[1996V679] SECURITY BANK AND TRUST COMPANY, petitioner, vs.

REGIONAL TRIAL COURT OF MAKATI, BRANCH 61, MAGTANGGOL EUSEBIO and LEILA VENTURA, respondents.1996 Oct 231st DivisionG.R. No. 113926HERMOSISIMA, JR. J.:

Questions of law which are of first impression are sought to be resolved in this case: Should the rate of interest on a loan or forbearance of money, goods or credits, as stipulated in a contract, far in excess of the ceiling prescribed under or pursuant to the Usury Law, prevail over Section 2 of Central Bank Circular No. 905 which prescribes that the rate of interest thereof shall continue to be 12% per annum? Do the Courts have the discretion to arbitrarily override stipulated interest rates of promissory notes and stipulated interest rates of promissory notes and thereby impose a 12% interest on the loans, in the absence of evidence justifying the imposition of a higher rate? This is a petition for review on certiorari for the purpose of assailing the decision of Honorable Judge Fernando V. Gorospe of the Regional Trial Court of Makati, Branch 61, dated March 30, 1993, which found private respondent Eusebio liable to petitioner for a sum of money. Interest was lowered by the court a quo from 23% per annum as agreed upon the parties to 12% per annum. The undisputed facts are as follows: On April 27, 1983, private respondent Magtanggol Eusebio executed Promissory Note No. TL/74/178/83 in favor of petitioner Security Bank and Trust Co. (SBTC) in the total amount of One Hundred Thousand Pesos (P100,000.00) payable in six monthly installments with a stipulated interest of 23% per annum up to the fifth installment. 1 On July 28, 1983, respondent Eusebio again executed Promissory Note No. TL/74/1296/83 in favor of petitioner SBTC. Respondent bound himself to pay the sum of One Hundred Thousand Pesos (P100,000.00) in six (6) monthly installments plus 23% interest per annum. 2 Finally, another Promissory Note No. TL74/1491/83 was executed on August 31, 1983 in the amount of Sixty Five Thousand Pesos (P65,000.00). Respondent agreed to pay this note in six (6) monthly installments plus interest at the rate of 23% per annum. 3 On all the abovementioned promissory notes, private respondent Leila Ventura had signed as co-maker.

Upon maturity which fell on the different dates below, the principal balance remaining on the notes stood at: 1) PN No. TL/74/748/83 P16,665.00 as of September 1983 2) PN No. TL/74/1296/83 P83,333.00 as of August 1983.

3) PN No. TL/74/1991/83 P65,000.00 as of August 1983. Upon the failure and refusal of respondent Eusebio to pay the aforestated balance payable, a collection case was filed in court by petitioner SBTC. 5 On March 30, 1993, the court a quo rendered a judgment in favor of petitioner SBTC, the dispositive portion which reads: WHEREFORE, premises above-considered, and plaintiff's claim having been duly proven, judgment is hereby rendered in favor of plaintiff and as against defendant Eusebio who is hereby ordered to: 1. Pay the sum of P16,655.00, plus interest of 12% per annum starting 27 September 1983, until fully paid; 2. Pay the sum of P83,333.00, plus interest of 12% per annum starting 28 August 1983, until fully paid; 3. Pay the sum of P65,000.00, plus interest of 12% per annum starting 31 August 1983, until fully paid; 4. Pay the sum equivalent to 20% of the total amount due and payable to plaintiff as and by way of attorney's fees; and to 5. Pay the costs of this suit. SO ORDERED. 6 On August 6, 1993, a motion for partial reconsideration was filed by petitioner SBTC contending that: (1) the interest rate agreed upon by the parties during the signing of the promissory notes was 23% per annum; (2) the interests awarded should be compounded quarterly from due date as provided in the three (3) promissory notes; (3) defendants Leila Ventura should likewise be held liable to pay the balance on the promissory notes since she has signed as co-maker and as such, is liable jointly and severally with defendant Eusebio without a need for demand upon her. 7

Consequently, an Order was issued by the court a quo denying the motion to grant the rates of interest beyond 12% per annum; and holding defendant Leila Ventura jointly and severally liable with co-defendants Eusebio. Hence, this petition. The sole issue to be settled in this petition is whether or not the 23% rate of interest per annum agreed upon by petitioner bank and respondents is allowable and not against the Usury Law. We find merit in this petition.

From the examination of the records, it appears that indeed the agreed rate of interest as stipulated on the three (3) promissory notes is 23% per annum. 8 The applicable provision of law is the Central Bank Circular No. 905 which took effect on December 22, 1982, particularly Sections 1 and 2 which state: 9 Sec. 1. The rate of interest, including commissions, premiums, fees and other charges, on a loan or forbearance of any money, goods or credits, regardless of maturity and whether secured or unsecured, that may be charged or collected by any person, whether natural or judicial, shall not be subject to any ceiling prescribed under or pursuant to the Usury Law, as amended. Sec. 2. The rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of express contract as to such rate of interest, shall continue to be twelve per cent (12%) per annum. CB Circular 905 was issued by the Central Bank's Monetary Board pursuant to P.D. 1684 empowering them to prescribe the maximum rates of interest for loans and certain forbearances, to wit: Sec. 1. Section 1-a of Act No. 2655, as amended, is hereby amended to read as follows: Sec. 1-a. The Monetary Board is hereby authorized to prescribe the maximum rate of interest for the loan or renewal thereof or the forbearance of any money, goods or credits, and to change such rate or rates whenever warranted by prevailing economic and social conditions: Provided, That changes in such rate or rates may be effected gradually on scheduled dates announced in advance. In the exercise of the authority herein granted, the Monetary Board may prescribe higher maximum rates for loans of low priority, such as consumer loans or renewals thereof as well as such loans made by pawnshops, finance companies and other similar credit institutions although the rates prescribed for these institutions need not necessarily be uniform. The Monetary Board is also authorized to prescribed

different maximum rate or rates for different types of borrowings, including deposits and deposit substitutes, or loans of financial intermediaries. 10 The court has ruled in the case of Philippine National Bank v. Court of Appeals 11 that: P.D. No. 1684 and C.B. Circular No. 905 no more than allow contracting parties to stipulate freely regarding any subsequent adjustment in the interest rate that shall accrue on a loan or forbearance of money, goods or credits. In fine, they can agree to adjust, upward or downward, the interest previously stipulated. All the promissory notes were signed in 1983 and, therefore, were already covered by CB Circular No. 905. Contrary to the claim of respondent court, this circular did not repeal nor in anyway amend the Usury Law but simply suspended the latter's effectivity. Basic is the rule of statutory construction that when the law is clear and unambiguous, the court is left with no alternative but to apply the same according to its clear language. As we have held in the case of Quijano v. Development Bank of the Philippines: 12 . . . We cannot see any room for interpretation or construction in the clear and unambiguous language of the above-quoted provision of law. This Court had steadfastly adhered to the doctrine that its first and fundamental duty is the application of the law according to its express terms, interpretation being called for only when such literal application is impossible. No process of interpretation or construction need be resorted to where a provision of law peremptorily calls for application. Where a requirement or condition is made in explicit and unambiguous terms, no discretion is left to the judiciary. It must see to it that is mandate is obeyed. The rate of interest was agreed upon by the parties freely. Significantly, respondent did not question that rate. It is not for respondent court a quo to change the stipulations in the contract where it is not illegal. Furthermore, Article 1306 of the New Civil Code provides that contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. We find no valid reason for the respondent court a quo to impose a 12% rate of interest on the principal balance owing to petitioner by respondent in the presence of a valid stipulation. In a loan or forbearance of money, the interest due should be that stipulated in writing, and in the absence thereof, the rate shall be 12% per annum. 13 Hence, only in the absence of a stipulation can the court impose the 12% rate of interest. The promissory notes were signed by both parties voluntarily. Therefore, stipulations therein are binding between them. Respondent Eusebio, likewise, did

not question any of the stipulations therein. In fact, in the Comment filed by respondent Eusebio to this court, he chose not to question the decision and instead expressed his desire to negotiate with the petitioner bank for "terms within which to settle his obligation." 14 IN VIEW OF THE FOREGOING, the decision of the respondent court a quo, is hereby AFFIRMED with the MODIFICATION that the rate of interest that should be imposed be 23% per annum. SO ORDERED. Pdilla, Bellosillo, Vitug and Kapunan, JJ., concur.

