Spouses Estares vs. Court of Appeals

Certiorari under Rule 65 cannot be availed of as a substitute for the lost remedy of an ordinary appeal under Rule 45, and a writ of preliminary injunction will not issue absent a clear and unmistakable legal right and an urgent necessity to prevent serious damage. A party who fails to establish the existence of a right to be protected and that the acts sought to be enjoined violate that right is not entitled to injunctive relief.

The Estares spouses obtained a loan from Prominent Lending & Credit Corporation (PLCC), secured by a real estate mortgage over a parcel of land with improvements in Santa Rosa, Laguna. The loan was evidenced by a promissory note and secured by the mortgage, and the spouses later claimed that these documents did not reflect their true agreement. PLCC initiated extrajudicial foreclosure proceedings before the Office of the Provincial Sheriff of Laguna upon the spouses' failure to pay. The dispute thus centered on the validity of the loan documents and the propriety of the foreclosure, with the spouses seeking to restrain the scheduled auction sale.

On January 12, 1998, Spouses Eliseo F. Estares and Rosenda P. Estares obtained a loan from Prominent Lending & Credit Corporation (PLCC) in the amount of ₱800,000.00, secured by a real estate mortgage over a 363-square-meter parcel of land with improvements situated in the Municipality of Santa Rosa, Laguna, covered by Transfer Certificate of Title No. 99261. The spouses later alleged that the promissory note and the real estate mortgage were falsified because they had affixed their signatures on two blank documents, and that the monthly interest of 3.5% and the 3% penalty on each delayed monthly interest differed from the 18% interest per annum to which they had agreed.

For failure to pay their obligation despite repeated demands, PLCC filed a petition for extrajudicial foreclosure with the Office of the Provincial Sheriff of Laguna, and on June 8, 1999, the Sheriff sent a Notice of Extrajudicial Sale to the spouses. The extrajudicial sale was scheduled for July 13, 1999 at 10:00 a.m.

At the hearing on the spouses' application for a writ of preliminary injunction, Rosenda testified that the loan proceeds of ₱637,000.00, received on January 12, 1998, were used in the improvement and renovation of their boarding house. She admitted that they did not question PLCC in writing why they received only ₱637,000.00; that when they received the Statement of Account, they did not question the figures appearing therein; and that when they received PLCC's demand letter, they went to the latter's office not to question the loan's terms and conditions but merely to request an extension of three months to pay their obligation. She acknowledged that they raised the alleged discrepancy in the amount loaned and received, as well as the blank documents they allegedly signed, only after PLCC initiated the foreclosure proceedings. In opposition, PLCC presented its manager, Rey Arambulo, who testified that the spouses were duly apprised of the terms and conditions of the loan, including the rate of interest, penalties, and other charges, in accordance with the Truth in Lending Act or Republic Act No. 3765.

During the hearing on the spouses' motion for reconsideration on September 17, 1999, Eliseo moved that he be allowed to testify on the circumstances of the loan, but the trial court denied the motion, deeming it best that he be presented during the trial on the merits. Eliseo, an overseas contract worker, had taken leave from work in the Middle East to testify on the circumstances of the loan, which he claimed was material to clarify the matter of notarization of the real estate mortgage and to show that the document was falsified.

• Right to Injunctive Relief: The Estares spouses insisted that they firmly established their right to injunctive relief, claiming that the promissory note, credit application, disbursement voucher, disclosure statement, and real estate mortgage were falsified; that the promissory note did not reflect the true amount of the loan, its term, interest, and charges; that the ₱126,362.28 represented additional charges not agreed upon prior to or before the consummation of the loan; and that the amount of the loan and rate of interest stated in the falsified promissory note were fictitious or simulated.
• Nullity of the Auction Sale: The spouses maintained that the auction sale conducted on January 5, 2000 should be nullified because it lacked republication of the notice of auction sale and was conducted in violation of the Court of Appeals' Resolution dated December 14, 1999, which they claimed enjoined the parties to maintain the status quo pending the filing of the respondents' Comment; they argued that PLCC and Sheriff Magat preempted the Court of Appeals from resolving their petition and rendered the petition moot and academic.
• Denial of Due Process: The spouses averred that Eliseo was denied due process when the trial court refused to allow him to testify during the hearing on the motion for reconsideration; they contended that Eliseo, an overseas contract worker, purposely took leave from work in the Middle East to testify on the circumstances of the loan and that his testimony was material to clarify the matter of notarization of the real estate mortgage and to show that the document was falsified.

