VOL.

338, AUGUST 23, 2000 551

Zabat vs. Court of Appeals

*
G.R. No. 122089. August 23, 2000.

MELITON ZABAT and MARYLOU ZABAT, petitioners, vs. THE

HONORABLE COURT OF APPEALS, HONORABLE
PRESIDING JUDGE, Branch 114, Pasay City, THE NATIONAL
HOUSING AUTHORITY and ALEJANDRA & GUILLERMO
MAURI, JR., respondents.

Remedial Law; Injunction; Injunction is not granted to take property

out of the possession or control of one party to be placed into that of
another whose title has not been clearly established by law; Requisites for
the issuance of the writ of preliminary injunction.—As a rule, injunction is
not granted to take property out of the possession or control of one party to
be placed into that of another whose title has not been clearly established by
law. For the issuance of the writ of preliminary injunction to be proper, it
must be shown that the invasion of the right sought to be protected is
material and substantial, that the right of complainant is clear and
unmistakable and that there is an urgent and paramount necessity for the
writ to prevent serious damage.
Same; Same; The remedy of injunction could no longer be availed of
where the act to be prevented had long been consummated.—Additionally, it
should be stressed that the remedy of injunction could no longer be availed
of where the act to be prevented had long been consummated. In their
complaint before the trial court and in the present petition, petition-

_______________

* SECOND DIVISION.

552

552 SUPREME COURT REPORTS ANNOTATED

Zabat vs. Court of Appeals

ers pray that the NHA be enjoined from evicting them and from
demolishing their structure. What they truly and ultimately desire, however,
is to overturn the award of the lot solely to the Mauris. This, in our view, is
not legally feasible. The award of the lot has already been accomplished.
Same; Same; Administrative decisions on matters within the execu-tive
jurisdiction can only be set aside on proof of grave abuse of discretion,
fraud or error of law.—Courts cannot enjoin an agency from performing an
act within its prerogative, except when in the exercise of its authority it
gravely abused or exceeded its jurisdiction. Administrative decisions on
matters within the executive jurisdiction can only be set aside on proof of
grave abuse of discretion, fraud, or error of law. Absent these badges of
executive excesses, no injunction may be granted.
Same; Administrative Law; Exhaustion of Administrative Remedies;
Before a party may seek the intervention of the court, it is a precondition
that he should first avail of all the means afforded by administrative
processes.—Here we find applicable the doctrine of exhaustion of
administrative remedies. Before a party may seek the intervention of the
court, it is a precondition that he should first avail of all the means afforded
by administrative processes. A party aggrieved must not merely initiate the
prescribed administrative procedure to obtain relief, but must also pursue it
to its appropriate conclusion before seeking judicial intervention in order to
give that administrative agency an opportunity to decide the matter by itself
correctly and prevent unnecessary and premature resort to court.

PETITION for review on certiorari of a decision of the Court of

Appeals.

The facts are stated in the opinion of the Court.

     Honorio S. Laguilles, Jr. for petitioners.
     Marvin Herrera for private respondents.

QUISUMBING, J.:

Before us is an appeal by certiorari

1
under Rule 45 of the Rules of
Court assailing the decision of the Court of Appeals promulgated

_______________

1 Rollo, pp. 33-42.

553

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Zabat vs. Court of Appeals

2
February 24, 1995, in CA-G.R. No. 43886, and its resolution
promulgated September 22, 1995, denying the motion for
reconsideration. In said decision, the appellate court affirmed the
judgment dated August 23, 1993, of the Regional Trial Court of
3
Pasay City, Branch 114.
The antecedent facts, summarized by the Court of Appeals from
the records below, are as follows:

