Republic of the
Supreme Court
THIRD DIVISION
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MANDY COMMODITIES CO., INC.,
Petitioner, - versus - THE INTERNATIONAL COMMERCIAL BANK OF
Respondent. |
G.R. No. 166734 Present:
Ynares-Santiago,
J., Chairperson, chico-nazario, VELASCO, JR., nachura, and PERALTA, JJ. Promulgated: July 3, 2009
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I O N PERALTA, J.: |
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Assailed in this petition for certiorari[1] is
the August 30, 2002 Decision[2] of
the Court of Appeals in CA-G.R. SP No. 68382 as well as its September 3, 2004
Resolution[3]
which denied reconsideration. The
assailed decision affirmed the September 7, 1999 Order[4]
issued by the Regional Trial Court of Manila, Branch 4 in LRC Case entitled “In
the Matter of the Petition for the Issuance of a Writ of Possession Pending
Redemption” which directed the issuance of a writ of possession following the
extrajudicial foreclosure of the mortgages constituted by petitioner Mandy
Commodities Co., Inc. in favor of respondent The International Commercial Bank
of China.
The
facts follow.
On
July 17 and P20,000,000.00
loan from respondent The International Commercial Bank of
On the day of the execution of the
first deed, petitioner and respondent entered into an agreement whereby they
specifically stipulated to consider the buildings “as chattels, and as such,
they can be the subject of a Chattel Mortgage under the law.”[6] The deeds of chattel mortgage and the
agreement were registered with the Chattel Mortgage Registry of Manila.[7]
When petitioner defaulted in the
payment of its obligation, respondent, on February 26, 1999, applied before a
notary public for the notarial sale of the mortgaged buildings, pursuant to
paragraph 18 of the chattel mortgage agreements which practically gave the
mortgagee full and irrevocable power as attorney-in-fact to sell and dispose of
the mortgaged properties in a public or private sale should the mortgagor
default in the payment of its obligation.[8]
Alleging that petitioner as mortgagor despite repeated demands failed to make
good its commitment, respondent mortgagee prayed that the subject buildings be
sold to satisfy the total money obligation of P26,825,770.83 inclusive
of interest, but exclusive of charges and penalties.[9]
The sale was scheduled on
At the sale, respondent placed the
highest bid at P25,435,716.89, and so on
It appears that the controversy arose
when, on
In its Order[16] dated
P600,000.00, granted the petition, and directed the issuance of a
writ of possession supposedly in pursuant to
Act No. 3135.
Petitioner immediately filed a Motion
for Reconsideration[17]
in which it pointed out that, in accordance with its agreement with respondent,
the buildings covered by the mortgage were in fact chattels and not real properties,
and the fact that the parties agreed to that effect, should bar either of them
from claiming the contrary. Asserting
that the governing law is Act No. 1508 (The Chattel Mortgage Law) and not Act
No. 3135, petitioner advanced that the foreclosure sale was null and void as it
did not follow the specific procedure laid down by the applicable law,
particularly the requirement of a 10-day personal notice to the mortgagor of
the date and time of the sale.
In the meantime, as an offshoot of
the September 7, 1999 Order, the trial court issued a Writ of Possession dated December
10, 2001, directing the sheriff to place respondent in possession of the
subject buildings.[18]
The sheriff complied and served a notice to vacate on petitioner.[19]
Subsequently, the motion for
reconsideration was denied in the trial court’s January 16, 2001 Order,[20]
thus, urging petitioner to seek redress from the said Order as well as from the
September 7, 1999 Order directly to this Court via a Rule 45 petition, docketed
as G.R. No. 146929.[21] In this recourse, petitioner claimed that it
was error for the trial court to affirm the validity of the foreclosure sale
which was conducted under the provisions of Act No. 3135 considering that the
parties had agreed to be bound by Act No. 1508, and that the writ of possession
pending redemption should not have been issued in view of the irregularities
that marked the foreclosure sale.[22] The petition, however, was dismissed in the
Court’s
Unrelenting, petitioner then sought
the annulment of the twin orders of the trial court this time through a Rule 47
petition[25] before
the Court of Appeals. There, it
specified the errors supposedly committed by the trial court in the issuance of
the challenged orders which allegedly were made without jurisdiction since the
trial court had no power to issue writs of possession under Act No. 1508. It invoked denial of due process when it was
deprived of its properties without respondent complying with the 10-day notice
requirement in Act No. 1508.
