Case Digest: DEVELOPMENT BANK OF THE PHILIPPINES et al. v. DIGNO ALBAO JR. et al.

Case Digest: DEVELOPMENT BANK OF THE PHILIPPINES et al. v. DIGNO ALBAO JR. et al.

               Petitioner Development Bank of the Philippines (DBP), through its co-petitioner Janette Lagarejos (Lagajeros) granted a loan to Digno Albao et al. The loan was secured by a mortgage over a titled property with improvements. Respondents Albao et al. failed to pay their obligations as they fell due. When petitioner DBP‘s demands remained unheeded, it foreclosed the mortgaged property. Albao et al. then filed before the Regional Trial Court (RTC) petition for injunction with prayer for preliminary injunction or temporary restraining order (TRO) against DBP et al. and the Ex Officio Sheriff to enjoin them from selling Albao et al.‘s property during the public auction. The RTC issued the TRO prayed for by them.

                DBP et al. moved for a reconsideration of the RTC‘s order invoking Section 2 of Presidential Decree No. 385, which provides that “no restraining order, temporary or permanent injunction shall be issued by the court against any government financial institution in any action taken by such institution in compliance with the mandatory foreclosure”.

            Accordingly, the RTC, lifted the writ of preliminary injunction, dismissed the main petition for Injunction and directed herein DBP and Lagajeros to proceed with the public auction. Respondents Albao et al. moved for a reconsideration of the RTC‘s order, while, in a separate move, they filed their Notice of Appeal to the Court of Appeals (CA). The RTC denied the Albao et al.‘s motion for reconsideration. The Court of Appeals reversed the ruling of the RTC.

ISSUE:

Whether or not the Court of Appeals correctly ordered the remand of the case to the RTC for pre-trial and trial on the merits in the Injunction case filed by respondents

HELD:

It bears emphasis that the complaint filed by Albao et al. from which the present petition arose was one for injunction as a main action, as opposed to injunction as a provisional remedy. Since the act sought to be prevented the sale at public auction of the property subject of the mortgage had occurred, nothing remained to be resolved by the RTC. It was thus a patent error for the appellate court to order the remand of the case for further proceedings. Section 5 of Rule 39, which provides that “where the executed judgment is reversed totally or partially, or annulled, on appeal or otherwise, the trial court may, on motion, issue such orders of restitution or reparation of damages as equity and justice may warrant under the circumstances,” is self-explanatory. If the executed judgment is reversed on appeal, “the trial court may, on motion, issue such orders of restitution or reparation of damages as equity and justice may warrant under the circumstances.”

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