Palm Tree Estates vs. PNB

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FIRST DIVISION

G.R. No. 159370 October 3, 2012

PALM TREE ESTATES, INC. an !ELLE AIR GOL" AN# CO$NTR% CL$!,INC.,Petitioners,vs.P&ILIPPINE NATIONAL !AN',Respondent.

LEONAR#O(#E CASTRO, J.:

This is a Petition for Review on Certiorari1of the Decision2andReso!tion"dated #arch 21, 2$$" and %!&!st ', 2$$", respective(, of theCo!rt of %ppeas in C%)*.R. SP No. +-', which &ranted the Petition forCertiorari ed /( respondent Phiippine Nationa 0an PN03 and reversedand set aside the Orders dated #a( 1, 2$$1 and Septe4/er ", 2$$1 of the

Re&iona Tria Co!rt RTC3 of 5ap!)5ap! Cit(, 0ranch 2, in Civi Case No.--1")5. The Order'dated #a( 1, 2$$1 of the tria co!rt &ranted theappication for iss!ance of writ of prei4inar( in6!nction of petitioners Pa4Tree 7states, Inc. PT7I3 and 0ee %ir *of and Co!ntr( C!/, Inc. 0%*CCI3,whie the Order-dated Septe4/er ", 2$$1 denied PN08s 4otion forreconsideration.

On 9an!ar( 2:, 1::, PT7I entered into a seven)(ear ter4 oana&ree4ent+with PN0 for the a4o!nt of P"2$ 4iion, or its ;S doare

oan, a Rea 7state #ort&a&e=over '= parces of and coverin& an a&&re&atearea of "-",:1+ sec!ted /( PT7I in favor of PN0 on Fe/r!ar( 21, 1::.

On 9!ne 1-, 1::=, !pon the re

To i3 e>tend the &race period for the principa repa(4ent of the 5oan, ii3a4end the interest pa(4ent date of the 5oan, and iii3 &rant in favor of the0orrower an additiona 5oan the ?%dditiona 5oan?3 in the a4o!nt note>ceedin& P=$,$$$,$$$.$$, > > >.1$

On the sa4e da(, 9!ne 1-, 1::=, as a res!t of PT7I8s transfer to 0%*CCI ofthe ownership, tite and interest over 1::,1"' sec!ted an %4end4ent to Rea 7state #ort&a&e11infavor of PN0 with 0%*CCI as acco44odation 4ort&a&or with respect to therea properties transferred to it /( PT7I. The reevant portion of thea&ree4ent provides@
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S7CTION 1. %#7ND#7NTS

1.$1 The #ort&a&ed Properties inc!din& that portion transferred to 0%*CCIsha contin!e to sec!re PT7I8s o/i&ations to the #ort&a&ee of whatever indand nat!re, and whether s!ch o/i&ations have /een contracted, /efore,

d!rin& or after the date of this instr!4ent.

1.$2 The e>istin& 4ort&a&e ien in favor of the #ort&a&ee annotated on thetites coverin& the portion of the #ort&a&ed Properties which is transferred infavor of 0%*CCI sha /e carried over to the new tites to /e iss!ed as ares!t of the transfer.12

On %!&!st 1$, 1:::, PT7I and PN0 e>ec!ted fo!r doc!4ents. First, onacco!nt of PT7I8s fai!re to avai of the P=$ 4iion additiona oan &ranted!nder the a4end4ent to 5oan %&ree4ent and !pon its re
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stated reason for the denia of PT7I8s re

It wo!d /e diAc!t for !s to 6!stif( to o!r 0oard of Directors (o!r re

in o!r previo!s 4eetin&s. If (o! wi reca, we 4entioned that in order for !sto eva!ate PT7I8s restr!ct!rin& rearreara&es on the 4ort&a&ed properties. Bowever, to this date, (o! have notre4itted an( pa(4ents nor s!/4itted an( pa(4ent pans therefor.21

%s PT7I defa!ted in its pa(4ent of past d!e oan with PN0, the /an ed aPetition22for e>tra6!dicia forecos!re of the 4ort&a&ed properties on #arch2, 2$$1.2"The foowin& da(, #arch 2=, 2$$1, PT7I8s President, enichi%i4oto, wrote a etter2'to PN08s President, Feiciano 5. #iranda, 9r.,

rein& ofprincipa, acco!ntin&, n!it( of interests and penaties, ann!4ent of petitionfor e>tra6!dicia forecos!re, in6!nction, da4a&es, with pra(er for te4porar(restrainin& order, and writ of prei4inar( in6!nction.2+This was doceted asCivi Case No. --1")5 and raed to 0ranch 2.

