CANELAND SUGAR vs Alon

G.R. No. 142896

September 12, 200
Caneland Sugar Corporation (petitioner) filed with RTC a complaint for damages, injunction, and
nullity of mortgage against the Land Bank of the hilippines (respondent)!
RTC" holding in a#eyance the auction sale! $otwithstanding said directi%e, another foreclosure
sale was scheduled! This was hold in a#eyance and re&schedules on $o%em#er '( for the
following reasons"
)owe%er, !*! +,( pro%ides that it shall #e mandatory for go%ernment financial institution
to foreclose collaterals and-or securities for any loan, credit accommodations and-or
guarantees granted #y them whene%er the arrearages on such account, including
accrued interest and other charges amount to at least ./0 of the total outstanding
o#ligation as appearing in the #ooks of the financial institution! 1oreo%er, no restraining
order, temporary or permanent injunction shall #e issued #y the court against any
go%ernment financial institution in any action taken #y such institution in compliance with
the mandatory foreclosure pro%ided #y said law! 2 2 2 The defendant Land Bank of the
hilippines and 3ric B! *e 4era, Sheriff of this Court, are here#y authori5ed to proceed
with the e2trajudicial foreclosure sale on $o%em#er '(, '666!
+
etitioner filed a 1otion for Reconsideration of the trial court7s 8rder, #ut this was denied per
8rder dated $o%em#er ,, '666!
9
etitioner then filed with the Court of :ppeals (C:) a etition for Certiorari and rohi#ition with
;njunction, docketed as C:&<!R! S $o! (='+>! ;n a *ecision
(
dated 1arch .., .///, the C:,
finding that the RTC did not commit any gra%e a#use of discretion, denied due course and
dismissed the petition for lack of merit!
=
etitioner sought reconsideration of the *ecision, which
was e%entually denied #y the C: in a Resolution dated :pril '>, .///!
>
)ence, the present etition for Re%iew on Certiorari under Rule 9( of the Rules of Court!
etitioner contends in the main that the RTC7s act of authori5ing the foreclosure of its property
amounts to a prejudgment of the case since it amounts to a ruling that respondent has a %alid
mortgage in its fa%or! etitioner also argues, among others, that residential *ecree (!*!) $o!
+,( is not applica#le inasmuch as at the time of the lease to Sunni2, ;nc!, the management and
control of its operations has already #een %irtually taken o%er #y respondent!
8n the other hand, respondent maintains that" !*! $o! +,( prohi#its the issuance of an
injuncti%e order against go%ernment financial institutions? the C: did not commit any gra%e a#use
of discretion? the RTC 8rder merely dealt with the propriety of the injuncti%e order and not the
%alidity of the mortgage? and the issue of the propriety of the injuncti%e order has #een rendered
moot and academic #y the foreclosure sale conducted and the issuance of a certificate of sale #y
the sheriff!
,
Based on the arguments of the parties, the principal issue is whether the C: erred in finding that
the RTC did not commit gra%e a#use of discretion in not enjoining the e2trajudicial foreclosure of
the properties su#ject of this case!
@ithout first resol%ing the foregoing issue, the Court finds that the petition should #e denied for
the sole reason that the act sought to #e enjoined #y petitioner is already fait accompli!
;n Transfield Philippines, Inc. v. Luzon Hydro Corporation,
6
the Court held that A
B;Cnjunction would not lie where the acts sought to #e enjoined ha%e already #ecome fait
accompli or an accomplished or consummated act! ;n Ticzon v. Video Post Manila,
Inc. this Court ruled that where the period within which the former employees were
prohi#ited from engaging in or working for an enterprise that competed with their former
employerD the %ery purpose of the preliminary injunction Dhas e2pired, any declaration
upholding the propriety of the writ would #e entirely useless as there would #e no actual
case or contro%ersy #etween the parties insofar as the preliminary injunction is
concerned!
