THIRD DIVISION
[G.R. No. 217482. December 10, 2018.]
ROSA-SANZ NEIGHBORHOOD ASSOCIATION, INC., petitioner, vs.PHILIPPINE NATIONAL BANK, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution datedDecember 10, 2018, which reads as follows:
"G.R. No. 217482 (Rosa-Sanz Neighborhood Association, Inc. v. Philippine National Bank) — This is an appeal by certiorari under Rule 45 of the 1997 Rules of Court (Rules of Court) seeking to reverse and set aside the April 30, 2014 Decision 1 and the February 17, 2015 Resolution 2 of the Court of Appeals, Cagayan de Oro City (CA), in CA-G.R. SP No. 04570-MIN. The assailed decision and resolution set aside and nullified the June 21, 2011 Order 3 and September 8, 2011 Order 4 of the Regional Trial Court of Davao City, Branch 11 (RTC), in Civil Case No. 32,450-08, a complaint for specific performance and declaration of nullity of deed of conditional sale. The RTC issued a writ of preliminary injunction in favor of the members of the Rosa-Sanz Neighborhood Association, Inc. (petitioner) against Philippine National Bank (respondent).
Antecedents
Petitioner is an association composed of alleged lessees of respondent on a residential lot located at Sobrecarey St., Bo. Obrero, Davao City, more particularly described as Lot 1-1-2 of the subdivision plan (LSR) Psd-3814 containing an area of more or less 1,263 square meters (subject property). Respondent acquired the subject property sometime in March 1970, as per Transfer Certificate of Title (TCT) No. T-26545.
In the complaint, petitioner alleged that its members constructed their houses on the subject property and that respondent allowed them to stay on the premises. They were asked to pay rentals to one Miss Salvacion Perez (Perez) per a letter of respondent, dated August 4, 1974, addressed to one of them. When Perez ceased to be the collector for respondent, one of petitioner's members, Julia Alabastro, paid directly to respondent.
On November 27, 1992, the members of petitioner signified to respondent their desire to buy the subject property. They were represented by their counsel, Atty. Bernabe Alabastro, who spoke with respondent's Norma Diaz. The latter advised them to make an offer to respondent. SDHTEC
Despite the members making known to respondent several times their desire to purchase the subject property, respondent allegedly offered it for sale in a public auction. It was sold to Joji Hagan Career Center Foundation (Joji Hagan) through a deed of conditional sale. Members of the City Demolition Team then purportedly conducted a survey on the number of houses to be demolished.
Thus, petitioner brought the instant action for specific performance and declaration of nullity of the conditional sale between respondent and Joji Hagan. It applied for a writ of preliminary injunction seeking to enjoin respondent and Joji Hagan from demolishing their houses pending resolution of the case.
The RTC Ruling
In its June 21, 2011 order, the RTC issued a writ of preliminary injunction enjoining respondent and Joji Hagan from removing the members of petitioner from the premises and from demolishing their houses pending resolution of the case. It found it necessary to issue the injunctive writ pending resolution of the issues raised in the complaint. It also ordered petitioner to post an injunction bond in the amount of P2,000,000.00.
Respondent moved for reconsideration, which the RTC denied in its September 8, 2011 order. It reasoned that certain parties would suffer more if an injunctive writ is not issued. The non-issuance of the writ in this case would mean displacement of the members and their families, thus, it is incumbent upon the court to step in to prevent greater damage.
Aggrieved, petitioner filed a petition for certiorari before the CA questioning the June 21, 2011 and September 8, 2011 orders of the RTC.
The CA Ruling
In its April 30, 2014 decision, the CA granted the petition. It set aside and nullified the June 21, 2011 and September 8, 2011 orders of the RTC. It held that there is insufficient basis to warrant the issuance of the writ of preliminary injunction in favor of petitioner and its members. It found that petitioner failed to establish in its complaint that its members possess a clear legal right for the issuance of the writ. It noted that there is no stipulation or provision of law granting them the right of first refusal over the subject property. Thus, the issuance of the injunctive writ constitutes grave abuse of discretion on the part of the RTC. Further, it ruled that the issuance of an injunctive writ in favor of petitioner would still be unwarranted even if they have a preferential right to buy the subject property. This is because a contract of sale entered into in violation of a preemptive right is merely rescissible, and the remedy is to rescind the sale and compel respondent to execute the necessary deed of sale in their favor.
