VOL. 351, FEBRUARY 7, 2001
399
Idolor vs. Court of Appeals
*
G.R. No. 141853. February 7, 2001.
TERESITA V. IDOLOR, petitioner, vs. HON. COURT OF
APPEALS, SPS. GUMERSINDO DE GUZMAN and
ILUMINADA DE GUZMAN and HON. PRUDENCIO A.
CASTILLO, JR., Presiding Judge, Regional Trial Court,
National Capital Judicial Region, Branch 220, Quezon
City, respondents.
Actions; Injunction; Requisites; Injunction is a preservative
remedy aimed at protecting substantive rights and interests—it is
not designed to protect contingent or future rights.—Injunction is a
preservative remedy aimed at protecting substantive rights and
interests. Before an injunction can be issued, it is essential that
the following requisites be present: 1) there must be a right in
esse or the existence of a right to be protected; 2) the act against
which the injunction is to be directed is a violation of such right.
Hence the existence of a right violated, is a prerequisite to the
granting of an injunction. Injunction is not designed to protect
contingent or future rights. Failure to establish either the
existence of a clear and positive right which should be judicially
protected through the writ of injunction or that the defendant has
committed or has attempted to commit any act which has
endangered or tends to endanger the existence of said right, is a
sufficient ground for denying the injunction. 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.
Same; Same; It is always a ground for denying injunction that
the party seeking it has insufficient title or interest to sustain it,
and no claim to the ultimate relief sought—in other words, that
she shows no equity—and the possibility of irreparable damage
without proof of actual existing right is not a ground for an
injunction.—In the instant case, we agree with the respondent
Court that petitioner has no more proprietary right to speak of
over the foreclosed property to entitle her to the issuance of a writ
of injunction. It appears that the mortgaged property was sold in
a public auction to private respondent Gumersindo on May 23,
1997 and the sheriffs certificate of sale was registered with the
Registry of Deeds of
_________________
*
THIRD DIVISION.
400
400
SUPREME COURT REPORTS ANNOTATED
Idolor vs. Court of Appeals
Quezon City on June 23, 1997. Petitioner had one year from the
registration of the sheriffs sale to redeem the property but she
failed to exercise her right on or before June 23, 1998, thus
spouses de Guzman are now entitled to a conveyance and
possession of the foreclosed property. When petitioner filed her
complaint for annulment of sheriffs sale against private
respondents with prayer for the issuance of a writ of preliminary
injunction on June 25, 1998, she failed to show sufficient interest
or title in the property sought to be protected as her right of
redemption had already expired on June 23, 1998, i.e. two (2) days
before the filing of the complaint. It is always a ground for
denying injunction that the party seeking it has insufficient title
or interest to sustain it, and no claim to the ultimate relief sought
—in other words, that she shows no equity. The possibility of
irreparable damage without proof of actual existing right is not a
ground for an injunction.
Obligations and Contracts; Novation; Words and Phrases;
Novation is the extinguishment of an obligation by the substitution
or change of the obligation by a subsequent one which terminates
it, either by changing its objects or principal conditions, or by
substituting a new debtor in place of the old one, or by subrogating
a third person to the rights of the creditor; No novation of a
contract had occurred when the new agreement entered into
between the parties was intended to give life to the old one.—
Novation is the extinguishment of an obligation by the
substitution or change of the obligation by a subsequent one
which terminates it, either by changing its objects or principal
conditions, or by substituting a new debtor in place of the old one,
or by subrogating a third person to the rights of the creditor.
Under the law, novation is never presumed. The parties to a
contract must expressly agree that they are abrogating their old
contract in favor of a new one. Accordingly, it was held that no
novation of a contract had occurred when the new agreement
entered into between the parties was intended to give life to the
old one.
