GR 179230; (March, 2010) (Digest)
G.R. No. 179230, March 9, 2010
EUGENE L. LIM, Petitioner, vs. BPI AGRICULTURAL DEVELOPMENT BANK, Respondent.
FACTS
The respondent bank granted petitioner Eugene L. Lim and his wife a revolving credit line and medium-term loans, secured by real estate mortgages. They executed several promissory notes containing a cross-default provision. This provision stated that failure to pay any obligation due to the bank or its affiliates would cause the entire outstanding amount under the note to become immediately due and payable. Petitioner defaulted on Promissory Note No. 1000045-08. Respondent bank sent a final demand letter and subsequently filed an application for extrajudicial foreclosure of the mortgages. Petitioner filed a complaint for injunction with damages before the RTC to enjoin the foreclosure, alleging that the bank’s act of accelerating the maturity of all loans was in gross bad faith and abuse of right, especially during an economic crisis, and that the loans were adequately secured by collaterals. The RTC issued a writ of preliminary injunction. The Court of Appeals reversed this, lifting the injunction.
ISSUE
Whether the Court of Appeals erred in lifting the writ of preliminary injunction issued by the trial court, specifically on the ground that petitioner failed to establish a clear right in esse (a right in existence) entitling him to the injunctive relief.
RULING
The Supreme Court DENIED the petition and upheld the Court of Appeals’ decision. The Court ruled that one of the essential requisites for issuing a writ of preliminary injunction is that the applicant must have a clear and unmistakable right in esse, founded on or granted by law. Petitioner admitted executing the promissory note, reviewing its cross-default provision, and defaulting on his payment. The bank’s declaration of default and move to foreclose were pursuant to the unchallenged cross-default provision in the contract. The allegations in petitioner’s complaint for injunction and damages, and the evidence presented during the hearing for the preliminary injunction, failed to establish such a clear legal right. The trial court’s basis for the injunction—that there were “legal matters to be looked into” regarding the acceleration clause—was erroneous, as jurisdiction is determined by the pleadings, and petitioner did not properly challenge the validity of the provision. Therefore, petitioner had no right in esse to support the injunction.