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EDUARDO L. RAYO, Petitioner, |
G.R. No. 165142
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- versus - |
Present: QUISUMBING, J.,
Chairperson, CARPIO, CARPIO
MORALES, TINGA,
and VELASCO,
JR., JJ. |
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METROPOLITAN BANK AND TRUST COMPANY AND BRANCH 223
OF THE REGIONAL TRIAL COURT OF Respondents. |
Promulgated: December 10, 2007 |
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QUISUMBING, J.:
Before us is a petition for review
assailing the Resolutions dated
The pertinent facts are
undisputed.
Midas Diversified Export Corp. (Midas), thru its president, Mr.
Samuel U. Lee, obtained six (6) loans from private respondent Metropolitan Bank
and Trust Company (Metrobank), amounting to P588,870,000 as evidenced by
promissory notes. To secure the payment
of an P8,000,000 loan, Louisville Realty & Development Corporation (
When the debtor-mortgagor failed
to pay, Metrobank extra-judicially foreclosed the
real estate mortgage in accordance with Act No. 3135,[3]
as amended. Thereafter, in a public
auction, Metrobank was the highest bidder. A Certificate of Sale[4]
dated
WHEREFORE, in consideration of the foregoing premises,
the instant petition is hereby GRANTED.
Upon the filing of a bond in the amount of ONE HUNDRED THOUSAND PESOS ([P]100,000.00),
let a Writ of Possession over the properties covered by Transfer Certificates
of Title Nos. N-163455, N-166349 & N-166350 issue in favor of the
petitioner METROPOLITAN BANK & TRUST COMPANY to be implemented by the
Deputy Sheriff of Branch 223, Regional Trial Court of Quezon City by placing
the petitioner in possession over the parcels of land with all its
improvements.
SO ORDERED.[7]
On
Meanwhile, on
On
On
Petitioner now comes
before us raising the following as primary issue:
WHETHER OR NOT SECTION 7 OF
ACT NO. 3135 IS CONTRARY TO THE DUE PROCESS PROVISION OF THE PHILIPPINE
CONSTITUTION CONSIDERING THAT SUCH SECTION 7 OF THE LAW PROVIDES OR ALLOWS,
ACCORDING TO THIS HONORABLE COURT, FOR AN EX-PARTE PROCEEDING WHICH IS A
“JUDICIAL PROCEEDING BROUGHT FOR THE BENEFIT OF ONE PARTY ONLY, AND WITHOUT
NOTICE TO, OR CONSENT BY ANY PERSON ADVERSELY INTERESTED” “OR A PROCEEDING
WHEREIN RELIEF IS GRANTED WITHOUT AN OPPORTUNITY FOR THE PERSON AGAINST WHOM THE RELIEF IS
SOUGHT TO BE HEARD,” AS HELD IN THE
CASE OF GOVERNMENT SERVICE INSURANCE SYSTEM VS. COURT OF APPEALS, 169 SCRA
244 @ 255,
He also raises the following as secondary issues:
I.
WHETHER OR NOT THE PETITIONER
HAS THE LEGAL PERSONALITY TO SEEK THE ANNULMENT OF JUDGMENT IN [THE] SUBJECT
LRC CASE NO. Q-13915(01).
II.
WHETHER OR NOT PRIVATE
RESPONDENT VIOLATED THE RULE AGAINST FORUM-SHOPPING WHEN IT DID NOT INFORM THE
HONORABLE BRANCH 223 OF THE REGIONAL TRIAL COURT OF QUEZON CITY REGARDING THE
FILING OF CIVIL CASE NO. Q-02-46514 FOR NULLIFICATION OF REAL ESTATE MORTGAGE
CONTRACT AND THE EXTRA-JUDICIAL FORECLOSURE
Stated simply, the issues raised are: (1) Does petitioner have the legal
personality in the annulment of judgment proceedings? (2) Is Section 7 of Act No. 3135, as amended, unconstitutional?
(3) Is respondent guilty of forum-shopping?