The Court of Appeals gave due course
to the petition and issued a temporary restraining order to enjoin the sheriff
from enforcing the notice to vacate. At
the ensuing hearing, no settlement materialized, but the parties, admitting
that there were no factual issues to be resolved anyway, agreed not to have a
writ of preliminary injunction issued in the case. Instead, petitioner committed to deposit the
corresponding monthly rentals on the subject buildings to an account it owned
jointly with respondent.[26]
On
In
its bid to once again avert the implementation of the writ of possession,
petitioner, in this petition for review under Rule 65,[30]
insists on the nullity of the
Respondent was told to comment,[32]
but instead, ROP Investments, Limited - Philippine Branch (ROP Philippines)[33]
moved that it be substituted as the respondent in this case, because in
September 2003, it had acquired by assignment all the rights, titles and
interest of respondent.[34] The Court allowed the substitution.[35]
ROP Philippines posits that the
filing of the petition was a mere after-thought in the hope of curing the wrong
remedy availed of by petitioner in the first instance, which resulted in the
dismissal of its petition in G.R. No. 146929 for violation of the rule on
hierarchy of courts. It maintains that
the Court of Appeals did not abuse its discretion in dismissing the petition
which was, to begin with, procedurally infirm as the grounds invoked by
petitioner are not apt for a Rule 47 petition.[36] Finally, it asserts that the issuance of the
writ of possession is a ministerial duty of the trial court under Act No. 3135,
and that since petitioner did not pursue any of the proper remedies against the
orders of the trial court, then with more reason that the said writ be issued
in the case.[37]
Prefatorily,
we find no need to delve further and deeper into
the facts and issues raised by both petitioner and respondent because at the
outset it is clear that the instant petition must be dismissed in any event,
first, for being the wrong remedy under the premises, and second, for failure of
petitioner to demonstrate grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of the Court of Appeals in rendering the assailed Decision
and Resolution.
We agree with the Court of Appeals
that the remedy of annulment was not the proper remedy to set aside the orders
of the trial court. To start with, the
remedy of petition for annulment of judgment, final order or resolution under
Rule 47 of the Rules of Court is an extraordinary one inasmuch as it is
available only where the ordinary remedies of new trial, appeal, petition for
relief or other remedies can no longer be availed of through no fault of the
petitioner.[38] The relief it affords is equitable in
character[39] as it strikes at the core of finality of such
judgments and orders.
The grounds for a petition for
annulment are in themselves specific in the same way that the relief itself
is. The Rules restrict the grounds only
to lack of jurisdiction and extrinsic fraud[40] to prevent the remedy from being used by a losing party in making a
complete farce of a duly promulgated decision or a duly issued order or
resolution that has long attained finality.[41] This certainly is based on sound public
policy for litigations and, despite occasional risks of error, must be brought
to a definite end and the issues that go with them must one way or other be
laid to rest.[42] In turn, lack of jurisdiction -- the ground relied upon by petitioner
-- is confined only to either lack of jurisdiction over the
person of the defending party or over the subject matter of the claim.[43] A valid invocation of this ground rests
exclusively on absolute lack of jurisdiction as opposed to a mere abuse of jurisdictional discretion[44] or mere errors in judgment committed
in the exercise of jurisdiction[45] inasmuch as jurisdiction is distinct from the exercise thereof.[46]
Hence,
where the facts demonstrate that the court has validly
acquired jurisdiction over the respondent and over the subject matter of the
case, its decision or order cannot be validly voided via a petition for
annulment on the ground of absence or lack of jurisdiction.[47]
It must be noted that in
its petition for annulment of the assailed orders on the ground of lack of
jurisdiction, petitioner kept alluding to several errors supposedly committed
by the trial court which tend to show that said tribunal had no jurisdiction to
issue the orders. In this light,
inasmuch as the petition questioned the manner by which the trial court arrived
at the issuance of its orders, it is unmistakable that petitioner, in effect,
acknowledged that the trial court possessed jurisdiction to take cognizance of
respondent’s application for a writ of possession.