Unsatisfied, petitioner moved for reconsideration of this decision which the CA denied in its February 17, 2015 resolution. Hence, this appeal. AScHCD
Proceedings before the Court
Petitioner assails the CA decision and resolution on the following grounds: First, the court a quo seriously erred in ruling that they had no clear legal right to warrant the issuance of an injunctive writ. They insist that there was a perfected contract of sale between petitioner and respondent. There was allegedly a meeting of minds between them, considering the concurrence of the offer and the acceptance. This perfected contract of sale is enforceable under the law. Thus, it cannot be said that its members do not have a clear and unmistakable right warranting the issuance of the injunctive writ. Second, it insists that "probability" is enough basis for the issuance of injunction as a provisional remedy. In any case, the injunction bond shall answer for any damage that respondent may suffer.
In its Comment, 5 dated October 9, 2015, respondent argues that the CA was correct in ruling that petitioner failed to establish that its members possess a clear legal right to warrant the issuance of the injunctive writ. Rather, what was established is that respondent is the owner of the subject property and petitioner is merely interested to purchase the same. First, it denies that there was ever a perfected contract of sale between itself and petitioner. It points to the exchange of letters between itself and petitioner as proof that they were still in the negotiation phase. Thus, an injunctive writ may not issue since there was no perfected contract of sale. The CA correctly nullified the RTC issuance. Second, it clarifies, contrary to petitioner's position, that the word "probably" in Section 3 (b), Rule 58 of the 1997 Rules of Court, qualifies the phrase "work injustice" and not the existence of a clear legal right.
In its Reply, 6 dated September 10, 2016, petitioner reiterates its position. First, it insists that there is a perfected contract of sale between its members and respondent. It points to an alleged August 18, 1994 letter written by their counsel to respondent's Vice-President Nicardo M. Leopoldo which conveyed "acceptance" of respondent's counter-offer of P682,000.00 and voluntarily set the terms of the transaction. This was purportedly never rejected by respondent. Second, it argues that respondent and Joji Hagan were in bad faith in entering into the Deed of Conditional Sale. For the first time before the Court, petitioner raises the validity of the public auction as an issue. Further, they insist that Joji Hagan should have conducted a "proper verification on the right of the occupants who have been lessees of the subject property for several decades already." 7
Hence, this petition.
ISSUE
WHETHER THE CA SERIOUSLY ERRED IN NULLIFYING THE WRIT OF PRELIMINARY INJUNCTION ISSUED BY THE RTC IN FAVOR OF PETITIONER.
THE COURT'S RULING
The petition is denied for lack of merit. The CA did not seriously err in nullifying the writ of preliminary injunction issued by the RTC in favor of petitioner. No clear legal right exists in favor of petitioner warranting the issuance of an injunctive writ. Petitioner failed to prove that there is a perfected contract of sale between itself and respondent.
Section 3, Rule 58 of the Revised Rules of Court provides the grounds for the issuance of a writ of preliminary injunction, to wit:
SECTION 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 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.
To be entitled to the injunctive writ, the applicant must show that there exists a right to be protected which is directly threatened by an act sought to be enjoined. Furthermore, there must be a showing that the invasion of the right is material and substantial and that there is an urgent and paramount necessity for the writ to prevent serious damage. The applicant's right must be clear and unmistakable. In the absence of a clear legal right, the issuance of the writ constitutes grave abuse of discretion. Where the applicant's right or title is doubtful or disputed, injunction is not proper. The possibility of irreparable damage without proof of an actual existing right is not a ground for injunction. 8 caITAC
A clear and positive right especially calling for judicial protection must be shown. Injunction is not a remedy to protect or enforce contingent, abstract, or future rights; it will not issue to protect a right not in esse and which may never arise, or to restrain an act which does not give rise to a cause of action. There must exist an actual right. There must be a patent showing by the applicant that there exists a right to be protected and that the acts against which the writ is to be directed are violative of said right. 9
In the instant case, petitioner alleges that it has a clear legal right threatened by the planned demolition of its members' constructed houses on the subject property. This clear legal right arises from the supposed perfected contract of sale between itself and respondent for the subject property. Thus, it insists that the RTC correctly issued an injunctive writ in its favor. On the other hand, respondent maintains that there is no perfected contract of sale between itself and petitioner. Hence, there is no clear legal right in favor of petitioner warranting the issuance of an injunctive writ. The CA correctly nullified the issuance thereof by the RTC.
Hence, at the center of the instant controversy is this question: Is there a perfected contract of sale between petitioner and respondent over the subject property?
The Court answers in the negative.
In Heirs of Ignacio v. Home Bankers Savings and Trust Co., et al., 10 the Court elucidated on the perfection of contracts, viz.:
Contracts are perfected by mere consent, which is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The requisite acceptance of the offer is expressed in Article 1319 of the Civil Code which states:
ART. 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified acceptance constitutes a counter-offer.
