Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R.
No. 70987 September 29, 1988GREGORIO Y. LIMPIN, and ROGELIO M.
SARMIENTO,petitioners,vs.INTERMEDIATE APPELLATE COURT and GUILLERMO
PONCE,respondents.Danilo A. Basa for petitioner Gregorio Y. Limpin,
Jr.Angara, Abello, Concepcion, Regala & Cruz Law Offices for
petitioner Rogelio Sarmiento.Sycip, Salazar, Hernandez &
Gatmaitan Law Offices and Eugenio C. Lindo for respondent Guillermo
Ponce.NARVASA,J.:Once again the parties are before this Court; this
time, for a determination of whether or not theequity of
redemptionrecognized in favor of petitioner Rogelio M. Sarmiento in
this Court's judgment promulgated on January 30, 1987, still
subsists and may be exercised, more than a year after that judgment
had become final and executory.The proceedings concern two (2)
lots, then covered by TCTs Nos. 92836 and 92837, which, together
with two (2) others, were originally mortgaged in 1973 to herein
private respondent Ponce by their former owners, the Spouses Jose
and Marcelina Aquino. These two lots were afterwards sold in 1978
by the same Aquino Spouses to Butuan Bay Wood Export Corporation.
Against this corporation herein petitioner Limpin obtained a money
judgment in 1979; and to satisfy the judgment, the two lots were
levied on and sold at public auction in 1980, Limpin being the
highest bidder. Limpin later sold the lots to his co-petitioner,
Sarmiento.Earlier however or a day before levy was made on the two
lots in execution of the judgment against Butuan Bay Wood Export
Corporation. Ponce had initiated judicial proceedings for the
foreclosure of the mortgage over said two (2) lots (together with
the two (2) others mortgaged to him Judgment was rendered in his
favor and became final; and at the ensuing foreclosure sale, the
lots were acquired by Ponce himself as highest bidder. Ponce then
moved for confirmation of the foreclosure sale, but the Court
confirmed the sale of only two lots, refusing to do so as regards
the two which had been subject of the execution sale in Limpin's
favor (i.e., those covered TCTs Nos. 92836 and 92837).It was to
resolve the resulting dispute that Ponce instituted a special civil
action in the Intermediate Appellate Court, impleading Limpin and
Sarmiento a indispensable parties respondents. That Court rendered
judgment on February 28, 1985 in Ponce's favor; Limpin and
Sarmiento appealed; this Court denied their appeal.The judgment of
this Court of January 30, 1987 dismissed Sarmiento's and Limpin's
petition for review on certiorari of the Appellate Court's decision
of February 28, 1985. It in effect affirmed the latter's decision
whichinter aliaordered the Trial Court "to confirm the sale (of the
lots formerly covered by TCT Nos. 92836 and 92837) and issue a writ
of possession to ... (Guillermo Ponce) with respect to the
aforesaid lots,subject to the equity of redemption of the
respondent Rogelio V. Sarmiento1Applying the doctrine laid down
inSantiago v. Dionisio, a 1953 decision of this Court2the
Intermediate Appellate Court's decision declared that "the sale to
Ponce, as the highest bidder in the foreclosure sale of the two
lots in question should have been confirmed,subject to Limpin's
(and now Sarmiento's) equity of redemption."This Court's aforesaid
judgment also clearly and categorically sustained the exercise by
the Appellate Court ofjurisdiction over the personsof Rogelio M.
Sarmiento and Gregorio Limpin.3There can thus be no question that
the petitoners herein, said Rogelio Sarmiento and Gregorio Limpin,
were affected and are bound by the decision of the Intermediate
Appellate Court, and that of this Court affirming it.Rogelio M.
Sarmiento, particularly, was aware that the Trial Court had the
ministerial duty to execute the Appellate Court's decision, i.e.,
to confirm the sale and issue a writ of possession as regards the
aforesaid lots, subject to the equity of redemption explicitly
recognized in his favor in the decisions mentioned. He knew that he
had theprerogative to exercise his equity of redemption, if not
from the moment that the judgment of this Court became final and
executory,4at least until the Courta quo, presided over by Hon.
Antonio Solano, subsequently confirmed the sale and issued a writ
of possession in favor of Guillermo Ponce in June, 1987.5He did not
try to exercise that right before, at or about the time of the
confirmation of the foreclosure sale by Judge Solano. Instead, he
instituted no less than two (2) actions in the same Regional Trial
Court which were assigned to another branch, presided over by Hon.
Teodoro Beltran- attempting to relitigate precisely the same issues
which this Court and the Intermediate Appellate Court had already
passed upon and resolved adversely to him. For doing so for
trifling with and abusing the processes of the courts, and thus
unwarrantedly delaying execution of the final and executory
judgment against him he and his counsel were both found guilty of
contempt and correspondingly punished by this Court, by Resolution
dated May 5, 1988. The same resolution also decreed the dismissal
of the complaints in both cases and the nullification and setting
aside of the restraining or injunctive orders of Judge Beltran.It
was not until March 11, 1988-nine months or so after entry of the
judgment recognizing his equity of redemption as
successor-in-interest of the original mortgagors that Sarmiento
finally be stirred himself to attempt to exercise his unforeclosed
equity of redemption. On that day he filed a motion with the Court
presided over by Hon. Judge Antonio Solano, manifesting that he
would exercise the right and asked the Court to fix the redemption
price.6The Court opined that "this should be the subject of the
agreement between Ponce and Sarmiento.7Sarmiento then wrote to
Ponce on March 23, 1988 offering "P 2.6 million as redemption price
for the two lots originally covered by TCTs Nos. 92836 and 92837,
now 307100 and 307124.8Ponce's answer, dated March 25, 1988,
rejected the offer said averred "that the period within which ...
(Sarmiento) could have exercised such right ... (had)
lapsed.9Sarmiento reacted by filing a motion with the Solano Court,
dated March 29, 1988, asking it to "fix the redemption price ...
and that the implementation of the writ of possession be
provisionally deferred.10An opposition was promptly filed by Ponce
under date of May 4, 198811in which he argued that "Sarmiento's
right to exercise his equity of redemption over those lots had long
expired," the opportunity to exercise it having presented itself
but not availed of "(i) after ... default in the performance of the
conditions of the mortgage and (ii) before the Sheriffs sale of the
property and the judicial confirmation thereof." According to
Ponce, "from October 17, 1982, ... (when) Sarmiento's
predecessors-in-interest defaulted in their obligations over the
mortgaged properties, up to June 17, 1987, when this ... (Trial)
Court confirmed the auction sale of those properties, Sarmiento
could (and should) have exercised his 'equity of redemption.'"
Judge Solano did not share this view, and ruled accordingly.12The
issue has been brought to this Court for resolution by Ponce's
"Motion for Clarification" dated May 27, 1988 and "Supplemental
Motion ..." dated June 13, 1988, as to which Sarmiento has
submitted a Comment dated June 17,1988. To the comment a reply has
been presented by Ponce under date of August 3, 1988.Ponce
states13that the term,equity of redemption, means "the right of the
mortgagor to redeem the mortgaged property after his default in the
performance of the conditions of the mortgage but before the sale
of the property or the judicial) confirmation of the (Sheriffs)
sale," citingTop Rate International Services, Inc. v. IAC142 SCRA
473 [1976], or "the right to redeem mortgaged property by paying
the amount ordered by the court within a period of ninety days, or,
even thereafter but before the confirmation of the sale,
invokingSun Life Assurance Co. of Canada v. Diez, 52 Phil. 275
[1928].14On this premise, he postulates that "from October 17,
1982, the date Sarmiento's predecessors-in-interest defaulted in
their obligations over the mortgaged properties, up to June 17,
1987, when the lower court confirmed the auction sale of those
properties, Sarmiento could have exercised his 'equity of
redemption."' Not having done so within that time, his equity of
redemption had been extinguished; indeed, by opting to file "new
suits against Ponce ... seeking to annul Ponce's titles over those
properties" instead of redeeming the same, he had "waived his
equity of redemption (assuming such right existed at the time the
suits were commenced)."It is Sarmiento's position, on the other
hand,15that the "17 June 1987 confirmation of the sale of the two
lots could not have cut off ... (his) equity of redemption;" in
fact, "Ponce himself, in his 'Urgent Motion' dated 1 June 1987,
precisely prayed for the issuance of a writ of possession'subject
to the equity of redemption of Rogelio M. Sarmiento' thereby
recognizing Sarmiento's equity of redemption beyond confirmation
date,"16He also argues that he had not been informed of the time
when his right of redemption would be cut-off,17because he "never
received a copy of any Motion for Confirmation, much less notice of
hearing thereon in violation of his right to due process;" that to
hold otherwise would "render nugatory the decision of the Court of
Appeals and this ... Court on the issue;" and that he is entitled
to a reasonable time, e.g., a year, for the exercise of his equity
of redemption.18Theequity of redemptionis, to be sure, different
from and should not be confused with theright of
redemption.19Theright of redemptionin relation to a
mortgage-understood in the sense of a prerogative to re-acquire
mortgaged property after registration of the foreclosure sale-
exists only in the case of theextrajudicialforeclosure of the
mortgage. No such right is recognized in ajudicialforeclosure
except only where the mortgagee is the Philippine National Bank or
a bank or banking institution.Where a mortgage isforeclosed
extra-judicially, Act 3135 grants to the mortgagor the right of
redemption within one (1) year from the registration of the
sheriffs certificate of foreclosure sale.20Where the foreclosure
isjudicially effected, however, no equivalent right of redemption
exists. The law21declares that a judicial foreclosure sale, "when
confirmed by an order of the court, ... shall operate to divest the
rights of all the parties to the action and to vest their rights in
the purchaser,subject to such rights of redemption as may be
allowed by law.22Such rights exceptionally "allowed by law" (i.e.,
even after confirmation by an order of the court) are those granted
by the charter of the Philippine National Bank (Acts No. 2747 and
2938), and the General Banking Act (R.A. 337).23These laws confer
on the mortgagor, his successors in interest or any judgment
creditor of the mortgagor, the right to redeem the property sold on
foreclosure-after confirmation by the court of the foreclosure
sale-which right may be exercised within a period of one (1) year,
counted from the date of registration of the certificate of sale in
the Registry of Property.But, to repeat, no such right of
redemption exists in case of judicial foreclosure of a mortgage if
the mortgagee is not the PNB or a bank or banking institution. In
such a case, the foreclosure sale, "when confirmed by an order of
the court. ... shall operate to divest the rights of all the
parties to the action and to vest their rights in the purchaser."
