G.R. No. 163902; January 27, 2006
CASENT REALTY & DEVELOPMENT CORPORATION, Petitioner, vs. PREMIERE DEVELOPMENT BANK, Respondent.

FACTS

Petitioner Casent Realty obtained loans from respondent Premiere Bank, secured by a real estate mortgage. After Casent Realty defaulted, Premiere Bank initiated extrajudicial foreclosure proceedings. Casent Realty filed a complaint for injunction and damages, arguing the foreclosure was premature due to a dispute over the exact amount of the unpaid obligation. The Regional Trial Court (RTC) issued a preliminary injunction, halting the foreclosure. During pre-trial, both parties agreed to engage an independent auditor, Sycip Gorres Velayo and Co., to review the account computations to facilitate a possible settlement.
Subsequently, Casent Realty filed a “Very Urgent Motion for Clarification,” seeking to limit the auditor’s role to a historical review of payments and their application, expressly stating this was for settlement assistance only and should not touch on the merits of the case. The RTC denied this motion but issued an order allowing Casent Realty to manifest if it was no longer interested in the auditor’s assistance, in which case the pre-trial would simply proceed.

ISSUE

Whether the Court of Appeals correctly granted Premiere Bank’s petition for certiorari to annul the RTC order that allowed Casent Realty to proceed without utilizing the independent auditor.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the RTC orders. The Court held that the Court of Appeals erred in granting the petition for certiorari under Rule 65, as no grave abuse of discretion by the RTC was established. The RTC’s order was a permissible interlocutory order that did not decide the case on the merits but merely provided a procedural option to Casent Realty regarding the use of an auditor for settlement talks. An order that merely maintains the status quo or provides alternatives to advance pre-trial proceedings does not constitute a final resolution of rights.
The essence of a special civil action for certiorari is the correction of jurisdictional errors or acts performed with grave abuse of discretion amounting to lack or excess of jurisdiction. Grave abuse of discretion implies a capricious, whimsical, or despotic exercise of judgment. The RTC’s order, which responded to Casent Realty’s own motion and preserved its right to a full trial, exhibited neither. It was a reasonable exercise of the court’s discretion to manage its proceedings. Mere errors of judgment, absent a showing of arbitrariness, are not correctible by certiorari.