In a 20-page decision, the SC's second division denied the petition of the Far East Bank and Trust Company branch in Cebu for review on certiorari against the injunction that the RTC-Mandaue City branch 56 had issued earlier.
An injunction is a judicial remedy issued in order to prohibit a party from doing or continuing to do a certain activity, while a certiorari is a writ issued by a higher court to a lower court demanding the record of a particular case.
The injunction temporarily stopped the foreclosure of the Dacay group's collateral despite the latter's failure to settle its loan with the bank amounting to millions of pesos.
Named respondents in the case that the bank had filed in court are Mary Dacay, Henry Dacay, Benson Dacay, Ramon Dacay and Ernesto Dacay Jr.-directors and corporate officers of at least six companies based in Mandaue City.
The loan contract between the bank and the Dacay group stipulated that upon failure or refusal of the mortgagor to pay the obligations when due, the entire principal, interest, penalties and other charges shall be immediately demandable and payable without need of notice or demand.
In such situation, the mortgagee, or the bank, shall also have the absolute discretion to foreclose the mortgage properties.
When the bank moved for the foreclosure of the mortgaged properties, however, the lawyers of the Dacay group immediately filed in court and successfully secured a writ of preliminary mandatory injunction.
The SC's affirmation of the lower court's issuance of the writ has temporarily set aside the foreclosure proceedings until the case is resolved by the lower court. - Rene U. Borromeo