There then exists only what is known as theequity of redemption.
This is simply the right of the defendant mortgagor to extinguish
the mortgage and retain ownership of the property by paying the
secured debt within the 90-day period after the judgment becomes
final, in accordance with Rule 68, or even after the foreclosure
sale but prior to its confirmation. Section 2, Rule 68 provides
that... If upon the trial ... the court shag find the facts set
forth in the complaint to be true, it shall ascertain the amount
due to the plaintiff upon the mortgage debt or obligation,
including interest and costs, and shall render judgment for the sum
so found due and order the same to be paid into court within a
period of not less thanninety (90) days from the date of the
service of such order, and that in default of such payment the
property be sold to realize the mortgage debt and Costs.24This is
the mortgagor'sequity (not right) of redemptionwhich, as above
stated, may be exercised by him even beyond the 90-day period "from
the date of service of the order,' and even after the foreclosure
sale itself, provided it be before the order of confirmation of the
sale.25After such order of confirmation, no redemption can be
effected any longer.It is this same equity of redemption that is
conferred by law on the mortgagor's successors-in-interest, or
third persons acquiring rights over the mortgaged property
subsequent, and therefore subordinate, to the mortgagee's lien.26If
these subsequent or junior lienholders be not joined in the
foreclosure action, the judgment in the mortgagor's favor is
ineffective as to them, of course. In that case, they retain what
is known as the"unforeclosed equity of redemption,"and a separate
foreclosure proceeding should be brought to require them to redeem
from the first mortgagee, or the party acquiring title to the
mortgaged property at the foreclosure sale, within 90 days,27under
penalty of losing that prerogative to redeem. In the case at bar,
however, there is no occasion to speak of any "unforeclosed equity
of redemption' in Sarmiento's favor since he was properly impleaded
in the judicial proceeding where his and Ponce's rights over the
mortgaged property were ventilated and specifically
adjudicated.Under the circumstances obtaining in this case, the
plain intendment of the Intermediate Appellate Court was to give to
Sarmiento, not the unforeclosed equity of redemption pertaining to
a stranger to the foreclosure suit, but the sameequity of
redemptionpossessed by the mortgagor himself. The judgment cannot
be construed as contemplating or requiring the institution of a
separate suit by Ponce to compel Sarmiento to exercise his
unforeclosed equity of redemption, or as granting Sarmiento the
option to redeem at any time that he pleases, subject only to
prescription. This would give rise to that multiplicity of
proceedings which the law eschews. The judgment plainly intended
that Sarmiento exercise his option to redeem, assuccessor of the
mortgagor.Upon the facts on record, Sarmiento cannot be heard to
complain of denial of due process for alleged lack of notice of any
motion or hearing for confirmation of sale. The Decision of the
Intermediate Appellate Court which he and his predecessor, Limpin,
had appealed to this Courtspecifically orderedthe Trial Court to
confirm28the judicial foreclosure sale in favor of Ponce over the
two lots, in these terms.29WHEREFORE, the orders dated October
16,1983 and December 19,1983 of the respondent court, so far as
they deny the confirmation of the sale of the lots formerly covered
by TCT Nos. 92836 and 92837, are SET ASIDE, and the respondent
court is hereby ORDERED to confirm the sale and issue a writ of
possession to the petitioner with respect to the aforesaid lots,
subject to the equity of redemption of the respondent Rogelio V.
Sarmiento. Without costs.Given the fact that said appealed orders
of the Trial Court had been issued upon motion for confirmation
earlier made by Ponce-which was duly served and heard-the
aforecited Decision of the Intermediate Appellate Court can be
construed in no wise than as a peremptory command to the Trial
Court to confirm the sale as directed,motu proprio, and without the
need of any further motion or other action on the part of Ponce.
The rejection by this Court of Sarmiento's and Limpin's appeal in
its own Decision of January 30, 1987, which imported nothing less
than a total affirmance of the Decision of the Appellate Court,
should therefore have sufficiently alerted Sarmiento that
confirmation could come at any time after this Court's Decision
became final, with or without any action from Ponce. He cannot, in
the circumstances, claim unfair surprise. He should, upon being
notified of this Court's Decision, have taken steps to redeem the
properties in question or, at the very least, served the Trial
Court and Ponce with notice of his intention to exercise his equity
of redemption. There was certainly time enough to do this the order
confirming the foreclosure sale issuing only on June 17, 1987had he
not occupied himself with the fruitless maneuverings to re-litigate
the issues already recounted. Indeed, had he made an attempt to
redeem, even belatedly but within a reasonable period of time after
learning of the order of confirmation (the record shows he did
learn of it within three [3) days after its issuance),30he might
perhaps have given the Court some reason to consider his bid on
equitable grounds. He did not. He let nine (9) months pass, to
repeat, in carrying out improper (and contumacious stratagems to
negate the judgments against him, before making any such
move.Neither can Sarmiento acceptably claim that Ponce, by moving
for a writ of possession subject to his (Sarmiento's) equity of
redemption, recognized the existence and enforceability of that
prerogativebeyondthe prescribed cut-off date of confirmation of the
sale. Such an interpretation of the motion is totally unwarranted,
given the fact that said motion was made at a time (June 1, 1987)
when there was as yet no order confirming the sale and, since
Sarmiento's equity of redemption then still unquestionably existed,
there was hardly occasion or for that matter, any reason as far as
Ponce was concerned, to provide against its lapsing. Moreover,
assuming for the sake of argument that a resolutory period fixed by
law may be extended by act of the party in whose favor its
expiration would operate, that act must bespeak a clear and
unequivocal intent to grant such an extension. No such clear grant
can be inferred from the terms of Ponce's motion, which can, and in
fact should be, read as a mere affirmation that there existed at
the time an equity of redemption in Sarmiento's favor.WHEREFORE,
the Court hereby rules that the equity of redemption claimed and
invoked by Rogelio M. Sarmiento over the properties originally
covered by Transfer Certificates of Title Nos. 92836 and 92837 (now
by TCTs Numbered 307100 and 307124), Registry of Deeds of Quezon
City, subject of this case, lapsed and ceased to exist without
having been properly exercised, on June 17, 1987, with the issuance
by the Trial Court of the Order confirming the sheriffs sale (on
judicial foreclosure) of said properties in favor of Guillermo
Ponce.Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.
Republic of the PhilippinesSUPREME COURTManilaTHIRD DIVISIONG.R.
NO. 156542 June 26, 2007CANDELARIA Q. DAYOT,Petitioner,vs.SHELL
CHEMICAL COMPANY, (PHILS.), INC.,Respondent.D E C I S I O
NAUSTRIA-MARTINEZ,J.:Assailed in the Petition for Review
onCertioraribefore the Court is the July 30, 2002 Decision1of the
Court of Appeals (CA) in CA-G.R. SP. No. 70696 nullifying the
January 8, 2002 Amended Order,2January 10, 2002 Alias Writ of
Possession,3January 10, 2002 Notice to Vacate4and April 12, 2002
Order,5which were all issued by the Regional Trial Court (RTC) of
Iloilo, Branch 29; and the CA December 23, 2002 Resolution6denying
herein petitioner's Motion for Reconsideration.The facts of the
case are as follows:On April 20, 1982, Panay Railways, Inc. (PRI)
executed a real estate mortgage contract over six parcels of land
located in Lapuz District, Iloilo City in favor of Traders Royal
Bank (TRB) for purposes of securing its loan obligations to
TRB.7The subject properties are denominated as follows:Lot No.
3834, covered by Transfer Certificate of Title (TCT) No.
T-45727;Lot No. 1-A, covered by TCT No. T-45728; andLot Nos. 6153,
6156, 6158 and 6159, all covered by TCT No. T-58200. PRI failed to
pay its loan. As a consequence, the mortgaged properties were
foreclosed and sold at public auction to TRB as the highest bidder.