In their co4paint, PT7I and 0%*CCI cai4ed that, o!t of the P"2$ 4iion

ter4 oan co44itted /( PN0 !nder the oan a&ree4ent, PN0 reeased on( atota a4o!nt of P2'=,$'-,+:."+,2or a decienc( of P1,:-',"2$.+' whichPN0 faied to reease despite de4ands.2=PT7I and 0%*CCI aso averred thatPN0 too advanta&e of their nancia diAc!t( /( !niatera( 13 convertin&the ;S doar deno4inated oan to a peso oan at an !nreasona/econversion rate of P"=.-$@;SE1, when the prevaiin& conversion rate at theti4e of the reease of the oan was on( P2+.2-@;SE1, and 23 re)pricin& theinterests to e>or/itant and !nconsciona/e rates.2:

PT7I and 0%*CCI f!rther ae&ed that, !nder threat of forecos!re, the( wereforced to e>ec!te an a4end4ent to the oan a&ree4ent acnowed&in& the

principa o/i&ation as of %pri 2$, 1::= to /e P"'-,$"-,1:.$ even if the(received on( P2'=,$'-,+:."+."$ #oreover, PT7I and 0%*CCI si&ned thea4end4ent to the oan a&ree4ent /eca!se of PN08s oer to e>tend anadditiona P=$ 4iion oan which the atter faied to reease despite the factthat a conditions for its reease had /een co4pied with in %pri 1:::."1PT7Iand 0%*CCI f!rther cai4ed that the a4end4ent to the oan a&ree4ent,a4end4ent to the rea estate 4ort&a&e, certain pro4issor( notes and theirrespective discos!re state4ents and the restr!ct!rin& a&ree4ent sho!d /e
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decared void as the( were e>ec!ted p!rs!ant to a void a4end4ent to theoan a&ree4ent, and with vitiated consent and witho!t f! consideration."2

Fina(, PT7I and 0%*CCI stated that the e>tra6!dicia forecos!re initiated /(respondent on their properties was patent( n! and void since it inc!ded

pro4issor( notes which were s!pposed to have aread( /een paid, as we asproperties which have aread( /een transferred to 0%*CCI and were /ein&4ade to answer !nder the restr!ct!rin& a&ree4ent of which 0%*CCI was nota part(.""F!rther4ore, PT7I averred that the a4end4ent to the rea estate4ort&a&e had /een novated /( a s!/se

On the other hand, PN0 ref!ted PT7I and 0%*CCI8s ae&ations and cai4ed

that it had aread( iss!ed to PT7I the tota a4o!nt of P"-+,22,1-2.'+ whiche>ceeded the P"2$ 4iion covered /( the oan a&ree4ent /( P"+4iion."-Ghatever dea( in the reease of the oan proceeds, if an(, wasattri/!ta/e on( to PT7I."+

%ccordin& to PN0, the conversion of doar oans to peso oans was not!niatera /!t 4ade !pon the re

advices."=

PN0 iewise denied that the oan a&ree4ent and the a4end4ent to it, thea4end4ent to rea estate 4ort&a&e, certain pro4issor( notes and theirdiscos!re state4ents, as we as the restr!ct!rin& a&ree4ent, were ae>ec!ted witho!t PT7I8s consent.":;nder the aw, enichi %i4oto, PT7I8spresident, and other e>ec!tive oAcers co!d /e pres!4ed to /e responsi/eand intei&ent eno!&h to caref!( read, !nderstand and eva!ate each oandoc!4ent for %i4oto8s si&nat!re.'$

PN0 f!rther cai4ed that PT7I was &ranted an additiona P=$ 4iion oan

which was sec!red /( a ped&e of PT7I8s shares of stoc. There was nonovation /eca!se neither was the o/6ect and principa conditions chan&ed,nor PT7I s!/stit!ted as de/tor, nor an( third person s!/ro&ated in PN08sri&hts.'1

%fter hearin& the PT7I and 0%*CCI8s appication for iss!ance of writ ofprei4inar( in6!nction, the RTC of 5ap!)5ap! Cit( re
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S!/se

O R D 7 R

For reso!tion is paintis8 appication for iss!ance of writ of prei4inar(in6!nction to prevent the acts co4pained of.

It is to /e noted that the reso!tion of the appication is on( prei4inar( incharacter and 4a( chan&e dependin& !pon the nat!re, character and wei&htof evidence that wi /e presented d!rin& tria on the 4erits.

%fter caref!( &oin& thro!&h with the parties8 ar&!4ents contained in theirrespective 4e4oranda to&ether with their respective doc!4entar(evidences appended thereto, it is ver( cear that the positions of the partiesare co4pete( opposed to each other which indicates sic3 that rea

controversies e>ist. The Co!rt /eieves that a these e&a controversies canon( /e resoved in a tria on the 4erits where the parties are &iven co4peteopport!nit( to present their case and add!ce evidence.