• Procedural Deficiencies: PLCC posited that the petition should be dismissed for being deficient on both procedural and substantive aspects; that the petition was filed beyond the sixty-day period required by the rules and therefore filed out of time; and that the verification and certification of non-forum shopping were both insufficient, the verification speaking of a "Pre-Trial Brief" while the certification of non-forum shopping was executed only by Rosenda.
• Failure to Establish Right to Injunctive Relief: PLCC argued that the Estares spouses failed to establish their right to injunctive relief.
• Impropriety of Raising Auction Sale in the Motion for Reconsideration: PLCC argued that the validity of the January 5, 2000 auction sale was brought only in the motion for reconsideration, which is improper because it is a factual issue best addressed to the trial court.
• No Preemption of the Court of Appeals: PLCC claimed that Sheriff Magat did not preempt the Court of Appeals in deciding CA-G.R. SP No. 56123 when he conducted the auction sale on January 5, 2000 because the Resolution dated December 14, 1999 of the said court did not suspend or restrain the sheriff from conducting the foreclosure sale.
• No Denial of Due Process: PLCC argued that Eliseo was not denied due process because he sought to testify on factual matters in the hearing on their motion for reconsideration, which is improper as factual matters are best brought and proved during the trial on the merits of the case.

• Propriety of the Remedy: Whether the Estares spouses' resort to a petition for certiorari and prohibition under Rule 65, instead of a petition for review under Rule 45, was the proper remedy to assail the Court of Appeals' Decision and Resolution.
• Verification and Non-Forum Shopping: Whether the defects in the verification and in the certification of non-forum shopping, the latter having been signed only by Rosenda, warranted the dismissal of the petition.
• Denial of Injunctive Relief: Whether the Court of Appeals committed grave abuse of discretion in upholding the trial court's denial of the application for a writ of preliminary injunction.
• Nullity of the Auction Sale: Whether the Court of Appeals gravely abused its discretion in refusing to nullify the January 5, 2000 auction sale for lack of republication of the notice of auction sale and for allegedly preempting the Court of Appeals.
• Denial of Due Process: Whether Eliseo was denied due process when the trial court refused to allow him to testify during the hearing on the motion for reconsideration.

• Propriety of the Remedy: No. The petition for certiorari under Rule 65 was the wrong remedy, as the proper recourse was a petition for review under Rule 45; certiorari cannot be availed of as a substitute for the lost remedy of an ordinary appeal.
• Verification and Non-Forum Shopping: No. The defects did not warrant dismissal; the verification error was a slight, honest mistake, and the certification of non-forum shopping signed by Rosenda alone constituted substantial compliance with the Rules.
• Denial of Injunctive Relief: No. The Court of Appeals committed no grave abuse of discretion, the spouses having failed to establish their right to injunctive relief and the acts against which the writ was to be directed being violative of such right.
• Nullity of the Auction Sale: No. The absence of republication of the notice of auction sale is a factual matter that cannot be inquired into in a petition for certiorari and is best addressed to the trial court; the Court of Appeals' Resolution did not enjoin the conduct of the auction sale.
• Denial of Due Process: No. Eliseo was not denied due process; the essence of due process is the reasonable opportunity to be heard, and he was given the full opportunity to testify on the circumstances of the loan during the trial of the main case.

