GR 163011; (June, 2007) (Digest)
G.R. No. 163011, June 7, 2007
DUVAZ CORPORATION, Petitioner, vs. EXPORT AND INDUSTRY BANK, Respondent.
FACTS
Petitioner Duvaz Corporation acquired the loan obligations of its subsidiary, RDR Property Holdings, Inc., from Urban Bank. These loans were secured by real estate mortgages. Following a mutual restructuring agreement due to Duvaz’s default, it executed promissory notes totaling ₱263 Million in favor of Urban Bank. Urban Bank was later acquired by respondent Export and Industry Bank (EIB). When the restructured loans matured and remained unpaid, EIB demanded settlement. Duvaz, instead of proposing a payment plan, protested the amount and filed a complaint for reformation of instrument against EIB.
Duvaz alleged that its true 1998 agreement with Urban Bank was a dacion en pago (deed of sale in payment), intended to fully settle its obligation, and not a loan restructuring as reflected in the written contract. It prayed for a writ of preliminary injunction to enjoin EIB from foreclosing the mortgaged properties pending the main action. The Regional Trial Court granted the injunction. EIB challenged this order via a petition for certiorari before the Court of Appeals.
ISSUE
Whether the Court of Appeals correctly nullified the RTC’s order granting the writ of preliminary injunction.
RULING
Yes, the Court of Appeals was correct. The Supreme Court affirmed the CA’s decision denying the writ of preliminary injunction. A writ of preliminary injunction is a preservative remedy to protect a clear and existing right. The applicant must prove a right in esse, meaning a right that is clear, unmistakable, and already existing.
Here, Duvaz’s claimed right to be free from foreclosure emanated solely from its allegation of an unrecorded dacion en pago agreement. This alleged right is contingent, future, and yet to be established by competent evidence during a full trial on the merits. It is not a clear and unmistakable right that warrants the extraordinary protection of an injunction. The parol evidence rule generally prohibits varying the terms of a written agreement, and Duvaz’s claim of an exception is a matter for final determination, not for preliminary relief. The trial court’s grant of the injunction, based on a right that is merely alleged and unproven, constituted a grave abuse of discretion. The CA properly annulled the order. The Supreme Court also found no merit in Duvaz’s ancillary claim that EIB engaged in forum shopping by filing the certiorari petition, as such a remedy is expressly sanctioned by the rules.