THIRD DIVISION
|
PHILIPPINE NATIONAL BANK, Petitioner, - versus - GOTESCO TYAN MING
DEVELOPMENT, INC., Respondent. |
G.R.
No. 183211
Present: YNARES-SANTIAGO, J.,
Chairperson, CARPIO,* NACHURA, and PERALTA, JJ. Promulgated: June 5,
2009 |
x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
This petition for review filed by
Philippine National Bank (PNB) seeks to nullify and set aside the March 12,
2008 Decision[1] of the
Court of Appeals (CA) in CA-G.R. SP No. 99194, which affirmed the Orders dated
August 24, 2006[2] and
March 2, 2007[3] of the
Regional Trial Court (RTC) of Pasig City, and the June 6, 2008 Resolution,[4]
denying PNB’s motion for reconsideration.
The antecedents.
On April 7, 1995,
PNB, along with Metropolitan Bank and Trust Company (MBTC), United Coconut
Planters Bank (UCB), and Citytrust Banking Corporation (CBC), extended credit
facilities worth P800,000,000.00 to respondent Gotesco Tyan Ming
Development, Inc. (GOTESCO). To secure the credit facility, GOTESCO
executed a Mortgage Trust Indenture over a parcel of land in P800,000,000.00
from its credit line, but failed to pay it in full. Accordingly, PNB, MBTC, UCB, and CBC
instituted foreclosure proceedings on the GOTESCO property.
On July 30, 1999, the property was
auctioned and was awarded to PNB as the highest bidder for P1,240,000,496.82. A Certificate of Sale[6]
was issued on August 4, 1999 and was registered with the Register of Deeds on
November 9, 1999.
The one-year redemption period
expired without GOTESCO exercising its right of redemption. Accordingly, PNB
consolidated the title in its name and, on July 18, 2005, TCT No. PT-127557[7]
in the name of PNB was issued. Consequently, PNB filed an Ex-Parte Petition for Issuance of Writ of Possession with the RTC
of Pasig City. The case was docketed as
LRC Case No. R-6695-PSG and was raffled to Branch 155.
GOTESCO then filed a motion to consolidate
LRC Case No. R-6695-PSG with its case
for annulment of foreclosure
proceedings, specific
performance and damages against PNB, docketed as Civil
Case No. 68139, and pending with RTC Branch 161.
On August 24, 2006, Hon. Judge Luis
R. Tongco of Branch 155 issued an Order granting the motion for consolidation:
Finding merit in the Motion For Consolidation filed
by [respondent] Gotesco Tyan Ming Development, Inc., through counsel, on August
7, 2006, and as prayed for and over the opposition of x x x petitioner
Philippine National Bank (PNB), the same is hereby GRANTED.
Let, therefore, the entire records of the instant
case be forwarded to the Office of the Clerk of Court, RTC,
SO ORDERED.[8]
PNB filed a motion for reconsideration,
but RTC Branch 161 denied the same, viz.:
After a careful and judicious consideration
of the arguments raised by the parties in their respective pleadings, this
Court resolves to DENY the Urgent Motion for Reconsideration.
A perusal of the arguments/issues raised by the
petitioner in its pleadings would clearly show that they were mere reiteration
of its previous arguments/issues which have been duly considered and passed
upon by Honorable Judge Luis R. Tongco who ordered the consolidation of this
case, in his discretion, to the civil case pending before this Court and no new
matter was raised to warrant the reconsideration of the assailed Order dated
August 24, 2006.
As a rule, the consolidation of several cases
involving the same parties and subject matter is discretionary with the trial
court. However, consolidation of these
cases becomes a matter of duty if two or more cases are tried before the same
judge, or, if filed with different branches of the same Court of First
Instance, one of such cases has not been partially tried. (Raymundo, et al. v. Felipe, L-30887, Dec. 24, 1971). Noteworthy is the fact that the civil case
pending before this Court is in the stage of presentation of [GOTESCO’s]
initial evidence.