Petitioner insists that contrary to the ruling of the Court
of Appeals, he has the legal personality to institute the annulment of judgment
case against Metrobank, considering that the
For its part, Metrobank claims that it was not a party to the
deed of assignment among
Under Section 2,[15]
Rule 3 of the Rules of Court, every action must be prosecuted or defended in
the name of the real party-in-interest, or one “who stands to be benefited or
injured by the judgment in the suit.”[16]
A real party-in-interest is one with “a
present substantial interest” which means such interest of a party in the
subject matter of the action as will entitle him, under the substantive law, to
recover if the evidence is sufficient, or that he has the legal title to
demand.[17]
Now, is petitioner Rayo a real party-in-interest? Initially, we recognized herein petitioner as
the co-assignee of the subject real properties as shown in the
First, there was no violation of petitioner’s right to
constitutional due process. In a long
line of cases,[18]
we have consistently ruled that the issuance of a writ of possession in favor
of the purchaser in a foreclosure sale of a mortgaged property under Section 7 of Act No. 3135, as amended is a
ministerial duty of the court. The
purchaser of the foreclosed property, upon ex parte
application and the posting of the required bond, has the right to acquire
possession of the foreclosed property during the 12-month redemption period and
with more reason, after the expiration of the redemption period.
An ex parte
petition for the issuance of a writ of possession
under Section 7 of Act No. 3135 is not, strictly speaking, a “judicial process”
as contemplated in Article 433[19]
of the Civil Code. It is a judicial
proceeding for the enforcement of one’s right of possession as purchaser in a
foreclosure sale. It is not an ordinary suit filed in court, by which one
party “sues another for the enforcement of a wrong or protection of a right, or
the prevention or redress of a wrong.” It is a non-litigious proceeding
authorized in an extrajudicial foreclosure of mortgage pursuant to Act No.
3135, as amended, and is brought for the benefit of one party only, and without
notice to, or consent by any person adversely interested. It is a proceeding where the relief is
granted without requiring an opportunity for the person against whom the relief
is sought to be heard. No notice is
needed to be served upon persons interested in the subject property.[20]
Second, in the
deed of assignment, petitioner also acknowledged that the subject real
properties were already sold at various extrajudicial foreclosure sales and
bought by Metrobank. Clearly, petitioner
recognized the prior existing right of Metrobank as the mortgagee-purchaser
over the subject real properties.[21] Actual knowledge of a prior mortgage with
Metrobank is equivalent to notice of registration[22]
in accordance with Article 2125[23]
of the Civil Code. Conformably with
Articles 1312[24]
and 2126[25]
of the Civil Code, a real right or lien in favor of Metrobank had already been
established, subsisting over the properties until the discharge of the
principal obligation, whoever the possessor(s) of the land might be.[26] As petitioner is not a party whose interest is adverse to that of
Third, we also note that petitioner availed of the wrong
remedy in filing Civil Case No. Q02-46514, for nullification of real estate
mortgage and extrajudicial foreclosure sale, more than six (6) months after the
issuance of the writ of possession considering the mandate of Section 8[27]
of Act No. 3135, as amended. Hence, even
petitioner’s action for annulment of judgment cannot prosper as it cannot be a
substitute for a lost remedy.
Now, petitioner is challenging the constitutionality of
Section 7 of Act No. 3135, as amended. He
avers that Section 7 violates the due process clause because, by the mere
filing of an ex parte motion in the proper
cadastral court, the purchaser in a foreclosure sale is allowed to obtain
possession of the foreclosed property during the redemption period.
The Court of Appeals ruled that petitioner’s attempt to
challenge the constitutionality of Section 7 of Act No. 3135, as amended,
constitutes a collateral attack that is not allowed. We fully agree with the appellate court’s ruling. For reasons of public policy, the
constitutionality of a law cannot be attacked collaterally.[28]
With regard to forum-shopping;
forum-shopping is the filing of multiple suits involving the same parties for
the same cause of action, either simultaneously or successively, for the
purpose of obtaining a favorable judgment. It exists where the elements of litis
pendentia are present or where a final judgment in one case will amount to res
judicata in another.[29]
The issuance of the writ of possession
being a ministerial function, and summary in nature, it cannot be said to be a
judgment on the merits. It is only an
incident in the transfer of title. Hence,
a separate case for annulment of mortgage and foreclosure sale cannot be barred
by litis pendentia or res judicata.[30]
Clearly, insofar as LRC Case No. Q-13915(01)
and Civil Case No. Q02-46514 are concerned, Metrobank is not guilty of
forum-shopping.
WHEREFORE, the petition is DENIED for lack
of merit. The assailed Resolutions dated
SO ORDERED.