Same; Same; Where the parties to the new obligation expressly
recognize the continuing existence and validity of the old one,
where, in other words, the parties expressly negated the lapsing of
the old obligation, there can be no novation.—A review of the
“Kasunduang Pag-aayos” which is quoted earlier does not support
petitioner’s contention that it novated the real estate mortgage
since the will to novate did not appear by express agreement of
the parties nor the old and the new contracts were incompatible
in all points. In fact, petitioner expressly recognized in the
Kasunduan the existence and the validity of the old obligation
where she acknowledged her long” overdue account since
September 20, 1994 which was
401
VOL. 351, FEBRUARY 7, 2001
401
Idolor vs. Court of Appeals
secured by a real estate mortgage and asked for a ninety (90) days
grace period to settle her obligation on or before December 21,
1996 and that upon failure to do so, she will execute a deed of sale
with a right to repurchase without interest within one year in
favor of private respondents. Where the parties to the new
obligation expressly recognize the continuing existence and
validity of the old one, where, in other words, the parties
expressly negated the lapsing of the old obligation, there can be
no novation.
Same; Same; It is not proper to consider an obligation novated
by unimportant modifications which do not alter its essence.—
Notably, the provision in the “Kasunduang Pag-aayos” regarding
the execution of a deed of sale with right to repurchase within one
year would have the same effect as the extrajudicial foreclosure of
the real estate mortgage wherein petitioner was given one year
from the registration of the sheriffs sale in the Registry of
property to redeem the property, i.e., failure to exercise the right
of redemption would entitle the purchaser to possession of the
property. It is not proper to consider an obligation novated by
unimportant modifications which do not alter its essence. It bears
stress that the period to pay the total amount of petitioner’s
indebtedness inclusive of interest amounted to P1,233,288.23
expired on December 21, 1996 and petitioner failed to execute a
deed of sale with right to repurchase on the said date up to the
time private respondents filed their petition for extrajudicial
foreclosure of real estate mortgage. The failure of petitioner to
comply with her undertaking in the “kasunduan” to settle her
obligation effectively delayed private respondents’ right to
extrajudicially foreclose the real estate mortgage which right
accrued as far back as 1994. Thus, petitioner has not shown that
she is entitled to the equitable relief of injunction.
PETITION for review on certiorari of a decision of the
Court of Appeals.
The facts are stated in the opinion of the Court.
Samson, Montesa, Villacorta and Associates for
petitioner.
Antonio Z. Magabo for private respondents.
402
402
SUPREME COURT REPORTS ANNOTATED
Idolor vs. Court of Appeals
GONZAGA-REYES, J.:
This is a petition for review on certiorari filed by petitioner
1
Teresita Idolor which seeks to set aside the decision of 2the
respondent Court of Appeals which reversed
the Order of
3
the Regional Trial Court of Quezon City granting Idolor’s
prayer for the issuance of a writ of preliminary injunction
and the resolution
denying petitioner’s motion for
4
reconsideration.
On March 21, 1994, to secure a loan of P520,000.00,
petitioner Teresita Idolor executed in favor of private
respondent Gumersindo De Guzman a Deed of Real Estate
Mortgage with right of extrajudicial foreclosure upon
failure to redeem the mortgage on or before September 20,
1994. The object of said mortgage is a 200-square meter
property with improvements located at 66 Ilocos Sur
Street, Barangay Ramon Magsaysay, Quezon City covered
by TCT No. 25659.
On September 21, 1996, private respondent Iluminada
de Guzman, wife of Gumersindo de Guzman, filed a
complaint against petitioner Idolor before the Office of the
Barangay Captain of Barangay Ramon Magsaysay, Quezon
City, which resulted in a 5“Kasunduang Pag-aayos” which
agreement is quoted in full :
“Kami, ang (mga) may sumbong at (mga) ipinagsusumbong sa
usaping binabanggit sa itaas, ay nagkakasundo sa pamamagitan
nito na ayusin ang aming alitan gaya ng sumusunod:
Na ako si Teresita V. Idolor of legal age ay nakahiram ng
halagang P520,000.00 noong September 20, 1994.
