Case Digest (G.R. No. L-46658)
Facts:
Philippine National Bank v. Hon. Gregorio G. Pineda, in his capacity as Presiding Judge of the Court of First Instance of Rizal, Branch XXI, and Tayabas Cement Company, Inc., G.R. No. L-46658, May 13, 1991, Supreme Court Third Division, Fernan, C.J., writing for the Court. Petitioner PNB sought certiorari to annul orders dated March 4, 1977 and May 31, 1977 of the Court of First Instance (CFI) of Rizal, Branch XXI, which had issued a writ of preliminary injunction and denied reconsideration in Civil Case No. 24422.
In 1963 the Arroyo spouses borrowed P580,000.00 from PNB to acquire a controlling interest in Tayabas Cement Company, Inc. (TCC); they secured the loan with a real estate mortgage over the La Vista property (TCT No. 55323). Later, TCC contracted an eight-year deferred letter of credit (L/C) through PNB for importation of cement plant machinery worth US$7,000,000; the Arroyo spouses executed a Surety Agreement (Aug. 5, 1964) and Covenant (Aug. 6, 1964) to secure that accommodation. The imported machinery arrived and was released to TCC under a trust receipt; when TCC failed to pay upon drawings under the L/C, PNB, pursuant to the trust receipt, repossessed the machinery on May 19, 1968.
Separate personal accounts of the Arroyo spouses (including a P160,000.00 loan secured by Hacienda Bacon in Isabela, Negros Occidental) also became delinquent, prompting PNB to initiate extra-judicial foreclosure proceedings in 1975 under Act No. 3138 (as amended) and Presidential Decree No. 385 to foreclose the mortgages on La Vista and Hacienda Bacon. At the August 11, 1975 auction PNB was the highest bidder, but the Arroyo spouses’ representative objected, asserting the foreclosure referred only to their personal account and not to the liabilities as sureties for TCC. PNB filed a supplemental petition (Aug. 13, 1975) to include the Arroyos’ surety liabilities (claimed at P35,019,901.49) in the foreclosure; this was opposed.
The Acting Clerk of Court and Ex-Officio Sheriff in Quezon City, Diana L. Dungca, held on Sept. 12, 1975 that factual questions required judicial determination and suspended the sale. PNB filed a mandamus in CFI Quezon City (Civil Case No. Q-21505) in May 1976 to compel Dungca to proceed; Branch V granted the petition on Sept. 6, 1976 and ordered the foreclosure sale to proceed. Before that decision became final, TCC filed Civil Case No. 24422 in CFI Rizal, Branch XXI (Sept. 14, 1976) seeking, among other reliefs, a writ of preliminary injunction to enjoin foreclosure and a declaration that PNB’s repossession satisfied TCC’s obligations. Branch XXI issued a temporary restraining order (Oct. 5, 1976) and on March 4, 1977 granted a writ of preliminary injunction; PNB’s motion for reconsideration was denied (May 31, 1977), prompting this petition for certiorari.
Petitioner argued (a) P.D. No. 385 prohibits issuance of injunctions against mandatory foreclosures by government financial institutions; (b) the injunction nullified a final order of a co-equal court (Branch V); (c) the injunction sought to control acts bey...(Subscriber-Only)
Issues:
- Did Presidential Decree No. 385 prohibit the issuance of a writ of preliminary injunction against petitioner’s foreclosure action in this case?
- Did the issuance of the writ by CFI Rizal, Branch XXI, unlawfully interfere with the jurisdiction and orders of a co-equal court (CFI Branch V) and thus amount to excess of jurisdiction?
- Was the writ of preliminary injunction properly directed against the Provincial Sheriff of Negros Occidental and ex-officio Sheriff of Bacolod City given territorial limitations on enforcement of injunctions?
- Did PNB’s repossession of the imported machinery and equipment under the trust receipt operate to extinguish TCC’s inde...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)