SPECIAL THIRD DIVISION
|
MARTIN T. SAGARBARRIA, Petitioner, - versus - PHILIPPINE BUSINESS BANK, Respondent. |
G.R.
No. 178330
Present: YNARES-SANTIAGO, J.,
Chairperson, CHICO-NAZARIO, VELASCO, JR., and NACHURA, JJ. Promulgated: July 23,
2009 |
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RESOLUTION
NACHURA, J.:
For
resolution is petitioner’s motion for reconsideration urging this Court to
reconsider its Decision promulgated on January 21, 2008, viz.:
Considering the petition for review on certiorari, as well as the comment thereon, the Court resolves to DENY the petition for failure to sufficiently show that the appellate court committed reversible error in the challenged decision and resolution as to warrant the exercise by this Court of its discretionary appellate jurisdiction.[1]
The antecedents.
Petitioner Martin Sagarbarria (petitioner)
executed a deed of real estate mortgage over his property in P11,500,000.00 loan of Key
Commodities Inc. (Key Commodities).
When the loan became due and
demandable, Key Commodities failed to pay the same. Consequently, on February 28, 2003, PBB filed
an application for foreclosure with the Office of the Clerk of Court and
Ex-Officio Sheriff of
To enjoin the PBB from proceeding with
the foreclosure, petitioner filed a complaint for the Annulment of Real Estate Mortgage, Nullification of Application for
Extrajudicial Foreclosure of Real Estate Mortgage and Damages, with prayer for
the immediate issuance of a Temporary Restraining Order (TRO) and/or
Preliminary Injunction[2] with
the Regional Trial Court (RTC) of Makati City. It was docketed as Civil Case No. 03-312 and
was raffled to Branch 64. Petitioner
succeeded in pre-empting the auction sale as PBB withdrew its application for
extra-judicial foreclosure.
On October 30, 2003, PBB filed an
Answer[3] in
Civil Case No. 03-312. Traversing
petitioner’s complaint, PBB contended that there was no factual and legal basis
for the annulment of the mortgage. By way of counterclaim, PBB prayed for the
payment of the mortgage loan which had already reached P18,000,000.00.
On February 24, 2005, while the
annulment case remained pending, PBB revived the remedy of foreclosure. It filed a petition[4] for
extrajudicial foreclosure, supplementing the facts stated in its first
application, as follows: (i) as of February 2005, the obligation had ballooned
to P30,000,000.00; (ii) the offer of dacion
en pago was rejected and another demand to pay was served on the
petitioner; and (iii) the petitioner’s address was already 22 Joaquin Street,
San Lorenzo Village Makati.
The petition was granted and a notice
of sale was issued setting the auction sale on March 28, 2005. The sale proceeded and the property was
awarded to the PBB as the sole bidder for P13,000,000.00. A certificate
of sale was issued in favor of the PBB and was registered with the Registry of
Deeds on March 29, 2005.
In April 2005, respondent filed a
petition for the issuance of a writ of possession with the RTC of Makati,
docketed as LRC Case No. M-4676 and raffled to Branch 145. Despite the ex parte nature of the proceeding, the RTC was able to give due
course to the petition only after a year or on April 27, 2006. The RTC granted the petition and ordered the
issuance of a writ of possession in favor of PBB upon the latter’s posting of a
bond of P13,000,000.00.[5] However, after being informed that the
redemption period had already expired and PBB had consolidated its ownership
over the subject property on April 20, 2006, the RTC amended its decision on
May 29, 2006 by deleting the requirement of a bond. On the same day, a writ of possession[6]
was issued in favor of PBB.
Petitioner assailed the issuance of
the writ by filing a petition for certiorari
with the CA. It likewise sought the annulment of the extrajudicial proceedings
on the ground that it was conducted and issued without notice and in violation
of the rule against forum shopping.
Petitioner claimed that he was effectively denied his right to
participate in the foreclosure proceedings when the notice of sale was
forwarded to him at a different address, despite knowledge of his actual
address. He also claimed that the PBB committed forum-shopping when it filed an
application for judicial foreclosure during the pendency of the civil case for
annulment of mortgage. By opting to
collect on its credit through a counterclaim in the case for annulment of
mortgage, it had already waived the remedy of extrajudicial foreclosure.
By Decision[7]
dated November 22, 2006, the Court of Appeals (CA) affirmed PBB’s entitlement
to a writ of possession as a matter of right.