/---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\

[2008V403] BANCO DE ORO-EPCI, INC.,* Petitioner, versus JAPRL DEVELOPMENT CORPORATION, RAPID FORMING CORPORATION and JOSE U. AROLLADO, Respondents.2008 Apr 141st DivisionG.R. No. 179901D E C I S ION CORONA, J.: This petition for review on certiorari[1] seeks to set aside the decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 95659 and its resolution[3] denying reconsideration. After evaluating the financial statements of respondent JAPRL Development Corporation (JAPRL) for fiscal years 1998, 1999 and 2000,[4] petitioner Banco de Oro-EPCI, Inc. extended credit facilities to it amounting to P230,000,000[5] on March 28, 2003. Respondents Rapid Forming Corporation (RFC) and Jose U. Arollado acted as JAPRLs sureties. Despite its seemingly strong financial position, JAPRL defaulted in the payment of four trust receipts soon after the approval of its loan.[6] Petitioner later learned from MRM Management, JAPRLs financial adviser, that JAPRL had altered and

falsified its financial statements. It allegedly bloated its sales revenues to post a big income from operations for the concerned fiscal years to project itself as a viable investment.[7] The information alarmed petitioner. Citing relevant provisions of the Trust Receipt Agreement,[8] it demanded immediate payment of JAPRLs outstanding obligations amounting to P194,493,388.98.[9] SP Proc. No. Q-03-064 On August 30, 2003, JAPRL (and its subsidiary, RFC) filed a petition for rehabilitation in the Regional Trial Court (RTC) of Quezon City, Branch 90 (Quezon City RTC).[10] It disclosed that it had been experiencing a decline in sales for the three preceding years and a staggering loss in 2002.[11] Because the petition was sufficient in form and substance, a stay order[12] was issued on September 28, 2003.[13] However, the proposed rehabilitation plan for JAPRL and RFC was eventually rejected by the Quezon City RTC in an order dated May 9, 2005.[14] Civil Case No. 03-991 Because JAPRL ignored its demand for payment, petitioner filed a complaint for sum of money with an application for the issuance of a writ of preliminary attachment against respondents in the RTC of Makati City, Branch 145 (Makati RTC) on August 21, 2003.[15] Petitioner essentially asserted that JAPRL was guilty of fraud because it (JAPRL) altered and falsified its financial statements.[16] The Makati RTC subsequently denied the application (for the issuance of a writ of preliminary attachment) for lack of merit as petitioner was unable to substantiate its allegations. Nevertheless, it ordered the service of summons on respondents. [17] Pursuant to the said order, summonses were issued against respondents and were served upon them. Respondents moved to dismiss the complaint due to an allegedly invalid service of summons.[18] Because the officers return stated that an administrative assistant had received the summons,[19] JAPRL and RFC argued that Section 11, Rule 14 of the Rules of Court[20] contained an exclusive list of persons on whom summons against a corporation must be served.[21] An administrative assistant was not one of them. Arollado, on the other hand, cited Section 6, Rule 14 thereof[22] which mandated personal service of summons on an individual defendant.[23] The Makati RTC, in its October 10, 2005 order,[24] noted that because corporate officers are often busy, summonses to corporations are usually received only by administrative assistants or secretaries of corporate officers in the regular course of business. Hence, it denied the motion for lack of merit. Respondents moved for reconsideration[25] but withdrew it before the Makati RTC could resolve the matter.[26]

RTC SEC Case No. 68-2008-C On February 20, 2006, JAPRL (and its subsidiary, RFC) filed a petition for rehabilitation in the RTC of Calamba, Laguna, Branch 34 (Calamba RTC). Finding JAPRLs petition sufficient in form and in substance, the Calamba RTC issued a stay order[27] on March 13, 2006. In view of the said order, respondents hastily moved to suspend the proceedings in Civil Case No. 03-991 pending in the Makati RTC.[28] On July 7, 2006, the Makati RTC granted the motion with regard to JAPRL and RFC but ordered Arollado to file an answer. It ruled that, because he was jointly and solidarily liable with JAPRL and RFC, the proceedings against him should continue. [29] Respondents moved for reconsideration[30] but it was denied.[31] On August 11, 2006, respondents filed a petition for certiorari[32] in the CA alleging that the Makati RTC committed grave abuse of discretion in issuing the October 10, 2005 and July 7, 2006 orders.[33] They asserted that the court did not acquire jurisdiction over their persons due to defective service of summons. Thus, the Makati RTC could not hear the complaint for sum of money.[34] In its June 7, 2007 decision, the CA held that because the summonses were served on a mere administrative assistant, the Makati RTC never acquired jurisdiction over respondents. Thus, it granted the petition.[35] Petitioner moved for reconsideration but it was denied.[36] Hence, this petition. Petitioner asserts that respondents maliciously evaded the service of summonses to prevent the Makati RTC from acquiring jurisdiction over their persons. Furthermore, they employed bad faith to delay proceedings by cunningly exploiting procedural technicalities to avoid the payment of their obligations.[37] We grant the petition. Respondents, in their petition for certiorari in the CA, questioned the jurisdiction of the Makati RTC over their persons (i.e., whether or not the service of summons was validly made). Therefore, it was only the October 10, 2005 order of the said trial court which they in effect assailed.[38] However, because they withdrew their motion for reconsideration of the said order, it became final. Moreover, the petition was filed 10 months and 1 day after the assailed order was issued by the Makati RTC,[39] way past the 60 days allowed by the Rules of Court. For these reasons, the said petition should have been dismissed outright by the CA. More importantly, when respondents moved for the suspension of proceedings in Civil Case No. 03-991 before the Makati RTC (on the basis of the March 13, 2006 order of the Calamba RTC), they waived whatever defect there was in the service of

summons and were deemed to have submitted themselves voluntarily to the jurisdiction of the Makati RTC.[40] We withhold judgment for the moment on the July 7, 2006 order of the Makati RTC suspending the proceedings in Civil Case No. 03-991 insofar as JAPRL and RFC are concerned. Under the Interim Rules of Procedure on Corporate Rehabilitation, a stay order defers all actions or claims against the corporation seeking rehabilitation[41] from the date of its issuance until the dismissal of the petition or termination of the rehabilitation proceedings.[42] The Makati RTC may proceed to hear Civil Case No. 03-991 only against Arollado if there is no ground to go after JAPRL and RFC (as will later be discussed). A creditor can demand payment from the surety solidarily liable with the corporation seeking rehabilitation.[43] Respondents abused procedural technicalities (albeit unsuccessfully) for the sole purpose of preventing, or at least delaying, the collection of their legitimate obligations. Their reprehensible scheme impeded the speedy dispensation of justice. More importantly, however, considering the amount involved, respondents utterly disregarded the significance of a stable and efficient banking system to the national economy.[44] Banks are entities engaged in the lending of funds obtained through deposits[45] from the public.[46] They borrow the publics excess money (i.e., deposits) and lend out the same.[47] Banks therefore redistribute wealth in the economy by channeling idle savings to profitable investments. Banks operate (and earn income) by extending credit facilities financed primarily by deposits from the public.[48] They plough back the bulk of said deposits into the economy in the form of loans.[49] Since banks deal with the publics money, their viability depends largely on their ability to return those deposits on demand. For this reason, banking is undeniably imbued with public interest. Consequently, much importance is given to sound lending practices and good corporate governance.[50]