It is also unmistakable that the trial court, in which jurisdiction over
applications for writs of possession is by law vested, had acquired jurisdiction
over the subject matter of respondent's application merely upon its
filing. And since it had so acquired
jurisdiction over the incidents of the application, it was then bound to act on
it and issue the writ prayed for inasmuch as that duty is essentially
ministerial.[48] The purported errors that it may have
incidentally committed do not negate the fact that it had, in the first place,
acquired the authority to dispose of the application and that it had since
retained such authority until the assailed orders were issued. Such errors, if indeed there were, are
nevertheless mere errors of judgment which are
correctible by an ordinary appeal before the Court of Appeals,[49] a remedy that was then available to petitioner, and not by a petition
for annulment under Rule 47. Furthermore, the order granting a petition
for a writ of possession is a final order from which an appeal would be the
proper and viable remedy. [50]
We, therefore,
find no grave abuse of discretion amounting to lack or excess of jurisdiction
on the part of the Court of Appeals, because it had every good and valid reason
to dismiss the petition for annulment filed with it.
Moreover, we cannot help but observe that the instant petition is
bound to meet a certain failure because for yet a third time since the petition
in G.R. No. 146929, petitioner
had sought to evade the consequences of the foreclosure sale by resorting to
another wrong remedy.
In Alba v. Court of Appeals[51] and Linzag
v. Court of Appeals,[52] it was held that a party aggrieved by
the decision of the Court of Appeals in a petition filed with it for annulment
of judgment, final order or resolution is not a petition for certiorari under
Rule 65, but rather an ordinary appeal under Rule 45 where only questions of
law may be raised. A petition for certiorari
is, like a petition for annulment, a remedy of last resort and must be
availed of only when an appeal or any other adequate, plain or speedy remedy
may no longer be pursued in the ordinary course of law.[53] A remedy is said to be plain, speedy and
adequate when it will promptly relieve the petitioner from the injurious effects of
the judgment and the acts of the lower court or agency.[54]
To warrant the issuance of a writ of certiorari,
the tribunal must be shown to have capriciously and whimsically exercised its
judgment in a way equivalent to lack or excess of jurisdiction; or, in other
words, that the power was exercised in an arbitrary manner by reason of
passion, prejudice, or personal hostility as to amount to an evasion of a
positive duty or to a virtual refusal either to perform the duty enjoined or to
act at all in contemplation of law.[55]
A bare allegation of grave abuse of discretion is not enough.
x x x when
a court exercises its jurisdiction, an error committed while so engaged does
not deprive it of the jurisdiction being exercised when the error was
committed. If it did, every error
committed by a court would deprive it of its jurisdiction and every erroneous
judgment would be a void judgment. In
such a situation, the administration of justice would not survive. Hence, where the issue or question involved
affects the wisdom or legal soundness of the decision—not the jurisdiction of
the court to render the said decision—the same is beyond the province of a
special civil action for certiorari.
In the
case at bar, not only was an appeal available to petitioner as a remedy from
the assailed Decision of the Court of Appeals; petitioner also failed to
sufficiently show the circumstances that
would otherwise justify such a departure from the rule as to make available to
him the remedy of a petition for certiorari in lieu of an appeal.
Be that as it
may, while an appeal would have been the proper remedy under the premises, it
is nevertheless glaring from the records that such remedy was no longer
viable. Petitioner has conceded that, as
shown by the records, it received the Resolution of the Court of Appeals
denying its motion for reconsideration on
The remedies of appeal in the ordinary
course of law and that of certiorari
under Rule 65 of the Revised Rules of Court are mutually
exclusive and not alternative or cumulative. Time and again this Court has
reminded members of the bench and bar that the special civil action of Certiorari cannot be used as a
substitute for a lost appeal where the latter remedy is available; especially
if such loss or lapse was occasioned by one’s own negligence or error in the
choice of remedies.
All told, aside from the fact that a perusal
of the assailed decision indicates neither reversible error nor grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the Court
of Appeals, the instant petition must be dismissed for being a wrong remedy
under the Rules of Court.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate
Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MINITA
V. CHICO-NAZARIO PRESBITERO
J. VELASCO, JR.
Associate Justice Associate Justice
ANTONIO EDUARDO B. NACHURA
Associate Justice
ATTESTATION
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.
