GR 168746; (November, 2009) (Digest)
G.R. No. 168746 ; November 5, 2009
EQUITABLE PCI BANK, INC., Petitioner, vs. HON. SALVADOR Y. APURILLO in his capacity as Presiding Judge, Regional Trial Court of Tacloban City, Branch 8, and YKS REALTY DEVELOPMENT, INC., Respondents.
FACTS
Respondent YKS Realty Development, Inc. obtained loans from the predecessors of petitioner Equitable PCI Bank, secured by real estate mortgages. For the EBC account, a credit line secured by mortgage was amended to reach ₱53 million, but only ₱10.4 million was actually released. EBC initiated extrajudicial foreclosure for this ₱10.4 million. For the PCIB account, YKS obtained a dollar loan converted to pesos, with the obligation documented in a promissory note maturing in 2004. Despite the 2004 maturity date, PCIB also initiated extrajudicial foreclosure in 2001.
YKS filed a complaint for declaratory relief and injunction with the RTC, arguing the foreclosure petitions were defective. YKS contended the EBC petition sought to foreclose properties for a fraction of the secured credit line, and the PCIB petition was based on a promissory note that was either void or not yet due. The RTC granted a writ of preliminary injunction, halting the foreclosure sales. Equitable PCI Bank challenged this via certiorari with the CA, which dismissed the petition, leading to this appeal.
ISSUE
Whether the Court of Appeals erred in dismissing the petition for certiorari and in effect affirming the RTC’s grant of a writ of preliminary injunction against the extrajudicial foreclosure.
RULING
The Supreme Court denied the petition and affirmed the CA. The legal logic centers on the propriety of the injunctive relief and the limited scope of certiorari. A writ of preliminary injunction is a preservative remedy to prevent threatened or continuous injustice. The RTC found that YKS raised serious and substantial legal questions regarding the validity of the foreclosure proceedings, including the discrepancy between the secured amount and the claim, and the prematurity of the PCIB obligation. These issues warranted judicial determination before allowing the foreclosure to proceed, as their resolution could render the sale void.
On procedural grounds, the petition before the CA was one for certiorari under Rule 65, which only corrects jurisdictional errors or grave abuse of discretion. The RTC’s evaluation of the factual and legal bases for the injunction—such as the existence of a clear right needing protection and a prima facie case—was within its discretionary power. The Supreme Court found no grave abuse in this exercise of discretion. The CA correctly ruled that the RTC did not act capriciously or whimsically, as the factual allegations by YKS, if proven, could invalidate the foreclosure. Therefore, the appellate court committed no reversible error in upholding the injunction to maintain the status quo pending litigation on the merits.