PRI failed to redeem the foreclosed properties. Hence, TRB
consolidated its ownership over the subject parcels of land and,
thereafter, certificates of title were issued in its name, to wit:
TCT No. T-84233, which canceled TCT No. T-45728; TCT No. T-84234,
which canceled TCT No. T-45727; and TCT Nos. T-84235, T-84236,
T-84237 and T-84238, all of which canceled TCT No.
T-58200.Thereafter, TRB filed a Petition for Writ of Possession
with the RTC of Iloilo City, docketed as LRC CAD. REC. NO. 1 ILOILO
CITY and LRC CAD. REC. NO. 9616 ILOILO CITY.8In its Order dated
October 22, 1990, the trial court granted the petition and ordered
the issuance of a writ of possession in favor of TRB.9However, the
writ was not fully implemented.On November 20, 1990, TRB sold to
spouses Edmundo and Candelaria Dayot (Spouses Dayot), by virtue of
a Deed of Absolute Sale, five parcels of land which are portions of
Lots 3834, 1-A and 6153.Subsequently, on February 5, 1991,
Candelaria Dayot (petitioner) filed a Supplemental Pleading before
the RTC of Iloilo City, praying that she, being the transferee of
all the rights and interests of TRB over the parcels of land
subject of the Petition for Writ of Possession filed by the latter,
be substituted as the new petitioner in LRC CAD. REC. NOS. 1 and
9616, and that an alias writ of possession be issued in her favor.
The trial court granted petitioner's prayer in its Order dated
March 12, 1991.10On April 1, 1991, the RTC issued an Alias Writ of
Possession in favor of herein petitioner.11On August 24, 1994, the
spouses Dayot filed with the RTC of Iloilo City, a complaint for
Recovery of Ownership and Possession, Annulment of Documents,
Cancellation of Titles, Reconveyance and Damages against TRB,
Petron Corporation (Petron) and herein respondent Shell Chemical
Company (Phil.), Inc. (Shell), praying that Shell be directed to
vacate the portion of Lot No. 6153 which it actually possesses and
for both Petron and Shell to surrender ownership and possession of
portions of parcels of lands covered separately by TCT Nos. T-47484
and T-94116. The case was docketed as Civil Case No. 21957.12On
August 21, 1997, while Civil Case No. 21957 was pending resolution,
herein petitioner filed in LRC CAD. REC. NOS. 1 and 9616 an Amended
Supplemental Motion for the Issuance of Writ of Possession, praying
that Shell be ejected from the portion of Lot 6153 which it
actually possesses.Shell lodged an Opposition to petitioner's
Amended Supplemental Motion arguing, among others, that petitioner
is guilty of forum shopping as it seeks the same relief being
sought in Civil Case No. 21957 and that the parcels of land sold to
petitioner do not include the portion of Lot 6153 being possessed
by Shell.13On May 7, 1999, the RTC of Iloilo, Branch 30 issued an
Order denying herein petitioner's Motion for the Issuance of a Writ
of Possession, insofar as Shell is concerned.14Despite the issuance
of the above-mentioned Order, petitioner filed two successive
motions praying for the issuance of an alias writ of possession.
Shell opposed these motions.Subsequently, the petition for the
issuance of a writ of possession was re-raffled to Branch 29 of the
RTC of Iloilo, as the presiding judge of Branch 30 inhibited
himself from hearing the case.On January 8, 2002, Branch 29
promulgated an Amended Order, the dispositive portion of which
reads:Wherefore, let an Alias Writ of Possession issue on the
affected portions of Lots 3834, 1-A and 6153, all situated in the
City of Iloilo, with a total land area of 14,940 sq. meters
occupied by Shell and 17,000 sq. meters occupied by Petron and to
place and install petitioner Candelaria Dayot in possession
thereof.Mr. Redentor Rodriguez, Sheriff IV of this Court is hereby
directed to implement this order.SO ORDERED.15On January 10, 2002,
the Branch Clerk of Court of RTC Iloilo, Branch 29, issued an Alias
Writ of Possession.On even date, the Sheriff served upon Shell a
Notice to Vacate.Thereafter, Shell and Petron moved for the
reconsideration of the January 8, 2002 Order of the RTC but the
trial court denied it via its Order dated April 12, 2002.Shell then
filed a petition forcertiorariand prohibition with the CA praying
for the nullification of the January 8, 2002 and April 12, 2002
Orders of RTC Iloilo, Branch 29, as well as the Alias Writ of
Possession and Notice to Vacate both dated January 10, 2002. The
petition also sought to permanently enjoin the RTC from enforcing
the assailed orders and processes and from acting and conducting
further proceedings in the subject case.On July 30, 2002, the CA
promulgated its presently assailed Decision, the dispositive
portion of which reads as follows:WHEREFORE, premises considered,
the Petition is GRANTED and the questioned four (4) rulings of the
court a quo are hereby declared NULL and VOID. No costs.SO
ORDERED.16Petitioner's Motion for Reconsideration was denied by the
CA in its Resolution dated December 23, 2002.Hence, herein petition
for review oncertiorari, anchored on the following grounds:1. THAT
RESPONDENT IS BARRED FROM FILING THE PETITION FOR CERTIORARI WITH
THE COURT OF APPEALS, ASSAILING THE AMENDED ORDER DATED JANUARY 8,
2002 OF HON. RENE B. HONRADO, PRESIDING JUDGE, REGIONAL TRIAL
COURT, ILOILO CITY, BRANCH 29, AFTER RESPONDENT LOST ITS RIGHT TO
APPEAL BECAUSE A SPECIAL CIVIL ACTION FOR CERTIORARI IS NOT AND
CANNOT BE A SUBSTITUTE FOR A LOST OR EXPIRED APPEAL THUS, THE
DECISION PROMULGATED JULY 30, 2002 AND THE RESOLUTION PROMULGATED
DECEMBER 23, 2002 OF THE HONORABLE COURT OF APPEALS WERE ISSUED
CONTRARY TO PREVAILING JURISPRUDENCE AND THAT SAID COURT DECIDED A
QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW AND APPLICABLE
DECISIONS OF THIS HONORABLE SUPREME COURT AND THE ACCEPTED AND
USUAL COURSE OF JUDICIAL PROCEEDINGS.2. THAT PETITIONER IS ENTITLED
TO THE POSSESSION OF THE ENTIRE LOTS 3834, 1-A, 6153, 6156, 6158
AND 6159 INCLUDING THE AREA OF 14,940 SQ. METERS OCCUPIED BY
RESPONDENT WHICH AREAS ARE PORTIONS OF LOTS 6153, 3834 AND 1-A,
OCCUPATION THEREOF BY RESPONDENT BEING THAT OF MERE INTRUDER OR
TRESSPASSER.17In her first assigned error, petitioner argues that
respondent should have been barred from filing a special civil
action forcertioraribefore the CA because this recourse is
available only when there is no speedy and adequate remedy in the
course of law. Petitioner further argues that respondent should
have appealed the Amended Order of the RTC dated April 12, 2002,
but it did not. Petitioner avers that respondent can no longer
resort to the filing of a petition forcertioraribecause this remedy
is not a substitute for a lost appeal.Anent the second assigned
error, petitioner claims that she is not guilty of forum shopping,
as Civil Case No. 21957 involves the issue of ownership while the
present case is for the recovery of possession; and that the
subject matter of the present case is different from that of Civil
Case No. 21957. Even granting that the same parcels of land are
involved in these cases, petitioner argues that a writ of
possession can still be validly issued and implemented in
consonance with the rule that proceedings incident to
extra-judicial foreclosure of mortgages to resolve the possession
of third-party claimants may proceed independently of the action
which said claimants may bring to enforce or protect their claim of
ownership over the property.Lastly, petitioner asserts that
respondent's TCT No. T-47484 refers to a lot which is different
from those being contested in the instant case.In its Comment,
respondent contends that it did not err in resorting to the remedy
of filing a petition forcertiorariwith the CA. It argues that even
when appeal is available as a proper remedy, the Supreme Court will
allow a writ ofcertiorariif the petition appears to be genuinely
meritorious or if filed on the basis of a patent, capricious and
whimsical exercise of discretion by a trial judge, or when an
appeal will not promptly relieve petitioner from the injurious
effects of the disputed orders; that the Amended Order of the RTC
dated January 8, 2002 collaterally attacked respondent's title over
the disputed property; that petitioner is not a buyer in good
faith; that, as a transferee, petitioner merely acquired the rights
and interests that TRB had by reason of the foreclosure of the
mortgage made in its favor; that the contested Alias Writ of
Execution is barred byres judicataandlitis pendentia; and that
respondent has the right to possess the disputed property as it has
satisfactorily shown that it is the registered owner of and has
title over the subject property.The Court finds the petition bereft
of merit.It bears to emphasize at the outset that the present
petition for review arose by reason of the special civil action
forcertiorarifiled by respondent Shell with the CA questioning the
January 8, 2002 Amended Order, Alias Writ of Possession, Notice to
Vacate and the April 12, 2002 Order issued by the RTC of Iloilo,
Branch 29. Accordingly, any discussions on the issues raised as
well as rulings by this Court in the present petition apply only
insofar as the claim of respondent Shell is concerned.As to the
first assigned error, it is true that as a rule whilecertiorarias a
remedy may not be used as a substitute for an appeal, especially
for a lost appeal, this rule should not be strictly enforced if the
petition is genuinely meritorious.18It has been held that where the
rigid application of the rules would frustrate substantial justice,
or bar the vindication of a legitimate grievance, the courts are
justified in exempting a particular case from the operation of the
rules.19The Court has given due course to petitions
forcertiorarialthough appeal is the proper remedy where the
equities of the case warranted such action, mindful that dismissals
based on technicalities are looked upon with disfavor.20In the
present case, the Court finds no error on the part of the CA in
giving due course to the petition forcertiorarifiled by respondent
as its case is genuinely meritorious for reasons that will be
discussed forthwith.As to the second assigned error, the Court
agrees with petitioner that she is not guilty of forum
shopping.There is forum shopping when a party avails himself of
several judicial remedies in different courts, simultaneously or
successively, all substantially founded on the same transactions
and the same essential facts and circumstances, and all raising
substantially the same issues either pending in or already resolved
adversely by some other courts.21The test to determine whether a
party violated the rule against forum shopping is whether the
elements of litis pendentia are present, or whether a final
judgment in one case will amount to res judicata in another.22In
other words, when litis pendentia or res judicata does not exist,
neither can forum shopping exist.23The requisites oflitis
pendentiaare: (a) the identity of parties, or at least such as
representing the same interests in both actions; (b) the identity
of rights asserted and relief prayed for, the relief being founded
on the same facts; and (c) the identity of the two cases such that
judgment in one, regardless of which party is successful, would
amount to res judicata in the other.24On the other hand, the
elements ofres judicata, also known as "bar by prior judgment,"
are: (1) the former judgment must be final; (b) the court which
rendered it had jurisdiction over the subject matter and the
parties; (c) it must be a judgment on the merits; and (d) there
must be, between the first and second actions, identity of parties,
subject matter, and causes of action.25It bears to note that the
proceedings conducted subsequent to the filing of a petition for
the issuance of a writ of possession areex parteand summary in
nature. The order for the issuance of the writ is simply an
incident in the transfer of title in the name of the
petitioner.26Hence, such order cannot be said to be a judgment on
the merits,i.e., one rendered after a consideration of the evidence
or stipulations submitted by the parties at the trial of the case.