CONSUELO
YNARES-SANTIAGO
Associate
Justice
Third
Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the
Division Chairperson’s Attestation, I certify that the conclusions in the above
Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
[1] Under Rule 65 of the Rules of Court.
[2] Penned by Associate Justice Portia Aliño-Hormachuelos, with Associate Justices Elvi John S. Asuncion and Edgardo F. Sundiam, concurring; rollo, pp. 29-44.
[3]
[4] Penned by Acting Presiding Judge Antonio I. De Castro; rollo, pp. 64-65.
[5] CA rollo, p. 202.
[6] See Agreement, rollo, p. 73.
[7] CA rollo, p. 203.
[8]
18. THE MORTGAGOR(S) hereby irrevocably appoint(s) the MORTGAGEE as attorney-in-fact for the mortgagors with full power and authority after any condition of this mortgage has been broken to… seize and take actual possession [of the properties] without any order or any other power or permission than herein granted; to sell, assign, transfer and deliver the whole of the properties mortgaged… at the option of the MORTGAGEE, without either demand, advertisement or notice of any kind which are hereby expressly waived, at public or private sale x x x.
[9]
[10]
[11]
[12] See Affidavit of Publication executed by Jose B. Cabiling, Chief Editor of The Philippine Recorder, id. at 58. See also CA rollo, p. 203.
[13]
[14]
[15]
[16]
WHEREFORE, let the corresponding writ of possession be issued directing the Sheriff of this Branch to place the herein petitioner in actual physical possession of the foreclosed property consisting of twenty-five (25) units of two-storey buildings located at Numencia St., Binondo, Manila, (Lot 1, Block 1862, Manila Cadastre No. 13) covered by Tax Declaration Nos. 97-0006, 97-00007; 97-00008; 97-00009; 97-00010; and 97-00011; and to eject therefrom the herein respondent Mandy Commodities Co., Inc., its agents and some other persons claiming rights under it.
SO ORDERED.
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[24]
[25]
[26]
[27]
WHEREFORE,
all the foregoing premises considered, the petition is DENIED. The RTC Order dated
SO ORDERED.
[28]
[29]
[30] Rollo, pp. 3-23.
[31]
[32] Resolution dated
[33] ROP Investments, Limited-Philippine Branch is
a corporation organized and existing under the laws of
[34] Rollo, pp. 105-106.
[35] Resolution
dated
[36]
[37]
[38] Morales v. Subic Shipyard & Engineering, Inc., G.R. No. 148206
[39] Ramos
v. Hon. Judge Combong Jr., G.R. No. 144273,
[40]
[41] Morales v. Subic Shipyard & Engineering, Inc., supra
note 38.
[42] See Ramos v. Hon. Judge Combong, Jr., supra note 39 and Barco v. Court of Appeals, 465 Phil. 39, 54 (2004).
[43] Republic of the Philippines v.
Heirs of Antonio Carag, et al., G.R. No. 155450,
[44] Republic
v. “G” Holdings, Inc., G.R. No. 141241, November 22, 2005, 475 SCRA
608.
[45] Tolentino v. Leviste, G.R. No. 156118,
[46]
[47] Morales
v. Subic Shipyard & Engineering, Inc., supra note
38.
[48] Oliveros v. Presiding Judge,
G.R. No. 165963, September 3, 2007, 532 SCRA 109, 118; Alarilla v. Ocampo,
463 Phil. 158, 166 (2003); Chailease Finance Corp. v. Ma, 456 Phil. 498,
503 (2003); Samson v. Rivera, G.R. No. 154355,
[49] Tolentino v. Leviste, supra note 45.
[50] See
[51] G.R. No. 164041,
[52] G.R. No. 122181,
[53] Rules of Court, Rule 65, Sec. 1.
[54] Tagle v. Equitable PCI Bank, G.R. No.
172299,
[55]
[56]
[57] See rollo, p. 5.
[58] G.R. No. 172299, April 22, 2008, 552 SCRA 424, 439-440.