G.R. No. L-56122 November 18, 1993
RENE KNECHT, petitioner, vs. THE COURT OF APPEALS, DEVELOPMENT BANK OF THE PHILIPPINES, LUZ RUBIO, ELIZABETH KEON, UNITED COCONUT PLANTERS BANK, DBP GOVERNOR RECIO GARCIA, ET AL., respondents.

FACTS

On December 5, 1969, petitioner Rene Knecht and respondent Levy R. Garcia purchased a parcel of land with an eleven-storey building known as the “Tower Hotel” in Ermita, Manila, which was mortgaged to respondent Development Bank of the Philippines (DBP). The buyers assumed the mortgage. From December 5, 1969, to August 20, 1973, petitioner failed to pay the amortizations to DBP. On August 21, 1973, a compromise agreement in a civil case enabled petitioner to regain possession and management of the hotel. Petitioner claims that in February 1977, he executed an antedated deed of trust (November 15, 1976) in favor of respondent Elizabeth Keon, assigning 50% interest in his equity and constituting him as a mere trustee. In April 1977, petitioner opened a savings account with respondent United Coconut Planters Bank (UCPB) in the name of Tower Hotel, authorizing Keon to withdraw. On May 4, 1977, Keon allegedly took over management. On August 18, 1977, DBP foreclosed the mortgage, and the property was sold at public auction with DBP as the highest bidder. A certificate of sale was issued on August 22, 1977, and registered on September 5, 1977. DBP then leased the hotel to respondent Luz Rubio. On February 17, 1978, petitioner filed an action for nullification of the foreclosure sale with a prayer for a preliminary injunction (Civil Case No. 113873), asking the court to stop the running of the one-year redemption period and to restore his possession and management. The one-year redemption period expired on September 2, 1978, without petitioner exercising his right and without the trial court issuing an injunction. On March 26, 1979, the trial court issued two orders: one withholding resolution on suspending the redemption period until after trial, and another denying the petition for a preliminary mandatory injunction to restore possession, as petitioner’s right to the property was not clearly established. Petitioner filed a petition for certiorari with the Court of Appeals, which dismissed it on October 28, 1980, and denied reconsideration on January 21, 1981. Hence, this petition for review.

ISSUE

Whether the Court of Appeals erred in sustaining the trial court’s order denying petitioner’s prayer for a writ of preliminary mandatory injunction to restore his possession and management of the Tower Hotel and to stop the running of the redemption period.

RULING

The petition is DENIED, and the decision of the Court of Appeals is AFFIRMED. The Supreme Court held that for a writ of preliminary injunction to issue, the petitioner must show a right to be protected and that the acts against which the injunction is directed violate that right. Petitioner failed to make a prima facie showing of title or right to possession warranting a mandatory injunction. The status quo before the complaint was filed was that DBP was in possession of the property after the foreclosure sale, not petitioner. A writ of preliminary mandatory injunction is improper to take property out of one’s possession and place it in another’s hands without such a showing. Petitioner’s alleged “just causes” for non-payment of amortizations, such as military detention and non-restructuring of the loan, are matters to be determined in the main case for nullification of the foreclosure sale. Furthermore, petitioner’s registration of a notice of lis pendens adequately protects any rights he may have over the property by binding any prospective buyer to the outcome of the civil case.