“This controversy traces its beginning to the contest between plaintiffs-

appellants, spouses Meliton and Marylou Zabat (plaintiffs-appellants, for
brevity) and defendants-appellees Alejandra and Guillermo Mauris (Mauris,
for brevity) over a piece of land particularly designated as Lot 8, Block 7,
Phase 1-a in the Tramo/F Victor upgrading project of the National Housing
Authority (NHA, for brevity), with an area of sixty (60) square meters.
In 1977, the NHA conducted a census of residents and discovered that
two (2) structures, one owned by plaintiff-appellant Marylou Zabat and the
other by the Mauris, were constructed on the controverted lot. Nonetheless,
Marylou Zabat was included in the census as owner of a structure and given
a tag number for the purpose. (Records, p. 154, Annex “O.”)
Subsequently, in 1981 a census verification was conducted again by the
NHA which found that the structure owned by the plaintiffs-appellants was
being rented out to a certain Conrado Briones and on the basis thereof,
plaintiffs-appellants were declared as absentee structure owners and under
Section 1 (a) of Memo Circular No. 13 issued by the NHA, an absentee
structure owner is disqualified from a lot award. (Rollo, pp. 61-65, Annex
“1-A.”)
The lot was subsequently awarded to the Mauris. (Annex “O,” supra.)
Marylou Zabat raised the matter on appeal to the Awards and Arbitration
Committee (AAC, for brevity) of the NHA on March 15, 1983.
On March 5, 1985, the AAC decided to reconsider the status of Mrs.
Zabat and declared her as a project beneficiary, but of another lot in view of
the fact that the controverted lot has already been allocated to the Mauris per
resolution No. 85-14 dated March 5, 1985.

_______________

2 CA Rollo, p. 128.
3 Supra, note 1 at 44-53.

554

554 SUPREME COURT REPORTS ANNOTATED

Zabat vs. Court of Appeals

A motion to reconsider that Order was filed by Zabat but was denied by
the AAC on August 16, 1985.
Eight (8) days later or on August 24, 1985, the lot was awarded to the
Mauris and a conditional contract to sell was executed by the NHA in the
former’s favor.
 Thereafter NHA sent several notices of demolition to the plaintiffs-
appellants.
On July 23, 1991, the plaintiffs-appellants filed Civil Case No. 8294
before the Regional Trial Court of Pasay City to enjoin the defendants-
appellees from proceeding with their eviction. (Records, p. 37.) In the
course of the proceedings before the trial court, the City Hall of Pasay City
was gutted by fire destroying the Court records therein including those of
Civil Case No. 8294.
On October 21, 1992, the plaintiffs-appellants filed a motion for
reconstitution of the records of the case and for the resumption of
proceedings which was denied by the trial court in its Order dated October
22, 1992 for being filed beyond the reglementary period. (Records, pp. 42-
43; Records, p. 44.)
On October 22, 1992, plaintiffs-appellants again filed Civil Case No.
9365, likewise for Injunction with Prayer for the issuance of a writ of
preliminary injunction to enjoin the defendants-appellees and the persons
working under them to refrain from demolishing the structure of the
plaintiffs-appellants. (Records, p. 2.)
The Mauris and the NHA filed separate motions to dismiss on the ground
that the case is barred by prior judgment, laches and that the plaintiffs-
appellants have neither existing nor inchoate right over the property.
(Records, pp. 27-36.)
The Court denied the motions to dismiss on November 17, 1992.
(Records, p. 57.) The Mauris and the NHA thereafter filed their respective
Answers. (Records, pp. 58-63.)
Meanwhile, the prayer for the issuance of a writ of preliminary
injunction by the plaintiffs-appellants was denied in view of their failure to
establish a clear and positive right over the lot in dispute in an Order dated
4
March 1, 1993 of the trial court. (Records, p. 104.)”

_______________

4 Id., at 33-35.

555

VOL. 338, AUGUST 23, 2000 555

Zabat vs. Court of Appeals

On August 23, 1993, the trial court rendered its judgment finding
that the award of the lot to the Mauris was valid and lawful, thus:

“WHEREFORE, premises considered, this Court finds the award of Lot 8,

Block 7, Phase 1-a to defendants Alejandria and Guillermo Mauri valid and
lawful. Consequently, the instant complaint for injunction is therefore
DISMISSED. For plaintiff to pay the sum of P5,000.00 as and for attorney’s
fees and to pay the costs of suit.
5
 5
SO ORDERED.”

Petitioners seasonably appealed to the Court of Appeals. On

February 24, 1995, it rendered its decision upholding the trial court,
decreeing that:

“WHEREFORE, premises considered, the decision of the trial Court in

Civil Case No. 9365 is AFFIRMED with the modification that the award of
attorney’s fees is deleted.
No special pronouncement as to costs.
6
SO ORDERED.”

