GR L 63805; (August, 1984) (Digest)
G.R. No. L-63805 August 31, 1984
Republic Planters Bank vs. The Intermediate Appellate Court, Hon. Mariano Castaneda, Jr., et al.
FACTS
Petitioner Republic Planters Bank granted a loan to respondent spouses, secured by a mortgage on their properties. Upon default, the bank initiated extrajudicial foreclosure. The spouses filed a civil case against their attorney-in-fact and the bank, alleging misappropriation of loan proceeds, and obtained a restraining order against the foreclosure. The trial court dismissed the complaint for lack of cause of action against the bank. The spouses filed motions for reconsideration and an amended complaint, but the bank moved to strike these, arguing the dismissal order was final. The trial court, however, issued another restraining order and later admitted the amended complaint.
The bank filed a certiorari petition with the Intermediate Appellate Court (IAC), which issued a resolution directing the trial court to desist from enforcing its orders. Despite this, the spouses voluntarily dismissed their case without prejudice, which the trial court granted. The spouses then refiled an identical complaint as a new case one day before a rescheduled foreclosure sale, and the trial court issued another ex-parte restraining order.
ISSUE
Whether the trial court committed grave abuse of discretion in issuing restraining orders and entertaining the refiled complaint, thereby unjustly obstructing the bank’s right to foreclose.
RULING
Yes. The Supreme Court reversed the IAC’s dismissal and found grave abuse of discretion by the trial court. The legal logic is that the trial court’s order dismissing the original complaint for lack of cause of action had become final and executory. The subsequent admission of an amended complaint after finality and the issuance of restraining orders based on a voluntarily dismissed and then refiled identical complaint constituted a clear abuse of discretion. The acts of the spouses in dismissing and refiling were patently dilatory, aimed solely at frustrating the bank’s statutory right to foreclose. A court’s discretion in issuing injunctive relief must be sound and just, not used to defeat legal objectives. The trial court’s actions departed from accepted procedure, amounting to a denial of due process for the bank. The Supreme Court dissolved the restraining order, declared the original dismissal order final, and made permanent its own restraining order.