granted lightly or precipitately. It should be granted only when the court is fully satisfied that the law
permits it and the emergency demands it. [14] (Emphasis
ours)
In
this case, the unreliable and unconvincing testimony of respondents’ main
witness is utterly deficient to establish the existence of the aforementioned
requisites for the issuance of a writ of preliminary injunction.
The
trial court also, wittingly or unwittingly, misinterpreted the testimony of
petitioner’s witnesses by concluding that petitioner failed to release the
entire amount of the loan to respondent Ta Fa, when
what the witness said was that P6 million out of the P19 million
loan granted to Ta Fa was applied as payment to Ta Fa’s previous outstanding loans. Such application of proceeds of the
subsequent loan bears the consent of Ta Fa since all three
Promissory Notes uniformly contain the following stipulation:
x x x x
and each of us, do hereby authorize and empower
the CHINA BANKING CORPORATION at its option without notice, to apply to the
payment of this note and/or any other particular obligation or all or any of us
to the CHINA BANKING CORPORATION as the said Corporation may select, the dates
of the maturity, whether or nor said obligation are then due, any or all
moneys, securities, value which are now or which may hereafter be in its hands
on deposit or otherwise to the credit of all or any one of us, and the CHINA
BANKING CORPORATION is hereby authorized to sell at public such securities or
things of value for the purpose of applying their proceeds to such payments.[15]
Hence,
it cannot be said that the P6 million was not released for the account
of respondent Ta Fa who benefitted
from the P6 million as said amount was used to clear his previous
obligations.
Such patently
capricious and whimsical exercise of the trial court’s judgment is tantamount
to grave abuse of discretion amounting to lack of jurisdiction. The CA erred in dismissing the petition for certiorari
filed before it by herein petitioner.
WHEREFORE, the petition
is GRANTED. The Decision of the
Court of Appeals dated
Costs against respondents.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
WE
CONCUR:
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson
|
MINITA
V. CHICO-NAZARIO Associate
Justice |
ANTONIO
EDUARDO B. NACHURA Associate
Justice |
RUBEN
T. REYES
Associate
Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
CONSUELO
YNARES-SANTIAGO
Associate
Justice
Chairperson,
Third Division
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution, and the Division Chairperson’s
Attestation, it is hereby certified that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
REYNATO
S. PUNO
Chief
Justice
[1] Penned
by Associate Justice Andres B. Reyes, Jr., with Associate Justices Eugenio S. Labitoria and Regalado E. Maambong, concurring;
rollo, pp. 8-16.
[2]
[3] Rollo, pp. 63-65.
[4] Rollo, p. 16.
[5]
[6] Citibank, N.A. (Formerly First National City
Bank) v. Sabeniano, G.R. No. 156132, October 12, 2006, 504 SCRA 378, 409.
[7] Rollo, p. 66.
[8] G.R.
No. 149669,
[9] TSN,
[10] TSN,
[11] G.R.
No. 168584,
[12]
[13] G.R.
No. 164529,
[14]
[15] Annexes “R,” “S” and “T,” rollo, pp. 337, 338, 339, respectively,