'/
Records show that the foreclosure sale which petitioner sought to #e enjoined #y the RTC has
already #een carried out #y the Sheriff, and in fact, a Certificate of Sale dated Eune .=, ./// was
issued to respondent!
''
There is, therefore, no more actual case or contro%ersy #etween the
parties insofar as the RTC7s refusal to enjoin the sale is concerned, and any resolution #y the
Court of the impropriety or propriety of the RTC7s refusal to issue any restraining or injuncti%e
relief against the foreclosure sale will ser%e no purpose #ut merely lend further addle to Ci%il
Case $o! ./=>&9/ pending #efore the RTC!
$e%ertheless, e%en if petitioner7s Fuest for the issuance of an injuncti%e relief has #een rendered
moot and academic #y the holding of the foreclosure sale and issuance of Certificate of Sale, the
Court finds it necessary to resol%e the merits of the principal issue raised for the future guidance
of #oth #ench and #ar! :s the Court stated in Acop v. Guinona, !r.,
'.
Gcourts will decide a
Fuestion otherwise moot and academic if it is Hcapa#le of repetition, yet e%ading re%iew!7G
etitioner does not dispute its loan o#ligation with respondent! etitioner7s #one of contention
#efore the RTC is that the promissory notes are silent as to whether they were co%ered #y the
1ortgage Trust ;ndenture and 1ortgage articipation on its property co%ered #y TCT $o! T&
''.6.!
'+
;t does not categorically deny that these promissory notes are co%ered #y the security
documents! These %ague assertions are, in fact, negati%e pregnants, i!e!, denials pregnant with
the admission of the su#stantial facts in the pleading responded to which are not sFuarely
denied! :s defined in "epu#lic of the Philippines v. $andian#ayan,
'9
a negati%e pregnant is a
Gform of negati%e e2pression which carries with it an affirmation or at least an implication of some
kind fa%ora#le to the ad%erse party! ;t is a denial pregnant with an admission of the su#stantial
facts alleged in the pleading! @here a fact is alleged with Fualifying or modifying language and
the words of the allegation as so Fualified or modified are literally denied, has #een held that the
Fualifying circumstances alone are denied while the fact itself is admitted!G
etitioner7s allegations do not make out any justifia#le #asis for the granting of any injuncti%e
relief! 3%en when the mortgagors were disputing the amount #eing sought from them, upon the
non&payment of the loan, which was secured #y the mortgage, the mortgaged property is
properly su#ject to a foreclosure sale! This is in consonance with the doctrine that to authori5e a
temporary injunction, the plaintiff must show, at least pri%a facie, a right to the final relief!
'(
The foregoing conclusion finds greater force in light of the pro%isions of !*! $o! +,(,
'=
Section '
of which, pro%ides for a mandatory foreclosure, viz!"
Section '! ;t shall #e mandatory for go%ernment financial institutions, after the lapse of
si2ty (=/) days from the issuance of this *ecree, to foreclose the collaterals and-or
securities for any loan, credit, accommodation, and-or guarantees granted #y them
whene%er the arrearages on such account, including accrued interest and other charges,
amount to at least twenty (./0) of the total outstanding o#ligations, including interest and
other charges, as appearing in the #ooks of account and-or related records of the
financial institution concerned! This shall #e without prejudice to the e2ercise #y the
go%ernment financial institution of such rights and-or remedies a%aila#le to them under
their respecti%e contracts with their de#tors, including the right to foreclose on loans,
credits, accommodations, and or guarantees on which the arrearages are less than
twenty percent (./0)!
while Section . prohi#its the issuance of restraining orders or injunctions against go%ernment
financial institutions in any foreclosure action taken #y such institutions, to wit"
Section .! $o restraining order, temporary or permanent injunction shall #e issued #y the
court against any go%ernment financial institution in any action taken #y such institution in
compliance with the mandatory foreclosure pro%ided in Section ' hereof whether such
restraining order, temporary or permanent injunction is sought #y the #orrower(s) or any
third party or parties, e2cept after due hearing in which it is esta#lished #y the #orrower
and admitted #y the go%ernment financial institution concerned that twenty percent (./0)
of the outstanding arrearages had #een paid after the filing of foreclosure proceedings!
etitioner cannot find any solace in its contention that the case of &ilipinas Mar#le Corporation v.
