SECOND DIVISION
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TECNOGAS*
PHILIPPINES MANUFACTURING CORPORATION, Petitioner, - versus - PHILIPPINE
NATIONAL BANK, Respondent. |
G.R.
No. 161004 Present: Quisumbing, J., Chairperson, Carpio Morales, Tinga, VELASCO, JR., and BRION, JJ. Promulgated: April 14, 2008 |
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DECISION
QUISUMBING,
J.:
For
review under Rule 45 are the Decision[1] and
the Resolution[2]
dated
The
antecedent facts are as follows:
On P35 million and a 5-year Term Loan of P14
million. To secure the loan, Tecnogas executed a Real Estate Mortgage[5]
(REM) over its parcel of land in Parañaque City, covered by Transfer
Certificate of Title (TCT) No. 122533[6] and
registered in the Registry of Deeds of Parañaque City.
The REM authorized
PNB to extrajudicially foreclose the mortgage as the
duly constituted attorney-in-fact of Tecnogas[7]
in case Tecnogas defaults on its obligations. It also provided that the mortgage will stand
as a security for any and all other obligations of Tecnogas
to PNB, for whatever kind or nature, and regardless of whether the obligations
had been contracted before, during or after the constitution of the mortgage.[8]
On
several occasions, Tecnogas’ loan had been increased,
renewed and restructured upon its requests whenever it could not pay its
obligations on their due dates. Finally,
when the loan matured, PNB sent collection letters[9]
to Tecnogas, but the latter only proposed to pay its
obligations by way of dacion en pago conveying TCT No. 122533.[10]
As of P205,025,743.59, inclusive of interest and
penalties.[11]
On
A day
before the auction sale, Tecnogas filed with the Parañaque City RTC a complaint[12]
for annulment of extrajudicial foreclosure sale, with application for the issuance
of a temporary restraining order (TRO) and writ of preliminary injunction
docketed as Civil Case No. 01-0330. On
the same date, the RTC issued a TRO valid for 72 hours.[13] On
On
On
On
Meanwhile,
the auction sale was set on August 17 and 24, 2004. Tecnogas filed an
Urgent Motion for the Issuance of a TRO/Injunction. The
In its
memorandum, Tecnogas raises the following issues:
I.
WHETHER OR NOT THE TWO (2)
RTC JUDGES A QUO COMMITTED GRAVE ABUSE OF DISCRETION WHICH IS
CORRECTIBLE BY CERTIORARI UNDER RULE 65[.]
II.
WHETHER OR NOT THE COURT OF
APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN PRE-EMPTING THE MERITS OF THE
MAIN CASE[.]
III.
WHETHER OR NOT THERE WERE
ERRORS OF JUDGEMENT COMMITTED BY THE TWO (2) RTC JUDGES A QUO.
IV.
WHETHER OR NOT THE INSTANT
PETITION HAS BEEN RENDERED MOOT AND ACADEMIC BY THE FORECLOSURE
Simply, the issues are:
(1) Did the Court of Appeals err in ruling that
Tecnogas was not entitled to an injunctive relief? (2) Did
the foreclosure sale render the petition moot?
Tecnogas admits its liability and that its proposal to pay by way of dacion
en pago was not accepted by PNB. But
Tecnogas avers that its proposal constitutes a valid
tender of payment. It further avers that
the Court of Appeals, in issuing the assailed decision, preempted the merits of
the main case in Civil Case No. 01-0330.
It finally avers that the foreclosure sale did not render the petition
moot.[18]
PNB
counters that the proposal to pay by way of dacion en pago did not
extinguish Tecnogas’ obligation; thus, the
extrajudicial foreclosure sale was proper.
It also contends that the Court of Appeals did not preempt the
resolution of the main case in Civil Case No. 01-0330, as its findings were
necessary to resolve the issue on injunction.
It finally contends that the foreclosure of the REM rendered the
petition moot.[19]
Considering the
submissions and contentions of the parties, we are in agreement that the
petition lacks merit.