As stressed by the Honorable Supreme Court in the
case of Philippine Savings Bank v.
Spouses Rodolfo C. Mañalac, Jr., G.R. No. 145441, April 26, 2005, to wit:
“In Active
Wood Products Co., Inc. v. Court of Appeals, x x x The Court held that while a
petition for a writ of possession is an ex-parte proceeding, being made on a
presumed right of ownership, when such presumed right of ownership is contested
and is made the basis of another action, then the proceedings for writ of
possession would also become groundless.
The entire case must be litigated and if need be must be consolidated
with a related case so as to thresh out thoroughly all related issues.
In the same case,
the Court likewise rejected the contention that under the Rules of Court only
actions can be consolidated. The Court
held that the technical difference between an action and a proceeding, which
involve the same parties and subject matter, becomes insignificant and
consolidation becomes a logical conclusion in order to avoid confusion and
unnecessary expenses with the multiplicity of suits.”
WHEREFORE, in view of the foregoing, finding no
cogent reason to reverse and set aside the assailed Order dated August 24,
2006, the Urgent Motion for Reconsideration is hereby DENIED and the two (2)
cases being consolidated, this Court deems it proper to treat Civil Case No.
68139 for Annulment of Foreclosure Sale, etc. as an opposition to this case (LR
Case No. R-6695-PSG). Thus, petitioner
should first present evidence.
Accordingly, the March 30, 2007 setting in Civil
Case No. 68139 is cancelled and reset to April 13, 2007 at 1:30 o’clock (sic) in
the afternoon for the presentation of x x x PNB’s evidence.
SO ORDERED.[9]
PNB then filed a petition for certiorari with the CA. On March 12, 2008, the CA rendered the
assailed Decision dismissing the petition.
Citing Philippine Savings Bank v.
Mañalac, Jr.,[10] the CA rejected PNB’s argument that a
petition for issuance of a writ of possession cannot be consolidated with an
ordinary civil action. The CA further
held that the RTC merely complied with the express mandate of Section 1, Rule 31
of the 1997 Rules of Civil Procedure in granting the motion for consolidation.
Thus, it cannot be charged with grave abuse of discretion.
PNB moved for reconsideration of
the decision, but the CA denied it on June 6, 2008.
PNB is now before us faulting the
CA for dismissing its petition.
On March 27, 2009, PNB moved for the
issuance of a temporary restraining order (TRO) and/or writ of preliminary
injunction to enjoin the proceedings in LRC Case No. R-6695-PSG and in Civil
Case No. 68139. PNB claimed that its
petition for issuance of a writ of possession, which is supposed to be summary
in nature, is in grave and imminent danger of being wrongfully subjected to
litigation. It alleged that its witness is set to be cross-examined on April
23, 2009 at 1:30 p.m. despite PNB’s continuing objection as to the flow of
trial. It argued that, in the event that
the RTC further proceeds with the hearing of the consolidated cases, the present
petition will become moot and academic.
Thus, unless the RTC is restrained or enjoined from further hearing the
two improperly consolidated cases, PNB’s right to due process, particularly to
an expeditious and summary hearing of its ex-parte
petition, will be utterly violated. PNB
added that it would also suffer grave and irreparable injury as its right to
take immediate possession of the mortgaged property, with the title thereto now
consolidated in its name, would be rendered nugatory. In its April 20, 2009 Resolution, this Court
granted PNB’s prayer and issued a TRO enjoining the proceedings a quo.
In the main, PNB contends that the
consolidation of its petition for issuance of a writ of possession with
GOTESCO’s case for annulment of foreclosure proceedings has seriously
prejudiced its right to a writ of possession.
It points that after the consolidation of title in its name, when
GOTESCO failed to redeem the property, entitlement to a writ of possession
becomes a matter of right. Moreover, a
petition for issuance of a writ of possession is a non-litigious proceeding;
hence, it must not be consolidated with a civil action for the annulment of
foreclosure proceedings, specific performance, and damages, which is litigious
in nature. It faults the CA for
affirming the RTC’s action.