Thus, in the present case, any order or decision of the RTC in LRC
CAD. REC. NOS. 1 and 9616 cannot be considered as determinative of
the merits of Civil Case No. 21957.Moreover, the aforementioned
cases cannot be said to be identical as the basic issue in LRC CAD.
REC. NOS. 1 and 9616 is possession while in Civil Case No. 21957
the issue raised is essentially that of ownership of the disputed
lots.Based on the foregoing, there can be nolitis pendentiaorres
judicata. Since neitherlitis pendentianorres judicataexists in the
instant case, petitioner may not be held guilty of forum
shopping.Nonetheless, the Court finds that under applicable laws
and jurisprudence, respondent cannot be ejected from the property
by means of an ex-parte writ of possession.Article 433 of the Civil
Code states: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.Under
the aforequoted provision, one who claims to be the owner of a
property possessed by another must bring the appropriate judicial
action for its physical recovery. The term "judicial process" could
mean no less than an ejectment suit or reivindicatory action, in
which the ownership claims of the contending parties may be
properly heard and adjudicated.27In the present case, petitioner
had already complied with this procedure by filing Civil Case No.
21957.The ex-parte petition for issuance of a possessory writ filed
by petitioner's predecessor, TRB, in LRC CAD. REC. NOS. 1 and 9616,
strictly speaking, is not the kind of "judicial process"
contemplated above. Even if the same may be considered a judicial
proceeding for the enforcement of ones 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 or
protection of a right, or the prevention or redress of a
wrong."28The second paragraph of Section 33, Rule 39, of the Rules
of Court relating to the right of possession of a purchaser of
property in an extra-judicial foreclosure sale provides:Sec. 33.
Deed and possession to be given at expiration of redemption period;
by whom executed or given.x x xUpon the expiration of the right of
redemption, the purchaser or redemptioner shall be substituted to
and acquire all the rights, title, interest and claim of the
judgment obligor to the property at the time of levy. The
possession of the property shall be given to the purchaser or last
redemptioner by the same officerunless a third party is actually
holding the property adversely to the judgment obligor.(emphasis
supplied)Thus, in Barican v. Intermediate Appellate Court,29this
Court held that the obligation of a court to issue a writ of
possession in favor of the purchaser in an extra-judicial
foreclosure sale of a mortgaged property ceases to be ministerial
once it is shown that there is a third party in possession of the
property who is claiming a right adverse to that of the mortgagor
and that such third party is a stranger to the foreclosure
proceedings in which theex-partewrit of possession was applied
for.It bears emphasis that an ex-parte petition for issuance of a
writ of possession is a non-litigious proceeding authorized in an
extra-judicial foreclosure of mortgage pursuant to Act 3135, as
amended.30It is brought for the benefit of one party only, and
without notice to, or consent by any person adversely
interested.31Furthermore, unlike a judicial foreclosure of real
estate mortgage under Rule 68 of the Rules of Court where an action
for foreclosure is brought before the RTC where the mortgaged
property or any part thereof is situated, any property brought
within the ambit of Act 3135 is foreclosed by the filing of a
petition, not with any court of justice, but with the office of the
sheriff of the province where the sale is to be made.As such, a
third person in possession of an extra-judicially foreclosed
property, who claims a right superior to that of the original
mortgagor, is thus given no opportunity to be heard in his
claim.32It stands to reason, therefore, that such third person may
not be dispossessed on the strength of a mere ex-parte possessory
writ, since to do so would be tantamount to his summary ejectment,
in violation of the basic tenets of due process.33Besides, as
earlier stressed, Article 433 of the Civil Code, cited above,
requires nothing less than ejectment or reivindicatory action to be
brought even by the true owner. After all, the actual possessor of
a property enjoys a legal presumption of just title in his favor,
which must be overcome by the party claiming otherwise.In the case
at bar, it is not disputed that herein respondent had been in
possession of the subject lots since 1975 and that it has in its
premises bulk plant and fuel storage facilities for the purpose of
conducting its business. In this respect, the Court agrees with the
findings of the CA that petitioner had knowledge of respondent's
prior possession of the disputed properties. Yet, instead of
pursuing Civil Action No. 21957 where respondent will be given a
chance to substantiate its claim of ownership, petitioner still
insists on obtaining a writ of possession pursuant to its alleged
right as purchaser of the properties which had been
extra-judicially foreclosed. The Court cannot sanction this
procedural shortcut. To enforce the writ against herein respondent,
an unwitting third party possessor who took no part in the
foreclosure proceedings, would be tantamount to the taking of real
property without the benefit of proper judicial intervention.Hence,
it was not a ministerial duty of the trial court under Act No. 3135
to issue a writ of possession for the ouster of respondent from the
lot subject of this instant case, particularly in light of the
latter's opposition and claim of ownership and rightful possession
of the disputed properties.Moreover, the trial court was without
authority to grant the ex-parte writ, since petitioner's right of
possession under said Act could be rightfully enforced only against
PRI as the original mortgagor and its successors-in-interest,34but
not against respondent which possesses the property subject of
execution under a claim of ownership, having bought the same from
the Development Bank of the Philippines (DBP).In the present case,
the questioned Amended Order of the RTC Iloilo, Branch 29 dated
January 8, 2002 was issued on the strength of the Writ of
Possession issued by the RTC of Iloilo, Branch 30 dated October 24,
1990. It is clear from the said writ that the sheriff is directed
to eject PRI or any person claiming interest under it from Lot Nos.
3834, 1-A, 6153, 6156, 6158 and 6159 and to place TRB in possession
thereof. However, respondent is not a successor-in-interest of PRI.
Instead, respondent claims ownership over the subject lot by virtue
of a Deed of Absolute Sale dated June 30, 1975, wherein the
property was sold to it by the DBP. As a consequence of such sale,
respondent obtained TCT No. 47484 on July 28, 1977. Clearly,
respondent's right of possession is adverse to that of PRI or
TRB.Furthermore, registration of the lots in petitioners name does
not automatically entitle the latter to possession thereof.35As
discussed earlier, petitioner must resort to the appropriate
judicial process for recovery of the properties and cannot simply
invoke its title in an ex-parte proceeding to justify the ouster of
respondent,36especially in view of the fact that the latter also
has in its possession a Transfer Certificate of Title over the
subject properties. The court cannot just ignore the claim of
herein respondent, who is in actual possession of the subject
properties, that it has been the owner thereof since 1975 and,
therefore, has the better right to possess them. Neither can the
RTC rely on the Surveyor's Report dated August 3, 1997 because
respondent was not given the opportunity to refute it, the same
being submitted in theex-parteproceedings for the issuance of a
writ of possession in favor of Dayot. Due process dictates that
herein respondent cannot simply be ejected on the strength of the
subject Surveyor's Report without giving it (respondent) the
opportunity to present its own evidence. All of these issues must
be ventilated and resolved on the merits after a proper hearing. In
the instant case, the proper forum is Civil Case No. 21957.Finally,
it is expressly stipulated in the Additional Stipulations of Real
Estate Mortgage executed by PRI in favor of TRB that it "excludes
those areas already sold to Shell Co., Inc. with total area of
14,920 sq. meters, known as Lot No. 6153-B and portion of Lot No.