Protecting the integrity of the banking system has become, by large, the responsibility of banks. The role of the public, particularly individual borrowers, has not been emphasized. Nevertheless, we are not unaware of the rampant and unscrupulous practice of obtaining loans without intending to pay the same. In this case, petitioner alleged that JAPRL fraudulently altered and falsified its financial statements in order to obtain its credit facilities. Considering the amount of petitioners exposure in JAPRL, justice and fairness dictate that the Makati RTC hear whether or not respondents indeed committed fraud in securing

A finding of fraud will change the whole picture. In this event, petitioner can use the finding of fraud to move for the dismissal of the rehabilitation case in the Calamba RTC. The protective remedy of rehabilitation was never intended to be a refuge of a debtor guilty of fraud. Meanwhile, the Makati RTC should proceed to hear Civil Case No. 03-991 against the three respondents guided by Section 40 of the General Banking Law which states: Section 40. Requirement for Grant of Loans or Other Credit Accommodations. Before granting a loan or other credit accommodation, a bank must ascertain that the debtor is capable of fulfilling his commitments to the bank. Towards this end, a bank may demand from its credit applicants a statement of their assets and liabilities and of their income and expenditures and such information as may be prescribed by law or by rules and regulations of the Monetary Board to enable the bank to properly evaluate the credit application which includes the corresponding financial statements submitted for taxation purposes to the Bureau of Internal Revenue. Should such statements prove to be false or incorrect in any material detail, the bank may terminate any loan or credit accommodation granted on the basis of said statements and shall have the right to demand immediate repayment or liquidation of the obligation. In formulating the rules and regulations under this Section, the Monetary Board shall recognize the peculiar characteristics of microfinancing, such as cash flow-based lending to the basic sectors that are not covered by traditional collateral. mphasis supplied) Under this provision, banks have the right to annul any credit accommodation or loan, and demand the immediate payment thereof, from borrowers proven to be guilty of fraud. Petitioner would then be entitled to the immediate payment of P194,493,388.98 and other appropriate damages.[51] Finally, considering that respondents failed to pay the four trust receipts, the Makati City Prosecutor should investigate whether or not there is probable cause to indict respondents for violation of Section 13 of the Trust Receipts Law.[52]

ACCORDINGLY, the petition is hereby GRANTED. The June 7, 2007 decision and August 31, 2007 resolution of the Court of Appeals in CA-G.R. SP No. 95659 are REVERSED and SET ASIDE.

The Regional Trial Court of Makati City, Branch 145 is ordered to proceed expeditiously with the trial of Civil Case No. 03-991 with regard to respondent Jose U. Arollado, and the other respondents if warranted. SO ORDERED. Section 6. Stay Order. - If the court finds the petition to be sufficient in form and substance, it shall, not later than five (5) days from the filing of the petition, issue an Order: (a) applying a Rehabilitation Receiver and fixing his bond; (b) staying enforcement of all claims, whether for money or otherwise and whether such enforcement is by court action or otherwise, against the debtor, its guarantors and sureties not solidarily liable with the debtor; (c) prohibiting the debtor from selling, encumbering, transferring, or disposing in any manner any of its properties except in the ordinary course of business; (d) prohibiting the debtor from making any payment of its liabilities outstanding as at the date of filing of the petition; (e) prohibiting the debtors suppliers of goods or services from withholding supply of goods and services in the ordinary course of business for as long as the debtor makes payments for the services and goods supplied after the issuance of the stay order; (f) directing the payment in full of all administrative expenses incurred after the issuance of the stay order; (g) fixing the initial hearing on the petition not earlier than forty-five (45) days but not later than sixty (60) days from the filing thereof; (h) directing the petitioner to publish the Order in a newspaper of general circulation in the Philippines once a week for two (2) consecutive weeks; (i) directing all creditors and all interested parties (including the Securities and Exchange Commission) to file and serve on the debtor a verified comment on or opposition to the petition, with supporting affidavits and documents, not later than ten (10) days before the date of the initial hearing and putting them on notice that their failure to do so will bar them from participating in the proceedings; and (j) directing the creditors and interested parties to secure from the court copies of the petition and its annexes within such time as to enable themselves to file their comment on or opposition to the petition and to prepare for the initial hearing of the petition. mphasis supplied)

[2007V502] LEIDEN E. FERNANDEZ, GLORIA B. ADRIANO, EMELDA A. NEGAPATAN, JESUS P. TOMONGHA, ELEONOR A. QUIANOLA, ASTEMA C. CAMPO, FLORIDA VILLACERAN, FLORIDA B. TALLEDO AND BRENDA GADIANO, Petitioners, versus NICASIO C. ANION, the Labor Arbiter of the Regional Arbitration Branch VII-Cebu City; MARGUERITE LHUILLIER; and ALVAREZ CAETE LOPEZ PANGANDOYON AHAT & PAREDES LAW OFFICES, represented by ATTY. WILFREDO S. PANGANDOYON, JR., Respondents.2007 Apr 241st DivisionG.R. No. 138967D E C I S I O N

GARCIA, J.:

The instant petition is a proceeding for contempt in connection with the execution of a final and executory Decision[1] of this Court in G.R. No. 105892, entitled Leiden E. Fernandez, et al., v. National Labor Relations Commission, et al., a labor case involving the illegal dismissal of herein petitioners by respondent Marguerite Lhuillier from their employment at Agencia Cebuana-H. Lhuillier Pawnshop (Agencia Cebuana, hereafter), of which the latter is the sole proprietor. Via the present recourse, petitioners pray the Court to hold the respondents guilty of civil and criminal contempts for failure to comply with and implement the Decision of the Court in G.R. No. 105892. They also seek the inhibition of respondent Labor Arbiter Nicasio C. Anion from taking part in further execution proceedings relative to the same case, and request that a final computation be made by the Court of the exact amount of the monetary awards due them under the same Decision. Stripped to the bare essentials, the material facts briefly stated as follows: In 1990, petitioners filed their respective complaints against respondent Marguerite Lhuillier and/or Agencia Cebuana with the Regional Arbitration Branch VII, Cebu City, for illegal dismissal, service incentive pay, reinstatement with full back wages, and damages. Their complaints were consolidated and assigned to then Labor Arbiter Gavino Velasquez, Jr. who, in a decision[2] dated August 30, 1991, found for the petitioners, to wit: WHEREFORE, judgment is hereby rendered in favor of the complainants [petitioners] and against the respondent. The respondent is hereby ordered: 1. To reinstate the complainants to their respective position at the Agencia Cebuana with full back wages without qualifications; if reinstatement is not feasible, for one reason or another, to pay to the complainants their respective separation pay, service incentive leave pay with full back wages without qualification computed hereunder as follows: 2. To pay to all the complainants the amount of P100,000.00 for moral damages and the amount of another P100,000.00 for exemplary damages, plus the amount of P98,018.25 as attorneys fees representing 10% of the total award and the amount of P30,000.00 for litigation expenses. Claiming denial of due process, respondent Marguerite Lhuillier appealed to the National Labor Relations Commission (NLRC), in connection with which she filed a cash bond of P748,411.34. In a decision dated March 11, 1992, the NLRC vacated the decision of Labor Arbiter Velasquez, Jr. and remanded the case to the Regional Arbitration Branch VII, Cebu City, for further proceedings.

