St. Dominic Corporation v. The Intermediate Appellate Court
REITERATIONFacts
The Antecedents: The underlying dispute concerns a parcel of land, Lot No. 8, Block 101 of the Malaya Subdivision. Initially awarded by the People's Homesite and Housing Corporation (PHHC) to Cristobal Santiago, Jr., the property's title was subsequently transferred to spouses Carlos Robes and Adalia Francisco. The Robes spouses mortgaged the property to Manufacturer's Bank and Trust Company. Due to default, the bank foreclosed the mortgage, and the property was sold at public auction to Aurora Francisco. Later, Aurora Francisco sold the property to St. Dominic Corporation. The Bustamante spouses intervened in a case seeking to nullify the award and subsequent sales, claiming legal interest in the property. Procedural History: Civil Case No. Q-11895 was filed seeking to cancel the title of the Robes spouses. The Bustamante spouses intervened. Following foreclosure and sale to Aurora Francisco, and then to St. Dominic Corporation, the trial court in Civil Case No. Q-11895 issued a judgment nullifying the award to Santiago and the sale to the Robes spouses, and directing the PHHC to process the Bustamante spouses' application. However, the trial court, in an order dated June 29, 1982, qualified the writ of execution to exclude St. Dominic Corporation, a non-party. The Bustamante spouses appealed this order to the Intermediate Appellate Court (IAC), which set aside the trial court's orders and directed strict conformity with the judgment. Separately, in LRC Case No. 851 (76), Aurora Francisco obtained a writ of possession, which the Bustamante spouses sought to quash, arguing they were third parties in possession. The trial court denied their motion, and this denial formed the basis of the petition in G.R. No. L-48630. The Petition: G.R. No. 70623 is a petition for review on certiorari filed by St. Dominic Corporation, assailing the IAC's decision which ordered the execution of the trial court's judgment against St. Dominic Corporation. St. Dominic Corporation argues that as a third party not involved in the original case, it cannot be bound by the judgment. G.R. No. L-48630 is a petition for certiorari filed by the Bustamante spouses, assailing the trial court's order granting a writ of possession to Aurora Francisco, arguing that a writ of possession cannot be issued against a third party in adverse possession. St. Dominic Corporation intervened in G.R. No. L-48630 as the successor-in-interest to Aurora Francisco.
Issue(s)
Whether the Intermediate Appellate Court erred in setting aside the trial court's orders which exempted St. Dominic Corporation from the enforcement of the final and executory judgment in Civil Case No. Q-11895. Whether the trial court erred in issuing a writ of possession against the Bustamante spouses, who were third parties not directly involved in the foreclosure proceedings.
Ruling
In G.R. No. 70623, the petition is GRANTED. The decision of the Intermediate Appellate Court is REVERSED and SET ASIDE. The trial court's writ of execution, with the qualification excluding St. Dominic Corporation, is sustained. The portion of the trial court's decision directing the PHHC to process the application of Francisco Banzon Bustamante is declared without force and effect. In G.R. No. L-48630, the petition is DISMISSED for lack of merit.
Ratio Decidendi
On the issue of whether the IAC erred in setting aside the trial court's orders exempting St. Dominic Corporation from execution: The Court held that a judgment cannot bind persons who are not parties to the action. Execution of a judgment can only be issued against a party to the action, not against a third person who has not had their day in court. St. Dominic Corporation was not impleaded as a party in Civil Case No. Q-11895, and the proceedings therein did not involve or affect it. Therefore, the trial court could not execute the judgment against St. Dominic Corporation without violating due process. The trial court's statement exempting a non-party was not an amendment of its final judgment but a correct application of the principle that judgments are conclusive only between the parties and their successors-in-interest. The appellate court's ruling that the present certiorari proceedings were not the appropriate forum to determine the effect of the judgment on subsequent transactions was also deemed erroneous, as this determination was crucial to whether the execution should affect the petitioner. On the issue of whether the trial court erred in issuing a writ of possession against the Bustamante spouses: The Court affirmed the trial court's ruling that a writ of possession may issue even if a third party is in possession, provided that the third party does not hold the property by an adverse title or right. The Bustamante spouses' claim as 'occupants-applicants' for purchase from PHHC was considered inchoate and not an adverse title that could prevail over the clean title of Aurora Francisco and subsequently St. Dominic Corporation. The right of the respondent to possession was founded on ownership, which became absolute after the foreclosure sale and issuance of titles. The Court reiterated that the purchaser at a foreclosure sale is entitled to possession, and the sheriff's duty is to place the purchaser in possession. The Bustamante spouses' re-entry onto the land after vacating it meant they must vacate again, and the writ of possession could no longer be quashed.
Main Doctrine
A judgment cannot bind persons who are not parties to the action. Execution of a judgment can only be issued against one who is a party to the action, and not against one who, not being a party in the case, has not yet had his day in court. A writ of possession issued in a foreclosure suit cannot summarily eject a third person who is not a party to the foreclosure proceedings or mortgage, unless such third person holds the property by an adverse title or right.