5."37Petitioner insists that respondent's TCT No. T-47484 refers to
a different parcel of land. Whether respondent's title refers to
the same property subject of the present case and whether the
parcels of land sold to herein petitioner are the same properties
foreclosed by TRB are issues which should properly be resolved in
Civil Case No. 21957. This is not the proper forum to determine who
between the parties is entitled to ownership of the disputed lands,
as the issue in the present case is merely limited to the propriety
of the issuance of a writ of possession relating to foreclosure of
mortgage.WHEREFORE, the instant petition isDISMISSED. The Decision
and Resolution of the Court of Appeals dated July 30, 2002 and
December 23, 2002 in CA-G.R. SP. No. 70696 areAFFIRMEDinsofar as
respondent Shell Chemical Company (Phils.), Inc. is concerned.
Costs against petitioners. SO ORDERED.
Republic of the PhilippinesSUPREME COURTManilaSECOND
DIVISIONG.R. No. 119247 February 17, 1997CESAR
SULIT,petitioner,vs.COURT OF APPEALS and ILUMINADA
CAYCO,respondents.REGALADO,J.:The primary issue posed before the
Court, in this appeal bycertiorarifrom a decision1of the Court of
Appeals, is whether or not the mortgagee or purchaser in an
extrajudicial foreclosure sale is entitled to the issuance of a
writ of possession over the mortgaged property despite his failure
to pay the surplus proceeds of the sale to the mortgagor or the
person entitled thereto. Secondarily, it calls for a resolution of
the further consequences of such non-payment of the full amount for
which the property was sold to him pursuant to his bid.The material
facts, as found by respondent court, are not disputed:It appears
from the record that on 9 June 1992 petitioner (herein private
respondent) Iluminada Cayco executed a Real Estate Mortgage (REM)
over Lot 2630 which is located in Caloocan City and covered by TCT
No. (23211) 11591 in favor of private respondent (herein
petitioner) Cesar Sulit, to secure a loan of P4 Million. Upon
petitioner's failure to pay said loan within the stipulated period,
private respondent resorted to extrajudicial foreclosure of the
mortgage as authorized in the contract. Hence, in a public auction
conducted by Notary Public Felizardo M. Mercado on 28 September
1993 the lot was sold to the mortgagee, herein private respondent,
who submitted a winning bid of P7 Million. As stated in the
Certificate of Sale executed by the notary public (Annex B,
petition), the mortgaged property was sold at public auction to
satisfy the mortgage indebtedness of P4 Million. The Certificate
further states as follows:IT IS FURTHER CERTIFIED, that the
aforementioned highest bidder/buyer, CESAR SULIT, being the
petitioner/mortgagee thereupon did not pay to the undersigned
Notary Public of Kalookan City the said sum of SEVEN MILLION PESOS
(P7,000,000.00), Philippine Currency, the sale price of the
above-described real estate property together with all improvements
existing thereon, which amount was properly credited to the PARTIAL
satisfaction of the mortgage debt mentioned in the said real estate
mortgage, plus interests, attorney's fees and all other incidental
expenses of foreclosure and sale (par. 2, Annex B, petition).On 13
December 1993 private respondent petitioned the Regional Trial
Court of Kalookan City for the issuance of a writ of possession in
his favor. The petition was docketed as LRC Case No. C-3462 and
assigned to Branch 131, presided over by public respondent.On 17
January 1994 respondent Judge issued a decision (should have been
denominated as order), the dispositive part of which
reads:WHEREFORE, finding the subject petition to be meritorious,
the same is hereby GRANTED. As prayed for, let a Writ of Possession
be issued in favor of herein petitioner, Cesar Sulit, upon his
posting of an indemnity bond in the amount of One Hundred Twenty
Thousand (P120,000.00) Pesos (Annex C, petition).On 28 March 1994
petitioner filed a Motion to have the auction sale of the mortgaged
property set aside and to defer the issuance of the writ of
possession. She invited the attention of the courta quoto some
procedural infirmities in the said proceeding and further
questioned the sufficiency of the amount of bond. In the same
Motion petitioner prayed as an alternative relief that private
respondent be directed to pay the sum of P3 Million which
represents the balance of his winning bid of P7 Million less the
mortgage indebtedness of P4 Million (Annex D, petition). This
Motion was opposed by private respondent who contended that the
issuance of a writ of possession upon his filing of a bond was a
ministerial duty on the part of respondent Judge (Annex E), to
which Opposition petitioner submitted a Reply (Annex F,
petition).On 11 May 1994 respondent Judge denied petitioner's
Motion and directed the issuance of a writ of possession and its
immediate enforcement by deputy sheriff Danilo Norberte (Annex G,
petition)."2(Emphasis words supplied for clarity).From the
aforesaid orders of the courta quo, herein private respondent
Iluminada Cayco filed on May 26, 1994 a petition forcertiorariwith
preliminary injunction and/or temporary restraining order before
respondent Court of Appeals, which immediately issued astatus
quoorder restraining the respondent judge therein from implementing
his order of January 17, 1994 and the writ of possession issued
pursuant thereto. Subsequently, respondent court rendered judgment
on November 11, 1994, as follows:IN JUDGMENT, We grant the writ
ofcertiorariand the disputed order of 17 January 1994 which
precipitately directed the issuance of a writ of possession in
favor of private respondent and the subsequent order of 11 May 1994
which denied petitioner's Motion for Reconsideration are hereby SET
ASIDE.Accordingly, private respondent is ordered to pay unto
petitioner, through the notary public, the balance or excess of his
bid of P7 Million after deducting therefrom the sum of P4,365,280
which represents the mortgage debt and interest up to the date of
the auction sale (September 23, 1993), as well as expenses of
foreclosure based on receipts which must be presented to the notary
public.In the event that private respondent fails or refuses to pay
such excess or balance, then the auction sale of 28 September 1993
is deemed CANCELLED and private respondent may foreclose the
mortgage anew either in a judicial or extrajudicial proceeding as
stipulated in the mortgage contract.Corollary to the principal
issue earlier stated, petitioner asserts that respondent Court of
Appeals gravely erred when it failed to appreciate and consider the
supposed legal significance of the bouncing checks which private
respondent issued and delivered to petitioner as payment for the
agreed or stipulated interest on the mortgage obligation. He
likewise avers that a motion for reconsideration or an appeal, and
notcertiorari, is the proper remedy available to herein private
respondent from an order denying her motion to defer issuance of
the writ of possession. Moreover, it is claimed that any question
regarding the propriety of the sale and the issuance of the writ of
possession must be threshed out in a summary proceeding provided
for in Section 8 of Act 3135.There is no merit in petitioner's
contention that the dishonored checks amounting to a total of
P1,250,000.00, allegedly representing interest of 5% per month from
June 9, 1992 to December 9, 1992, were correctly considered by the
trial court as the written agreement between the parties. Instead,
we find the explanation of respondent court in rejecting such
postulate, on the basis of Article 1956 of the Civil Code,3to be
more logical and plausible, to wit:It is noteworthy that the Deed
of Real Estate Mortgage executed by the parties on 9 June 1992
(Annex A, Petition) does not contain any stipulation for payment of
interest. Private respondent who maintains that he had an agreement
with petitioner for the payment of 5% monthly interest did not
produce any other writing or instrument embodying such a
stipulation on interest. It appears then that if any such agreement
was reached by the parties, it was merely a verbal one which does
not conform to the aforequoted statutory provision. Certainly, the
dishonored checks claimed to have been issued by petitioner in
payment of interest could not have been the written stipulation
contemplated in Article 1956 of the Code. Consequently, in the
absence of a written stipulation for the imposition of interest on
the loan obtained by petitioner, private respondent's assessment
thereof has no legal basis.4It is elementary that in the absence of
a stipulation as to interest, the loan due will now earn interest
at the legal rate of 12%per annum5which, according to respondent
court, is equivalent to P365,280.000.00 computed from December 10,
1992, after private respondent's obligation became due, until
September 23, 1993, the date of the auction sale. It is this amount
which should further be deducted from the purchase price of
P7,000,000.00, together with any other expenses incurred in
connection with the sale, such as the posting and publication of
notices, notarial and documentary fees, and assessments or taxes
due on the disputed property.It baffles this Court, therefore, why
petitioner has continually failed up to the present to submit
documentary evidence of the alleged expenses of the foreclosure
sale, and this in spite of the express requirement therefor in the
certificate of sale6issued by the notary public for the purpose of
computing the actual amount payable by the mortgagor or
redemptioner in the event of redemption. It may thus be safely
presumed that such evidence having been willfully suppressed, it
would be adverse if produced.7Coming now to the main issue in this
case, petitioner argues that it is ministerial upon the court to
issue a writ of possession after the foreclosure sale and during
the period of redemption, invoking in support thereof Sections 7
and 8 of Act 3135 which conjointly provide:Sec. 7. 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 anex partemotion 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 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.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
Number 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.The governing law thus explicitly
authorizes the purchaser in a foreclosure sale to apply for a writ
of possession during the redemption period by filing anex
partemotion under oath for that purpose in the corresponding
registration or cadastral proceeding in the case of property with
Torrens title. Upon the filing of such motion 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.No discretion
appears to be left to the court. Any question regarding the
regularity and validity of the sale, as well as the consequent
cancellation of the writ, is to be determined in a subsequent
proceeding as outlined in Section 8, and it cannot be raised as a
justification for opposing the issuance of the writ of possession
since, under the Act, the proceeding for this isex parte.8Such
recourse is available to a mortgagee, who effects the extrajudicial
foreclosure of the mortgage, even before the expiration of the
period of redemption provided by law and the Rules of Court.9The
rule is, however, not without exception. Under Section 35, Rule 39
of the Rules of Court, which is made applicable to the
extrajudicial foreclosure of real estate mortgages by Section 6 of
Act 3135, the possession of the mortgaged property may be awarded
to a purchaser in the extrajudicial foreclosure "unless a third
party is actually holding the property adversely to the judgment
debtor."10Thus, in the case ofBarican, et al.vs.Intermediate
Appellate Court,et al.,11this Court took into account the
circumstances that long before the mortgagee bank had sold the
disputed property to the respondent therein, it was no longer the
judgment debtor who was in possession but the petitioner spouses
who had assumed the mortgage, and that there was a pending civil
case involving the rights of third parties. Hence, it was ruled
therein that under the circumstances, the obligation of a court to
issue a writ of possession in favor of the purchaser in a
foreclosure of mortgage case ceases to be ministerial.Now, in
forced sales low prices are generally offered and the mere
inadequacy of the price obtained at the sheriff's sale, unless
shocking to the conscience, has been held insufficient to set aside
a sale. This is because no disadvantage is caused to the mortgagor.
