SOLID BUILDERS INC., vs. CHINA BANK 695 SCRA GR.

179665 April 3, 2013

FACTS:

During the period from Sept. 4, 1992 to March 27, 1996, CBC granted several loans to Solid builder, which
amounted to 139, 999, 234.34 exclusive of interests nd pother chrages.To secure loans , Medina foods
Industries , Inc eecuted in CBC's favor several security agrrements and contracts of real estate mortgage over
parcels of land in the Loyola Grand Villas in Quezon City and new Cubao Central in Cainta, Rizal.
Subsquently proposed to CBC scheme through with SBI would sell the mortgaged properties and shae the
proceeds with CBC on a 50-50 basis until such time that the whole obligation would be fully paid.SBI also
proposed that there be partial releases of the certifictes of title of the mortgaged propeties without the burden
of updating interests on all loans. There was a letter dated March 20, 2000 addressed to CBC, SBI requested
that restructuring of its loans , areduction of interests and penalties and the implementation of a DACION en
PAGO on New Cubao Central property .In response CBC sent SBI letter stating that loans had been
completely restructred effective March 1, 1999 and that the amount P218, 540646.00. On the aspects of
interests and chrges , CBC suggested the updating of the obligation to avoid paying of interests and
charges.Later on another letter was sent to SBI to settle thier outstanding account.

Oct 5, 2000 claiming interests and charges imposed CBC were inquitious and unconscionable to enjoin CBC
initial foreclosure proceedings, SBI and MFII filed a complaint to "Compel execution of contract and for
performance and Damages , with prayer for Writ of preliminary Injucntion and Ex parte TRO" in the RTC of
Pasig.Court granted the issuance of writ of Preliminary injucntion .CBC sought reconsideration but court
denied it dated dec. 10, 2001.It filed a "Motion to dissolve an Injuction order' but it was denied .Aggrived CBC
Petition for Certiorari. CA reversed and set aside orders of the Trial court adn dissolved the writ of
injucntion.SBI and MFII file MR but then CA in a resouliton denied on Sep. 18, 2007.

ISSUE: Whether or not the plaintiffs hae the right to ask for an injuctive relief in order to rpevent the
defendants bank form taking over their properties.

HELD: Petition denied. A writ of preliminary is an order granted at any stage of an action prior to judgement
of fianl order reuqiring a party , court, agency, or a person to refrain from particular acts. It is preservative
remedy to ensnure the protection of a party's substantive rights or interests pending the final judgement in the
principal action. A plea for injuctive relief lies upon the existence of a claimed emergency or extraordinary
situation which should be avoided otheriwse, the outcome of a litigation would be useless as as a party
applying for writ is concerned. At time s referred to as a "STRONG ARM OF EQUITY", court consistently
rules hat there is no power the exercise of which is more delicate an which calls for greater circumspection that
the isusuance of Injucntion.It should only be extended "in cases of extreme injury" where courts of law cannot
afford an adequate or commensurate emedy for damage; It is the duty of the court to determine whether the
necessary requisites are present in the case before it. In this conncetion a writ of preliminary injuction is issued
to prserve the status quo ante upon applicantâs 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 injury. Here SBI and MFII
basiclly claim a right to have thier mortgaged porpoerties shileded from froeclosure by CBC on the ground that
interest rate and enalty chrages imposed by CBC on the loans availed by SBI are inquitious and
unconscionable. For the court there was no clear right that warrants the extraordinary protection of an ijnuctive
wirt has been shown by SBI and MFII to exist in thier favor, for the grant of writ of preliminary injcuntion has
not been satisfied. In the absence of any requisite, and where facts are shown to be wanting in bringing the
matter within the conditions for its issuance, the ancillary writ of injunction must be struck down for having
been rendered in grave abuse of dsicretion. Hence, CA did not err when it granted the petition of CBC for the
dissolution of the writ of preliminary injunction. The guidelines speak of strict exceptions and conditions. To
reverse the decision of the Court of Appeals and reinstate the writ of preliminary injunction issued by the trial
court will be to allow SBI and MFII to circumvent the guidelines and conditions provided by the En Banc
Resolution in A.M. No. 99-10-05-0 dated February 20, 2007 and prevent CBC from foreclosing on the
mortgaged properties based simply on the allegation that the interest on the loan is unconscionable. This Court
will not permit such a situation. What cannot be done directly cannot be done indirectly. All told, the relevant
circumstances in this case show that there was failure to satisfy the requisites for the issuance of a writ of
preliminary injunction. The injunctive writ issued by the trial court should therefore be lifted and dissolved.
That was how the Court of Appeals decided. That is how it should be.Wherefore, the petition was DENIED.