Following the NLRCs denial of their motion for reconsideration, petitioners went to this Court on a petition for certiorari in G.R. 105892.

In a Decision[3] promulgated on January 28, 1998, the Court granted the certiorari petition, reversed and set aside the assailed decision and resolution of the NLRC and reinstated with modifications the decision of Labor Arbiter Velasquez, Jr., thus: WHEREFORE, the petition is hereby GRANTED and the assailed Decision and Resolution are REVERSED and SET ASIDE. The labor arbiters decision is REINSTATED with MODIFICATIONS, such that the award of separation pay is deleted and the service incentive leave pay is computed from December 16, 1975 up to the petitioners actual reinstatement. Full back wages, including the accrued thirteenth month pay, are also awarded to the nine petitioners - - Leiden Fernandez, Brenda Gadiano, Gloria Adriano, Emelia Negapatan, Jesus Tomongha, Eleonor Quianola, Asteria Campo, Florida Villaceran and Florida Talledo - - from the date of their illegal dismissal to the time of their actual reinstatement. Petitioners Lim and Canonigo, whom we find to have voluntarily resigned, are not entitled to any benefit. SO ORDERED.

On April 28, 1998, the Decision became final and executory and an Entry of Judgment was made thereon in the Book of Entries of Judgment. What transpired next lies at the core of the instant petition for contempt. On April 8, 1999, herein public respondent Labor Arbiter Nicasio C. Anion, by way enforcing this Courts Decision in G.R. No. 105892, issued a writ of execution[4] commanding the Deputy Sheriff to: x x x REINSTATE the complainants [petitioners] at the respondent Agencia Cebuana and to proceed to the premises of the respondent located at Calderon St., Cebu City or wherever the same could be found and collect from the respondent the sum of P3,505,092.33 representing complainants award plus execution fee of P34,550.92 and the deposit fee of P17,535.46 or a total sum of P3,556,178.71 and thereafter turn over the said sum to this Office for appropriate disposition. Should you fail to collect said sum in cash, you are hereby authorized to cause the satisfaction of the same on the movable or immvable properties of the respondent not exempt from execution. On April 15 and 16, 1999, the Deputy Sheriff, garnished the Citibank and Metrobank accounts of respondent Marguerite Lhuillier and levied on a parcel of land belonging to her located in Mandaue City.

On April 20, 1999, petitioners filed with the same Regional Arbitration Branch VII, Cebu City, a motion for the release to them of respondents cash bond earlier posted by her in connection with her appeal to the NLRC from the adverse decision of Labor Arbiter Velasquez, Jr. On the very same day, respondent Labor Arbiter Anion issued an Order directing the release of the cash bond to the petitioners. Petitioners received the amount of P748,411.34. Then, on May 14, 1999, respondents Alvarez Caete Lopez Pangandoyon Ahat & Paredes Law Offices, through respondent Atty. Wilfredo S. Pangandoyon, Jr., filed with Labor Arbiter Nicasio C. Anion, on behalf of Marguerite Lhuillier, a motion[5] to lift or set aside the writ of garnishment alleging that the garnished accounts were not in the name of Marguerite Lhuillier alone but were joint accounts with Christopher Darza and Claudine Darza. The motion further claims that the writ of execution was directed only against Agencia Cebuana, hence, not even Marguerite Lhuillier can be made personally liable thereunder. Petitioners vigorously opposed the motion to lift, arguing that respondents Alvarez Caete Lopez Pangandoyon Ahat & Paredes Law Offices have no legal personality to represent Margruerite Lhuillier as they are not her counsels on record. Petitioners point out that the counsels on record for Marguerite Lhuillier are Atty. Amadeo D. Seno and Atty. Luis V. Diores and that there had been no proper substitution of counsel made. Moreover, petitioners claim in the same opposition that the garnished bank accounts are not joint accounts but are accounts only in the name of Marguerite Lhuillier, who, contrary to the allegations in the motion, is just as liable under the writ as Agencia Cebuana. In a resolution dated June 10, 1999, respondent Labor Arbiter Nicasio C. Anion granted the motion to lift or set aside the writ of garnishment and directed the Deputy Sheriff to enforce this Courts Decision in G.R. No. 105892 only on the properties of Agencia Cebuana. On June 21, 1999, petitioners appealed the aforementioned resolution of Labor Arbiter Ainon to the NLRC. Subsequently, they also filed with this Court the instant petition for civil and criminal contempt and other disciplinary sanctions; inhibition of the respondent labor arbiter; final computation of the exact figure of petitioners monetary awards including separation pay; with request to consolidate petitioners recent appeal filed with the [NLRC] to this instant petition. In sum, petitioners submit that the collective acts of the public and private respondents constitute contempt of this Court in that they thwarted the implementation of the final and executory Decision of the Court in G.R. No. 105892. First off, it greatly saddens the Court that petitioner employees, who were illegally dismissed way back in 1990 -- seventeen (17) years before this date -- have yet to be fully compensated for the injustice that had befallen them almost two decades ago despite the final and executory judgment of this very Court in their favor. It is

in the interests of justice, therefore, that the Court must make conclusive clarifications as to the execution of its final Decision against respondent Marguerite Lhuillier. In an individual proprietorship, the owner has unlimited personal liability for all the debts and obligations of the business.[6] As sole proprietor of Agencia Cebuana, from whose employment the petitioners were unlawfully removed, Marguerite Lhuillier is the party against whom the Courts final and executory Decision in G.R. No. 105892 is enforceable. Put differently, Marguerite Lhuillier is personally liable under the same Decision. Garnishment and levy over her property are proper in the dispensation of justice. Be that as it may, we do not find, however, any contumacious act to have been committed by both the public and private respondents, either individually or collectively. As it were, there was never an attempt on their part to subvert or hold at bay the final implementation of the executory Decision of the Court in the main case. Quite the contrary, recognizing the executory character of this Courts Decision in question, respondent Labor Arbiter Nicasio Anion issued a writ of execution for its implementation. For their part, the private respondents did not actually or maliciously resist the writ thus issued. What they opposed was the garnishment of the bank accounts allegedly jointly owned by respondent Marguerite Lhuillier and two others, not the writ of execution itself. We hold, however, that such accounts, even if joint as claimed by the private respondents, are subject to garnishment. It is in the nature of joint accounts that anyone of the depositors has access to the entire funds therein. If, afterwards, there should be squabbling amongst the supposed joint depositors as to the share of each, they can sort it out amongst themselves. We reiterate for the purpose of clarity that private respondent Marguerite Lhuillier is personally liable under this Courts Decision in dispute. Her co-respondent Agencia Cebuana is a sole proprietorship without a juridical personality of its own. But while the position taken by the public and private respondents that the judgment in question is not enforceable against respondent Marguerite Lhuillier, but solely against Agencia Cebuana is wrong, they are not liable for contempt. For one, the filing of the respondent law firm of Alvarez Caete Lopez Pangandoyon Ahat & Paredes Law Offices of its motion to lift the order of garnishment cannot be adjudged contumacious simply because they do not appear as counsel of record of respondent Marguerite Lhuillier/Agencia Cebuana. Their engagement to file that particular motion does not appear to be a replacement or substitution of counsel where the withdrawal or consent of former counsel is required. There was no intention on their part to replace or substitute the counsels on record of Marguerite Lhuillier and/or Agencia Cebuana. For sure, the services of the counsels on record were never terminated. In this light, we are inclined to believe that the engagement of the law firm of Alvarez Caete Lopez Pangandoyon & Paredes Law Offices