A writ
of preliminary injunction may be issued only upon clear showing by the
applicant of the existence of the following: (1) a right in esse
or a clear and unmistakable right to be protected; (2) a violation of that
right; and (3) an urgent and paramount necessity for the writ to prevent
serious damage. In the absence of a
clear legal right, the issuance of the injunctive writ constitutes grave abuse
of discretion.[20]
Dacion
en pago is a special
mode of payment whereby the debtor offers another thing to the creditor who
accepts it as equivalent of payment of an outstanding obligation. The undertaking is really one of sale, that
is, the creditor is really buying the thing or property of the debtor, payment
for which is to be charged against the debtor’s debt. As such, the essential elements of a contract
of sale, namely, consent, object certain, and cause or consideration must be
present. It is only when the thing
offered as an equivalent is accepted by the creditor that novation takes place,
thereby, totally extinguishing the debt.[21]
On the
first issue, the Court of Appeals did not err in ruling that Tecnogas has no clear legal right to an injunctive relief
because its proposal to pay by way of dacion en pago did not extinguish
its obligation. Undeniably, Tecnogas’ proposal to pay by way of dacion en pago was
not accepted by PNB. Thus, the
unaccepted proposal neither novates the parties’
mortgage contract nor suspends its execution as there was no meeting of the
minds between the parties on whether the loan will be extinguished by way of dacion
en pago. Necessarily, upon Tecnogas’ default in its obligations, the foreclosure of
the REM becomes a matter of right on the part of PNB, for such is the purpose
of requiring security for the loans.
By
disallowing Tecnogas’ prayer for injunctive relief,
the Court of Appeals did not preempt the resolution of the main case in Civil
Case No. 01-0330 for annulment of extrajudicial foreclosure sale. In said case, the trial court still needs to
resolve the issues of whether Tecnogas observed the procedures
prescribed by Act No. 3135,[22]
as amended, on extrajudicial foreclosure of REM, and whether it suffered damage
as a result of PNB’s acts. These issues are still unresolved questions
which have to be passed upon by the trial court after hearing the evidence of
both parties so that an adjudication of the rights of the parties can be had.[23]
On the
second issue, the holding of the extrajudicial foreclosure sale did not render
this case moot. A case becomes moot only
when there is no more actual controversy between the parties, or when no useful
purpose can be served in passing upon the merits.[24]
In this case, the decision of the
Court of Appeals annulling the grant of preliminary injunction in favor of Tecnogas has not yet become final on
WHEREFORE, the instant
petition is DENIED for lack
of merit. The assailed Decision and
Resolution dated
SO ORDERED.
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LEONARDO A. QUISUMBING Associate Justice |
WE CONCUR:
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CONCHITA CARPIO MORALES Associate Justice |
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DANTE O. TINGA Associate Justice |
PRESBITERO J. VELASCO,
JR. Associate Justice |
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ARTURO D. BRION Associate Justice |
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A T T E S T A T I O N
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.
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LEONARDO A. QUISUMBING Associate Justice Chairperson |
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution,
and the Division Chairperson’s Attestation, I certify 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.
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|
REYNATO S. PUNO Chief Justice |
* Technogas Philippines Manufacturing Corp. in some parts of the records.
[1] Rollo, pp. 28-36. Penned by Associate Justice Bernardo P.
Abesamis, with Associate Justices Jose L. Sabio, Jr. and Jose C. Mendoza
concurring.
[2]
[3] Records, Vol. I, p. 299. Penned by Pairing Judge Helen Bautista-Ricafort.
[4]
[5] CA rollo,
pp. 72-76.
[6]
[7]
[8]
[9]
[10]
[11] CA rollo, pp. 145-146.
[12] Records, Vol. I, pp. 8-47.
[13]
[14]
[15]
[16]
[17] Rollo, p. 296.
[18]
[19]
[20] Tayag v. Lacson, G.R. No. 134971,
[21] Philippine Lawin Bus, Co. v. Court of
Appeals, G.R. No. 130972, January 23, 2002, 374 SCRA 332, 338, citing Filinvest
Credit Corp. v. Phil. Acetylene, Co., Inc., No. L-50449,
[22] An
Act to Regulate the
[23] See Philippine National Bank v. Court of
Appeals, G.R. No. 121251,
[24]
[25] See Lee v. Court of Appeals, G.R.
No.147191,