GR 157553; (September, 2004) (Digest)
G.R. No. 157553; September 8, 2004
AUTOCORP GROUP and AUTOGRAPHICS, INC., petitioners, vs. Hon. COURT OF APPEALS and KEPPEL MONTE BANK, respondents.
FACTS
Petitioners Autocorp Group and Autographics, Inc. obtained a loan from respondent Keppel Monte Bank, secured by a real estate mortgage. Upon default, the bank initiated extrajudicial foreclosure. Petitioners filed a complaint for annulment of the loan and mortgage with a prayer for a preliminary injunction. The Regional Trial Court (RTC) issued a writ of preliminary injunction, halting the foreclosure sale. The Court of Appeals, however, granted the bank’s petition for certiorari, annulling the RTC’s order for issuing the injunction without a proper hearing as required by the Rules of Court. The foreclosure sale then proceeded, and the properties were awarded to the bank.
Subsequently, petitioners filed an amended complaint seeking to annul the foreclosure sale and to enjoin the registration of the certificate of sale and the bank’s takeover of the properties. The RTC granted a new writ of preliminary injunction. The bank again elevated the case to the Court of Appeals, which set aside the RTC’s order. The appellate court ruled that the injunction was improperly issued to restrain the registration of the certificate of sale, which is a ministerial duty, and to preempt a writ of possession, which the bank was entitled to seek as the purchaser in the foreclosure sale.
ISSUE
Whether the Court of Appeals erred in setting aside the RTC’s order granting a writ of preliminary injunction to restrain the registration of the certificate of sale and the bank’s takeover of the foreclosed properties.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic is clear: a writ of preliminary injunction is a preservative remedy, not to determine substantive rights but to maintain the status quo pending litigation. However, its issuance is improper when it seeks to enjoin a purely ministerial act. The registration of a certificate of sale with the Register of Deeds is a ministerial duty mandated by law; it is not a discretionary act that can be restrained by injunction. Furthermore, the injunction issued by the RTC effectively preempted the bank’s clear right under Act No. 3135, as amended, to file a petition for a writ of possession after the foreclosure sale. A writ of possession is a proceeding summary in nature, issued as a matter of right to the purchaser in a foreclosure sale. The injunction, by seeking to prevent the bank from taking possession, interfered with this statutory right. The Court of Appeals correctly found that the RTC committed grave abuse of discretion in granting the injunction, as it was issued to restrain acts which were either ministerial or pursuant to a clear legal right, thereby altering rather than preserving the status quo.