appears to have been on collaborative effort basis. Besides, it is settled rule in our jurisdiction that a lawyer is presumed to be properly authorized to represent any cause in which he appears.[7] It is hard to imagine that the respondent law firm who has no personal interest in the case would fight for and defend a case with persistence and vigor if it had not been authorized or employed by the party concerned.[8] Besides, it must be stressed that the respondent law firm merely filed a motion to lift the order of garnishment, an appearance which is basically limited in character. On the part of the respondent Labor Arbiter, it appears clear to us that it was never his intent to defy the final and executory Decision of this Court in the main case, much less to delay its enforcement. He did, after all, issue a writ of execution on April 8, 1999. Not only that. When the petitioners filed their motion for the release to them of respondents cash bond in connection with her appeal to the NLRC from the earlier adverse decision of Labor Arbiter Velasquez Jr., respondent Labor Arbiter Nicasio C. Anion issued an order directing such release that very same day and petitioners did receive the amount of P748,411.34. Hence, the Decision of this Court in question had, in fact, already been partially executed. For this reason, we do not see the need for the inhibition of Labor Arbiter Nicasio Anion in the enforcement process of the same Decision. He is, however, directed with all dispatch to satisfy the final and executory Decision of this Court in G.R. No. 105892. The petitioners have waited long enough for the justly deserved fruits of their labor. As regards the companion request of the petitioners for a final computation by the Court of the exact amounts of monetary awards due them under the same Decision, the Court is not inclined to venture thereon considering that said computation had already been done by Labor Arbiter Velasquez, Jr., in his decision of March 11, 1992, as affirmed with modifications by the Court in its Decision in G.R. No. 105892. IN VIEW WHEREOF, and finding no contumacious act on the part of the herein respondents, the instant petition is DISMISSED but the respondent Labor Arbiter Nicasio C. Ainon is DIRECTED to IMMEDIATELY IMPLEMENT this Courts Decision in G.R. No. 105892. No Costs. SO ORDERED.

[2006V1482] CHINA BANKING CORPORATION, Petitioner, versus THE HONORABLE COURT OF APPEALS and JOSE JOSEPH GOTIANUY as substituted by ELIZABETH GOTIANUY LO, Respondents.2006 Dec 181st DivisionG.R. No. 140687D E C I S I O N

CHICO-NAZARIO, J.: A Complaint for recovery of sums of money and annulment of sales of real properties and shares of stock docketed as CEB-21445 was filed by Jose Joseph Gotianuy against his son-in-law, George Dee, and his daughter, Mary Margaret Dee, before the Regional Trial Court (RTC) of Cebu City, Branch 58. Jose Gotianuy accused his daughter Mary Margaret Dee of stealing, among his other properties, US dollar deposits with Citibank N.A. amounting to not less than P35,000,000.00 and US$864,000.00. Mary Margaret Dee received these amounts from Citibank N.A. through checks which she allegedly deposited at China Banking Corporation (China Bank). He likewise accused his son-in-law, George Dee, husband of his daughter, Mary Margaret, of transferring his real properties and shares of stock in George Dees name without any consideration. Jose Gotianuy, died during the pendency of the case before the trial court.[1] He was substituted by his daughter, Elizabeth Gotianuy Lo. The latter presented the US Dollar checks withdrawn by Mary Margaret Dee from his US dollar placement with Citibank. The details of the said checks are: 1) CITIBANK CHECK NO. 69003194405412 dated September 29 1997 in the amount of US$5,937.52 payable to GOTIANUY: JOSE AND/OR DEE: MARY MARGARET; 2) CITIBANK CHECK NO. 69003194405296 dated September 29 1997 in the amount of US$7,197.59 payable to GOTIANUY: JOSE AND/OR DEE: MARY MARGARET; 3) CITIBANK CHECK NO. 69003194405414 dated September 29 1997 in the amount of US$1,198.94 payable to GOTIANUY: JOSE AND/OR DEE: MARY MARGARET; 4) CITIBANK CHECK NO. 69003194405413 dated September 29 1997 in the amount of US$989.04 payable to GOTIANUY: JOSE AND/OR DEE: MARY MARGARET;

5) CITIBANK CHECK NO. 69003194405297 dated October 01 1997 in the amount of US$766,011.97 payable to GOTIANUY: JOSE AND/OR DEE: MARY MARGARET; and 6) CITIBANK CHECK NO. 69003194405339 dated October 09 1997 in the amount of US$83,053.10 payable to GOTIANUY: JOSE AND/OR DEE: MARY MARGARET.[2] Upon motion of Elizabeth Gotianuy Lo, the trial court[3] issued a subpoena to Cristota Labios and Isabel Yap, employees of China Bank, to testify on the case. The Order of the trial court dated 23 February 1999, states:

Issue a subpoena ad testificandum requiring MS. ISABEL YAP and CRISTOTA LABIOS of China Banking Corporation, Cebu Main Branch, corner Magallanes and D. Jakosalem Sts., Cebu City, to appear in person and to testify in the hearing of the above entitled case on March 1, 1999 at 8:30 in the morning, with regards to Citibank Checks (Exhs. AAA to AAA-5) and other matters material and relevant to the issues of this case.[4] China Bank moved for a reconsideration. Resolving the motion, the trial court issued an Order dated 16 April 1999 and held: The Court is of the view that as the foreign currency fund (Exhs. AAA to AAA-5) is deposited with the movant China Banking Corporation, Cebu Main Branch, Cebu City, the disclosure only as to the name or in whose name the said fund is deposited is not violative of the law. Justice will be better served if the name or names of the depositor of said fund shall be disclosed because such a disclosure is material and important to the issues between the parties in the case at bar. Premises considered, the motion for reconsideration is denied partly and granted partly, in the sense that Isabel Yap and/or Cristuta Labios are directed to appear before this Court and to testify at the trial of this case on April 20, 1999, May 6 & 7, 1999 at 10:00 oclock in the morning and only for the purpose of disclosing in whose name or names is the foreign currency fund (Exhs. AAA to AAA-5) deposited with the movant Bank and not to other matters material and relevant to the issues in the case at bar.[5] From this Order, China Bank filed a Petition for Certiorari[6] with the Court of Appeals. In a Decision[7] dated 29 October 1999, the Court of Appeals denied the petition of China Bank and affirmed the rder of the RTC. In justifying its conclusion, the Court of Appeals ratiocinated: From the foregoing, it is pristinely clear the law specifically encompasses only the money or funds in foreign currency deposited in a bank. Thus, the coverage of the law extends only to the foreign currency deposit in the CBC account where Mary Margaret Dee deposited the Citibank checks in question and nothing more.

It has to be pointed out that the April 16, 1999 Order of the court of origin modified its previous February 23, 1999 Order such that the CBC representatives are directed solely to divulge in whose name or names is the foreign currency fund (Exhs. AAA to AAA-5) deposited with the movant bank. It precluded inquiry on other materials and relevant to the issues in the case at bar. We find that the directive of the court below does not contravene the plain language of RA 6426 as amended by P.D. No. 1246.