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LEONARDO A. QUISUMBING Associate Justice |
WE CONCUR:
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ANTONIO T. CARPIO Associate Justice |
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CONCHITA CARPIO MORALES Associate Justice |
DANTE O. TINGA Associate Justice |
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PRESBITERO J. VELASCO, JR. Associate Justice |
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A T T E S T A T I O N
I attest
that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
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LEONARDO A. QUISUMBING Associate Justice Chairperson |
C E R T I F I C A T I O N
Pursuant
to Section 13, Article VIII of the Constitution, and the Division Chairperson’s
Attestation, I certify that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
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REYNATO S. PUNO Chief Justice |
[1] Rollo, pp. 24-31. Penned by Associate Justice
Fernanda Lampas Peralta, with Associate Justices Josefina Guevara-Salonga and Juan Q. Enriquez, Jr. concurring.
[2]
[3] An
Act to Regulate the
[4] Rollo, pp. 106-107.
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12] Sec. 7. Possession during redemption period. - In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.
[13] Rollo, pp. 227-228.
[14]
[15] SEC. 2. Parties
in interest. – A real party in interest is the party who stands to be
benefited or injured by the judgment in the suit, or the party entitled to the
avails of the suit. Unless otherwise
authorized by law or these Rules, every action must be prosecuted or defended
in the name of the real party in interest.
[16] Caro v. Sucaldito, G.R. No. 157536,
[17] See Kilosbayan, Incorporated v. Morato,
G.R. No. 118910,
[18] Ancheta v. Metropolitan Bank & Trust Company, Inc., G.R. No. 163410, September 16, 2005, 470 SCRA 157; Paderes v. Court of Appeals, G.R. Nos. 147074 and 147075, July 15, 2005, 463 SCRA 504; Arquiza v. Court of Appeals, G.R. No. 160479, June 8, 2005, 459 SCRA 753; Development Bank of the Philippines v. Gatal, G.R. No. 138567, March 4, 2005, 452 SCRA 697; Idolor v. Court of Appeals, G.R. No. 161028, January 31, 2005, 450 SCRA 396; De Vera v. Agloro, G.R. No. 155673, January 14, 2005, 448 SCRA 203; Ong v. Court of Appeals, G.R. No. 121494, June 8, 2000, 333 SCRA 189; Samson v. Rivera, G.R. No. 154355, May 20, 2004, 428 SCRA 759.
[19] Art. 433. Actual possession under claim of ownership raises a disputable presumption of ownership. The true owner must resort to judicial process for the recovery of the property.
[20] De Vera v. Agloro, supra at 215.
[21] Rollo, p. 142.
[22] See Rehabilitation Finance Corp. v. Javillonar, et al., 107 Phil 664, 668 (1960).
[23] Art.
2125. In addition to the requisites
stated in Article 2085, it is indispensable, in order that a mortgage may be
validly constituted, that the document in which it appears be recorded in the
Registry of Property. If the instrument
is not recorded, the mortgage is nevertheless binding between the parties.
The
persons in whose favor the law establishes a mortgage have no other right than
to demand the execution and the recording of the document in which the mortgage
is formalized.
[24] Art. 1312.
In contracts creating real rights, third persons who come into
possession of the object of the contract are bound thereby, subject to the
provisions of the Mortgage Law and the Land Registration laws.
[25] Art.
2126. The mortgage directly and
immediately subjects the property upon which it is imposed, whoever the
possessor may be, to the fulfillment of the obligation for whose security it
was constituted.
[26] See Paderes v. Court of Appeals, supra
at 512.
[27] Sec. 8. The debtor may, in the
proceedings in which possession was requested, but not later than thirty days
after the purchaser was given possession, petition that the sale be set aside
and the writ of possession cancelled, specifying the damages suffered by
him, because the mortgage was not violated or the sale was not made in
accordance with the provisions hereof, and the court shall take cognizance of
this petition in accordance with the summary procedure provided for in section
one hundred and twelve of Act Numbered Four hundred and ninety six; and if it
finds the complaint of the debtor justified, it shall dispose in his favor of
all or part of the bond furnished by the person who obtained possession. Either
of the parties may appeal from the order of the judge in accordance with
section fourteen of Act Numbered Four hundred and ninety six; but the order of
possession shall continue in effect during the pendency of the appeal.
(Emphasis ours.)
[28] Philippine National Bank v.
[29] Melo v. Court of Appeals, G.R. No.
123686,
[30] Arquiza v. Court of Appeals, supra note 18, at 765.