GR 163878; (December, 2006) (Digest)
G.R. No. 163878 ; December 12, 2006
FAR EAST BANK AND TRUST COMPANY, petitioner, vs. SHEMBERG MARKETING CORPORATION, et al., respondents.
FACTS
Respondent corporations and individual Dacays obtained multiple loans from petitioner Far East Bank and Trust Company (FEBTC), secured by real estate mortgages. The mortgage contracts contained acceleration clauses and authorized extrajudicial foreclosure under Act No. 3135 upon default. Respondents executed numerous promissory notes for the loan releases. Upon the loans’ maturity on February 14, 2001, and respondents’ failure to pay, FEBTC initiated extrajudicial foreclosure proceedings.
In response, respondents filed a Complaint for Declaratory Relief, Injunction, Damages, and Annulment of Promissory Notes and Contracts before the Regional Trial Court (RTC) of Mandaue City. They alleged that the loan documents they signed were standard pre-printed forms with blanks later filled by bank employees with false and inaccurate entries, disputing the documents’ genuineness. They sought a temporary restraining order (TRO) and preliminary injunction against the foreclosure. The RTC granted a 72-hour TRO and, after conducting multiple trial-type hearings with witness testimonies and submissions of memoranda, issued an Order granting the preliminary injunction. FEBTC’s motion for reconsideration was denied.
ISSUE
Whether the Court of Appeals erred in dismissing FEBTC’s certiorari petition and affirming the RTC’s issuance of the writ of preliminary injunction.
RULING
The Supreme Court denied FEBTC’s petition and affirmed the Court of Appeals. The core legal issue was the propriety of a certiorari petition to challenge the RTC’s interlocutory order granting a preliminary injunction. The Court reiterated that a writ of certiorari under Rule 65 is a remedy for correcting errors of jurisdiction, not errors of judgment. It lies only when there is a grave abuse of discretion amounting to lack or excess of jurisdiction, defined as a capricious, whimsical, or despotic exercise of judgment.
The Court of Appeals correctly found that the RTC did not commit grave abuse of discretion. The trial court acted in a fair, reasonable, and expeditious manner by holding hearings, allowing presentation of evidence and cross-examination, and requiring memoranda before issuing the injunction. Since the RTC had jurisdiction over the persons and subject matter, its evaluation of the evidence for the injunctive writ constituted an exercise of that jurisdiction. Any alleged error in its factual or legal conclusions would, at best, be a mere error of judgment correctible by appeal, not by certiorari. Therefore, the extraordinary writ was properly denied.