The Co!rt f!rther /eieves that whie a the e&a controversies are /ein&heard and tried, the stat!s

Noted /( this Co!rt is the iss!e of, a4on& others, the propriet( of theforecos!re proceedin&s in ine with paintis8 contention ?> > > thatproperties of the paintis are /ein& 4ade to answer /( the defendants for

o/i&ations which are not sec!red /( these properties, or that properties ofpaintis which are aread( free fro4 the 4ort&a&e are inc!ded in thePetition %nne> ?G? of the Co4paint3 for e>tra)6!dicia forecos!re.Contin!in&, the paintis ea/orated that ?Ghie paintis are not disp!tin&the ri&ht of a creditor)4ort&a&ee to proceed a&ainst the properties of ade/tor)4ort&a&or to pa( for an( !npaid sec!red o/i&ations, it 4!st /ecear( !nderstood, however, that an( forecos!re proceedin&s that 4a( /eeected reative thereto 4!st on( aect the properties s!/6ect of the4ort&a&e contract and sho!d on( /e 4ade to answer for the correct and!ndisp!ted o/i&ations which are sec!red /( the properties so!&ht to /eforecosed. %n( forecos!re proceedin&s which wi inc!de properties which

are not s!/6ect of the 4ort&a&e contract or which wi 4ae the saidproperties answer for o/i&ations which are not sec!red /( the saidproperties wi /e tanta4o!nt to tain& of properties witho!t d!e process ofaw in vioation of the Constit!tion > > >.?

In other words, there are serio!s controversies whose reso!tion 4!st not /erendered 4oot and acade4ic /( the perfor4ance of the assaied acts. In thisre&ard, the Co!rt is adoptin& the r!in& of the S!pre4e Co!rt in the case of


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Rava Deveop4ent Corporation vs. Co!rt of %ppeas, 211 SCR% 1'', thatsa(s@

? > > > it is a we setted r!e that the soe o/6ect of a prei4inar( in6!nctionwhether prohi/itor( or 4andator( is to preserve the stat!s

4erits of the case can /e heard %via vs. Tap!can, 2$$ SCR% 1'= 1::13. It is!s!a( &ranted when it is 4ade to appear that there is a s!/stantiacontrovers( /etween the parties and one of the4 is co44ittin& an act orthreatenin& the i44ediate co44ission of an act that wi ca!se irrepara/ein6!r( or destro( the stat!s

The Co!rt is convinced that, at the ver( east, paintis have the ri&ht to /ef!( heard /efore it is na( deprived of its ri&hts over the 4ort&a&edproperties in

cai4 that the principa a4o!nt and the tota o/i&ation ae&ed /( thedefendant is not correct, that the escaation of the interest is not e&a orthat their propert( can on( /e forecosed after na deter4ination of thee>act and correct a4o!nt of the tota o/i&ation. On the other hand, thedefendant /an is f!( protected /eca!se its cai4s on the 4ort&a&edproperties are proper( recorded, if not re&istered. 0esides, paintisad4itted their said inde/tedness to the defendant /an and si&nied to4eet their said o/i&ations on( after the deter4ination of the e>act a4o!ntof the sa4e.

On the 4atter of the

andHpenaties, the Co!rt is of the opinion that it wo!d /e in the interest of6!stice and e

the oan, and on( after the spo!ses ref!sed to 4eet their o/i&ationsfoowin& s!ch deter4ination.?

In essence, therefore, the Co!rt is swa(ed to order the 4aintenance of thestat!s


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da4a&ed and in6!red &rave( and even irrepara/(. The Co!rt does not wantthat to happen !nti it has f!( disposed of the case.

GB7R7FOR7, pre4ises considered, et a writ of prei4inar( in6!nction iss!een6oinin& the defendants, or an( person or a&ents actin& for and in their

/ehaf, fro4 forecosin& the s!/6ect properties of the paintis, andHor fro4f!rther proceedin& with forecos!re !nder the Petition %nne> ?G? of theCo4paint3, !pon in& /( the paintis, and approva /( this Co!rt, of anin6!nction /ond in the a4o!nt of ON7 #I55ION %ND FIV7 B;NDR7DTBO;S%ND P1,-$$,$$$.$$3 P7SOS.'2

Reconsideration of the a/ove order was denied in an Order dated Septe4/er", 2$$1. Thereafter, PN0 ed a Petition for Certiorari with the Co!rt of%ppeas ae&in& that the RTC of 5ap!)5ap! Cit( acted with &rave a/!se ofdiscretion in iss!in& the Orders dated #a( 1, 2$$1 and Septe4/er ", 2$$1.

The Co!rt of %ppeas, in the assaied Decision dated #arch 21, 2$$", fo!nd4erit in PN08s petition. %ccordin& to the Co!rt of %ppeas, PT7I and 0%*CCIfaied to show a cear and !n4istaa/e ri&ht which wo!d have necessitatedthe iss!ance of a writ of prei4inar( in6!nction, whie PN0 had the ri&ht toe>tra6!dicia forecos!re !nder the oan a&ree4ent when its de/torsdefa!ted in their o/i&ation.'"Th!s, the Co!rt of %ppeas &ranted PN08spetition.

Reconsideration was denied in a Reso!tion dated %!&!st ', 2$$".

Bence, this petition.

This Co!rt is ased to resove the iss!e of whether the writ of in6!nction wasiss!ed /( the tria co!rt with &rave a/!se of discretion, in which case theappeate co!rt correct( set it aside.