Hence, the present appeal, with petitioners assigning the fol-lowing

errors:

“I

BASIC ERROR WAS COMMITED BY THE RESPONDENT COURT

WHEN IT RELIED ON THE REQUISITES FOR A “WRIT OF INJUNC-
TION,” AN ANCILLARY AND PRELIMINARY REMEDY DIFFERENT
FROM THE ACTION FOR INJUNCTION WHICH WAS FILED IN THE
INSTANT CASE.

II

THE CONCLUSION THAT PETITIONERS SLEPT ON THEIR

RIGHTS IS CONTRARY TO THE UNDISPUTED FACTS OF THE
CASE; AND THE RESPONDENT COURT, MOREOVER,
DISREGARDED THE SET-

_______________

5 Id., at 53.
6 Id., at 41.

556

556 SUPREME COURT REPORTS ANNOTATED

Zabat vs. Court of Appeals

TLED PRINCIPLE THAT LACHES CANNOT BE INVOKED TO

DEFEAT JUSTICE OR TO PERPETUATE FRAUD OR INJUSTICE.

III

THE RESPONDENT COURT GRAVELY ERRED AND COMMITTED

A PALPABLE MISTAKE WHEN IT DECIDED PETITIONERS’ APPEAL
ON THE ISSUE OF “ABSENTEE STRUCTURE OWNER,” AN ISSUE
THAT WAS ALREADY DECIDED BY THE NHA IN FAVOR OF
PETITIONERS, THE DECISION OF THE NHA TO TRANSFER
PETITIONERS TO ANOTHER LOT BEING BASED NOT ON THEIR
LACK OF QUALIFICATION TO BE AWARDEES BUT ON THE
SUPPOSED SMALLNESS OF THE LOT IN QUESTION.

IV

THE NHA’S BASIS FOR ITS DECISION TO TRANSFER

PETITIONERS IS AN OBVIOUS FALSEHOOD AND SUCH FRAUD
RESULTING IN INJUSTICE CANNOT BE PERPETUATED BY A
RESORT TO THE PRINCIPLE OF DELAY OR LACHES SUCH AS
7
THAT DONE BY THE RESPONDENT COURT.”

In this petition, we must also determine (1) whether the filing of a

complaint for injunction below was the proper remedy available to
petitioners; (2) whether petitioners should have availed of the
administrative processes of the National Housing Authority (NHA)
before resorting to judicial relief; and (3) whether petitioners’
complaint before the trial court has become stale or moot.
At the outset, we find that on record, the NHA automatically
disqualified herein petitioner Marylou Pelayo Zabat from
maintaining a structure on the subject lot when it found her to be an
“absentee structure owner” during a census of households in 1981. It
found that said petitioner rented the lot to a certain Conrado Briones.
The NHA also concluded that the Mauris have maintained
occupancy of their house on the lot in question, justifying the award
of the lot to them.
When the NHA Awards and Arbitration Committee (AAC)
reviewed Zabat’s disqualification, it declared her a project
beneficiary, and awarded her a lot other than where her house stood.
Za-

_______________

7 Id., at 18-19.

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VOL. 338, AUGUST 23, 2000 557

Zabat vs. Court of Appeals

bat moved for reconsideration but the AAC denied her plea to
coown the lot already awarded to the Mauris.
On August 24, 1985, after the NHA General Manager approved
the award to the Mauris, a conditional contract to sell was executed
between the NHA and the Mauris, who tendered amortized
payments. Thereafter, notices requesting petitioners (Zabats) to
transfer to the lot earmarked for them and notices for the demolition
of their house were sent.
 It was only in 1991, six years after the lot was awarded by the
NHA to the Mauris, that petitioners sought to enjoin the NHA from
evicting them. They filed Civil Case No. 8294 with the Regional
Trial Court of Pasay City. Petitioners failed to seasonably file a
motion for reconstitution of the case records, lost when the Pasay
City Hall burned down, so the case was dismissed.
In 1992, petitioners subsequently filed Civil Case No. 9365 for
injunction with prayer for the issuance of a writ of preliminary
injunction to enjoin the NHA from demolishing their house. They
asserted that the NHA erroneously awarded the disputed lot solely to
the Mauris. They pointed out that the NHA was wrong in finding
that the lot was too small for both parties to co-own, despite reversal
of its own decision that earlier disqualified petitioners as project
beneficiaries. Other than pointing out the allegedly flawed reasoning
behind the award solely to the Mauris, petitioners stated that they
should also be the rightful awardees of the lot on which their
8
structure stands. However, they offered no legal basis for their
claim. Note that in their complaint, they merely referred to
themselves9
as registered occupants, and not as owners of the subject
property.
As a rule, injunction is not granted to take property out of the
possession or control of one party to be placed into that 10of another
whose title has not been clearly established by law. For the
issuance of the writ of preliminary injunction to be proper, it must be
shown that the invasion of the right sought to be protected is mate-

