Court of Appeals Cannot Stop a Writ of Possession Through a Standalone Injunction Petition

The Supreme Court’s 2006 ruling in Allgemeine-Bau-Chemie Phils., Inc. v. Metropolitan Bank & Trust Co. (G.R. No. 159296) clarifies a critical point for anyone facing foreclosure: the Court of Appeals cannot issue a preliminary injunction in an original action filed solely for that purpose. The case involved a company that had fully paid for condominium units, only to see those units covered by a bank’s writ of possession after the developer defaulted on its mortgage. The ruling is a stark reminder that procedural jurisdiction often decides cases before the merits are ever reached.

The Facts: A Fully Paid Buyer Caught in a Foreclosure

Asian Appraisal Holdings, Inc. (AAHI) obtained a ₱442.5 million loan from Solidbank Corporation in 1996 to build the Asian Star Building in Muntinlupa City. As security, AAHI executed a real estate mortgage over the land and the condominium, including all units, parking slots, and common areas. The mortgage was registered and annotated on the condominium certificates of title.

In 1999, AAHI sold Units 1004 and 1005, plus several parking slots, to Allgemeine-Bau-Chemie Phils., Inc. (the petitioner) for over ₱23 million. The petitioner occupied the units as its business premises and, by October 2001, had fully paid its obligation.

Meanwhile, AAHI defaulted on its loan. Solidbank’s successor, Metrobank, filed for extrajudicial foreclosure in October 2000. AAHI sued to stop the foreclosure, but the properties were sold at public auction to Metrobank, which received a certificate of sale. In January 2002, Metrobank filed an ex-parte petition for a writ of possession, which the RTC Branch 276 granted on April 9, 2002.

The petitioner, which had intervened in AAHI’s separate case before Branch 256, then filed its own petition with the Court of Appeals—not to challenge the writ’s validity, but simply to enjoin its implementation pending resolution of the underlying cases.

The Issue: Can the Court of Appeals Issue a Standalone Injunction?

The narrow legal question was whether the Court of Appeals had jurisdiction to grant a writ of preliminary injunction in an original action filed for that purpose alone—where no certiorari, prohibition, or other principal action was pending before it.

The Ruling: No Jurisdiction, Petition Dismissed

The Supreme Court denied the petition, holding that the Court of Appeals lacked jurisdiction over the petitioner’s original action for preliminary injunction.

Under Batas Pambansa Blg. 129, the Court of Appeals has original jurisdiction only over: (1) actions for annulment of RTC judgments, and (2) writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, plus auxiliary writs in aid of its appellate jurisdiction. A standalone injunction petition falls under neither category.

The Court cited Rule 58, Section 2 of the Rules of Court: a preliminary injunction may be granted only by the court where the action or proceeding is pending. The petitioner’s complaint-in-intervention was pending before Branch 256, not the Court of Appeals. Similarly, Rule 65, Section 7 allows injunctive relief only in a pending certiorari, prohibition, or mandamus case—and the petitioner’s filing did not allege that the RTC acted without or in excess of jurisdiction or with grave abuse of discretion. It was, in substance, a mere request to preserve the status quo.

The Court also noted a settled rule: an order granting or denying a preliminary injunction is not appealable.

Practical Takeaways

• A writ of possession is not stopped by a standalone injunction petition. The Court of Appeals cannot issue a preliminary injunction in an original action filed solely for that purpose; it must be tied to a pending case or a proper Rule 65 petition.
• Know which court has jurisdiction. A party seeking to stop a writ of possession must challenge the issuing court’s jurisdiction or allege grave abuse of discretion through certiorari or prohibition—not file a bare injunction petition.
• Full payment to the developer does not automatically defeat the bank’s rights. The mortgage was registered and annotated on the titles before the sale, so the bank’s rights as mortgagee prevailed over the buyer’s unregistered interest.
• Act early. The petitioner’s intervention came after the writ was issued. Challenging a foreclosure or writ of possession requires timely and procedurally correct action.
• Preliminary injunction orders are not appealable. The proper remedy is certiorari, not an appeal, when contesting the grant or denial of injunctive relief.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.