_______________
1
CA-G.R. SP No. 49469, penned by Justice Jesus M. Elbinias,
concurred in by Justices Delilah Vidallon Magtolis and Rodrigo V. Cosico;
Rollo, pp. 35-37.
2
3
CA Rollo, pp. 42-46.
Branch 220, presided by Judge Prudencio Altre Castillo, Jr.; Civil
Case No. Q-98-34728.
4
Justice Elbinias retired on October 15, 1999, thus the motion for
reconsideration was raffled to another member, Justice Cosico; Rollo, pp.
40-42.
5
Rollo, p. 43.
403
VOL. 351, FEBRUARY 7, 2001
403
Idolor vs. Court of Appeals
Na ang nasabing halaga ay may nakasanlang titulo ng lupa (TCT
No. 25659) under Registry receipt 3420 dated July 15, 1996.
Na ako si Teresita V. Idolor ay humihingi ng 90 days palugit
(grace period) to settle the said amount.
Failure to settle the above account on or before December 21,
1996, I agree to execute a deed of sale with the agreement to
repurchase without interest within one year.
Total amount of P1,233,288.23 inclusive of interest earned.
At nangangako kami na tutupad na tunay at matapat sa mga
katakdaan ng pag-aayos na inilahad sa itaas.”
Petitioner failed to comply with her undertaking; thus
private respondent Gumersindo filed a motion for execution
before the Office of the Barangay captain who subsequently
issued a certification to file action.
On March 21, 1997, respondent Gumersindo De Guzman
filed an extra judicial foreclosure of the real estate
mortgage pursuant to the parties agreement set forth in
the real estate mortgage dated March 21, 1994.
On May 23, 1997, the mortgaged property was sold in a
public auction to respondent Gumersindo, as the highest
bidder and consequently, the Sheriffs Certificate of Sale
was registered with the Registry of Deeds of Quezon City
on June 23, 1997.
On June 25, 1998, petitioner filed with the Regional
Trial Court of Quezon City, Branch 220, a complaint for
annulment of Sheriffs Certificate of Sale with prayer for
the issuance of a temporary restraining order (TRO) and a
writ of preliminary injunction against private respondents.
Deputy Sheriffs Marino Cachero and Rodolfo Lescano and
the Registry of Deeds of Quezon City alleging among others
alleged irregularity and lack of notice in the extrajudicial
foreclosure proceedings subject of the real estate mortgage.
In the meantime, a temporary restraining order was issued
by the trial court.
On July 28, 1998, the trial court issued a writ of
preliminary injunction enjoining private respondents, the
Deputy Sheriffs and the Registry of Deeds of Quezon City
from causing the issuance of a final deed of sale and
consolidation of ownership of the subject
404
404
SUPREME COURT REPORTS ANNOTATED
Idolor vs. Court of Appeals
property in favor of the De Guzman spouses. The trial court
denied the motion for reconsideration filed by the de
Guzman spouses.
Spouses de Guzman filed with the respondent Court of
Appeals a petition for certiorari seeking annulment of the
trial court’s order dated July 28, 1998 which granted the
issuance of a preliminary injunction.
On September 28, 1999, the respondent court granted
the petition and annulled the assailed writ of preliminary
injunction. Teresita Idolor filed her motion for
reconsideration which was denied in a resolution dated
February 4, 2000.
Hence this petition for review on certiorari filed by
petitioner Teresita V. Idolor. The issues raised by
petitioner are-: whether or not the respondent Court of
Appeals erred in ruling (1) that petitioner has no more
proprietary right to the issuance of the writ of injunction,
(2) that the “Kasunduang Pag-aayos” did not ipso facto
result in novation of the real estate mortgage, (3) that the
“Kasunduang Pag-aayos” is merely a promissory note of
petitioner to private respondent spouses; and (4) that the
questioned writ of preliminary injunction was issued with
grave abuse of discretion.
