G.R. No. 157163.

June 25, 2014 (Case Brief / Digest)

### Title:
**Bank of the Philippine Islands vs. Hon. Judge Agapito L. Hontanosas, Jr., et al.: A Case on
the Issuance of Preliminary Injunction Against Foreclosure**

### Facts:
The case began with respondents Spouses Silverio and Zosima Borbon, Spouses Xerxes and
Erlinda Facultad, and XM Facultad and Development Corporation filing Civil Case No.
CEB-26468 against Bank of the Philippine Islands (BPI) on May 22, 2001. They sought to
nullify promissory notes, real estate and chattel mortgages, and a continuing surety
agreement executed in BPI’s favor, alongside claiming for damages and attorney’s fees.
Additionally, they applied for a temporary restraining order (TRO) or writ of preliminary
injunction to halt BPI from foreclosing their properties’ mortgages.

As the case progressed, BPI opposed the injunction and filed a motion to dismiss on several
grounds, including improper venue and non-payment of the correct amount of legal fees.
The Regional Trial Court (RTC) of Cebu City denied BPI’s motion to dismiss and granted the
respondents’ application for a preliminary injunction. BPI’s motion for reconsideration was
also denied. Dissatisfied, BPI escalated the matter to the Court of Appeals (CA), which
affirmed the RTC’s decision. BPI then filed an appeal with the Supreme Court, challenging
the decisions on the basis of non-payment of the correct amount of docket fees, improper
venue, and the improvidence of the writ of preliminary injunction.

### Issues:
1. Whether Civil Case No. CEB-26468 should be dismissed for (a) non-payment of the
correct amount of docket fee; and (b) improper venue.
2. Whether the issuance of the writ of preliminary injunction against BPI, its agents, and
representatives, was proper.

### Court’s Decision:

The Supreme Court partly granted BPI’s appeal. It held that:
1. **Venue Properly Laid**: The Court ruled that the action was indeed a personal action,
rejecting BPI’s argument that it was a real action. Thus, filing the case in Cebu City, where
one of the principal plaintiffs resided, was correct. Consequently, the question of docket
fees based on the value of properties for a real action was moot.
2. **Improper Issuance of Preliminary Injunction**: The Court determined that the issuance
of the preliminary injunction was improper as the respondents did not fulfill the conditions
required for such a relief, notably failing to prove that the act of foreclosure would cause

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 G.R. No. 157163. June 25, 2014 (Case Brief / Digest)

irreparable injury beyond remediation.

### Doctrine:
– A writ of preliminary injunction is an extraordinary, preventive remedy that must be issued
only upon a clear showing of an actual existing right to be protected.
– A personal action is proper for cases involving the enforcement of personal contracts, not
affecting the title to or possession of real property, and venue is properly laid where any of
the principal parties reside.

### Class Notes:

– **Personal Action vs. Real Action**: A personal action involves contracts or damages not
linked to real property. Venue depends on the parties’ residence. A real action pertains to
disputes over real property, and venue is where the property is located.
– **Preliminary Injunction Requirements**: The applicant must show a clear legal right, the
act to be enjoined violates this right, and without injunction, an irreparable injury would
result.
– **Venue Determination**: In contract disputes not involving the title or possession of real
property, the action is considered personal.

### Historical Background:

This case highlights the judicial process concerning disputes over loan agreements and the
ensuing legal remedies such as foreclosure and injunctions within the Philippine context. It
underscores the importance of distinguishing between personal and real actions in
determining the proper venue and the stringent criteria for issuing a preliminary injunction
to ensure equity among the parties involved.

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