Philippine Supreme Court Resolutions


Philippine Supreme Court Resolutions > Year 2012 > June 2012 Resolutions > [G.R. No. 200939 : June 25, 2012] SPOUSES CARMELO, JR. AND ELIZABETH AFRICA, PETITIONERS, VERSUS BANK OF COMMERCE, THE PURPORTED TRANSFEREE OF TRADERS ROYAL BANK, RESPONDENT. :




SECOND DIVISION

[G.R. No. 200939 : June 25, 2012]

SPOUSES CARMELO, JR. AND ELIZABETH AFRICA, PETITIONERS, VERSUS BANK OF COMMERCE, THE PURPORTED TRANSFEREE OF TRADERS ROYAL BANK, RESPONDENT.

Sirs/Mesdames:

Please take notice that the Court, Second Division, issued a Resolution dated 25 June 2012 which reads as follows:

G.R. No. 200939 - SPOUSES CARMELO, JR. and ELIZABETH AFRICA, petitioners, versus BANK OF COMMERCE, The Purported Transferee of TRADERS ROYAL BANK, respondent.

This is a petition for review on certiorari filed under Rule 45 of the Rules of Court to assail the decision[1] dated July 28, 2011 and the resolution[2] dated March 2, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 111638. The CA dismissed the petition for certiorari filed by the spouses Carmelo, Jr. and Elizabeth Africa (petitioners) on the finding that the Regional Trial Court (RTC)[3] did not commit any grave abuse of discretion in refusing to resolve the validity of the foreclosure sale in a proceeding that denied the issuance of a writ of possession.

The Antecedents

The petitioners were former owners of real properties (subject properties) which were mortgaged to and foreclosed by Traders Royal, Bank (Traders). In the foreclosure sale of the subject properties, Traders was declared the highest bidder in whose favor a Certificate of Sale was issued. Traders later consolidated its ownership over the subject properties.

In 2007, the Bank of Commerce (respondent) filed before the RTC an Ex-Parte Petition for Issuance of Writ of Possession (ex-parte  petition) over the subject properties. The respondent claimed that it was the transferee-in-interest of Traders over the subject properties. The petitioners filed their Opposition and moved for the dismissal of the petition due to the nullity of the extrajudicial foreclosure sale; the notary public who conducted the sale allegedly lacked the proper authority to act.

The RTC granted the petitioners' motion to dismiss for the respondent's failure to prosecute and to comply with its order issued pursuant to Section 3, Rule 17 of the Rules of Court. The RTC, however, denied the petitioners' motion to declare the foreclosure sale null and void, reasoning that a separate proceeding should be instituted for this purpose. The RTC likewise refused to allow the petitioners to present evidence to support the invalidity of the foreclosure sale. The petitioners' motion for partial reconsideration was also denied.

  The petitioners elevated their case to the CA by way of a petition for certiorari  under Rule 65 of the Rules of Court. The petitioners claimed that the RTC committed grave abuse of discretion in denying their motion to declare the foreclosure sale null and void.

The CA dismissed the petition, ruling that the RTC acted in accordance with Section 8 of Act No. 3135 which provides that the mortgagor may assail the validity of the sale only after the purchaser-mortgagee is given the possession of the subject property. The CA ruled that the petitioners' motion lacked legal basis since the ex-parte  petition filed by the respondent had been dismissed.

The CA also ruled that the respondent's petition for the issuance of a writ  of possession was ex-parte, summary and non-litigious, and does not allow the presentation of evidence as this would run counter to the nature of the said proceedings.

The Present Petition

The petitioners question the CA's ruling, arguing that it was not in accord with the jurisprudence laid down by the Supreme Court in Sulit v. Court of Appeals[4] where the propriety of assailing the validity of the foreclosure sale even before the proceedings for the issuance of a writ  of possession was recognized. The petitioners also argue that Section 3, Rule 17 of the Rules of Court allows the presentation of evidence by the defendant to prove his counterclaim if the action is dismissed for failure to prosecute.

The Court's Ruling

We DENY the petition for the following reasons:

First, the petitioners bank on the application of the doctrine of stare decisis in invoking our ruling in Sulit. The doctrine of stare decisis, however, is appropriate only (so that the conclusion reached in an earlier case is applied to cases that follow) only if the facts in the earlier case are substantially the same as the cases that follow, even though the parties may be different in these cases.[5] Under the circumstances, the doctrine cannot be properly applied as the factual situation in Sulit is different from the present case.

In Sulit, a plea for a writ of possession was made during the redemption period and title to the property had not been consolidated in favor of the purchaser in the foreclosure sale.[6] In this case, the title of the subject properties had already been consolidated in favor of Traders.

  We also note that in Sulit, a writ of possession was issued by the trial court pending an unresolved motion to set aside the foreclosure sale and to defer the issuance of a writ of possession.[7] Thus, the Court ruled that the unresolved motion to set aside the foreclosure sale was deemed substantial compliance with the provisions of the law that allow the attack on the validity of the foreclosure sale after  possession has been given to the purchaser-mortgagee. In contrast, no writ of possession was issued by the trial court in the petitioners' case.

Second, in Espinoza v. United Overseas Bank Phils.,[8] we ruled that any and all questions regarding the regularity and validity of the sale may not be raised as a justification for opposing the issuance of a writ  of possession. The reason is that the issuance of a writ of possession is ministerial; its proceedings are ex-parte, summary and non-litigious as opposed to a petition to set aside a foreclosure sale which is adversarial and litigious.

Lastly, we emphasize that a subsequent proceeding to resolve the issue on the validity of foreclosure sale within the same proceeding is only allowed when a writ of possession has been issued and the purchaser-mortgagee has been placed in possession of the property.

The procedural reliefs in cases involving extrajudicial foreclosures are governed by the provisions of Sections 7[9] and 8[10] of Act No. 3135. In this regard, Section 8 of Act No. 3135 provides that a petition to set aside the sale and damages may only be filed in the same proceeding for the issuance of a writ of possession only if the writ has been issued and  the purchaser has been given possession of the property. These circumstances are not present in the case.

In light of the foregoing, the CA did not commit any reversible error given the absence of any basis in law and in jurisprudence allowing the RTC to resolve the validity of the foreclosure sale in a proceeding where no writ of possession has been issued.

ACCORDINGLY, premises considered, we DENY the petition for lack of merit.

SO ORDERED.

Bersamin, J., designated as Additional Member in lieu of Reyes,. J., per raffle dated June 20, 2012.

Very truly yours,

(Sgd.) TERESITA AQUINO TUAZON 
Deputy Division Clerk of Court

Endnotes:


[1] Rollo, pp 62-70: Penned by Associate Justice (now a member of the Court) Bievenido L. Reyes, and concurred in by Associate Justice Ramon M. Bato, Jr. and Associate Justice Elihu A. Yba´┐Żez.

[2] Id. at 72-73.

[3] Branch 168, Marikina City.

[4] G.R. No. 119247, February 17, 1997, 268 SCRA 441, 457.

[5] Lazatin v. Desierto, G.R. No. 147097, June 5, 2009, 588 SCRA 285, 294.

[6] Sulit v. Court of Appeals, supra note 3, at 445-446.

[7] Id. at 457.

[8] G.R. No. 175380, March 22, 2010, 616 SCRA 353, 358.

[9] 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 an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one-hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of court shall, upon the filing of such petition, collect the fees specified in par. eleven of section one hundred and fourteen of Act [No. 496] as amended by Act Numbered Twenty eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.

[10] 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 provision's 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 [No. 496]: 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 [14] of Act [No. 196]; but the order of possession shall continue in effect during the pendency of the appeal.




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