_______________

8 Records, p. 4.
9 Id. at 2.
10 Heirs of Joaquin Asuncion vs. Gervacio, Jr., 304 SCRA 322, 330 (1999).

558

558 SUPREME COURT REPORTS ANNOTATED

Zabat vs. Court of Appeals

rial and substantial, that the right of complainant is clear and

unmistakable and that there is an urgent
11
and paramount necessity for
the writ to prevent serious damage. In our view, petitioners have
not clearly and unmistakably shown why they were entitled to co-
own the lot with the Mauris. Though they were given a tag number
for the structure they reportedly owned, still they were deemed
absentee owners who should have been disqualified outright. If at all
the NHA awarded them another lot, it was out of its beneficence.
Additionally, it should be stressed that the remedy of injunction
could no longer be availed of where the act to be prevented had long
12
 12
been consummated. In their complaint before the trial court and in
the present petition, petitioners pray that the NHA be enjoined from
evicting them and from demolishing their structure. What they truly
and ultimately desire,13
however, is to overturn the award of the lot
solely to the Mauris. This, in our view, is not legally feasible. The
award of the lot has already been accomplished. The NHA awarded
the subject lot to the Mauris on August 24, 1985, while petitioners’
complaint for injunction was filed only on October 22, 1992. A span
of seven years has intervened. While petitioners might not have been
ejected earlier from the disputed property, this did not mean they had
ipso facto acquired legal ownership. The Mauris were awarded the
property long before and they have made amortized payments on it.
14
Injunction here would just mean exercise in futility.
Note further that petitioners did not allege that the NHA, through
the AAC, committed grave abuse of discretion, or acted without or
in excess of its jurisdiction in awarding the lot solely to the Mauris.
While it was alleged that the basis 15
for the decision of the AAC was a
falsehood and an outright fraud, there was no sufficient proof
thereof. Nor was evidence offered to show that the

_______________

11 Arcega vs. Court of Appeals, 275 SCRA 176, 180 (1997).

12 Africa vs. Sandiganbayan, 287 SCRA 408, 418 (1998).
13 Rollo, pp. 25-26; Records, pp. 4-5.
14 Union Bank of the Philippines vs. Court of Appeals, G.R. No. 133366, August 5,
1999, p. 8, 311 SCRA 795.
15 Rollo, p. 25.

559

VOL. 338, AUGUST 23, 2000 559

Zabat vs. Court of Appeals

AAC acted fraudulently. Courts cannot enjoin an agency from

performing an act within its prerogative, except when in the exercise
16
of its authority it gravely abused or exceeded its jurisdiction.
Administrative decisions on matters within the executive jurisdiction
can only be set aside on proof of grave abuse of discretion, fraud, or
17
error of law. Absent these badges of executive excesses, no
injunction may be granted.
Moreover, the long period which has elapsed, from the time of
the award of the lot to the Mauris in 1985 to the time petitioners
filed their complaint for injunction in 1992, has made petitioners’
claim upon the subject lot a stale demand. Laches already set in.
Petitioners failed, for an unreasonable and unexplained length of
time, to do that which by exercising due diligence could or should
have been done earlier. Their negligence or omission to assert their
right within a reasonable time, warrants a presumption
18
that they
have either abandoned or declined to assert it. Their delay in
asserting an alleged right to the lot is best exemplified by their
failure to appeal the decision of the AAC when it awarded the lot to
the Mauris. When the AAC reconsidered its earlier decision
declaring petitioner Marylou Zabat as absentee structure owner but
ordering her to transfer to another lot, she had moved for the
reconsideration of the order, praying that she be allowed to remain
on the lot. That motion for reconsideration was denied, and she did
not appeal. Again, when the lot was formally awarded by the NHA
to the Mauris on August 24, 1985, Zabat also did not complain right
away. It was only much later, in 1992, that petitioners filed their
complaint for injunction before the trial court, questioning the award
to the Mauris and praying that their eviction from the lot be
enjoined. It will be noted that during pre-trial, the parties both
agreed that no appeal
19
is on record with respect to the award of the
lot to the Mauris.

