G.R. No. 171336 - POLYSTYRENE MANUFACTURING COMPANY, INC., VS. PRIVATIZATION AND MANAGEMENT OFFICE.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, PMCI demanded and DBP acceded to the suspension of the foreclosure until a reconciliation of the accounts shall have been arrived at. As a quid pro quo , however, DBP required and secured the issuance by PMCI of six (6) postdated checks in the total amount of P3,000,000.00, subject to the result of the reconciliation. Of the checks thus issued, three (3) for P1.5 million were eventually encashed, after which PMCI issued a stop-payment order on the remaining checks, believing that it had overpaid DBP. On September 27, 1985, in the Regional Trial Court (RTC) of Makati, PMCI filed a suit for injunction to enjoin DBP, as defendant therein, from proceeding with the foreclosure proceedings. Docketed as Civil Case No. 11819, the complaint was raffled to Branch 60 of the court. Answering, DBP alleged that it initiated the foreclosure proceedings pursuant to Presidential Decree (P.D.) No. 385 [3] and that PMCI had not paid 20% of the outstanding arrearages, as required by the same P.D. No. 385. DBP likewise alleged that the issue raised by PMCI in its complaint is only one of accounting. By Order [4] dated November 5, 1985, the trial court, finding PMCI's case to be outside the ambit of P.D. No. 385, and on the postulate that a "significant and tremendous" discrepancy obtains between the PMCI's and DBP's respective accounting records and taking note of the payments thus far made by PMCI which indicated over-payment, issued the desired writ of preliminary injunction in PMCI's favor, disposing as follows: WHEREFORE, premises considered, let a writ of preliminary injunction be issued prohibiting and enjoining the defendant [DBP] from proceeding with the foreclosure of the mortgaged properties of the plaintiff [PMCI] upon the latter's filing and approval of a bond in the amount of P300,000.00 .... (Words in bracket added). After the denial of its motion for reconsideration, DBP went to the CA on a petition for certiorari under Rule 65 of the Rules of Court, docketed as CA-G.R. No. 09201-SP. At about this time, DBP had assigned its rights and interest over non-performing assets to the National Government which, in turn, constituted the Asset and Privatization Trust (APT) as trustee of the transferred accounts. Respondent Privatization Management Office (PMO) would later be created to assume the powers, duties, records, properties and obligations of the now defunct APT. Eventually, the CA rendered judgment setting aside the assailed November 5, 1985 Order of the RTC. Therefrom, PMCI appealed to this Court in G.R. No. 77631, entitled Polystyrene Manufacturing Co., Inc. v. Courts of Appeals and DBP. In a Decision [5] dated May 9, 1999, the Court set aside that of the appellate court and directed the trial court to conduct another hearing in accordance with the procedure set forth in P.D. No. 385 to determine the propriety of the issuance of a temporary restraining order (TRO) or a writ of preliminary injunction. Dispositively, the Decision reads: WHE