In Palattao v. Court of Appeals, this Court held that if the acceptance of the offer was not absolute, such acceptance is insufficient to generate consent that would perfect a contract. Thus:
Contracts that are consensual in nature, like a contract of sale, are perfected upon mere meeting of the minds. Once there is concurrence between the offer and the acceptance upon the subject matter, consideration, and terms of payment, a contract is produced. The offer must be certain. To convert the offer into a contract, the acceptance must be absolute and must not qualify the terms of the offer; it must be plain, unequivocal, unconditional, and without variance of any sort from the proposal. A qualified acceptance, or one that involves a new proposal, constitutes a counter-offer and is a rejection of the original offer. Consequently, when something is desired which is not exactly what is proposed in the offer, such acceptance is not sufficient to generate consent because any modification or variation from the terms of the offer annuls the offer. ICHDca
The acceptance must be identical in all respects with that of the offer so as to produce consent or meeting of the minds. Where a party sets a different purchase price than the amount of the offer, such acceptance was qualified which can be at most considered as a counter-offer; a perfected contract would have arisen only if the other party had accepted this counter-offer. In Villanueva v. Philippine National Bank, this Court further elucidated on the meaning of unqualified acceptance, as follows:
. . . While it is impossible to expect the acceptance to echo every nuance of the offer, it is imperative that it assents to those points in the offer which, under the operative facts of each contract, are not only material but motivating as well. Anything short of that level of mutuality produces not a contract but a mere counter-offer awaiting acceptance. More particularly on the matter of the consideration of the contract, the offer and its acceptance must be unanimous both on the rate of the payment and on its term. An acceptance of an offer which agrees to the rate but varies the term is ineffective. 11 (Emphasis in the original; citations omitted)
At this juncture, the Court notes that both parties cite the same evidence to support their respective positions. They refer to the letters exchanged concerning the subject property. In order to resolve the issue at hand, it is necessary to review these letters, especially since the courts a quo made no mention of them.
Per the annexes of the petition, a total of eight (8) letters were exchanged between the parties. The following are the pertinent excerpts from these letters:
1. Letter dated December 1, 1992, 12 from petitioner's counsel to respondent:
"x x x [I]nasmuch as the latest offer to them by [respondent] was P100,000.00 and the previous one was only P72,000.00, they would like to make a little bargain and offer to purchase it at P85,000.00."
2. Letter dated September 15, 1993, 13 from petitioner's counsel to respondent:
"Please be informed that the lessees are still willing to buy your said property at P102,000.00. Since the lessees have been occupants of the property for more than a decade, I earnestly request that for humanitarian reason they be given the preference to buy it. And the lessees will highly appreciate it if you can take up this matter with the Board with your appropriate recommendation." (Underscoring in the original)
3. Letter dated October 4, 1993, 14 from respondent to petitioner's counsel:
"Please be informed that your letter dated September 15, 1993 regarding an offer to buy an acquired asset of the Bank was referred to our Davao Branch for consideration and appropriate action."
4. Letter dated November 24, 1993, 15 from respondent to petitioner's counsel:
"In connection with your letter-offer of 9.15.93 in behalf of the lessees of our asset acquired (a/a) under TCT T-26545, please increase your offer of P102,000.00 since this is still not within our policy of disposal of a/a. Please be informed also that we will be requesting our Special Assets Management Department (SAMD) on publication for bidding of this property."
5. Letter dated April 14, 1994, 16 from petitioner's counsel to respondent:
"We are pleased to inform you that some tenants occupying the above-subject property have signified their intention to purchase the said property at the bank's offer of P470,000.00. TCAScE
In this connection, we are herein handing to your good office the sum of P90,000.00 as earnest money for the purchase of the said property covered by TCT No. T-26545.
Inasmuch as the purchase price is to be paid by seven (7) tenants [because the other occupants cannot meet the price offered], we wish to request that we be given a period of one hundred twenty (120) days from today within which to pay the balance of P380,000.00 as we have to survey the entire area to be subdivided into seven lots upon which we will base the amount to be paid by each of the seven (7) tenants/buyers."
6. Letter dated May 12, 1994, 17 from petitioner's counsel to respondent:
"Please be informed that after conferring with the said seven (7) tenants, they are also willing to purchase the said property at P600,000.00 subject to the following terms and conditions, to wit:
1. Upon approval by your office of this offer we are willing to immediately deposit the sum of P100,000.00;
2. The balance of P500,000.00 to be paid on monthly installment basis for a period of four to five years.
We hope with this new offer your good office can act on it soonest."