• Propriety of the Remedy: Under Rule 45, decisions, final orders, or resolutions of the Court of Appeals in any case may be appealed to the Supreme Court by filing a petition for review on certiorari, which is a continuation of the appellate process over the original case. In contrast, a special civil action under Rule 65 is an independent action based on the specific grounds therein provided and is proper only if there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. Thus, certiorari cannot be availed of as a substitute for the lost remedy of an ordinary appeal. By the spouses' own account, they received the Order dated July 7, 2000 denying their motion for reconsideration on July 18, 2000. Instead of filing a petition for review within 15 days thereof, or until August 2, 2000, they filed the special civil action by registered mail on September 16, 2000, or 60 days from receipt of the Order. By then, they had already lost the remedy of appeal, and by availing of a wrong remedy, the petition should have merited outright dismissal.
• Verification and Non-Forum Shopping: As to the verification, Rosenda stated therein that she caused the preparation of the "foregoing Pre-Trial Brief," which the Court considered a slight error and honest mistake in the preparation of the petition. The purpose of requiring a verification is simply to secure an assurance that the allegations of the petition have been made in good faith, or are true and correct, not merely speculative; the requirement is a condition affecting the form of pleadings, and noncompliance therewith does not necessarily render it fatally defective, verification being only a formal, not a jurisdictional, requirement. As to the certification of non-forum shopping signed only by Rosenda, the general rule is that the certificate must be signed by all the petitioners or plaintiffs in a case, and the signing by only one of them is insufficient because a lone signatory cannot be presumed to have personal knowledge of the matters required to be stated in the attestation. However, the rules on forum shopping, designed to promote and facilitate the orderly administration of justice, should not be interpreted with such absolute literalness as to subvert their ultimate and legitimate objective, which is simply to prohibit and penalize the evils of forum shopping; strict compliance underscores the mandatory nature of the rules but does not interdict substantial compliance under justifiable circumstances. The execution by Rosenda of the certificate in behalf of her co-petitioner and husband, Eliseo, constituted substantial compliance, since they share a common interest in the conjugal property involved, the petition originated from an action brought by the spouses and was clearly intended for the benefit of the conjugal partnership, and the husband was at that time an overseas contract worker working in Algeria while the petition was prepared in Sta. Rosa, Laguna; a rigid application that would disauthorize the wife's signing the certification in her behalf and that of her husband was too harsh and clearly uncalled for.
• Denial of Injunctive Relief: Generally, injunction is a preservative remedy for the protection of substantive rights or interests; it is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. The controlling reason for the existence of the judicial power to issue the writ is that the court may thereby prevent a threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly investigated and advisedly adjudicated. It is to be resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard of compensation. The application of the writ rests upon an alleged existence of an emergency or of a special reason for such an order before the case can be regularly heard, and the essential conditions for granting such temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and that on the entire showing from both sides, it appears, in view of all the circumstances, that the injunction is reasonably necessary to protect the legal rights of plaintiff pending the litigation. The spouses had the burden in the trial court to establish (a) the existence of their right to be protected and (b) that the acts against which the injunction is to be directed are violative of such right; to be entitled to an injunctive writ, the petitioner must show the existence of a clear and unmistakable right and an urgent and paramount necessity for the writ to prevent serious damage. The spouses failed to establish their right to injunctive relief. They did not deny that they were indebted to PLCC but only questioned the amount thereof; their property was by their own choice encumbered by a real estate mortgage; and upon the nonpayment of the loan secured by the mortgage, the mortgaged property was properly subject to a foreclosure sale. Rosenda's testimony sealed the fate of the necessity of the writ: she admitted that they did not question PLCC in writing why they received only ₱637,000.00, did not question the figures in the Statement of Account, and merely requested an extension of three months to pay when they received the demand letter; she acknowledged that they raised the alleged discrepancy and the blank documents only after PLCC initiated the foreclosure proceedings. The assessment and evaluation of evidence in the issuance of the writ of preliminary injunction involve findings of facts ordinarily left to the trial court for its conclusive determination; a trial court's decision to grant or deny injunctive relief will not be set aside on appeal unless the court abused its discretion. In granting or denying injunctive relief, a court abuses its discretion when it lacks jurisdiction, fails to consider and make a record of the factors relevant to its determination, relies on clearly erroneous factual findings, considers clearly irrelevant or improper factors, clearly gives too much weight to one factor, relies on erroneous conclusions of law or equity, or misapplies its factual or legal conclusions. The spouses clearly failed to prove that they had a right protected and that the acts against which the writ was to be directed were violative of said right; hence, the Court of Appeals did not commit grave abuse of discretion in dismissing the petition.
• Nullity of the Auction Sale: The absence of republication of the notice of auction sale is a factual matter which, by the weight of judicial precedents, cannot be inquired into by the Supreme Court in a petition for certiorari; it is best addressed to the attention of the trial court and taken up in the trial of the case, necessitating the presentation of evidence by both parties. The propriety of the auction sale is a matter which the trial court is in the best position to determine, for certiorari under Rule 65 is a remedy narrow in scope and inflexible in character, not a general utility tool in the legal workshop. It offers only a limited form of review, its principal function being to keep an inferior tribunal within its jurisdiction; it can be invoked only for an error of jurisdiction, that is, one where the act complained of was issued by the court, officer, or quasi-judicial body without or in excess of jurisdiction, or with grave abuse of discretion tantamount to lack or excess of jurisdiction, and not to be used for any other purpose, such as to cure errors in proceedings or to correct erroneous conclusions of law or fact. As to the assertion that the Court of Appeals' Resolution dated December 14, 1999 impliedly directed the parties to maintain the status quo, the Resolution clearly showed that the Court of Appeals did not give due course to the petition but merely required PLCC to comment thereon; it did not enjoin the conduct of the auction sale, and in any case, the necessity for the issuance of the writ of injunction had been found wanting.
• Denial of Due Process: A writ of preliminary injunction is generally based solely on initial and incomplete evidence; the evidence submitted during the hearing on an application for a writ of preliminary injunction is not conclusive or complete, for only a "sampling" is needed to give the trial court an idea of the justification for the preliminary injunction pending the decision of the case on the merits. It was the spouses' choice to present only Rosenda to testify on the circumstances of the loan at the hearing on their application, and they cannot assert that Eliseo should have been accorded that opportunity during the hearing on the motion for reconsideration. The essence of due process is found in the reasonable opportunity to be heard and submit any evidence one may have in support of one's defense; what the law proscribes is the lack of opportunity to be heard. As long as a party is given the opportunity to defend his interests in due course, he would have no reason to complain, for it is this opportunity to be heard that makes up the essence of due process. Eliseo cannot complain that he was deprived of due process since he was given the full opportunity to testify on the circumstances of the loan during the trial of the main case.