PT7I and 0%*CCI cai4 that the Co!rt of %ppeas sho!d not have &iven d!eco!rse to PN08s Petition for Certiorari as s!ch petition vioated Section 1,R!e +- of the R!es of Co!rt when it dei/erate( o4itted a the s!pportin&4ateria doc!4ents attached to the co4paint s!ch as the petition forforecos!re, the rea estate 4ort&a&e, the oan a&ree4ents, and pro4issor(notes. PT7I and 0%*CCI

of %ppeas of the orders of the tria co!rt atho!&h there was no ndin& thatthe tria co!rt acted witho!t or in e>cess of its 6!risdiction in iss!in& the saidorders. PT7I and 0%*CCI f!rther assert that the Co!rt of %ppeas was wron&in r!in& that no cear and !n4istaa/e ri&ht in favor of PT7I and 0%*CCIwas shown to e>ist.''

On the other hand, PN0 insists that PT7I and 0%*CCI faied to esta/ish anind!/ita/e ri&ht which was vioated /( PN0 and which o!&ht to /e protected
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/( an in6!nctive writ. The( aso faied to show that the a/sence of anin6!nctive writ wo!d ca!se the4 irrepara/e in6!r(.'-

For PN0, the Co!rt of %ppeas therefore correct( r!ed that there was no/asis for the tria co!rt8s iss!ance of a writ of prei4inar( in6!nction.

The petition has no 4erit.

The second para&raph of Section 1, R!e +- of the R!es of Co!rt provides@

The petition sha /e acco4panied /( a certied tr!e cop( of the 6!d&4ent,order or reso!tion s!/6ect thereof, copies of a peadin&s and doc!4entsreevant and pertinent thereto, and a sworn certication of non)for!4shoppin& as provided in the third para&raph of section ", R!e '+.

In this case, PN0 attached the foowin& doc!4ents to the Petition for

Certiorari which it ed in the Co!rt of %ppeas@

a3 Order dated #a( 1, 2$$1 &rantin& PT7I and 0%*CCI8s appicationfor the iss!ance of prei4inar( in6!nction

/3 Order dated Septe4/er ", 2$$1 den(in& PN08s 4otion forreconsideration

c3 PN08s 4e4orand!4 in s!pport of its opposition to the iss!ance ofprei4inar( in6!nction

d3 PN08s 4otion for reconsideration of the order dated #a( 1, 2$$1

e3 PN08s 4otion for ear( reso!tion dated 9!( ', 2$11

f3 PN08s s!ppe4enta 4otion for ear( reso!tion dated 9!( 2+, 2$$1

&3 PN08s answer with co!ntercai4 dated 9!ne -, 2$$1, to&ether withits anne>es ?%? to ?5? and

h3 PT7I and 0%*CCI8s co4paint dated %pri 1+, 2$$1, witho!t theanne>es.

PT7I and 0%*CCI fa!t PN0 for not inc!din& the anne>es to their co4paintwhich consisted of PN08s petition for forecos!re, the rea estate 4ort&a&e,the oan a&ree4ents, and pro4issor( notes. The( ar&!e that s!ch fai!re onPN08s part constit!ted a vioation of the second para&raph of Section 1, R!e+- of the R!es of Co!rt. The Co!rt is not pers!aded.
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The deter4ination of the co4peteness or s!Acienc( of the for4 of thepetition, inc!din& the reevant and pertinent doc!4ents which have to /eattached to it, is ar&e( eft to the discretion of the co!rt tain& co&niJanceof the petition, in this case the Co!rt of %ppeas. If the petition is ins!Acientin for4 and s!/stance, the sa4e 4a( /e forthwith dis4issed witho!t f!rther

proceedin&s.'+

That is the i4port of Section +, R!e +- of the R!es of Co!rt@

Sec. +. Order to co44ent. K If the petition is s!Acient in for4 and s!/stanceto 6!stif( s!ch process, the co!rt sha iss!e an order rees thereto.

In petitions for certiorari /efore the S!pre4e Co!rt and the Co!rt of %ppeas,the provisions of section 2, R!e -+, sha /e o/served. 0efore &ivin& d!e

co!rse thereto, the co!rt 4a( re

The Co!rt of %ppeas aread( deter4ined that PN08s petition co4pied withthe second para&raph of Section 1, R!e +- of the R!es of Co!rt and,conse

the for4a s!Acienc( of PN08s petition when the( faied to e theirco44ent on ti4e, eadin& the Co!rt of %ppeas to r!e in its Decision dated#arch 21, 2$$" as foows@

Parenthetica(, the ?#anifestation and #otion for 5eave To %d4itRespondents8 Co44ent LonM the Petition?, as we as respondents8 Co44entare here/( D7NI7D, considerin& that the( were ed 4ore than one 13 (earfro4 the apse of the re&e4entar( period of in& the sa4e. %ccordin&(,respondents8 Co44ent is ordered 7P;N*7D fro4 the record of this case.'

