G.R NO.

157163
JUNE 25, 2014

FACTS
Spouses Silverio and Zosima Borbon, Spouses

Xerxes and Erlinda Facultad, and XM Facultad

and Development Corporation obtained a loan
from BPI.
They executed promissory notes, constituted

real estate mortgages on several parcels of land

and a chattel mortgage on their Mitsubishi
Pajero and signed a continuing surety agreement
as security for the payment of the loan.

FACTS
Obligation

to
BPI
had
reachedP17,983,191.49, but the Spouses
Borbon, Facultad and the Corporation had only
been able to payP13 Million.

The

petitioner required them to issue

postdated checks to cover the loan under
threat of foreclosing on the mortgages.

FACTS
Civil Case No. CEB-26468
Commenced by Spouses Borbon, Facultad and the
Corporation, seeks the declaration of the nullity of
the promissory notes, real estate and chattel
mortgages and continuing surety agreement they
had executed in favor of BPI.

Likewise

prayed for is a temporary

restraining order (TRO) or writ of
preliminary injunction to prevent BPI
from foreclosing on the mortgages
against their properties.

ISSUE:
MAY A WRIT OF PRELIMINARY INJUNCTION
LIE TO STOP A BANK FROM INSTITUTING
FORECLOSURE PROCEEDINGS AGAINST A
DEFAULTING CREDITOR?

RESOLUTION
No. An injunction will not issue to protect a right not in esse,
or a right which is merely contingent and may never arise; or
to restrain an act which does not give rise to a cause of
action.
Respondents were not entitled to the writ of preliminary
injunction. The RTCs issuance of the writ of preliminary
injunction to enjoin the petitioner from proceeding with the
foreclosure of the mortgages was plainly erroneous and
unwarranted.

RESOLUTION
The Spouses Borbon, Facultad and the
Corporation, had admittedly constituted the
real estate and chattel mortgages to secure
the performance of their loan obligation to the
petitioner. As such, they were fully aware of
the consequences on their rights in the
properties given as collaterals should the loan
secured be unpaid.
The foreclosure of the mortgages would be the
remedy provided by law for the mortgagee to
exact payment.

RESOLUTION
WHEREFORE, the Court PARTIALLY GRANTS

the petition for review on certiorari; MODIFIES

the decision promulgated on July 9, 2002 by
annulling and setting aside the writ of
preliminary injunction in Civil Case No. CEB26468 issued by the Regional Trial Court,
Branch 16, in Cebu City for being devoid of
factual and legal bases.