• Certiorari as a Substitute for Lost Appeal — A special civil action for certiorari under Rule 65 is an independent action based on the specific grounds therein provided and is proper only if there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. It cannot be availed of as a substitute for the lost remedy of an ordinary appeal under Rule 45. In this case, the spouses received the Court of Appeals' denial of their motion for reconsideration on July 18, 2000 and had until August 2, 2000 to file a petition for review, but instead filed a Rule 65 petition on September 16, 2000; having lost the remedy of appeal, the petition merited outright dismissal.
• Requisites of a Writ of Preliminary Injunction — Injunction is a preservative remedy for the protection of substantive rights or interests, not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. The essential conditions for granting temporary injunctive relief are (a) that the complaint alleges facts which appear sufficient to constitute a cause of action for injunction and (b) that on the entire showing from both sides, it appears, in view of all the circumstances, that the injunction is reasonably necessary to protect the legal rights of the plaintiff pending the litigation. The applicant must establish the existence of a clear and unmistakable right and an urgent and paramount necessity for the writ to prevent serious damage. The spouses failed to establish their right to injunctive relief, having admitted that they questioned the loan's terms only after foreclosure proceedings began.
• Abuse of Discretion in Injunctive Relief — A trial court's decision to grant or deny injunctive relief will not be set aside on appeal unless the court abused its discretion. A court abuses its discretion when it lacks jurisdiction, fails to consider and make a record of the factors relevant to its determination, relies on clearly erroneous factual findings, considers clearly irrelevant or improper factors, clearly gives too much weight to one factor, relies on erroneous conclusions of law or equity, or misapplies its factual or legal conclusions.
• Substantial Compliance with the Certification of Non-Forum Shopping — The rule requiring the certificate of non-forum shopping to be signed by all petitioners or plaintiffs is mandatory, but it does not interdict substantial compliance under justifiable circumstances. The execution of the certificate by one spouse in behalf of the other constitutes substantial compliance where they share a common interest in conjugal property, the petition originated from an action brought by the spouses and was intended for the benefit of the conjugal partnership, and the other spouse was an overseas contract worker at the time of preparation.
• Verification as a Formal, Non-Jurisdictional Requirement — The purpose of requiring a verification is simply to secure an assurance that the allegations of the petition have been made in good faith, or are true and correct, not merely speculative. It is a condition affecting the form of pleadings, and noncompliance therewith does not necessarily render the pleading fatally defective, verification being only a formal, not a jurisdictional, requirement.
• Essence of Due Process — The essence of due process is found in the reasonable opportunity to be heard and to submit any evidence one may have in support of one's defense; what the law proscribes is the lack of opportunity to be heard. As long as a party is given the opportunity to defend his interests in due course, he has no reason to complain. A party who chose to present only one witness at the injunction hearing cannot claim denial of due process when the trial court defers the other witness's testimony to the trial on the merits.
• Narrow Scope of Certiorari — Certiorari under Rule 65 is a remedy narrow in scope and inflexible in character; it is not a general utility tool in the legal workshop. It offers only a limited form of review, its principal function being to keep an inferior tribunal within its jurisdiction. It can be invoked only for an error of jurisdiction — where the act complained of was issued without or in excess of jurisdiction, or with grave abuse of discretion tantamount to lack or excess of jurisdiction — and not to cure errors in proceedings or to correct erroneous conclusions of law or fact.