Inter%ediate Appellate Court
'>
is applica#le to the present case! ;n &ilipinas Mar#le, it was the
*B&imposed management of I1C that #rought the corporation to ruin, not to mention that there
were pri%a facie findings of mismanagement and misappropriation of the loan proceeds #y *B
and Bancom! 1oreo%er, the lia#ility of I1C for the loan, which was the #asis of the mortgage
#eing foreclosed, was not yet settled! These circumstances prompted the Court to grant an
injunction against the foreclosure sale! The Court ruled A
2 2 2 !*! +,( was ne%er meant to protect officials of go%ernment lending institutions who
take o%er the management of a #orrower corporation, lead that corporation to #ankruptcy
through mismanagement or misappropriation of its funds, and who, after ruining it, use
the mandatory pro%isions of the decree to a%oid the conseFuences of their misdeeds!
The designated officers of the go%ernment financing institution cannot simply walk away
and then state that since the loans were o#tained in the corporation7s name, then !*!
+,( must #e peremptorily applied and that there is no way the #orrower corporation can
pre%ent the automatic foreclosure of the mortgage on its properties once the arrearages
reach twenty percent (./0) of the total o#ligation no matter who was responsi#le!
',
;n the case at #ench, petitioner does not deny its lia#ility! @hile petitioner alleged that the
management and control of its operations has already #een %irtually taken o%er #y respondent,
thus, implying that it was respondent that caused petitionerJs present misera#le financial state,
this allegation is o#%iously merely an attempt to place itself under the &ilipinas Mar#le situation in
order to preempt the operation of !*! $o! +,(! etitioner7s claim is more appropriately threshed
out and determined after trial on the merits!
The Court likewise cannot sustain petitionerJs argument that the RTC7s refusal to grant any
injuncti%e relief amounts to a prejudgment of the issues #efore it! The RTC7s sole #asis for
allowing the foreclosure sale to proceed is !*! $o! +,(! ;t did not make any finding or
disposition on the issue of the %alidity of the mortgage!
;n any e%ent, such issue of the %alidity of the mortgage, not to mention the issue of the nullity of
the foreclosure sale as well as petitioner7s prayer for damages, still has to #e resol%ed in the trial
court!
:s ruled in Philippine 'ational (an) v. Court of Appeals,
'6
to wit"
;n the instant case, aside from the principal action for damages, pri%ate respondent
sought the issuance of a temporary restraining order and writ of preliminary injunction to
enjoin the foreclosure sale in order to pre%ent an alleged irrepara#le injury to pri%ate
respondent! ;t is settled that these injuncti%e reliefs are preser%ati%e remedies for the
protection of su#stanti%e rights and interests! !n"#n$t%on %s not & $&#se o' &$t%on %n
%tsel' b#t merel( & prov%s%on&l reme)(, &n &)"#n$t to & m&%n s#%t. *+en t+e &$t
so#,+t to be en"o%ne) +&-). be$ome fait accompli, onl( t+e pr&(er 'or prov%s%on&l
reme)( s+o#l) be )en%e). /o0ever, t+e tr%&l $o#rt s+o#l) st%ll pro$ee) 0%t+ t+e
)eterm%n&t%on o' t+e pr%n$%p&l &$t%on so t+&t &n &)"#)%$&t%on o' t+e r%,+ts o' t+e
p&rt%es $&n be +&)!
./
(3mphasis supplied)
*/ERE12RE, the petition is DEN!ED!
Costs against petitioner!
S2 2RDERED!