GOTESCO, on the other hand, submits
that the RTC and the CA did not err, much less abuse their discretion, in
granting the motion for consolidation.
It cites judicial economy and convenience of both parties as justification
for granting the motion for consolidation.
The
petition is meritorious.
The legal basis of an order of
consolidation of two (2) cases is Section 1, Rule 31 of the Rules of Civil
Procedure, which states:
SECTION 1. Consolidation.
— When actions involving a common question of law or fact are pending before
the court, it may order a joint hearing or trial of any or all the matters in
issue in the actions; it may order all the actions consolidated; and it may
make such orders concerning proceedings therein as may tend to avoid
unnecessary costs or delay.
In
Teston v. Development Bank of the
Philippines,[11] we laid
down the requisites for the consolidation of cases, viz.:
A court may order several actions pending
before it to be tried together where they arise from the same act, event or
transaction, involve the same or like issues, and depend largely or
substantially on the same evidence, provided that the court has jurisdiction
over the cases to be consolidated and that a joint trial will not give one
party an undue advantage or prejudice the substantial rights of any of the
parties.[12]
The rule allowing consolidation is designed
to avoid multiplicity of suits, to guard against oppression or abuse, to
prevent delays, to clear congested dockets, and to simplify the work of the
trial court; in short, the attainment of justice with the least expense and
vexation to the parties- litigants.[13]
Thus, in Philippine Savings Bank v. Mañalac,
Jr.,[14]
we disregarded the technical difference between an action and a proceeding, and
upheld the consolidation of a petition for the issuance of a writ of possession
with an ordinary civil action in order to achieve a more expeditious resolution
of the cases, thus:
In the instant case, the
consolidation of Civil Case No. 53967 with LRC Case No. R-3951 is more in
consonance with the rationale behind the consolidation of cases which is to
promote a more expeditious and less expensive resolution of the controversy
than if they were heard independently by separate branches of the trial court.
Hence, the technical difference between Civil Case No. 53967 and LRC Case No.
R-3951 must be disregarded in order to promote the ends of justice.[15]
But in the instant case, the
consolidation of PNB’s petition for a writ of possession with GOTESCO’s
complaint for annulment of foreclosure proceeding serves none of the purposes
cited above. On the contrary, it
defeated the very rationale of consolidation.
The record shows that PNB’s petition
was filed on May 26, 2006, and remains pending after three (3) years, despite
the summary nature of the petition.
Obviously, the consolidation only delayed the issuance of the desired
writ of possession. Further, it
prejudiced PNB’s right to take immediate possession of the property and gave
GOTESCO undue advantage, for GOTESCO continues to possess the property during
the pendency of the consolidated cases, despite the fact that title to the
property is no longer in its name.
It should be
stressed that GOTESCO was well aware of the expiration of the period to redeem
the property. Yet, it did not exercise
its right of redemption. There was not
even an attempt to redeem the property.
Instead, it filed a case for annulment of foreclosure, specific
performance, and damages and prayed for a writ of injunction to prevent PNB
from consolidating its title. GOTESCO’s
maneuvering, however, failed, as the CA and this Court refused to issue the
desired writ of injunction.
Cognizant
that the next logical step would be for PNB to seek the delivery of possession
of the property, GOTESCO now tries to delay the issuance of writ of
possession. It is clear that the motion
for consolidation was filed merely to frustrate PNB’s right to immediate
possession of the property. It is a transparent
ploy to delay, if not to prevent, PNB from taking possession of the property it
acquired at a public auction ten (10) years ago. This we cannot tolerate.