On the contrary, a mortgagor stands to gain with a reduced price
because he possesses the right of redemption. When there is the
right to redeem, inadequacy of price becomes immaterial since the
judgment debtor may reacquire the property or sell his right to
redeem, and thus recover the loss he claims to have suffered by
reason of the price obtained at the auction sale.12However, also by
way of an exception, inCometa, et al.vs.Intermediate Appellate
Court, et al.13where the properties in question were found to have
been sold at an unusually lower price than their true value, that
is, properties worth at least P500,000.00 were sold for only
P57,396.85, this Court, taking into consideration the factual
milieu obtaining therein as well as the peculiar circumstances
attendant thereto, decided to withhold the issuance of the writ of
possession on the ground that it could work injustice because the
petitioner might not be entitled to the same.The case at bar is
quite the reverse, in the sense that instead of an inadequacy in
price, there is due in favor of private respondent, as mortgagor, a
surplus from the proceeds of the sale equivalent to approximately
40% of the total mortgage debt, which excess is indisputably a
substantial amount. Nevertheless, it is our considered opinion, and
we so hold, that equitable considerations demand that a writ of
possession should also not issue in this case.Rule 68 of the Rules
of Court provides:Sec. 4. Disposition of proceeds of sale. The
money realized from the sale of mortgaged property under the
regulations hereinbefore prescribed shall, after deducting the
costs of the sale, be paid to the person foreclosing the mortgage,
and when there shall be any balance or residue, after paying off
such mortgage or other incumbrances, the same shall be paid to the
junior incumbrancers in the order of their priority, to be
ascertained by the court, or if there be no such incumbrancers or
there be a balance or residue after payment of such incumbrancers,
then to the mortgagor or his agent, or to the person entitled to
it.The application of the proceeds from the sale of the mortgaged
property to the mortgagor's obligation is an act of payment, not
payment by dation; hence, it is the mortgagee's duty to return any
surplus in the selling price to themortgagor.14Perforce, a
mortgagee who exercises the power of sale contained in a mortgage
is considered a custodian of the fund, and, being bound to apply it
properly, is liable to the persons entitled thereto if he fails to
do so. And even though the mortgagee is not strictly considered a
trustee in a purely equitable sense, but as far as concerns the
unconsumed balance, the mortgagee is deemed a trustee for the
mortgagor or owner of the equity of redemption.15Commenting on the
theory that a mortgagee, when he sells under a power, cannot be
considered otherwise than as a trustee, the vice-chancellor
inRobertson vs.Norris(1 Giff.421) observed: "That expression is to
be understood in this sense: that with the power being given to
enable him to recover the mortgage money, the court requires that
he shall exercise the power of sale in a provident way, with a due
regard to the rights and interests of the mortgagor in the surplus
money to be produced by the sale."16The general rule that mere
inadequacy of price is not sufficient to set aside a foreclosure
sale is based on the theory that the lesser the price the easier it
will be for the owner to effect the redemption.17The same thing
cannot be said where the amount of the bid is in excess of the
total mortgage debt. The reason is that in case the mortgagor
decides to exercise his right of redemption, Section 30 of Rule 39
provides that the redemption price should be equivalent to the
amount of the purchase price, plus one per cent monthly interest up
to the time of the redemption,18together with the amount of any
assessments or taxes which the purchaser may have paid thereon
after purchase, and interest on such last-named amount at the same
rate.19Applying this provision to the present case would be highly
iniquitous if the amount required for redemption is based on
P7,000.000.00, because that would mean exacting payment at a price
unjustifiably higher than the real amount of the mortgage
obligation. We need not elucidate on the obvious. Simply put, such
a construction will undeniably be prejudicial to the substantive
rights of private respondent and it could even effectively prevent
her from exercising the right of redemption.Where the redemptioner
chooses to exercise his right of redemption, it is the policy of
the law to aid rather than to defeat his right. It stands to
reason, therefore, that redemption should be looked upon with favor
and where no injury will follow, a liberal construction will be
given to our redemption laws, specifically on the exercise of the
right to redeem. Conformably hereto, and taking into consideration
the facts obtaining in this case, it is more in keeping with the
spirit of the rules, particularly Section 30 of Rule 39, that we
adopt such interpretation as may be favorable to the private
respondent.Admittedly, no payment was made by herein petitioner, as
the highest bidder, to the notary public who conducted the
extrajudicial foreclosure sale. We are not unmindful of the rule
that it is not necessary for the mortgagee to pay cash to the
sheriff or, in this case, the notary public who conducted the sale.
It would obviously serve no purpose for the sheriff or the notary
public to go through the idle ceremony of receiving the money and
paying it back to the creditor, under the truism that the lawmaking
body did not contemplate such a pointless application of the law in
requiring that the creditor must bid under the same conditions as
any other bidder.20It bears stressing that the rule holds true only
where the amount of the bid represents the total amount of the
mortgage debt.In case of a surplus in the purchase price, however,
there is jurisprudence to the effect that while the mortgagee
ordinarily is liable only for such surplus as actually comes into
his hands, but he sells on credit instead of for cash, he must
still account for the proceeds as if the price were paid in cash,
and in an action against the mortgagee to recover the surplus, the
latter cannot raise the defense that no actual cash was
received.21We cannot simply ignore the importance of surplus
proceeds because by their very nature, surplus money arising from a
sale of land under a decree of foreclosure stands in the place of
the land itself with respect to liens thereon or vested rights
therein. They are constructively, at least, real property and
belong to the mortgagor or his assigns.22Inevitably, the right of a
mortgagor to the surplus proceeds is a substantial right which must
prevail over rules of technicality.Surplus money, in case of a
foreclosure sale, gains much significance where there are junior
encumbrancers on the mortgaged property. Jurisprudence has it that
when there are several liens upon the premises, the surplus money
must be applied to their discharge in the order of their
priority.23A junior mortgagee may have his rights protected by an
appropriate decree as to the application of the surplus, if there
be any, after satisfying the prior mortgage. His lien on the land
is transferred to the surplus fund.24And a senior mortgagee,
realizing more than the amount of his debt on a foreclosure sale,
is regarded as a trustee for the benefit of junior
encumbrancers.25Upon the strength of the foregoing considerations,
we cannot countenance the apparent paltriness that petitioner
persistently accords the right of private respondent over the
surplus proceeds. It must be emphasized that petitioner failed to
present the receipts or any other proof of the alleged costs or
expenses incurred by him in the foreclosure sale. Even the trial
court failed or refused to resolve this issue, notwithstanding the
fact that this was one of the grounds raised in the motion filed by
private respondent before it to set aside the sale. Since it has
never been denied that the bid price greatly exceeded the mortgage
debt, petitioner cannot be allowed to unjustly enrich himself at
the expense of private respondent.As regards the issue concerning
the alleged defect in the publication of the notice of the sale,
suffice it to state for purposes of this discussion that a question
of non-compliance with the notice and publication requirements of
an extrajudicial foreclosure sale is a factual issue and the
resolution thereof by the lower courts is binding and conclusive
upon this Court,26absent any showing of grave abuse of discretion.
