Title
Evy Construction and Development Corp. vs. Valiant Roll Forming Sales Corp.
Case
G.R. No. 207938
Decision Date
Oct 11, 2017
Evy Construction sought a TRO to prevent encumbrance annotations on its property title, but courts denied relief, citing lack of urgency and due process compliance.
construction company
injunctive relief
parcel of land
A

Case Summary (G.R. No. 207938)

Key Dates and Procedural Milestones

Purchase and deed execution: Deed of Absolute Sale executed September 4, 2007 and notarized September 11, 2007; deed registered November 20, 2007 resulting in TCT No. 168590 in petitioner’s name. Annotations/levies: Notice of Levy on Attachment annotated September 18, 2007 and other attachment notices dated October 2 and November 8, 2007. Writ of Execution and notice of sale issued after judgment for respondent; respondent posted an indemnity bond of P745,700.00. Petitioner filed Complaint for Quieting of Title and prayed for TRO/PI on October 29, 2009. RTC denied the TRO application (November 9, 2009); motion for reconsideration denied (December 11, 2009). Court of Appeals affirmed (Decision October 22, 2012; Resolution June 25, 2013). Petition for review to the Supreme Court followed; Supreme Court denied petition (Decision October 11, 2017). Applicable law basis for decision: 1987 Constitution and Rule 58 of the Rules of Court (as applicable to TRO and PI).

Relevant Facts

Evy Construction purchased the property from Linda N. Ang and Senen T. Uyan. At the time of sale the TCT did not show liens or annotations other than a prior notice of adverse claim by Ang. Before registration in petitioner’s name, writs of attachment/levy relating to a separate litigation (Valiant v. Angeli Lumber and Hardware, Inc. and Linda Ngo Ang) were annotated on the title. Petitioner registered the deed and received TCT No. 168590 which already bore annotation of the earlier levies. Following judgment in favor of respondent, execution and notice of sale were carried out; respondent was the successful bidder and obtained a certificate of sale. Petitioner filed a Notice of Third-Party Claim and later commenced an action to quiet title, remove cloud, annul execution sale and for damages, and simultaneously sought injunctive relief to prevent further annotation and to retain its owner’s copy of the TCT.

Trial Court Proceedings on TRO/PI

Petitioner applied for both TRO and PI. The RTC conducted a summary hearing on November 9, 2009 that petitioner’s counsel attended, presented argument, and offered a witness; the court determined the issues were legal and found no need to proceed with witness testimony. The RTC denied the TRO/PI application for lack of legal basis; petitioner’s motion for reconsideration was denied. Petitioner argued it was deprived of due process because no separate hearing on the preliminary injunction was held apart from the summary hearing on the TRO.

Court of Appeals Ruling

The Court of Appeals affirmed the RTC. It held that petitioner failed to establish the right to a TRO/PI and did not demonstrate probable grave and irreparable injury warranting injunctive relief. The CA observed that petitioner’s contentions essentially reached the merits of the quieting-of-title action, and that granting injunctive relief at that stage would amount to prejudging the main case. The CA also noted petitioner had alternative remedies, including damages and the remedy against respondent’s indemnity bond.

Issues Presented to the Supreme Court

  1. Whether petitioner was denied due process when its application for preliminary injunction was denied in the same summary proceeding as the TRO application; and 2) Whether the trial court committed grave abuse of discretion in denying petitioner’s application for injunctive relief (TRO and PI).

Governing Law and Standards for TRO and Preliminary Injunction

Rule 58 of the Rules of Court governs TRO and PI. A TRO may be issued ex parte for limited periods (initially up to 72 hours; for up to 20 days upon verified application showing great or irreparable injury) to preserve the status quo until a hearing on the PI. A PI cannot be issued ex parte and requires notice and hearing. The requisites for PI include: (a) that the applicant is entitled to the relief sought which consists wholly or partly in restraining acts or requiring acts; (b) that continuance or commission of the complained acts during litigation would probably work injustice to the applicant; or (c) that acts threatened or done would tend to render judgment ineffectual. An applicant must show “actual and existing substantial rights” (rights in esse) and must demonstrate urgency and probable grave and irreparable injury. A PI is an extraordinary equitable remedy to be exercised sparingly and only upon satisfactory proof of these requisites.

Due Process Analysis on Hearing for PI

The Supreme Court rejected petitioner’s due process claim. Although petitioner contended no valid hearing on the PI was held, the record showed petitioner’s counsel presented argument and offered a witness at the November 9, 2009 hearing; the court concluded the issues were legal in nature and declined to require the witness testimony. Petitioner’s counsel agreed to submit the application for resolution and raised no contemporaneous objection. Under these circumstances, there was no denial of opportunity to be heard; the absence of a separate PI hearing did not constitute denial of due process where the party had been heard and accepted submission of the matter.

Analysis on Entitlement to Injunctive Relief: Rights in Esse and Torrens Principles

The Court emphasized that injunctive relief could not be used to adjudicate the merits of competing claims to property where factual questions remain. Under the Torrens system, a person dealing with the registered owner need not look beyond the title for unannotated encumbrances; conversely, duly annotated levies/attachments on title may be superior to a subsequent or unregistered sale. The key factual issues—whether respondent’s liens and levies were valid and whether respondent had prior knowledge of petitioner’s unregistered sale—are factual determinations for the trial court. Granting a PI would effectively prejudge which party has the better right to the property. The Court relied on the principle in Spouses Chua that a levy on attachment, duly registered, has preference over a prior unregistered sale and that the levy carries over to a subsequent certificate of title; an exception exists where the judgment creditor had knowledge of the unregistered sale, which may equate to registration. Because th

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