PT7I and 0%*CCI co4po!nded their error when the( s!/se

raise the iss!e in their 4otion for reconsideration of the decision of the Co!rtof %ppeas. S!ch o4ission constit!ted a waiver of the said iss!e p!rs!ant tothe o4ni/!s 4otion r!e.'=

Nevertheess, an e>a4ination of PN08s petition and the doc!4ents attachedto it wo!d show that the Co!rt of %ppeas8 deter4ination as to the for4as!Acienc( of the petition is correct. The doc!4ents attached to the petition
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were ade

% co4painant8s wron&f! cond!ct respectin& the 4atter for which in6!nctivereief is so!&ht prec!des the co4painant fro4 o/tainin& s!ch reief.':%

petition for a prei4inar( in6!nction is an e

Since in6!nction is the stron& ar4 of ei4sof e > >.-1Citation o4itted.3

In this case, the hands of PT7I were not !ns!ied when it so!&ht prei4inar(in6!nction. It was aread( in /reach of its contract!a o/i&ations when itdefa!ted in the pa(4ent of its inde/tedness to PN0.1wphi1PT7I8s

President, %i4oto, ad4itted that PT7I has !nsetted accr!ed o/i&ations inthe etter dated #arch 2=, 2$$1. #oreover, PT7I had so!&ht the resched!in&or deferra of its pa(4ent as we as the restr!ct!rin& of its oan. This Co!rthas hed that a de/tor8s vario!s and constant re

%s PT7I is not entited to the iss!ance of a writ of prei4inar( in6!nction, so is0%*CCI. The accessor( foows the principa. The accessor( o/i&ation of0%*CCI as acco44odation 4ort&a&or is tied to PT7I8s principa o/i&ation toPN0 and arises on( in the event of PT7I8s defa!t. Th!s, 0%*CCI8s interest in

the iss!ance of the writ of prei4inar( in6!nction is necessari( pre6!diced /(PT7I8s wron&f! cond!ct and /reach of contract.

In 0ar/ieto v. Co!rt of %ppeas,-"the Co!rt stated the &enera principes iniss!in& a writ of prei4inar( in6!nction@

% prei4inar( in6!nction is an order &ranted at an( sta&e of an action prior to6!d&4ent of na order, re

e>istence of a cai4ed e4er&enc( or e>traordinar( sit!ation which sho!d /eavoided for otherwise, the o!tco4e of a iti&ation wo!d /e !seess as far asthe part( app(in& for the writ is concerned.1wphi1

%t ti4es referred to as the ?Stron& %r4 of 7ercise of which is 4ore deicate and which casfor &reater circ!4spection than the iss!ance of an in6!nction. It sho!d on(/e e>tended in cases of &reat in6!r( where co!rts of aw cannot aord an
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adetre4e!r&enc( where the ri&ht is ver( cear where considerations of reativeinconvenience /ear stron&( in co4painant8s favor where there is a wif!and !nawf! invasion of paintis ri&ht a&ainst his protest andre4onstrance, the in6!r( /ein& a contin!in& one, and where the eect of the

4andator( in6!nction is rather to reesta/ish and 4aintain a pree>istin&contin!in& reation /etween the parties, recent( and ar/itrari( interr!pted/( the defendant, than to esta/ish a new reation.?

For the writ to iss!e, two reistenceof the ri&ht to /e protected, and that the facts a&ainst which the in6!nction isto /e directed are vioative of said ri&ht. > > >.-'

% writ of prei4inar( in6!nction is an e>traordinar( event which 4!st /e&ranted on( in the face of act!a and e>istin& s!/stantia ri&hts.--The d!t(of the co!rt tain& co&niJance of a pra(er for a writ of prei4inar( in6!nction

is to deter4ine whether the re

The ri&ht of PN0 to e>tra6!dicia( forecose on the rea estate 4ort&a&e inthe event of PT7I8s defa!t is provided !nder vario!s contracts of the parties.Forecos!re is /!t a necessar( conseercise its ri&ht to forecose on the

4ort&a&ed properties. It then /eca4e inc!4/ent on PT7I and 0%*CCI, whenthe( ed the co4paint and so!&ht the iss!ance of a writ of prei4inar(in6!nction, to esta/ish that the( have a cear and !n4istaa/e ri&ht whichre

In this connection, this Co!rt has denied the appication for a writ ofprei4inar( in6!nction that wo!d en6oin an e>tra6!dicia forecos!re of a4ort&a&e, and decared that forecos!re is proper when the de/tors are in

defa!t of the pa(4ent of their o/i&ation. In partic!ar, this Co!rt r!ed in7

Ghere the parties stip!ated in their credit a&ree4ents, 4ort&a&e contractsand pro4issor( notes that the 4ort&a&ee is a!thoriJed to forecose the4ort&a&ed properties in case of defa!t /( the 4ort&a&ors, the 4ort&a&eehas a cear ri&ht to forecos!re in case of defa!t, 4ain& the iss!ance of aGrit of Prei4inar( In6!nction i4proper. > > >.+$Citation o4itted.3
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The Co!rt of %ppeas did not err when it r!ed that PT7I and 0%*CCI faied toshow a cear and !n4istaa/e ri&ht which wo!d have necessitated theiss!ance of a writ of prei4inar( in6!nction. The Order dated #a( 1, 2$$1 ofthe tria co!rt faied to state a ndin& of facts that wo!d 6!stif( the iss!anceof the writ of prei4inar( in6!nction. It 4ere( stated the conc!sion that ?rea

controversies e>ist? /ased on the o/servation that ?the positions of theparties are co4pete( opposed to each other.?+1It si4p( decared@