The contention of petitioner that the [prescription] on absolute confidentiality under the law in question covers even the name of the depositor and is beyond the compulsive process of the courts is palpably untenable as the law protects only the deposits itself but not the name of the depositor. To uphold the theory of petitioner CBC is reading into the statute something that is not within the manifest intention of the legislature as gathered from the statute itself, for to depart from the meaning expressed by the words, is to alter the statute, to legislate and not to interpret, and judicial legislation should be avoided. Maledicta expositio quae corrumpit textum It is a dangerous construction which is against the words. Expressing the same principle is the maxim: Ubi lex non distinguit nec nos distinguere debemos, which simply means that where the law does not distinguish, we should not make any distinction. (Gonzaga, Statutes and their Construction, p. 75.)[8] From the Decision of the Court of Appeals, China Bank elevated the case to this Court based on the following issues: THE HONORABLE COURT OF APPEALS HAS INTERPRETED THE PROVISION OF SECTION 8 OF R.A. 6426, AS AMENDED, OTHERWISE KNOWN AS THE FOREIGN CURRENCY DEPOSIT ACT, IN A MANNER CONTRARY TO THE LEGISLATIVE PURPOSE, THAT IS, TO PROVIDE ABSOLUTE CONFIDENTIALITY OF WHATEVER INFORMATION RELATIVE TO THE FOREIGN CURRENCY DEPOSIT. II PRIVATE RESPONDENT IS NOT THE OWNER OF THE QUESTIONED FOREIGN CURRENCY DEPOSIT. THUS, HE CANNOT INVOKE THE AID OF THE COURT IN COMPELLING THE DISCLOSURE OF SOMEONE ELSES FOREIGN CURRENCY DEPOSIT ON THE FLIMSY PRETEXT THAT THE CHECKS (IN FOREIGN CURRENCY) HE HAD ISSUED MAY HAVE ENDED UP THEREIN. III PETITIONER CAN RIGHTLY INVOKE THE PROVISION OF SEC. 8, R.A. 6426, IN BEHALF OF THE FOREIGN CURRENCY DEPOSITOR, OWING TO ITS SOLEMN OBLIGATION TO ITS CLIENT TO EXERCISE EXTRAORDINARY DILIGENCE IN THE HANDLING OF THE ACCOUNT.[9] As amended by Presidential Decree No. 1246, the law reads: SEC. 8. Secrecy of Foreign Currency Deposits. All foreign currency deposits authorized under this Act, as amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree No. 1034, are hereby declared as and considered of an absolutely confidential nature and, except upon the written permission of the depositor, in no instance shall such foreign currency deposits be examined, inquired or looked into by any person,

government official, bureau or office whether judicial or administrative or legislative or any other entity whether public or private: Provided, however, that said foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. (As amended by PD No. 1035, and further amended by PD No. 1246, prom. Nov. 21, 1977) ( mphasis supplied.) Under the above provision, the law provides that all foreign currency deposits authorized under Republic Act No. 6426, as amended by Sec. 8, Presidential Decree No. 1246, Presidential Decree No. 1035, as well as foreign currency deposits authorized under Presidential Decree No. 1034 are considered absolutely confidential in nature and may not be inquired into. There is only one exception to the secrecy of foreign currency deposits, that is, disclosure is allowed upon the written permission of the depositor. This much was pronounced in the case of Intengan v. Court of Appeals,[10] where it was held that the only exception to the secrecy of foreign currency deposits is in the case of a written permission of the depositor. It must be remembered that under the whereas clause of Presidential Decree No. 1246 which amended Sec. 8 of Republic Act No. 6426, the Foreign Currency Deposit System including the Offshore Banking System under Presidential Decree 1034 were intended to draw deposits from foreign lenders and investors, and we quote: Whereas, in order to assure the development and speedy growth of the Foreign Currency Deposit System and the Offshore Banking System in the Philippines, certain incentives were provided for under the two Systems such as confidentiality of deposits subject to certain exceptions and tax exemptions on the interest income of depositors who are nonresidents and are not engaged in trade or business in the Philippines; Whereas, making absolute the protective cloak of confidentiality over such foreign currency deposits, exempting such deposits from tax, and guaranteeing the vested rights of depositors would better encourage the inflow of foreign currency deposits into the banking institutions authorized to accept such deposits in the Philippines thereby placing such institutions more in a position to properly channel the same to loans and investments in the Philippines, thus directly contributing to the economic development of the country. As to the deposit in foreign currencies entitled to be protected under the confidentiality rule, Presidential Decree No. 1034,[11] defines deposits to mean funds in foreign currencies which are accepted and held by an offshore banking unit in the regular course of business, with the obligation to return an equivalent amount to the owner thereof, with or without interest.[12]

It is in this light that the court in the case of Salvacion v. Central Bank of the Philippines,[13] allowed the inquiry of the foreign currency deposit in question mainly due to the peculiar circumstances of the case such that a strict interpretation of the letter of the law would result to rank injustice. Therein, Greg Bartelli y Northcott, an American tourist, was charged with criminal cases for serious illegal detention and rape committed against then 12 year-old Karen Salvacion. A separate civil case for damages with preliminary attachment was filed against Greg Bartelli. The trial court issued an Order granting the Salvacions application for the issuance of a writ of preliminary attachment. A notice of garnishment was then served on China Bank where Bartelli held a dollar account. China Bank refused, invoking the secrecy of bank deposits. The Supreme Court ruled: In fine, the application of the law depends on the extent of its justice x x x It would be unthinkable, that the questioned law exempting foreign currency deposits from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever would be used as a device by an accused x x x for wrongdoing, and in so doing, acquitting the guilty at the expense of the innocent.[14] With the foregoing, we are now tasked to determine the single material issue of whether or not petitioner China Bank is correct in its submission that the Citibank dollar checks with both Jose Gotianuy and/or Mary Margaret Dee as payees, deposited with China Bank, may not be looked into under the law on secrecy of foreign currency deposits. As a corollary issue, sought to be resolved is whether Jose Gotianuy may be considered a depositor who is entitled to seek an inquiry over the said deposits.

The Court of Appeals, in allowing the inquiry, considered Jose Gotianuy, a codepositor of Mary Margaret Dee. It reasoned that since Jose Gotianuy is the named co-payee of the latter in the subject checks, which checks were deposited in China Bank, then, Jose Gotianuy is likewise a depositor thereof. On that basis, no written consent from Mary Margaret Dee is necessitated. We agree in the conclusion arrived at by the Court of Appeals. The following facts are established: (1) Jose Gotianuy and Mary Margaret Dee are co-payees of various Citibank checks;[15] (2) Mary Margaret Dee withdrew these checks from Citibank;[16] (3) Mary Margaret Dee admitted in her Answer to the Request for Admissions by the Adverse Party sent to her by Jose Gotianuy[17] that she withdrew the funds from Citibank upon the instruction of her father Jose Gotianuy and that the funds belonged exclusively to the latter; (4) these checks were endorsed by Mary Margaret Dee at the dorsal portion; and (5) Jose Gotianuy

discovered that these checks were deposited with China Bank as shown by the stamp of China Bank at the dorsal side of the checks. Thus, with this, there is no issue as to the source of the funds. Mary Margaret Dee declared the source to be Jose Gotianuy. There is likewise no dispute that these funds in the form of Citibank US dollar Checks are now deposited with China Bank.