The CA upheld the general rule that the issuance of a writ
of possession to a purchaser in an extrajudicial foreclosure
sale becomes merely a ministerial function of the court. It
added that the right of the purchaser to the immediate possession of the
property cannot be defeated by the pendency of a case for annulment of the
mortgage. The CA likewise rejected the
claim of forum shopping, holding that to pursue an action, which has a
different cause of action, or a remedy that the law allows to be taken despite
the existence of another action, is not forum shopping. Finally, it ruled that certiorari is not a proper remedy because Section 8 of Act No. 3135
provides for an adequate remedy against an invalid or irregular
foreclosure. Hence, petitioner should
have filed a petition under Section 8[8] of
Act No. 3135, and in case of an adverse ruling, an appeal from the said adverse
decision. The rule is explicit that certiorari may only be allowed where there
is no appeal or any plain, speedy, and adequate remedy in the ordinary course
of law. Although the rule admits of several
exceptions, none of them are in point in petitioner’s case. Petitioner filed a motion for reconsideration,
but the CA denied the same in its June 6, 2007 Resolution.[9]
Petitioner came to us, faulting the
CA for dismissing his petition for certiorari.
On January 21, 2008, this Court denied the petition for failure to sufficiently
show that the CA had committed any reversible error in the assailed Decision
and Resolution to warrant the exercise by this Court of its discretionary appellate
jurisdiction.[10]
Petitioner then filed a Motion for Reconsideration (With Motion to Elevate
the Case to the Supreme Court en Banc).[11] In its June 16, 2008 Resolution,[12]
this Court required PBB to comment on the motion for reconsideration, but
denied petitioner’s motion to elevate the case to the Court en banc.
In the main, petitioner argues that
the RTC committed grave abuse of discretion in granting the writ of possession
despite the invalidity of the foreclosure proceedings. Thus, he posits that the CA committed
reversible error in dismissing his petition for certiorari. Petitioner urges
us to reconsider our Resolution denying the appeal.
At the
outset, it must be emphasized that what is on appeal before us is only the
issuance of the writ of possession over the
subject property issued by the RTC, Branch 145, in LRC Case No. M-4676.
Under Sec. 7 of Act No. 3135,[13] a
writ of possession may be issued either (1)
within the one-year redemption period, upon
the filing of a bond; or (2) after the lapse of the redemption
period, without need of a bond.[14]
Within the one-year redemption
period, a purchaser in a foreclosure sale may apply for a writ of possession by filing a petition in the form of an ex parte motion under oath for that purpose. Upon the filing of such motion with the RTC
having jurisdiction over the subject property and the approval of the
corresponding bond, the law, also in express terms, directs the court to issue
the order for a writ of possession.[15]
On the other hand, after the lapse of
the redemption period, a writ of possession may be issued in favor of the purchaser in a
foreclosure sale as the mortgagor is now considered to have lost interest over
the foreclosed property. Consequently, the purchaser, who has a right to
possession after the expiration of the redemption period, becomes the absolute
owner of the property when no redemption is made. In this
regard, the bond is no longer needed.
The purchaser can demand possession at any time following the
consolidation of ownership in his name and the issuance to him of a new TCT. After consolidation of title in the
purchaser’s name for failure of the mortgagor to redeem the property, the
purchaser’s right to possession ripens into the absolute right of a confirmed
owner. At that point, the issuance of a
writ of possession, upon proper application
and proof of title, to a purchaser in an extrajudicial foreclosure sale becomes
merely a ministerial function.[16]
In the present case, petitioner failed to redeem the
property within one (1) year from the registration of the Sheriff’s Certificate
of Sale with the Register of Deeds. PBB, being the purchaser of the
property at public auction, thus, had the right to file an ex parte
motion for the issuance of a writ of possession; and considering that it was
its ministerial duty to do so, the trial court had to grant the motion and to
thereafter issue the writ of possession.
We reject the petitioner's contention
that he was denied due process when the trial court issued the writ of
possession without notice.
It is settled that the proceeding in
a petition for a writ of possession is ex
parte and summary in nature. It is
a judicial proceeding brought for the benefit of one party only, and without
notice to, or consent by any person adversely interested. It is a proceeding wherein relief is granted
without an opportunity for the person against whom the relief is sought to be
heard.[17]
No notice is needed to be
served upon persons interested in the subject property. Hence, there is
no necessity of giving notice to the petitioner since he had already lost all
his interests in the property when he failed to redeem the same.[18] Accordingly,
the RTC may grant the petition in the absence of the mortgagor, in this case,
the petitioner.