The core issue in this petition is whether or not the
respondent Court erred in finding that the trial court
committed grave abuse of discretion in enjoining the
private and public respondents from causing the issuance
of a final deed of sale and consolidation of ownership of the
subject parcel of land in favor of private respondents.
Petitioner claims that her proprietary right over the
subject parcel of land was not yet lost since her right to
redeem the subject land for a period of one year had neither
lapsed nor run as the sheriffs certificate of sale was null
and void; that petitioner and the general public have not
been validly notified of the auction sale conducted by
respondent sheriffs; that the newspaper utilized in the
publication of the notice of sale was not a newspaper of
general circulation.
We do not agree.
405
VOL. 351, FEBRUARY 7, 2001
405
Idolor vs. Court of Appeals
Injunction is a preservative remedy
aimed at protecting
6
substantive rights and interests. Before an injunction can
be issued, it is essential that the following requisites be
present: 1) there must be a right in esse or the existence of
a right to be protected; 2) the act against which the7
injunction is to be directed is a violation of such right.
Hence the existence of a right violated, is a prerequisite to
the granting of an injunction. Injunction is not designed to
protect contingent or future rights. Failure to establish
either the existence of a clear and positive right which
should be judicially protected through the writ of injunction
or that the defendant has committed or has attempted to
commit any act which has endangered or tends to endanger
the existence of said right,
is a sufficient ground for
8
denying the injunction. 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 9 be thoroughly investigated and advisedly
adjudicated. It is to be resorted to only when there is a
pressing necessity to avoid injurious consequences which
10
cannot be remedied under any standard of compensation.
In the instant case, we agree with the respondent Court
that petitioner has no more proprietary right to speak of
over the foreclosed property to entitle her to the issuance of
a writ of injunction. It appears that the mortgaged property
was sold in a public auction to private respondent
Gumersindo on May 23, 1997 and the sheriff’s certificate of
sale was registered with the Registry of Deeds of Quezon
City on June 23, 1997. Petitioner had one year from the
registration of the sheriff’s sale to redeem the property but
she failed to exercise her right on or before June 23, 1998,
thus spouses de Guzman are now entitled to a conveyance
and possession of the foreclosed property. When petitioner
filed her complaint for annulment of sheriff’s sale against
private respondents with prayer
________________
6
Heirs of Joaquin Asuncion vs. Gervacio, Jr., 304 SCRA 322 (1999).
7
Ibid.; Sales vs. SEC, 169 SCRA 109 (1989).
8
S & A Gaisano Incorporated vs. Hidalgo, 192 SCRA 224 (1990) citing
Rosauro vs. Cuneta, 151 SCRA 575 (1987).
9
Del Rosario vs. CA, 255 SCRA 152 (1996).
10
Del Rosario vs. CA, supra.
406
406
SUPREME COURT REPORTS ANNOTATED
Idolor vs. Court of Appeals
for the issuance of a writ of preliminary injunction on June
25, 1998, she failed to show sufficient interest or title in the
property sought to be protected as her right of redemption
had already expired on June 23, 1998, i.e. two (2) days
before the filing of the complaint. It is always a ground for
denying injunction that the party seeking it has
insufficient title or interest to sustain it, and no claim to
the ultimate
11
relief sought—in other words, that she shows
no equity. The possibility of irreparable damage without
proof of actual
12
existing right is not a ground for an
injunction.
Petitioner’s allegation regarding the invalidity of the
sheriff’s sale dwells on the merits of the case; We cannot
rule on the same considering that the matter should be
resolved during the trial on the merits.