Jurisprudence teems with
pronouncements that, upon the expiration of the redemption period, the right of
the purchaser to the possession of the foreclosed property
becomes absolute. Thus, the mere filing of an ex parte motion for the issuance of a writ of possession would suffice, and there is
no bond required since possession is a necessary consequence
of the right of the confirmed owner. It is a settled principle that a
pending action for annulment of mortgage or foreclosure sale does not stay the
issuance of the writ of possession.[16] Indisputably, the consolidation of PNB’s
petition with GOTESCO’s complaint runs counter to this well established
doctrine.
In De Vera v. Agloro[17]
this Court upheld the denial by the RTC of a motion for consolidation of a
petition for issuance of a writ of possession with a civil action, as it would
prejudice the right of one of the parties, viz.:
It bears stressing that consolidation is
aimed to obtain justice with the least expense and vexation to the litigants.
The object of consolidation is to avoid multiplicity of suits, guard against
oppression or abuse, prevent delays and save the litigants unnecessary acts and
expense. Consolidation should be denied when prejudice would result to any of
the parties or would cause complications, delay, prejudice, cut off, or
restrict the rights of a party.
In the present case, the trial court acted in
the exercise of its sound judicial discretion in denying the motion of the
petitioners for the consolidation of LRC Case No. P-97-2000 with Civil Case No.
109-M-2000.
First. The proceedings in LRC Case No.
P-97-2000 is not, strictly speaking, a judicial process and is a non-litigious
proceeding; it is summary in nature. In contrast, the action in Civil Case No.
109-M-2000 is an ordinary civil action and adversarial in character. The rights
of the respondent in LRC Case No. P-97-2000 would be prejudiced if the said
case were to be consolidated with Civil Case No. 109-M-2000, especially since
it had already adduced its evidence.[18]
Likewise, in Teston v. Development Bank of the
Philippines,[19]
this Court explicitly declared that:
Consolidation should be denied when prejudice
would result to any of the parties or would cause complications, delay, cut
off, or restrict the rights of a party.[20]
It is true that the trial court is
vested with discretion whether or not to consolidate two or more cases. But in the
present case, we are of the considered view that the exercise of such
discretion by the RTC was less than judicious.
We are constrained to agree with PNB that, given the circumstances
herein cited, the RTC’s discretion has been gravely abused. Accordingly, the CA committed reversible
error in upholding the RTC.
WHEREFORE, the
petition is GRANTED. The assailed Decision and Resolution of the
Court of Appeals in CA-G.R. SP. No. 99194 and the Orders dated August 24, 2006
and March 2, 2007 of the
SO ORDERED.
ANTONIO
EDUARDO B. NACHURA
Associate
Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson
|
ANTONIO T. CARPIO Associate
Justice |
RENATO C. Associate
Justice |
DIOSDADO M. PERALTA
Associate
Justice
A T T E S T A T I O N
I attest 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.
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 Decision 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
* Additional member in lieu of Associate Justice Conchita Carpio Morales per Special Order No. 646 dated May 15, 2009.
** Additional member in lieu of Associate Justice Minita V. Chico-Nazario per Special Order No. 631 dated April 29, 2009.
[1] Penned by Associate Justice Amelita G. Tolentino, with Associate Justices Lucenito N. Tagle and Agustin S. Dizon, concurring; rollo, pp. 49-56.
[2] Rollo, p. 113.
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10] G.R. No. 145441, April 26, 2005, 457 SCRA 203.
[11] G.R. No. 144374, November 11, 2005, 474 SCRA 597.
[12] Teston
v. Development Bank of the
[13]
[14] G.R. No. 145441, April 26, 2005, 457 SCRA 203.
[15] Philippine Savings Bank v. Mañalac, Jr., id. at 214.
[16] See Fernandez v. Espinoza, G.R. No. 156421, April 14, 2008, 551 SCRA 136, 150.
[17] G.R. No. 155673, January 14, 2005, 448 SCRA 203.
[18] De Vera v. Agloro, id. at 218. (Citations omitted.)
[19] Teston v. Development Bank of the Philippines, supra note 11.
[20]