G.R. No. 241034 - Manila Hotel Corp. vs. Office of the Director, Bureau of Legal Affairs, Intellectual Property Office of the Philippines

The subject property is a parcel of land with a house located at No. 3491 Honda St., Bo. Pinagkaisahan, Makati City, originally covered by Transfer Certificate of Title (TCT) No. 180235 issued on January 27, 1967.
The property has been in the possession of respondent’s family—specifically the respondent, his parents, siblings, and his mother (the registered owner)—since 1967.

In 1994, respondent sold the subject property to spouses Enrique and Angelina Camacho for P2.5 million pesos, net of capital gains tax, documentary stamp tax, transfer taxes, and the balance of a loan outstanding with the Development Bank of the Philippines (DBP).
The transaction arrangement involved an initial partial payment of P100,000.00 pesos upon execution of a deed of absolute sale, with the remaining balance (P2.4 million pesos) to be paid upon securing a bank loan using the property as collateral by the Camachos.

On May 24, 1994, following the full settlement of its outstanding DBP loan, petitioner (First Global Realty and Development Corporation, FGRDC) took possession of the property.
Respondent, in executing the deed of sale to the Camacho spouses, facilitated the partial fulfillment of the transaction by receiving the initial P100,000.00 pesos.
Spouses Camacho subsequently used the property to secure a loan amounting to P1,190,000 pesos from petitioner. Despite receiving the loan, they defaulted on the balance of the sale price.

FGRDC, acting as petitioner, initiated a special civil action for foreclosure in the Regional Trial Court (RTC) Branch 143, Makati City, after the Camachos defaulted on their loan obligations.
On June 28, 1996, RTC Branch 143 rendered a decision ordering foreclosure and subsequent sale of the property. However, instead of proceeding with the auction, the Camachos executed a dacion en pago in favor of petitioner.
The dacion en pago was registered on April 29, 1997, with TCT No. 209050 issued in the name of petitioner, effectively transferring title based on an arrangement for settling the unpaid P1,190,000 loan.

Respondent, who had continuously occupied the property since 1967, sought judicial relief by filing a motion for intervention in Branch 143 to contest the deed of sale/mortgage, the dacion en pago, and subsequent title transfer.
He subsequently filed a separate complaint for the rescission of the deed of absolute sale, annulment of the dacion en pago, cancellation of petitioner’s title, and issuance of a new title in his name, coupled with a request for a temporary restraining order and/or writ of injunction to prevent petitioner’s possession of the property.
On May 21, 1998, the trial court (RTC) denied respondent’s prayer for a writ of preliminary injunction, a decision it reaffirmed on June 26, 1998 upon denying the motion for reconsideration.

The Court of Appeals (CA) reversed the RTC’s denial and granted respondent the preliminary injunctive relief pending the resolution of the main case.
The CA held that, given petitioner’s knowledge of the prior agreement between respondent and the Camachos and the irregularities in the transaction, granting petitioner possession pendente lite would be unjust.
Petitioner, aggrieved by the CA decision and the subsequent resolution denying possession to him, filed a petition for review on certiorari challenging both the factual findings and the legal conclusions of the CA.

Whether the factual findings of the Court of Appeals in its decision and resolution were supported by the evidence, or whether they were based on a misapprehension of the facts presented.

This issue questions the sufficiency and correctness of the appellate court’s findings regarding the irregularities in the transactions involving the property.
It examines if the trial and appellate courts interpreted the evidence in a manner that justifies granting the respondent the right to maintain possession pending the main proceedings.

Whether petitioner, as a purchaser for value in good faith, is entitled to immediate possession of the property, or whether respondent’s right to possession pendente lite should prevail until the resolution of the main case.

This issue pivots on the legal principles underlying the granting of a preliminary injunction and the preservation of the status quo.
It balances petitioner’s claim derived from the dacion en pago against respondent’s continuous possession and the potential grave and irreparable injury that would result if he were dispossessed.