As the owner of the funds unlawfully taken and which are undisputably now deposited with China Bank, Jose Gotianuy has the right to inquire into the said deposits. A depositor, in cases of bank deposits, is one who pays money into the bank in the usual course of business, to be placed to his credit and subject to his check or the beneficiary of the funds held by the bank as trustee.[18] On this score, the observations of the Court of Appeals are worth reiterating: Furthermore, it is indubitable that the Citibank checks were drawn against the foreign currency account with Citibank, NA. The monies subject of said checks originally came from the late Jose Gotianuy, the owner of the account. Thus, he also has legal rights and interests in the CBC account where said monies were deposited. More importantly, the Citibank checks (Exhibits AAA to AAA-5) readily demonstrate (sic) that the late Jose Gotianuy is one of the payees of said checks. Being a co-payee thereof, then he or his estate can be considered as a codepositor of said checks. Ergo, since the late Jose Gotianuy is a co-depositor of the CBC account, then his request for the assailed subpoena is tantamount to an express permission of a depositor for the disclosure of the name of the account holder. The April 16, 1999 Order perforce must be sustained.[19] ( mphasis supplied.) One more point. It must be remembered that in the complaint of Jose Gotianuy, he alleged that his US dollar deposits with Citibank were illegally taken from him. On the other hand, China Bank employee Cristuta Labios testified that Mary Margaret Dee came to China Bank and deposited the money of Jose Gotianuy in Citibank US dollar checks to the dollar account of her sister Adrienne Chu.[20] This fortifies our conclusion that an inquiry into the said deposit at China Bank is justified. At the very least, Jose Gotianuy as the owner of these funds is entitled to a hearing on the whereabouts of these funds. All things considered and in view of the distinctive circumstances attendant to the present case, we are constrained to render a limited pro hac vice ruling.[21] Clearly it was not the intent of the legislature when it enacted the law on secrecy on foreign currency deposits to perpetuate injustice. This Court is of the view that the

allowance of the inquiry would be in accord with the rudiments of fair play,[22] the upholding of fairness in our judicial system and would be an avoidance of delay and time-wasteful and circuitous way of administering justice.[23] Wherefore, premises considered, the Petition is DENIED. The Decision of the Court of Appeals dated 29 October 1999 affirming the Order of the RTC, Branch 58, Cebu City dated 16 April 1999 is AFFIRMED and this case is ordered REMANDED to the trial court for continuation of hearing with utmost dispatch consistent with the above disquisition. No costs. SO ORDERED.

[2002V620] LOS BAOS RURAL BANK, INC., petitioner, vs. PACITA O. AFRICA, GLORIA AFRICA, ANTONIO AFRICA, ARISTEO AFRICA, SOCORRO AFRICA, CONSUELO AFRICA, AND LOURDES AFRICA, respondents.2002 Jul 113rd DivisionG.R. No. 143994D E C I S I O N

PANGANIBAN, J.:

A writ of preliminary injunction is issued to preserve the status quo ante, upon an applicants showing of two important requisite conditions; namely, (1) the right to be protected exists prima facie, and (2) the acts sought to be enjoined are violative of that right. It must be proven that the violation sought to be prevented would cause an irreparable injustice. Statement of the Case Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the June 30, 2000 Decision[1] of the Court of Appeals[2] (CA) in CA-GR SP No. 53355. The decretal portion of the Decision reads as follows: "WHEREFORE, the petition is GRANTED. The Order dated April 19, 1999 insofar as it denied the petitioners application for the issuance of a writ of preliminary injunction, is hereby RECALLED and SET ASIDE. Let a writ of preliminary injunction issue in this case to restrain the respondent bank from proceeding with the foreclosure and consolidation of the title over the subject property upon posting by petitioners of a bond in the amount of Php20,000.00."[3] The Order of the Regional Trial Court (RTC) of Quezon City (Branch 220), which was reversed by the CA, reads as follows:

"WHEREFORE, premises considered, the Order of the Court dated July 22, 1997 is hereby recalled and set aside. The application for issuance of writ of preliminary injunction is hereby DENIED. "Issues in this case having been joined, let this case be set for pre-trial on May 28, 1999 at 8:30 o clock in the morning. Send notice of pre-trial to the parties and counsels."[4] The Facts The factual antecedents of the case are summarized by the Court of Appeals in this wise: "Petitioner Pacita Africa (Pacita for brevity) is the widow of Alberto Africa and the rest of her co-petitioners are their children. "Records disclose that sometime in June 1989, the Quezon City Hall building where the Register of Deeds was then holding office was razed by fire, destroying some of its records/documents among which was the original Transfer Certificate of Title (TCT) No. 203492 covering a parcel of land situated in Diliman, Quezon City, and registered in the name of petitioner Pacita. The aforesaid property was part of the conjugal property of petitioner Pacita and her late husband Alberto Africa. "On request of Pacita, private respondent Macy Africa, the common-law wife of petitioner Antonio Africa, worked for the reconstitution of the aforesaid TCT No. 203492. The same was done and a new Transfer Certificate of Title (TCT) No. RT76140 (203492) PR-36463 was issued in the name of Pacita Africa. While the reconstituted title was in her possession, Macy allegedly forged, or caused the forgery of, Pacitas signature on a Deed of Absolute Sale dated December 29, 1992, purporting to transfer ownership of the subject property to Macy. On the strength of the forged Deed of Absolute Sale, Macy was able to cause the issuance of TCT No. 81519 in her name, without the knowledge of any of herein petitioners. "Still as part of the scheme to defraud petitioners, Macy caused the preparation of a fake TCT No. 81519 in the name of Pacita, which the former showed to the latter to make Pacita believe that the said title was issued in her (Pacitas) name. "Sometime in March 1994, petitioners discovered private respondents fraudulent act. They (petitioners) likewise came to know that the subject property was mortgaged by Macy to the respondent bank. To protect their interests over the subject property, petitioners lodged an action in court against Macy and the respondent bank for Annulment of Title, Deed of Absolute Sale and Deed of Mortgage. The case was originally assigned to Branch 99 of the RTC of Quezon City and docketed as Civil Case No. Q-94-20898. "After the filing of the aforesaid case, the respondent bank in utter bad faith, foreclosed the subject property on June 11, 1996 without due notice to the

petitioners, prompting the petitioners to amend [their] complaint, this time incorporating therein a prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction, to stop the respondent bank from, among others, consolidating title to the subject property. "On July 2, 1997, RTC Branch 99 issued an Order granting petitioners application for a temporary restraining order. Meanwhile, the respondent bank filed its Manifestation, Opposition and Motion to Postpone dated July 11, 1997, praying, inter alia, for the denial of petitioners application for a writ of preliminary injunction, or in the alternative, for the cancellation of the hearing thereon. On July 18, 1997, the aforesaid court denied the respondent banks motion to postpone and proceeded with the hearing of petitioners application. Thereafter, petitioners application was considered submitted for resoltion. "On July 22, 1997, the Court issued an Order granting petitioners application for a writ of preliminary injunction to which respondent bank filed a Motion for Reconsideration dated July 11, 1997 followed by a Motion for Inhibition on January 1, 1998 praying that Hon. Felix M. de Guzman, presiding judge of RTC, Branch 99, inhibit himself from further trying the case. This latter motion was granted, and the case was re-raffled and assigned to Branch 220. "On April 19, 1999, RTC Branch 220, public respondent herein, issued the questioned Order." [5]

Ruling of the Court of Appeals The CA overturned the RTC Order dated April 19, 1999, and granted the issuance of a preliminary injunction to restrain petitioner from proceeding with the foreclosure and the consolidation of title over the subject property. The CA ruled that respondents had title to and possession of the property and were deprived thereof by petitioner. Thus, respondents had a clear and unmistakable right to protect their title and possession.[6] Hence, this Petition.[7] Issues In its Memorandum, petitioner raises the following issues for the Courts consideration: I Whether the Court of Appeals acted with patent grave abuse of discretion in applying the ruling in Verzosa vs. Court of Appeals, (299 SCRA 100), to the instant

case to justify its reversal of the 19 April 1999 Order of Branch 220 of the Regional Trial Court of Quezon City in Civil Case No. Q-94-20898[;] II Whether the Court of Appeals acted with patent grave abuse of discretion when it rationalized its decision by citing factual premises therein that are not borne out by the records nor based on evidence and in fact contrary to reality[;] III Whether the Court of Appeals acted with patent grave abuse of discretion when it ignored, disregarded and/or deviated from established jurisprudence governing the issuance of preliminary injunction demanded by private respondents against the petitioner bank[;] IV "Whether the Court [of] Appeals acted with patent grave abuse of discretion when it disregarded the pertinent provisions of Section 3, Rule 58, of the Revised Rules of Court providing for the grounds for issuance of preliminary injunction."[8] In sum, the issues boil down to whether the appellate court erred in issuing a writ of preliminary injunction to stop petitioners consolidation of its title to the subject property. This Courts Ruling The Petition is not meritorious; it has not shown any reversible error in the CAs Decision. Main Issue:

Propriety of Preliminary Injunction Petitioner argues that respondents do not have a right to the relief demanded, because they merely have possession of the property, as the legal title is in the name of Macy Africa.[9] Furthermore, it claims that the consolidation of title in its name does not constitute an "invasion of a right that is material and substantial."[10] On the other hand, respondents maintain that they would suffer great irreparable damage if the writ of preliminary injunction is not granted.[11] They likewise contend that if petitioner is allowed to consolidate its title to the subject property, they would lose their ancestral home, a loss that would result in unnecessary and protracted proceedings involving third parties.[12]

We agree with respondents. The grounds for the issuance of a writ of preliminary injunction are enumerated in Rule 58, Section 3 of the Revised Rules of Court, which reads as follows: "Sec. 3. Grounds for issuance of preliminary injunction. A preliminary injunction may be granted when it is established; (a)That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b)That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c)That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual." Injunction is a preservative remedy aimed at no other purpose than to protect the complainants substantive rights and interests[13] during the pendency of the principal action.[14] A preliminary injunction, as the term itself suggests, is merely temporary.[15] It is to be resorted to only when there is a pressing necessity to avoid injurious consequences that cannot be remedied under any standard of compensation.[16] Moreover, injunction, like other equitable remedies, should be issued only at the instance of a suitor who has sufficient interest in or title to the right or the property sought to be protected.[17] It is proper only when the plaintiff appears to be entitled to the relief demanded in the complaint.[18] In particular, the existence of the right and the violation thereof must appear in the allegations of the complaint[19] and must constitute at least a prima facie showing of a right to the final relief.[20] Thus, there are two requisite conditions for the issuance of a preliminary injunction, namely, (1) the right to be protected exists prima facie, and (2) the acts sought to be enjoined are violative of that right.[21] It must be proven that the violation sought to be prevented would cause an irreparable injustice. Further, while a clear showing of the right is necessary, its existence need not be conclusively established.[22] In fact, the evidence required to justify the issuance of a writ of preliminary injunction in the hearing thereon need not be conclusive or complete. The evidence need only be a "sampling" intended merely to give the court an idea of the justification for the preliminary injunction, pending the decision of the case on the merits.[23] Thus, to be entitled to the writ, respondents are only

required to show that they have the ostensible right to the final relief prayed for in their Complaint.[24] First Requisite: Existence of the Righ In the case at bar, we find ample justification for the issuance of a writ of preliminary injunction.[25] Evidently, the question on whether or not respondents possess the requisite right hinges on the prima facie existence of their legal title to the subject property.[26] They have shown that they have that right, and that it is directly threatened by the act sought to be enjoined.[27] First, as alleged in the Complaint,[28] Respondent Pacita Africa is the registered owner of the subject property. Her ownership is evidenced by the reconstituted Transfer Certificate of Title (TCT) No. RT-76140 (203492) PR-36463,[29] issued by the Registry of Deeds of Quezon City. Second, the validity of the Deed of Sale[30] dated December 29, 1992, is still in dispute because Respondent Pacita Africa claims that her signature was forged by the vendee, Macy Africa.[31] Third, there is doubt as to the validity of the mortgage in favor of petitioner, because there exists on record two TCTs covering the mortgaged property: (1) TCT No. 81519[32] registered in the name of Pacita Africa and (2) TCT No. 81519[33] registered in the name of Macy Africa. If indeed the Deed of Sale is a forgery, no parcel of land was ever transferred to the purported buyer[34] who, not being the owner, could not have validly mortgaged the property.[35] Consequently, neither has petitioner -- the buyer and mortgagee of the same lot -- ever acquired any title thereto.[36] Significantly, no evidence was presented by petitioner to controvert these allegations put forward by respondents. Clearly then, on the basis of the evidence presented, respondents possess the right to prevent petitioner from consolidating the title in its name. The first requisite -the existence of a right to be protected -- is thus present.[37] Second Requisite: Violation of Applicants Right As to the second requisite, what is sought to be enjoined by respondents is the consolidation of the title to the subject property in petitioners name. After having discovered that the property had been mortgaged to petitioner, respondents filed on June 12, 1994 an action for Annulment of Title, Deed of Sale, and Mortgage to protect their rights over the property.[38] This notwithstanding, petitioner foreclosed it on June 11, 1996.[39] To enjoin petitioner from consolidating the title in its name, respondents then filed an Amended Complaint,[40] praying for a writ of preliminary injunction.

Unless legally stopped, petitioner may consolidate title to the property in its name and enjoy the unbridled freedom to dispose of it to third persons, to the damage and prejudice of respondents.[41] What respondents stand to lose is material and substantial.[42] They would lose their ancestral home even without the benefit of a trial.[43] Clearly, the act sought to be enjoined is violative of their proprietary right over the property.[44] A writ of preliminary injunction is issued precisely to preserve threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly studied and adjudicated.[45] Denial of the application for the writ may make the Complaint of respondents moot and academic. Furthermore, it would render ineffectual a final judgment in their favor or, at the very least, compel them to litigate needlessly with third persons who may have acquired an interest in the property.[46] Such a situation cannot be countenanced.[47] Lis Pendens Petitioner further contends that respondents are not entitled to the relief prayed for, because they caused a notice of lis pendens to be annotated at the back of TCT No. 81519, registered in the name of Macy P. Africa; thus, that notice provided ample protection of their rights and interests.[48] We are not persuaded. A notice of lis pendens serves as an announcement to the whole world that a particular real property is in litigation and as a warning that those who acquire an interest in the property do so at their own risk -- they gamble on the result of the litigation over it.[49] However, the cancellation of such notice may be ordered by the court that has jurisdiction over it at any given time.[50] Its continuance or removal -- like the continuance or the removal of a preliminary attachment or injunction -- is not contingent on the existence of a final judgment on the action and ordinarily has no effect on the merits thereof.[51] Thus, the notice of lis pendens does not suffice to protect herein respondents rights over the property. [52] It does not provide complete and ample protection. Status Quo Ante Petitioner further claims that the RTC erred in enjoining the foreclosure sale of the subject property.[53] It argues that the foreclosure may no longer be enjoined, because it has long been effected since 1996.[54] We agree with petitioner. It is a well-entrenched rule that consummated acts can no longer be restrained by injunction[55] whose sole objective is to preserve the status quo until the merits of the case are fully heard.[56] Status quo is defined as the last actual peaceful uncontested situation that precedes a controversy, and its preservation is the office of an injunctive writ.[57]

In the instant case, the status quo was the situation of the parties at the time of the filing of the Amended Complaint[58] with a prayer for a writ of preliminary injunction. It was that point at which petitioner had already foreclosed the subject property and, hence, could no longer be enjoined from going on with the foreclosure. However, the last actual uncontested status that preceded the controversy was when the property in dispute was still registered in the name of Macy Africa, petitioner not having consolidated in its name the title thereto.[59] Thus, the issuance of the writ would no doubt preserve the status quo.[60] We cannot rule on the allegation of petitioner that this case is a "scam perpetrated by private respondents" to defraud it.[61] The truth or the falsity of that assertion cannot be ascertained by this Court at this time. Verily, we refrain from expressing any opinion on the merits of the case, pending a full consideration of the evidence that would be presented by the parties.[62] WHEREFORE, the Petition is DENIED and the assailed Decision of the Court of Appeals AFFIRMED. Costs against petitioner. SO ORDERED.