Petitioner next contends that the execution of the
“Kasunduang Pag-aayos” dated September 21, 1996
between her and spouses de Guzman before the Office of
the Lupon Tagapamayapa showed the express and
unequivocal intention of the parties to novate or modify the
real estate mortgage; that a comparison of the real estate
mortgage dated March 21, 1994 and the “Kasunduang Pagaayos” dated September 21, 1996 revealed the
irreconciliable incompatibility between them, i.e., that
under the first agreement, the amount due was five
hundred twenty thousand (P520,000) pesos only payable by
petitioner within six (6) months, after which it shall earn
interest at the legal rate per annum and nonpayment of
which within the stipulated period, private respondents
have the right to extrajudicially foreclose the real estate
mortgage while under the second agreement, the amount
due was one million two hundred thirty three thousand two
hundred eighty eight and 23/100 (P1,233,288.23) inclusive
of interest, payable within 90 days and in case of non
payment of the same on or before December 21, 1996,
petitioner should execute a deed of sale with right to
repurchase within one year without interest; that the
second agreement “Kasunduang Pagaayos” was a valid new
contract as it was duly
________________
11
Angela Estate, Inc. vs. CFI of Negros Occidental, 24 SCRA 500
(1968).
12
Heirs of Joaquin Asuncion vs. Gervacio, Jr., supra citing Arcega vs.
CA, 275 SCRA 176 (1997).
407
VOL. 351, FEBRUARY 7, 2001
407
Idolor vs. Court of Appeals
executed by the parties and it changed the principal
conditions of petitioner’s original obligations. Petitioner
insists that the “Kasunduang Pag-aayos” was not a mere
promissory note contrary to respondent court’s conclusion
since it was entered by the parties before the Lupon
13
Tagapamayapa which has the effect of a final judgment.
We are not persuaded.
Novation is the extinguishment of an obligation by the
substitution or change of the obligation by a subsequent
one which terminates it, either by changing its objects or
principal conditions, or by substituting a new debtor in
place of the old one, or14by subrogating a third person to the
rights of the creditor. Under the law, novation is never
presumed. The parties to a contract must expressly agree
that15they are abrogating their old contract in favor of a new
one. Accordingly, it was held that no novation of a
contract had occurred when the new agreement entered
into 16between the parties was intended to give life to the old
one.
A review of the “Kasunduang Pag-aayos” which is
quoted earlier does not support petitioner’s contention that
it novated the real estate mortgage since the will to novate
did not appear by express agreement of the parties nor the
old and the new contracts were incompatible in all points.
In fact, petitioner expressly recognized in the Kasunduan
the existence and the validity of the old obligation where
she acknowledged her long overdue account since Sep________________
13
Sections 416 and 417 of RA 7160 otherwise known as The New Local
Government Code of 1991” provides:
“Section 416. The amicable settlement and arbitration award should
have the force and effect of the final judgment of a court.
“Section 417. The amicable settlement or arbitration award may be
enforced by execution by the lupon within six (6) months from the date of
settlement. After the lapse of time, the settlement may be enforced the
action in the appropriate city or municipal court.”
14
Cochingyan. Jr. vs. R&B Surely and Insurance Co., Inc, 151 SCRA
339 (1987) citing De Cortes vs. Venturanza, 79 SCRA 709 (1977).
15
Huibonhua vs. CA, 320 SCRA 625 (1999) citing Rillo vs. CA, 274
SCRA 461 (1997).
16
Ibid.