7. Letter dated July 12, 1994, 18 from respondent to petitioner's counsel:
"Please be informed that our recommendation for its sale was returned to us by our Mindanao Branches Department in Manila in view of the following:
o For the purpose of pursuing the common interest in acquiring subject property, the offerors (sic) should form an association, duly registered to obtain legal personality and thus, enable it to transact properly with the Bank.
o That the offerors (sic) increase their offered price from P600,000 to P682,000 which is within the minimum market value to facilitate the approval of their offer/request which will then be within the Branch's authority. Otherwise, the recommendation will be forwarded for Board approval after proper compliance with the requirement to have the duly-registered association represent all offerors (sic) in the transaction."
8. Letter dated May 05, 2005, 19 from petitioner's counsel to respondent:
"We are happy to inform you that we are now organizing the association under the name and style, 'SANZ-SOBRECAREY SETTLERS ASSOCIATION, INC.'
During the meeting all the members of the association are anxious as to how much PNB will sell its said property to the association.
We shall highly appreciate it if you can inform the undersigned counsel of [respondent's] selling price of the said property to the association as well as the term thereof so that I can again meet the members for that purpose."
A plain, cursory reading of the above-quoted excerpts readily shows that there was no meeting of the minds between the parties. There was no concurrence of offer and acceptance as to either the rate of the payment or its term. In fact, the last letter from petitioner's counsel to respondent expressly requested respondent to inform them of the selling price of the subject property, as well as the term thereof, so he could meet his clients and discuss the same. On the basis of the foregoing, petitioner's claim that there was a perfected contract of sale between its members and respondent lacks merit and is completely baseless. cTDaEH
The Court notes petitioner's assertion in its September 10, 2016 reply concerning an alleged August 18, 1994 letter. Purportedly, petitioner conveyed "acceptance" of respondent's counter-offer of P682,000.00 and voluntarily set the terms of the transaction in this letter. The Court carefully reviewed the petition filed and no copy of such letter was attached. More importantly, the alleged August 18, 1994 letter is irrelevant in the face of the May 5, 2005 letter written by petitioner's counsel to respondent. At the risk of sounding repetitious, the May 5, 2005 letter contained an explicit request for respondent to state its selling price and terms of payment. This belies any and all claims that there was a perfected contract of sale.
To stress, there was no meeting of the minds between the parties for the sale of the subject property. There is no perfected contract of sale. It necessarily follows that petitioner does not enjoy any clear legal right in its favor for the issuance of an injunctive writ.
Again, injunction is not a remedy to protect or enforce contingent, abstract or future rights; it will not issue to protect a right not in esse and which may never arise, or to restrain an act which does not give rise to a cause of action. There must exist an actual right. There must be a patent showing by the applicant that there exists a right to be protected and that the acts against which the writ is to be directed are violative of said right. 20
In the instant case, petitioner failed to prove the existence of a right in esse in favor of its members. Thus, a writ of preliminary injunction cannot be issued in its favor. In the absence of a clear legal right, the issuance of the writ constitutes grave abuse of discretion. 21 The CA did not err in nullifying the injunctive writ issued by the RTC.
With regard to the issue of whether respondent and Joji Hagan acted in bad faith, particularly as to the validity of the public auction held by respondent, suffice it to say these arguments deserve scant consideration by the Court being raised for the first time before the Court only in petitioner's reply.
WHEREFORE, the petition is DENIED. The April 30, 2014 Decision and the February 17, 2015 Resolution of the Court of Appeals, Cagayan de Oro City, in CA-G.R. SP No. 04570-MIN, are AFFIRMED.
SO ORDERED."
Very truly yours,
(SGD.) WILFREDO V. LAPITANDivision Clerk of Court
Footnotes
1.Rollo, pp. 92-97; penned by Associate Justice Oscar V. Badelles, with Associate Justices Romulo V. Borja and Edward B. Contreras, concurring.
2.Id. at 105-106.
3.Id. at 47-49; penned by Judge Virginia Hofileña-Europa.
4.Id. at 50-51.
5.Id. at 117-137.
6.Id. at 154-167.
7.Id. at 158.
8.Ocampo v. Vda. de Fernandez, et al., 552 Phil. 166, 182 (2007).
9.Id. at 182-183.
10. 702 Phil. 109 (2013).
11.Id. at 121-122.
12.Rollo, p. 52.
13.Id. at 53.
14.Id. at 54.
15.Id. at 55.
16.Id. at 56.
17.Id. at 57.
18.Id. at 58.
19.Id. at 59.
20.Ocampo v. Vda. de Fernandez, et al., supra note 8, at 182-183.
21.Id. at 182.