In the case at bar, both the trial court and respondent Court of
Appeals have found that the sale was conducted in accordance with
law. No compelling reason exists in this case to justify a
rejection of their findings or a reversal of their
conclusions.There is likewise no merit in the argument that if
private respondent had wanted to question the validity of the sale,
she should have filed a petition to set the same aside and to
cancel the writ of possession. These, it is argued, should have
been disposed of in accordance with the summary procedure laid down
in Section 112 of the Land Registration Act, provided the petition
is filed not later than thirty days after the purchaser was given
possession of the land. Considering, however, that private
respondent has filed a motion to set aside the sale and to defer
the issuance of a writ of possession before the court where theex
partepetition for issuance of such writ was then pending, we deem
the same to be substantial compliance with the statutory
prescription.We, however, take exception to and reject the last
paragraph in the dispositive portion of the questioned decision of
respondent court, which we repeat:In the event that private
respondent fails or refuses to pay such excess or balance, then the
auction sale of 28 September 1993 is deemed CANCELLED and private
respondent (petitioner herein) may foreclose the mortgage anew
either in a judicial or extrajudicial proceeding as stipulated in
the mortgage contract.for lack of statutory and jurisprudential
bases. The quoted phrase "as stipulated in the mortgage contract"
does not, of course, envision such contingency or warrant the
suggested alternative procedure.Section 4 of Rule 64, hereinbefore
quoted, merely provides that where there is a balance or residue
after payment of the mortgage, the same shall be paid to the
mortgagor. While the expedient course desired by respondent court
is commendable, there is nothing in the cited provision from which
it can be inferred that a violation thereof will have the effect of
nullifying the sale. The better rule is that if the mortgagee is
retaining more of the proceeds of the sale than he is entitled to,
this fact alone will not affect the validity of the sale but simply
gives the mortgagor a cause of action to recover such
surplus.27This is likewise in harmony with the decisional rule that
in suing for the return of the surplus proceeds, the mortgagor is
deemed to have affirmed the validity of the sale since nothing is
due if no valid sale has been made.28In the early case ofCaparas
vs.Yatco, etc.,et al.,29it was also held that where the mortgagee
has been ordered by the court to return the surplus to the
mortgagor or the person entitled thereto, and the former fails to
do so and flagrantly disobeys the order, the court can cite the
mortgagee for contempt and mete out the corresponding penalty under
Section 3(b) of the former Rule 64 (now Rule 71) of the Rules of
Court.WHEREFORE, the questioned decision of the Court of Appeals is
MODIFIED by deleting the last paragraph of itsfallo, but its
disposition of this case in all other respects is hereby
AFFIRMED.SO ORDERED.Romero, Puno, Mendoza and Torres, Jr., JJ.,
concur.
Republic of the PhilippinesSUPREME COURTManilaTHIRD DIVISIONG.R.
No. 159882 November 23, 2007SPOUSES RUBEN and VIOLETA
SAGUAN,Petitioners,vs.PHILIPPINE BANK OF COMMUNICATIONS and COURT
OF APPEALS (Second Division),Respondents.D E C I S I O
NNACHURA,J.:This is a petition for review on certiorari1of the
Decision2dated January 24, 2003 and of the Resolution3dated August
21, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 71775. The
Decision affirmed the Orders4of the Regional Trial Court (RTC) of
Branch 31, Tagum City, Davao: (1) dated November 5, 2001 admitting
respondent Philippine Bank of Communications Exhibits "A" to "P";
(2) dated March 19, 2002 denying petitioners, spouses Ruben and
Violeta Saguans, Motion to Present Evidence, and granting private
respondents petition for issuance of a writ of possession; and (3)
dated May 6, 2002 denying petitioners Motion for Reconsideration of
the second order.The facts, as found by the CA, are not in
dispute:[Petitioners] spouses Ruben Saguan and Violeta Saguan
obtained a loan ofP3 Million from [respondent] Philippine Bank of
Communications. To secure the obligation, they mortgaged five
parcels of land covered by TCT Nos. 24274, 38894, 37455, 66339 and
19365, all of the Register of Deeds of the Province of Davao, and
improvements therein.Because [petitioners] defaulted in the payment
of their mortgage indebtedness, [respondent] extra-judicially
foreclosed the mortgage. In the auction sale on 05 January 1998,
[respondent] was the only and highest bidder forP6,008,026.74.
Sheriffs certificate of sale dated 12 January 1998 was executed and
annotated at the back of [petitioners] titles on 18 February 1998.
As [petitioners] failed to redeem the properties within the
one-year period ending on 18 February 1999, TCT Nos. T-154065,
T-154066, T-154067, T-154068 and T-154069 were issued in the name
of [respondent] in lieu of the old ones. Thus, [respondent]
consolidated ownership of the properties in its favor. Since the
parcels of land were in physical possession of [petitioners] and
other persons [co-petitioners in the petition before the CA],
[respondent], after due demand, filed a petition for writ of
possession with Branch 31, Regional Trial Court, Tagum City. x x
x.5Petitioners filed an Opposition6to the petition for writ of
possession to which respondent filed a Comment.7Petitioners
likewise filed a Reply8to the Comment.In their Opposition and
Reply, petitioners argued that a writ of possession should not
issue considering respondents failure to return the excess or
surplus proceeds9of the extrajudicial foreclosure sale based on our
ruling in Sulit v. Court of Appeals.10In refutation, respondent
points to petitioners remaining unsecured obligations with the
former to which the excess or surplus proceeds were applied.After
the hearing on respondents evidence, the RTC issued two (2)
separate orders requiring respondent to file a Formal Offer of
Evidence. Respondent failed to comply with the aforesaid orders
within the time frame prescribed, thus prompting petitioners to
file a motion to dismiss grounded on Section 3,11Rule 17 of the
Rules of Court.Thereafter, respondent belatedly filed its Formal
Offer of Evidence. Consequently, the RTC issued the first assailed
Order12admitting respondents offer of exhibits thereby rendering
petitioners motion to dismiss moot and academic. The RTC then
issued the Order13denying petitioners Motion to Present Evidence
and granted the petition for writ of possession. The last Order14of
the RTC denied petitioners Motion for Reconsideration.Upon petition
for certiorari and mandamus, the CA rejected petitioners
allegations of grave abuse of discretion in the lower courts
issuance of the foregoing Orders. The CA affirmed respondents
entitlement to a writ of possession as a matter of right, the
latter having consolidated its ownership over the parcels of land
upon expiration of the redemption period. It emphasized that the
issue on the failure to return the excess or surplus proceeds of
the auction sale had been squarely met by the respondent, and
therefore, the case was distinguishable from Sulit v. Court of
Appeals. In all, 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.Hence, this recourse.In this appeal, the issues for our
resolution are:1. Whether the RTC should have issued a writ of
possession considering respondents failure to remit the excess or
surplus proceeds of the extrajudicial foreclosure sale.2. Corollary
thereto, whether respondent may unilaterally apply the excess or
surplus proceeds of the extrajudicial foreclosure sale to
petitioners remaining unsecured obligations.3. Whether the RTC
should have granted petitioners motion to dismiss the petition for
writ of possession based on respondents failure to comply with the
RTCs Orders on the filing of a formal offer of evidence.A writ of
possession is an order enforcing a judgment to allow a persons
recovery of possession of real or personal property. An instance
when a writ of possession may issue is under Act No. 3135,15as
amended by Act No. 4118, on extrajudicial foreclosure of real
estate mortgage.16Sections 6 and 7 provide, to wit:Section 6.
Redemption. In all cases in which an extrajudicial sale is made
under the special power herein before referred to, the debtor, his
successors-in-interest or any judicial creditor or judgment
creditor of said debtor or any person having a lien on the property
subsequent to the mortgage or deed of trust under which the
property is sold, may redeem the same at anytime within the term of
one year from and after the date of the sale; and such redemption
shall be governed by the provisions of section four hundred and
sixty-four to four hundred and sixty-six, inclusive, of the Code of
Civil Procedure, in so far as these are not inconsistent with the
provisions of this Act.Section 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 [the] form of an ex-parte
motion in the registration or cadastral proceedings if the property
is registered, or in special proceedings in 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 court shall, upon the filing of such
petition, collect the fees specified in paragraph eleven of section
one hundred and fourteen of Act Number Four hundred and ninety-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.From the foregoing provisions, 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.17Within the redemption period the
purchaser in a foreclosure sale may apply for a writ of possession
by filing for that purpose an ex-parte motion under oath, in the
corresponding registration or cadastral proceeding in the case of
property covered by a Torrens title. Upon the filing of an ex-parte
motion and the approval of the corresponding bond, the court is
expressly directed to issue the order for a writ of possession.18On
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.19Consequently, 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.20In 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 purchasers name for failure of the
mortgagor to redeem the property, the purchasers 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.21Effectively, the court cannot exercise its
discretion.Therefore, the issuance by the RTC of a writ of
possession in favor of the respondent in this case is proper. We
have consistently held that the duty of the trial court to grant a
writ of possession in such instances is ministerial, and the court
may not exercise discretion or judgment.22The propriety of the
issuance of the writ was heightened in this case where the
respondents right to possession of the properties extended after
the expiration of the redemption period, and became absolute upon
the petitioners failure to redeem the mortgaged
properties.Notwithstanding the foregoing, the petitioners insist
that respondents failure to return the excess or surplus proceeds
of the extrajudicial foreclosure sale converted the issuance of a
writ of possession from a ministerial to a discretionary function
of the trial court pursuant to our holding in Sulit v. Court of
Appeals.23We are not persuaded.A careful reading of Sulit will
readily show that it was decided under a different factual milieu.
