Facts:

The case originated from a loan agreement dated August 3, 1984, wherein Prosperity Credit Resources, Inc. (petitioner) provided a loan to Metropolitan Fabrics, Inc. (respondent), secured by a mortgage on seven parcels of land owned by the respondent located at 685 Tandang Sora Avenue, Bo. Banlat, Quezon City. By October 27, 1987, the amount due under the loan had accumulated to P10.5 million due to respondent's default on payments. Consequently, the petitioner proceeded to foreclose on the mortgage and became the highest bidder during a public auction, acquiring the properties.

Following the foreclosure, the respondent sought to reacquire three of the lots, specifically covered by Transfer Certificate of Title Nos. 317705, 317706, and 317707, which were situated in such a way that it would leave the remaining four lots without access to Tandang Sora Avenue. The petitioner consented to the redemption of these lots with a condition that it would retain a right of way across th

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Facts:

Loan Transaction and Mortgage Agreement

• On August 3, 1984, petitioner Prosperity Credit Resources, Inc. extended a loan to private respondent Metropolitan Fabrics, Inc.
• To secure the payment of the loan, Metropolitan Fabrics, Inc. executed a mortgage over seven parcels of land located at 685 Tandang Sora Avenue, Bo. Banlat, Quezon City.
• The mortgaged lots comprised a commercial compound with Tandang Sora Avenue as the nearest public road.

Escalation of Loan and Subsequent Foreclosure

• By October 27, 1987, the loan amount had increased to P10.5 million due to accrual of interest and other charges.
• Owing to the default in payment by Metropolitan Fabrics, Inc., petitioner initiated foreclosure proceedings on the mortgage.
• In a public bidding process following the foreclosure, petitioner emerged as the highest bidder and acquired the seven lots.

Redemption Negotiations and the Memorandum of Undertaking

• After foreclosure, Metropolitan Fabrics, Inc. negotiated with petitioner for the redemption of three specific lots (TCT Nos. 317705, 317706, and 317707) located on the southern and middle portions of the compound.
• The proposed redemption of these three lots would have isolated the remaining four lots on the northwestern side from direct access to Tandang Sora Avenue.
• To address the access concern, petitioner agreed to the redemption on a condition: metropolitan respondent had to provide petitioner a right of way over the access road that formed part of the area to be redeemed.
• This agreement was formalized in a Memorandum of Undertaking dated September 18, 1987, which stated that the lot (constituting an existing private road) would remain open for ingress and egress for “whatever kind of passage” in favor of Prosperity Financial Resources, Inc. or its successors-in-interest.

Injunctive Suit and Lower Court Proceedings

• On November 7, 1991, petitioner filed an injunctive suit in the Regional Trial Court of Quezon City (Branch 95), seeking enforcement of its right of way as provided in the Memorandum of Undertaking.
• Petitioner argued that Metropolitan Fabrics, Inc. violated the agreement by:
• Refusing to permit excavations on the access road for the installation of water pipes.

ii. Imposing restrictions on the access of petitioner’s and its tenants’ trucks at specified times. iii. Subjecting vehicles to undue and unnecessary searches.

Appellate and Supreme Court Proceedings

• On November 26, 1994, the Court of Appeals granted the petition, setting aside the trial court’s orders on the grounds of grave abuse of discretion in issuing the preliminary mandatory injunction.
• The trial court’s findings and the interpretation of the phrase “for whatever kind of passage” in the Memorandum of Undertaking were critically evaluated.
• Petitioner elevated the case to the Supreme Court, contending that:
• The Court of Appeals improperly reversed the trial court regarding the interpretation of petitioner’s right over the access road.
• The doctrine applied (from Rivas v. SEC) was inappropriately extended to the current factual circumstances.
• The merits of the case were erroneously determined through a certiorari proceeding rather than by the trial court.
• The appellate court improperly made factual findings based on representations still subject to full trial proceedings.

Issue:

• Whether the Regional Trial Court gravely abused its discretion in issuing a writ of preliminary mandatory injunction that ordered Metropolitan Fabrics, Inc. to permit petitioner to make excavations for the installation of water pipes along the access road.
• Whether the phrase “for whatever kind of passage” in the Memorandum of Undertaking unambiguously confers upon petitioner the right to install water pipes, or if its interpretation requires further factual development at trial.
• Whether the Court of Appeals (and by extension, the trial court) overstepped its judicial functions by effectively deciding the merits of the case and pre-empting the determination of factual issues that should have been resolved during full trial proceedings.
• Whether the invocation of Rule 130, A11 (pertaining to the interpretation of documentary evidence) was appropriate in the context of a preliminary injunction proceeding.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)