_______________

16 Republic vs. Silerio, 272 SCRA 280, 289 (1997).

17 Itogon-Suyoc Mines, Inc. vs. Office of the President, 270 SCRA 63, 81 (1997).
18 Republic vs. Court of Appeals, 301 SCRA 366, 378-389 (1999).
19 Records, p. 121.

560

560 SUPREME COURT REPORTS ANNOTATED

Zabat vs. Court of Appeals

Here we find applicable the doctrine of exhaustion of administrative

remedies. Before a party may seek the intervention of the court, it is
a precondition that he should first avail of all the means afforded by
20
administrative processes. A party aggrieved must not merely
initiate the prescribed administrative procedure to obtain relief, but
must also pursue it to its appropriate conclusion before seeking
judicial intervention in order to give that administrative agency an
opportunity to decide the matter by itself 21
correctly and prevent
unnecessary and premature resort to court.
In this case, after their motion for reconsideration was denied by
the AAC in 1985, petitioners should have elevated their case 22to the
NHA General Manager, pursuant to NHA Circular No. 13. The
latter provides that all decisions of the AAC shall be subject 23
to
review and approval by the General Manager of the NHA. There
being no such review instituted by petitioners, the NHA
subsequently awarded the lot to the Mauris on August 24, 1985, as
24
 24
well as the contract to sell said lot. From the award of the lot and
the execution of the contract to sell by the NHA, petitioners should
have appealed to the Office of the President, pursuant to Executive
25
Order No. 19. Under the provisions thereof, appeals from awards
of contracts by government-owned or controlled corporations, such
as the NHA, as well as other appeals of similar nature not governed
by special laws, shall be taken to the Office of the President

_______________

20 Dy vs. Court of Appeals, 304 SCRA 331, 336 (1999).

21 Jariol vs. Commission on Elections, 270 SCRA 255, 262 (1997).
22 Code of Policies on Beneficiary Selection and Disposition of Homelots and
structures in Urban BLISS Level I Projects (ZIP); issued February 19, 1982.
23 Id. “V. BENEFICIARY SELECTION AND LOT ALLOCATION

xxx
7. . . . . .All decisions of the AAC shall be subject to review and approval of the General
Manager of the Authority . . .
x x x”

24 Rollo, p. 34.
25 Prescribing Rules and Regulations For Appeals To The Office Of The President
And For Finality Of Decisions Thereof; issued April 2, 1966.

561

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Zabat vs. Court of Appeals

26
by private parties adversely affected. None of these administrative
remedies were resorted to by petitioners, thus foreclosing on their
right to seek judicial relief.
Administrative disputes must end sometime, just as much as
public policy demands that finality be written in judicial
27
controversies. For failure to avail of the administrative processes of
the NHA to resolve their plaint, substituting resort to judicial
reliefafter much delay at that—we are constrained to rule that
petitioners may not avail of the injunctive remedy they seek.
WHEREFORE, the decision of the Court of Appeals
promulgated on February 24, 1995 and its resolution promulgated on
September 22, 1995, are hereby AFFIRMED.
No costs.
SO ORDERED.

     Bellosillo (Chairman), Mendoza, Buena and De Leon, Jr.,

concur.
 Judgment affirmed.

Note.—In the absence of a clear legal right, the issuance of the

injunctive writ constitutes grave abuse of discretion. (Arcega vs.
Court of Appeals, 275 SCRA 176 [1997])

——o0o——

______________

26 Id., “8. The foregoing rules shall apply to and be observed in ap-peals to this
Office taken by private parties adversely affected by decisions of the departments,
offices and entities specified below, as well as other appeals of similar nature not
governed by special laws.

xxx
(5) Government-owned or controlled corporations;
(a) Awards of contracts
x x x”

27 Camarines Norte Electric Cooperative, Inc. vs. Torres, 286 SCRA 666, 681
(1998).

562

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