In Sulit, the plea for a writ of possession was made during the
redemption period and title to the property had not, as yet, been
consolidated in favor of the purchaser in the foreclosure sale. In
stark contrast, the herein petitioners failed to exercise their
right of redemption within the one-year reglementary period
provided under Section 6 of Act No. 3135, as amended, and ownership
over the properties was consolidated in, and corresponding titles
issued in favor of, the respondent.We emphasize 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 need of notice to any person claiming an
adverse interest. It is a proceeding wherein relief is granted even
without giving the person against whom the relief is sought an
opportunity to be heard.24By its very nature, an ex-parte petition
for issuance of a writ of possession is a non-litigious proceeding
authorized under Act No. 3135, as amended.Be that as it may, the
debtor or mortgagor is not without recourse. Section 8 of Act No.
3135, as amended, provides: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.Thus, a party may file
a petition to set aside the foreclosure sale and to cancel the writ
of possession in the same proceedings where the writ of possession
was requested. However, in this case, petitioners do not challenge
the validity of the foreclosure nor do they wish to set aside the
foreclosure sale. It appears that the only remaining bone of
contention is the disposition of the excess or surplus proceeds of
the foreclosure sale. In short, petitioners do not question the
consolidation of ownership in favor of the respondent, but simply
demand the payment of the sum of money supposedly still owing them
from the latter.Article 427,25in relation to Article 428,26of the
Civil Code provides that ownership may be exercised over things or
rights, and grants the owner of property a right of action for
recovery against the holder and possessor thereof.Thus, even as we
rule that the writ of possession was properly issued in favor of
respondent as a consequence of its confirmed ownership, we are not
unmindful of the fact that the issue of the excess or surplus
proceeds of the foreclosure sale remains unsettled.Respondents
stance, as sustained by the CA, is that petitioners have remaining
unsecured obligations with respondent and the excess or surplus
proceeds of the foreclosure sale were validly, albeit unilaterally,
applied thereto.This argument is unacceptable.We have elucidated on
the import of surplus proceeds in the case of Sulit, viz.:In case
of a surplus in the purchase price, however, there is jurisprudence
to the effect that while the mortgagee ordinarily is liable only
for such surplus as actually comes into his hands, but he sells on
credit instead of for cash, he must still account for the proceeds
as if the price were paid in cash, and in an action against the
mortgagee to recover the surplus, the latter cannot raise the
defense that no actual cash was received.We cannot simply ignore
the importance of surplus proceeds because by their very nature,
surplus money arising from a sale of land under a decree of
foreclosure stands in the place of the land itself with respect to
liens thereon or vested rights therein. They are constructively, at
least, real property and belong to the mortgagor or his assigns.
Inevitably, the right of a mortgagor to the surplus proceeds is a
substantial right which must prevail over rules of
technicality.Surplus money, in case of a foreclosure sale, gains
much significance where there are junior encumbrancers on the
mortgaged property. Jurisprudence has it that when there are
several liens upon the premises, the surplus money must be applied
to their discharge in the order of their priority. A junior
mortgagee may have his rights protected by an appropriate decree as
to the application of the surplus, if there be any, after
satisfying the prior mortgage. His lien on the land is transferred
to the surplus fund. And a senior mortgagee, realizing more than
the amount of his debt on a foreclosure sale, is regarded as a
trustee for the benefit of junior encumbrancers.27Given the
foregoing pronouncement in Sulit, we cannot countenance respondents
cavalier attitude towards petitioners right to the surplus
proceeds. To begin with, the foreclosure of petitioners properties
was meant to answer only the obligation secured by the mortgage.
Article 2126 of the Civil Code unequivocally states: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.We need not
expound on the obvious. Simply put, even if petitioners have
remaining obligations with respondent, these obligations, as
conceded by respondent itself, were not collateralized by the
foreclosed properties.1avvphi1Furthermore, under Section 128of Act
No. 3135 as amended, the special power of attorney authorizing the
extrajudicial foreclosure of the real estate mortgage must be
either (1) inserted or stated in the mortgage deed itself; or (2)
the authority is attached thereto. Thus, petitioners supposed
remaining obligations which were not secured by the mortgage cannot
be made subject, or even susceptible, to the extrajudicial
foreclosure of mortgage.However, petitioners remedy lies in a
separate civil action for collection of a sum of money.29We have
previously held that where the mortgagee retains more of the
proceeds of the sale than he is entitled to, this fact alone will
not affect the validity of the sale but simply give the mortgagor a
cause of action to recover such surplus.30In the same case, both
parties can establish their respective rights and obligations to
one another, after a proper liquidation of the expenses of the
foreclosure sale, and other interests and claims chargeable to the
purchase price of the foreclosed property. The court can then
determine the proper application of compensation with respect to
respondents claim on petitioners remaining unsecured
obligations.31In this regard, respondent is not precluded from
itself filing a case to collect on petitioners remaining debt.Anent
the third issue, we agree with the CA that there was no grave abuse
of discretion in the trial courts liberality in giving ample time
and opportunity for respondent to complete the presentation of its
evidence. It was a liberality that carried no taint of partiality.
Despite the ex-parte nature of the proceedings, the RTC also
allowed petitioners to file pleadings to oppose the petition for
the issuance of the writ of possession. Clearly, petitioners were
not denied due process, and the trial judge acted accordingly in
admitting respondents uncontroverted evidence.Finally, we note
petitioners incorrect remedy of certiorari before the CA, which the
latter and both parties have apparently overlooked. 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.321wphi1Ineluctably, the RTC issued
the writ of possession in compliance with the express provisions of
Act No. 3135. It cannot, therefore, be charged with grave abuse of
discretion as there is no showing that, in the exercise of its
judgment, it acted in a capricious, whimsical, arbitrary or
despotic manner tantamount to lack of jurisdiction. 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.33Nonetheless,
we have allowed this procedural lapse to pass without incident, and
have resolved the issues raised.WHEREFORE, the Petition is DENIED.
The writ of possession in favor of respondent Philippine Bank of
Communications is hereby AFFIRMED without prejudice to petitioners
separate remedy for recovery of the excess or surplus proceeds of
the extrajudicial foreclosure sale. Costs against the petitioner.
SO ORDERED.Republic of the PhilippinesSUPREME COURTManilaTHIRD
DIVISIONTERESITA MONZON,Petitioner,- versus -SPS. JAMES & MARIA
ROSA NIEVES RELOVA and SPS. BIENVENIDO & EUFRACIA
PEREZ,Respondents.- versus -ADDIO PROPERTIES, INC.,Intervenor.G.R.
No. 171827Present:YNARES-SANTIAGO,
J.,Chairperson,AUSTRIA-MARTINEZ,CHICO-NAZARIO,NACHURA, andREYES,
JJ.Promulgated:September 17, 2008x- - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
-xD E C I S I O NCHICO-NAZARIO, J.:This is a Petition for Review on
Certiorari assailing the Decision1of the Court of Appeals dated 27
September 2005 and its Resolution dated 7 March 2006 in CA-G.R. CV
No. 83507 affirming the Decision of the Regional Trial Court (RTC)
of Tagaytay City, Branch 18.The factual and procedural antecedents
of this case are as follows:On 18 October 2000, the spouses James
and Maria Rosa Nieves Relova and the spouses Bienvenido and
Eufracia Perez, respondents before this Court, filed against Atty.
Ana Liza Luna, Clerk of Court of Branch 18 of the RTC of Tagaytay
City, and herein petitioner Teresita Monzon an initiatory pleading
captioned as a Petition for Injunction. The case, which was filed
before the same Branch 18 of the RTC of Tagaytay City, was docketed
as Civil Case No. TG-2069.In their Petition for Injunction,
respondents alleged that on 28 December 1998, Monzon executed a
promissory note in favor of the spouses Perez for the amount
ofP600,000.00, with interest of five percent per month, payable on
or before 28 December 1999. This was secured by a 300-square meter
lot in Barangay Kaybagal, Tagaytay City. Denominated as Lot No. 2A,
this lot is a portion of Psu-232001, covered by Tax Declaration No.
98-008-1793. On 31 December 1998, Monzon executed a Deed of
Absolute Sale over the said parcel of land in favor of the spouses
Perez.Respondents also claim in their Petition for Injunction that
on 29 March 1999, Monzon executed another promissory note, this
time in favor of the spouses Relova for the amount ofP200,000.00
with interest of five percent per month payable on or before 31
December 1999. This loan was secured by a 200 square meter lot,
denominated as Lot No. 2B, another portion of the aforementioned
Psu-232001 covered by Tax Declaration No. 98-008-1793. On 27
December 1999, Monzon executed a Deed of Conditional Sale over said
parcel of land in favor of the spouses Relova.On 23 October 1999,
the Coastal Lending Corporation extrajudicially foreclosed the
entire 9,967-square meter property covered by P