G.R. No. 132795. March 10, 2004.
Banco Filipino Savings and Mortgage Bank, petitioner, vs. Hon. Florentino A. Tuazon, Jr., Miguel Cano, Nonata Lizares, Louisa Lizares, Congregacion de las Hijas de la Caridad and Daughters of Charity, respondents.

FACTS

Petitioner Banco Filipino obtained a final and executory judgment in 1985 for the foreclosure of a real estate mortgage against Philfinance. Multiple attempts to execute this judgment through a sheriff’s sale were repeatedly thwarted by temporary restraining orders (TROs) obtained by Philfinance or other parties in various courts. In 1994, private respondents, claiming to be unpaid creditors of the insolvent Philfinance, filed a new action for damages (Civil Case No. 94-1688) before the RTC of Makati, Branch 66, seeking to enjoin the scheduled foreclosure sale. They argued that as co-creditors, Banco Filipino could not obtain preference over them.
Despite Banco Filipino’s motion to dismiss the complaint for failure to state a cause of action, Branch 66 granted a writ of preliminary injunction, suspending the foreclosure. The Court of Appeals upheld this injunction, ruling that Philfinance’s dissolution constituted a subsequent event that rendered execution of the final judgment unjust, as all creditors deserved to share in the corporation’s remaining assets. Banco Filipino elevated the case to the Supreme Court via a petition for review on certiorari.

ISSUE

Whether the Supreme Court should resolve the propriety of the injunction that prevented the execution of a final judgment, in light of subsequent events.

RULING

The Supreme Court dismissed the petition for being moot and academic. The core legal issue—the validity of the injunction blocking the foreclosure sale—was rendered inconsequential by a supervening event. Prior to the Court’s resolution, the subject property had already been titled in the name of Banco Filipino by virtue of a separate auction sale conducted by the City Government of Makati for realty tax delinquencies.
The petition’s ultimate purpose was to lift the injunction to allow the enforcement of the final foreclosure judgment. Since the property had already been acquired by petitioner through a different legal process, the specific relief sought could no longer be granted. The Court clarified that any claims by Philfinance’s other creditors regarding their rights to the proceeds from the property should be pursued in an appropriate case and forum, not within the confines of the instant petition which had been overtaken by circumstances. The dismissal was without prejudice to the ventilation of such claims elsewhere.