Neither was there a need for the court to suspend
the proceedings merely and solely because of the pendency of the complaint for
the nullification of the real estate mortgage and the foreclosure proceedings. As held by this Court in Fernandez v. Espinoza:[19]
[A]ct No. 3135, as amended by Act No. 4118, is categorical in stating that the purchaser must first be placed in possession of the mortgaged property pending proceedings assailing the issuance of the writ of possession.
Consequently, the RTC under which the application for the issuance of a writ of possession over the subject property is pending cannot defer the issuance of the said writ in view of the pendency of an action for annulment of mortgage and foreclosure sale. The judge with whom an application for a writ of possession is filed need not look into the validity of the mortgage or the manner of its foreclosure.
Any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for the refusal to issue a writ of possession. Regardless of whether or not there is a pending suit for the annulment of the mortgage or the foreclosure itself, the purchaser is entitled to a writ of possession, without prejudice, of course, to the eventual outcome of the pending annulment case.
The spouses Espinoza’s position that the issuance of the writ of possession must be deferred pending resolution of Civil Case No. 66256 is therefore unavailing. As we have recounted above, this Court has long settled that a pending action for annulment of mortgage or foreclosure sale does not stay the issuance of the writ of possession.
Ineluctably, the
RTC, Branch 145, which issued the writ of possession, cannot be adjudged to have committed grave abuse of discretion; nor can its order directing the issuance
of said writ be considered patently illegal, for, a fortiori, there is no discretion
involved in its issuance of such an order, it being the ministerial duty of the trial court under the circumstances.
We agree with the CA that petitioner
pursued the incorrect remedy of certiorari. A special civil action for certiorari may be availed of only if the
lower tribunal has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction; and if there is no appeal or any other plain,
speedy, and adequate remedy in the ordinary course of law. Absent grave abuse of discretion, petitioners should have
filed an ordinary appeal instead of a petition for certiorari. The soundness of the order granting the writ of possession is a matter of judgment, with
respect to which the remedy of the party aggrieved is ordinary appeal. An error
of judgment committed by a court in the exercise of its legitimate jurisdiction
is not the same as “grave abuse of
discretion.” Errors of judgment are correctible by appeal, while those of
jurisdiction are reviewable by certiorari.[20]
In fine, we find no
substantial argument that would warrant a reconsideration of our January 21,
2008 Resolution denying the appeal.
WHEREFORE,
the Motion for Reconsideration is DENIED
WITH FINALITY.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate
Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson
|
RENATO C. CORONA Associate
Justice |
MINITA V. CHICO-NAZARIO Associate
Justice |
PRESBITERO J. VELASCO, JR.
Associate
Justice
A T T E S T A T I O N
I attest that the conclusions in the above Resolution were
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
CONSUELO
YNARES-SANTIAGO
Associate
Justice
Chairperson,
Third Division
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 Resolution had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.
REYNATO
S. PUNO
Chief
Justice
* Vice Justice Diosdado M. Peralta whose spouse concurred in the assailed Court of Appeals resolution.
[1] Rollo, p. 318-A.
[2]
[3]
[4]
[5]
[6]
[7] Penned by Associate Justice Mario L. Guariña III, with Associate Justices Roberto A. Barrios (deceased) and Lucenito N. Tagle (retired), concurring, id. at 46-52.
[8] Section 8. Setting aside of sale and writ of possession. – 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.
[9] Rollo, p. 54.
[10] Supra note 1.
[11]
[12]
[13] Section 7. Possession during
redemption period. – In any sale made under the provisions of
this Act, the purchaser may petition the [Regional Trial Court] 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.
[14] Philippine National Bank v. Sanao Marketing Corporation, G.R. No. 153951, July 29, 2005, 465 SCRA 287, 300
[15] Saguan v. Philippine Bank of Communications, G.R. No. 159882, November 23, 2007, 538 SCRA 390, 396.
[16]
[17]
[18] De Vera v. Agloro, G.R. No. 155673, January 14, 2005, 448 SCRA 203, 215.
[19] G.R. No. 156421, April 14, 2008, 551 SCRA 136, 149-150.
[20] Saguan v. Philippine Bank of Communications, supra at 402-403.