Noted /( this Co!rt is the iss!e of, a4on& others, the propriet( of theforecos!re proceedin&s in ine with paintis8 contention ?> > > thatproperties of the paintis are /ein& 4ade to answer /( the defendants foro/i&ations which are not sec!red /( these properties, or that properties ofpaintis which are aread( free fro4 the 4ort&a&e are inc!ded in thePetition %nne> ?G? of the Co4paint3 for e>tra)6!dicia forecos!re.Contin!in&, the paintis ea/orated that ?Ghie paintis are not disp!tin&the ri&ht of a creditor)4ort&a&ee to proceed a&ainst the properties of a

de/tor)4ort&a&or to pa( for an( !npaid sec!red o/i&ations, it 4!st /ecear( !nderstood, however, that an( forecos!re proceedin&s that 4a( /eeected reative thereto 4!st on( aect the properties s!/6ect of the4ort&a&e contract and sho!d on( /e 4ade to answer for the correct and!ndisp!ted o/i&ations which are sec!red /( the properties so!&ht to /eforecosed. %n( forecos!re proceedin&s which wi inc!de properties whichare not s!/6ect of the 4ort&a&e contract or which wi 4ae the saidproperties answer for o/i&ations which are not sec!red /( the saidproperties wi /e tanta4o!nt to tain& of properties witho!t d!e process ofaw in vioation of the Constit!tion > > >.?+2

This cear( shows that the tria co!rt reied on( on the /are ae&ations ofPT7I and 0%*CCI that the 4ort&a&ed properties were /ein& 4ade to answerfor o/i&ations that are not covered /( the 4ort&a&e and that propertieswhich are not 4ort&a&ed are inc!ded in PN08s petition for e>tra6!diciaforecos!re. 0e(ond /are ae&ations, however, no specic evidence wascited. Th!s, the tria co!rt8s order &rantin& the iss!ance of a writ ofprei4inar( in6!nction had no fact!a /asis. It is ee4entar( that ae&ationsare not proof.+"Contentions and aver4ents in peadin&s do not constit!tefacts !ness the( are in the nat!re of ad4issions or proven /( co4petentevidence. This /eco4es 4ore si&nicant in connection with the iss!ance ofthe writ of prei4inar( in6!nction in i&ht of the Co!rt8s prono!nce4ent in

;niversit( of the Phiippines v. Bon. Cat!n&a, 9r.+'

The tria co!rt 4!st state its own ndin&s of fact and cite the partic!ar awto 6!stif( the &rant of prei4inar( in6!nction. ;t4ost care in this re&ard isde4anded. > > >.+-
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#oreover, an appication for in6!nctive reief is constr!ed strict( a&ainst thepeader.++%so, the possi/iit( of irrepara/e da4a&e witho!t proof of anact!a e>istin& ri&ht is not a &ro!nd for a prei4inar( in6!nction to iss!e.+

%t 4ost, the tria co!rt8s ndin& of the e>istence of a rea controvers(

/eca!se the respective cai4s of the parties are opposin& si4p( a4o!ntedto a ndin& that the ri&hts of PT7I and 0%*CCI are disp!ted, de/ata/e ord!/io!s. This Co!rt has hed, however, that@

In the a/sence of a cear e&a ri&ht, the iss!ance of the in6!nctive writconstit!tes &rave a/!se of discretion. In6!nction is not desi&ned to protectcontin&ent or f!t!re ri&hts. It is not proper when the co4painant8s ri&ht isdo!/tf! or disp!ted.+=74phasis s!ppied, citation o4itted.31wphi1

In view of the do!/tf! nat!re of the ae&ed ri&ht of PT7I and 0%*CCI, thetria co!rt8s prono!nce4ent re&ardin& the necessit( to iss!e a writ of

in6!nction to protect the ri&ht of PT7I and 0%*CCI to /e heard /efore the(are deprived of s!ch ae&ed ri&ht cr!4/es@

% writ of prei4inar( in6!nction is iss!ed to prevent an e>tra6!diciaforecos!re, on( !pon a cear showin& of a vioation of the 4ort&a&or8s!n4istaa/e ri&ht. ;ns!/stantiated ae&ations of denia of d!e process andpre4at!rit( of a oan are not s!Acient to defeat the 4ort&a&ee8s!n4istaa/e ri&ht to an e>tra6!dicia forecos!re.+:74phasis s!ppied.3

F!rther4ore, witho!t pre)e4ptin& the tria co!rt8s r!in& on the ae&ation ofPT7I and 0%*CCI re&ardin& PN08s ae&ed !niatera increase of interest

rates, the tria co!rt 4isappied %4eda v. Co!rt of %ppeas$

when it opinedthat ?it wo!d /e in the interest of 6!stice and e

the ae&ed !niatera increases in interest rates on( when the( ed theco4paint on %pri 2", 2$$1 and after PN0 had aread( e>ercised its ri&ht toe>tra6!dicia forecos!re. #oreover, despite ad4ittin& PT7Is inde/tedness toPN0, no tender of pa(4ent or consi&nation was 4ade. These s!/stantiadierences wor a&ainst the appica/iit( of %4eda in this case.