408
408
SUPREME COURT REPORTS ANNOTATED
Idolor vs. Court of Appeals
tember 20, 1994 which was secured by a real estate
mortgage and asked for a ninety (90) days grace period to
settle her obligation on or before December 21, 1996 and
that upon failure to do so, she will execute a deed of sale
with a right to repurchase without interest within one year
in favor of private respondents. Where the parties to the
new obligation expressly recognize the continuing existence
and validity of the old one, where, in other words, the
parties expressly negated the
17
lapsing of the old obligation,
there can be no novation. We find no cogent reason to
disagree with the respondent court’s pronouncement as
follows:
“In the present case, there exists no such express abrogation of
the original undertaking. The agreement adverted to (Annex 2 of
Comment, p. 75 Rollo) executed by the parties on September 21,
1996 merely gave life to the March 21, 1994 mortgage contract
which was then more than two years overdue. Respondent
acknowledged therein her total indebtedness in the sum of
P1,233,288.23 including the interests due on the unpaid mortgage
loan which amount she promised to liquidate within ninety (90)
days or until December 21, 1996, failing which she also agreed to
execute in favor of the mortgagee a deed of sale of the mortgaged
property for the same amount without interest. Evidently, it was
executed to facilitate easy compliance by respondent mortgagor
with her mortgage obligation. It (the September 21, 1996
agreement) is not incompatible and can stand together with the
mortgage contract of March 21, 1994.
A compromise agreement clarifying the total sum owned by a
buyer with the view that he would find it easier to comply with
his obligations under the Contract to Sell does not novate said
Contract to Sell (Rillo v. Court of Appeals, 274 SCRA 461 [1997]).
Respondent correctly argues that the compromise agreement
has the force and effect of a final judgment. That precisely is the
reason why petitioner resorted to the foreclosure of the mortgage
on March 27, 1997, after her failure to comply with her obligation
which expired on December 21, 1996.
Reliance by private respondent upon Section 417 of the New
Local Government Code of 1991, which requires the lapse of six
(6) months before the amicable settlement may be enforced, is
misplaced. The instant
________________
17
Huibonhua vs. CA, supra citing Cochingyan, Jr. vs. R&B Surety and
Insurance Co., Inc., supra.
409
VOL. 351, FEBRUARY 7, 2001
409
Idolor vs. Court of Appeals
case deals with extra judicial foreclosure governed by ACT No.
3135 as amended.”
Notably, the provision in the “Kasunduang Pag-aayos”
regarding the execution of a deed of sale with right to
repurchase within one year would have the same effect as
the extrajudicial foreclosure of the real estate mortgage
wherein petitioner was given one year from the registration
of the sheriff’s sale in the Registry of property to redeem
the property, i.e., failure to exercise the right of redemption
would entitle the purchaser to possession of the property. It
is not proper to consider an obligation novated by
18
unimportant modifications which do not alter its essence.
It bears stress that the period to pay the total amount of
petitioner’s indebtedness inclusive of interest amounted to
P1,233,288.23 expired on December 21, 1996 and petitioner
failed to execute a deed of sale with right to repurchase on
the said date up to the time private respondents filed their
petition for extrajudicial foreclosure of real estate
mortgage. The failure of petitioner to comply with her
undertaking in the “kasunduan” to settle her obligation
effectively delayed private respondents’ right to
extrajudicially foreclose the real estate mortgage which
right accrued as far back as 1994. Thus, petitioner has not
shown that she is entitled to the equitable relief of
injunction.
WHEREFORE, the petition is DENIED. The decision of
the respondent Court of Appeals dated September 28, 1999
is hereby AFFIRMED.
SO ORDERED.
Melo (Chairman), Vitug, Panganiban and
Sandoval-Gutierrez, JJ., concur.
Petition denied, judgment affirmed.
Notes.—Where three lot owners simultaneously entered
into a lease contract with one lessee, novation of the
contract could only be effected by their simultaneous act of
abrogating the original
________________
18
Tolentino, Volume IV, Civil Code of the Philippines, 1991 edition, p.
387 citing Sentencias, March 14, 1908, April 15, 1909 and July 8, 1910.
410
410
SUPREME COURT REPORTS ANNOTATED
People vs. Rondilla
contract and at the same time forging a new one in writing.
(Huibonhoa vs. Court of Appeals, 320 SCRA 625 [1999])
Neither acceptance of partial payment nor change of
place or manner of payment involves novation, for novation
cannot be presumed but must be expressly intended by the
parties. (Diongzon vs. Court of Appeals, 321 SCRA 477
[1999])
——o0o——
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