• "Thus, certiorari cannot be availed of as a substitute for the lost remedy of an ordinary appeal." — This passage states the ratio decidendi for the dismissal of the petition on procedural grounds, establishing that the spouses' failure to file a timely Rule 45 petition foreclosed their recourse to Rule 65.
• "The essential conditions for granting such temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and that on the entire showing from both sides, it appears, in view of all the circumstances, that the injunction is reasonably necessary to protect the legal rights of plaintiff pending the litigation." — This passage articulates the canonical formulation of the requisites for a writ of preliminary injunction, a doctrine frequently cited in subsequent jurisprudence.
• "The essence of due process is found in the reasonable opportunity to be heard and submit any evidence one may have in support of one's defense. What the law proscribes is the lack of opportunity to be heard." — This passage defines the constitutional standard of due process as applied to the denial of Eliseo's request to testify at the hearing on the motion for reconsideration.
• "For it is basic that certiorari under Rule 65 is a remedy narrow in scope and inflexible in character. It is not a general utility tool in the legal workshop." — This passage characterizes the limited function of the extraordinary writ of certiorari, explaining why the absence of republication of the notice of auction sale could not be inquired into in the petition.

• Go vs. Tong, G.R. No. 151942, November 27, 2003, 416 SCRA 557 — Cited for the rule that decisions, final orders, or resolutions of the Court of Appeals in any case may be appealed to the Supreme Court by a petition for review on certiorari under Rule 45, which is a continuation of the appellate process.
• Fortune Guarantee and Insurance Corporation vs. Court of Appeals, G.R. No. 110701, March 12, 2002, 379 SCRA 7 — Cited for the rule that certiorari cannot be availed of as a substitute for the lost remedy of an ordinary appeal.
• Heirs of Marcelino Pagobo vs. Court of Appeals, G.R. No. 121687, October 16, 1997, 280 SCRA 870 — Cited, with Fortune Guarantee, for the same rule barring certiorari as a substitute for appeal.
• Loquias vs. Office of Ombudsman, G.R. No. 139396, August 15, 2000, 338 SCRA 62 — Cited for the general rule that the certificate of non-forum shopping must be signed by all petitioners or plaintiffs and that signing by only one is insufficient.
• Donato vs. Court of Appeals, G.R. No. 129638, December 8, 2003, 417 SCRA 216 — Cited for the doctrine that the rules on forum shopping should not be interpreted with absolute literalness and that substantial compliance is permitted under justifiable circumstances.
• Del Rosario vs. Court of Appeals, G.R. No. 115106, March 15, 1996, 255 SCRA 152 — Cited for the essential conditions for granting temporary injunctive relief.
• Zamboanga Barter Goods Retailers Association, Inc. vs. Lobregat, G.R. No. 145466, July 7, 2004, 433 SCRA 624 — Cited for the requisites of injunctive relief, namely the existence of a right to be protected and that the acts against which the injunction is directed violate such right.
• Ong Ching Kian Chuan vs. Court of Appeals, G.R. No. 130360, August 15, 2001, 363 SCRA 145 — Cited for the requirement that the petitioner show a clear and unmistakable right and an urgent and paramount necessity for the writ to prevent serious damage.
• Almeida vs. Gonzales, G.R. No. 159124, January 17, 2005 — Cited for the enumeration of circumstances under which a court abuses its discretion in granting or denying injunctive relief.
• Land Bank of the Philippines vs. Court of Appeals, G.R. No. 129368, August 25, 2003, 409 SCRA 455 — Cited for the rule that certiorari is a remedy narrow in scope and inflexible in character, offering only a limited form of review.
• Anama vs. Court of Appeals, G.R. No. 128609, January 29, 2004, 421 SCRA 338 — Cited for the doctrine that the essence of due process is the reasonable opportunity to be heard and submit evidence in support of one's defense.
• Los Baños Rural Bank, Inc. vs. Africa, G.R. No. 143994, July 11, 2002, 384 SCRA 535 — Cited for the rule that evidence submitted during the hearing on an application for a writ of preliminary injunction is not conclusive or complete, only a "sampling" being needed.

• Section 1, Rule 65, Rules of Court — Provides that when any tribunal, board, or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court. The Court applied this provision in holding that the spouses' resort to certiorari was improper because the remedy of appeal under Rule 45 was available and had been lost.
• Rule 45, Rules of Court — Governs petitions for review on certiorari of decisions, final orders, or resolutions of the Court of Appeals, which are but a continuation of the appellate process over the original case. The Court invoked this rule to establish that the spouses should have filed a petition for review within 15 days from receipt of the denial of their motion for reconsideration, rather than a Rule 65 petition.
• Republic Act No. 3765 (Truth in Lending Act) — Cited in the pleadings and testimony as the law pursuant to which PLCC claimed the spouses were duly apprised of the terms and conditions of the loan, including the rate of interest, penalties, and other charges.

Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur. Puno, (Chairman), on official leave.