GB7R7FOR7, the petition is here/( D7NI7D.
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Costs a&ainst petitioners PT7I and 0%*CCI.

SO ORD7R7D.

TERESITA ). LEONAR#O(#E CASTRO%ssociate 9!stice

G7 CONC;R@

MARIA LO$R#ES P. A. SERENOChief 9!sticeChairperson

ANTONIO T. CARPIO

%ssociate 9!sticeMARTIN S. *ILLARAMA, )R.

%ssociate 9!stice

!IEN*ENI#O L. RE%ES

%ssociate 9!stice

C 7 R T I F I C % T I O N

P!rs!ant to Section 1", %rtice VIII of the Constit!tion, I certif( that the conc!sions inthe a/ove Decision had /een reached in cons!tation /efore the case was assi&ned tothe writer of the opinion of the Co!rts Division.

MARIA LO$R#ES P. A. SERENOChief 9!stice

"ootnote+

Per Specia Order No. 1"1- dated Septe4/er 21, 2$12.

1;nder R!e '- of the R!es of Co!rt.

2Roo, pp. '+)-1 penned /( %ssociate 9!stice 7o( R. 0eo, 9r. with %ctin&Presidin& 9!stice Cancio C. *arcia and %ssociate 9!stice Ser&io 5. Pestaiio,conc!rrin&.

"Id. at 12".

'Id. at '$-)'$.

-Id. at '$=)'$:.

+Id. at 1-$)1+$.
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15/20

Id. at '+.

=Id. at 1+1)1".

:Id. at +)".

1$Id. at +.

11Id. at +')++.

12Id. at +-.

1"Id. at =")=:.

1'Id. at ='.

1-Id. at :$):2.

1+Id. at ')=.

1Id. at -.

1=Id. at 2=2)2='.

1:Id. at "2$. In its entiret(, the etter reads e4phases in the ori&ina3@

Septe4/er 2$, 2$$$

P%5# TR77 7ST%T7S, INC.

0arrio %&!s and #ari&ondon5ap!)5ap! Cit(#actan Isand, Ce/!

%TT7NTION@ #R. 7NICBI %I#OTOPresident

Dear Sir@

O!r Corporate 0anin& Division IV has referred to !s for e&a action (o!rvioation of the Ped&e %&ree4ent thro!&h (o!r fai!re to deiveradditiona shares to /e ped&ed to the 0an, despite the deadine i4posed

on (o! to co4p( with the sa4e, s!/6ect of o!r #r. 7ar #ontero8s de4andetter to (o! dated %!&!st 1', 2$$$.

%s a conse
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Qo!r fai!re to heed this de4and wi eave !s with no reco!rse /!t toinstit!te the necessar( e&a 4eas!res to protect the interest of the 0an.

Ge en6oin (o! to &ive the 4atter (o!r preferentia attention.

Ver( tr!( (o!rs,

%TTQ. R%;5 D. #%55%RI S&d.3:thFoor, PN0 Financia Center

Ro>as 0vd., Pasa( Cit(

2$Id. at '=")'='. In its entiret(, the etter reads@

Fe/r!ar( 1:, 2$$1

#R. 7NICBI %I#OTOPresidentPa4 Tree 7states, Inc.0arrio %&!s and #ari&ondon5ap!)ap! Cit(#actan Isand, Ce/!

Dear #r. %i4oto,

Ge acnowed&e receipt of (o!r etter dated 9an!ar( 2", 2$$1 receivedon 9an!ar( "1, 2$$13 repansion pro&ra4s. The 0an contin!ed to de4onstrate its s!pport in1::= when it a&reed to e>tend the &race period of the Ter4 5oan foranother one (ear in reco&nition of the diAc!t 4aret conditions at thatti4e. F!rther4ore, in 1:::, the 0an approved an additiona P=$.$ #iionto ena/e PT7I to co4pete the deveop4ent of at east the &of co!rse.Ge even aowed the capitaiJation of !npaid interest a4o!ntin& P++.$-#iion, and the restr!ct!rin& of the ori&ina Ter4 5oan. Despite a these
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s!pport, PT7I has not co4pied with a its contract!a o/i&ations to PN0.O!r records show that PT7I8s ast interest pa(4ent to PN0 was 4ade on#arch +, 1::= (et.

In view of the fore&oin&, we re&ret to infor4 (o! that we cannot &ive d!econsideration to (o!r restr!ct!rin& proposa !ness the co44itted

sette4ent of the ins!rance pre4i!4, credit card advances and reat(ta>es are co4pied with.

