G.R. No. 164548 - Philippine National Bank vs. RJ Ventures Realty and Development Corporation

On 13 June 1996, First Women’s Credit Corporation (FWCC) received an invitation to bid from Philippine National Bank (PNB) for the sale of an 8,000-square-meter property (Buendia Property) in Makati City, covered by Transfer Certificate of Title No. S-15223.
FWCC submitted its bid on 10 July 1996 for P455,000.00 per square meter, totaling P3,640,000,000.00, and deposited 10% of the bid price with PNB by means of two checks.
A revised bid was submitted on 11 July 1996, with an increased offer, leading to an additional deposit with PNB.
On 17 July 1996, FWCC was awarded the property, subject to a condition requiring full payment of the balance within 30 calendar days from the receipt of the Notice of Award.

FWCC invoked the PNB rules on financing, requesting PNB to finance the entire balance of the purchase price on 24 July 1996.
Pending its loan application, FWCC assigned all its rights and title over the Buendia Property to RJ Ventures Realty & Development Corporation (RJVRD), which then assumed both the right to purchase and the obligations under the loan agreement with PNB.
PNB initially agreed to finance 80% of the purchase price on the condition that RJVRD deposit an additional 10% (amounting to P368,000,000.00) and arranged for Rajah Broadcasting Network, Inc. (RBN), an affiliate of RJVRD, to supply the necessary funds by way of a separate loan arrangement.

On 30 September 1996, the parties executed a Loan Agreement, a Deed of Sale, and a Real Estate Mortgage covering the Buendia Property.
The loan agreement featured a two-way peso/dollar convertibility option, and RJVRD converted its peso loan to US dollars to benefit from a lower interest rate.
Subsequent economic events, notably the Asian financial crisis in July 1997, led to a depreciation of the peso and a corresponding increase of the loan balance from approximately P2.94 billion to over P5.40 billion.

As negotiations for the restructuring of the loans proceeded, RJVRD and RBN’s accounts became delinquent despite several letters and notices – including demands sent on 25 January 1999 – regarding their failure to settle their respective obligations.
Numerous communications (letters of agreement on the redenomination of the loans and proposals for settlement) were exchanged between PNB and the respondents, yet the discussions did not resolve the dispute regarding the default in payments.
On 2 June 1998 and in subsequent months, PNB formally declared the accounts delinquent and continued to demand payments, while respondents maintained that the restructuring negotiations were ongoing.

In February 1999, PNB took steps to foreclose on the Buendia Property by issuing a Notice of Extrajudicial Sale scheduled for 2 March 1999, and a similar notice covered the sale of broadcasting equipment in Baguio City.
Respondents filed an urgent application for a Temporary Restraining Order (TRO) and a Writ of Preliminary Injunction, arguing that the foreclosure and take-over of the radio facilities would cause irreparable harm such as loss of income, tarnished reputation, and disruption of operations.
The Regional Trial Court (RTC) initially denied the TRO on the ground that respondents had defaulted and failed to show a clear right to restrain the foreclosure.
Later, the RTC issued orders granting a TRO and a preliminary injunction, which were subsequently lifted, reinstated, and later challenged on appeal by multiple parties including RBN and RJVRD.
PNB moved for reconsideration of the reinstated injunction; the Court of Appeals eventually reversed the RTC orders while maintaining the injunction against further foreclosure actions pending resolution of the merits.

Whether the petition filed by PNB involves questions of fact that would justify its dismissal.

Does the nature of the underlying transactions and defaults raise issues purely of fact rather than law?
Is there a need for a trial on the merits to address these factual disputes?

Whether the default by RJVRD and RBN in servicing their loan obligations justifies the denial of the writ of preliminary injunction.

Can the established defaults be taken as a sufficient ground for PNB to proceed with foreclosure without the encumbrance of an injunction?
Should the presence of delinquency nullify any potential right to preliminary relief?

Whether RBN’s admission of its failure to fully settle its loan obligations entitles PNB to foreclose on the mortgaged properties.

Does such an admission provide PNB with a clear legal basis to recover its dues through foreclosure?
How does this admission affect the balance between contractual rights and equitable considerations?

Whether the right of RJVRD and RBN to a writ of preliminary injunction is clear, existing, and unmistakable.

Do respondents possess an unambiguous right to protect their collateral, particularly the broadcasting equipment and radio facilities?
Does the demonstration of potential irreparable injury, such as loss of reputation and interruption of operations, warrant protecting the status quo?

Whether the Court of Appeals had a legal basis in reversing and setting aside the RTC orders (dated July 28, 1999 and October 26, 1999) and in reinstating the writ of preliminary injunction.

Did the appellate court properly apply the principles of granting provisional relief in light of pending factual determinations?
Is the exercise of judicial discretion in issuing the injunction subject to reversal only in the presence of grave abuse discretion?