Than (o!.

Ver( tr!( (o!rs,

F75ICI%NO 5. #IR%ND%, 9R. S&d.3President C7O

21Id. at '=".

22Id. at 1$1)121.

2"Id. at '+)'.

2'Id. at '=2.

2-Id. at 12')1':.

2+Id. at '.

2Id. This was ae&ed( co4prised of ;SE,:2",$$-.+: and P'$ 4iion.

2=Id. at 12)12: and 1" para&raphs 11 and 1+ and "-)"+, Co4paint, pp. ')+and 1'.

2:Id. at 12= and 1"$ para&raphs 1" and 1=)1:, Co4paint, pp. - and .

"$Id. at 1"1)1"2 and 1"=)1": para&raphs 2')2- and ":, Co4paint, pp. =): and1-)1+.

"1Id. at 1": aso para&raph '$, Co4paint, p. 1+.

"2Id. at 1"=)1'$ para&raphs ": and '2)'', Co4paint, pp. 1-)1.

""Id. at 1'1 para&raph '-, Co4paint, p. 1=.

"'Id.

"-Id. at "'2 and para&raph -, %nswer, p. " and para&raph :.e, PN08s#e4orand!4, p. =.
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"+Id. at "'")"'' and "'= para&raphs = and 1=, %nswer, pp. ')- and :.

"Id. at "'")"'+ and "-" para&raphs , 12)1' and 2=, %nswer, pp. ') and 1'.

"=Id.

":Id. at "-' para&raphs 2: and "1, %nswer, p. 1-.

'$Id. at "- para&raph "+i3, %nswer, p. 1=.

'1Id. at "')"-1 para&raphs 1)21, %nswer, pp. =)12.

'2Id. at '$-)'$.

'"Id. at ':a.

''Id. at 21)"1.

'-Id. at +:+)$$ PN08s Co44ents and Opposition to the Petition for Review onCertiorari, pp. 1")1.

'+Re&aado, ForenJ, R7#7DI%5 5%G CO#P7NDI;#, Vo. 1 1$th 7dition 2$1$3, p.=1+.

'Roo, p. -$.

'=Section =, R!e 1- of the R!es of Co!rt provides@

Sec. =. O4ni/!s 4otion. K S!/6ect to the provisions of section 1 of R!e :,

a 4otion attacin& a peadin&, order, 6!d&4ent, or proceedin& shainc!de a o/6ections then avaia/e, and a o/6ections not so inc!dedsha /e dee4ed waived. 74phasis s!ppied.3

':'2 %4 9!r 2d -:$ on In6!nctions, 2$.

-$Nisce v. 7

-1;niversit( of the Phiippines v. Bon. Cat!n&a, 9r., ""= Phi. 2=, '")'' 1::3.

-2RPRP Vent!res #ana&e4ent Deveop4ent Corporation v. *!adiJ, 9r., *.R. No.

1-22"+, 9!( 2=, 2$1$, +2+ SCR% ", ''.

-"*.R. No. 1='+'-, Octo/er "$, 2$$:, +$' SCR% =2-.

-'Id. at ='')='-.

--Overseas Gorers Gefare %d4inistration v. ChaveJ, *.R. No. 1+:=$2, 9!ne =,2$$, -2' SCR% '-1, '+.
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-+Id. at '2, citin& Civi Service Co44ission v. Co!rt of %ppeas, '- Phi. 2+,2= 2$$-3.

-Id.

-=5otto Resta!rant Corporation v. 0PI Fa4i( Savin&s 0an, Inc., *.R. No. 12+$,

#arch "$, 2$11, +'+ SCR% +::, $-, citin& 7

-:Id.

+$Id. at :1):2.

+1Roo, p. '$-.

+2Id. at '$-)'$+.

+"Peope v. Cedoro, 9r., '12 Phi. 2, = 2$$13 %n&ees v. Po(te> Desi&n, Inc.,*.R. No. 1-+", Octo/er 1-, 2$$, -"+ SCR% 1-:, 1+.

+'S!pra note -1.

+-Id. at '".

++0an&o Sentra n& Piipinas #onetar( 0oard v. %ntonio)VaenJ!ea, *.R. No.1='=, Octo/er 2, 2$$:, +$2 SCR% +:=, 21.

+Nisce v. 7

This wi conr4 o!r earier advice to (o! that the rate of interest on theo!tstandin& drawdownsHavai4ents on the Ter4 5oan3 has /een repriced

as foows@

PN NO. PRINCIP%5%#O;NT

P7RIOD COV7R7D INT7RR%T
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in ine with the provisions of the oan doc!4ents wherein (o! a&reed tothe ri&ht of PN0 to increase or decrease the rate of interest on the Ter45oan3, for the s!/se

;ness we receive a written o/6ection fro4 (o! within a period of ten I $3caendar da(s fro4 interest settin& date, it sha /e dee4ed that (o! area&reea/e to the interest rate

Palm Tree Estates vs. PNB

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