Banco de Oro Savings & Mortgage Bank v. Nery
REITERATIONFacts
The Antecedents: Banco de Oro Savings & Mortgage Bank (the Bank) granted a loan to Spouses Abelardo and Alegria Nery (the Nerys) secured by a real estate mortgage. The Nerys defaulted, and the mortgaged property was foreclosed, with the Bank as the highest bidder. Title was consolidated in the Bank's name after the Nerys failed to redeem the property. Despite consolidation of title, the Nerys remained in possession and requested more time to repurchase, obligating themselves to pay monthly rentals or reasonable compensation for their continued occupation. As the Nerys and their tenants did not vacate nor pay compensation, the Bank filed three separate ejectment suits. Procedural History: The Metropolitan Trial Court (MTC) ruled in favor of the Bank, ordering the Nerys to vacate and pay monthly compensation. The Nerys' motion for reconsideration was denied. Without an appeal or supersedeas bond, the MTC granted the Bank's motion for immediate execution. The Nerys then filed a Petition for certiorari with the Regional Trial Court (RTC), assailing the MTC's jurisdiction. The RTC issued a TRO but later denied the application for a preliminary injunction. The Sheriff proceeded to execute the MTC Decision, delivering possession to the Bank. The Nerys then filed a Petition with the Court of Appeals (CA), seeking to compel the RTC to resolve their injunction issue. The CA issued a TRO and later a Writ of Preliminary Injunction enjoining the enforcement of the MTC Decision. The Petition: The Bank filed a Petition for Review on Certiorari with the Supreme Court, seeking to nullify the CA Resolutions enjoining the enforcement of the MTC Decision, arguing that the CA committed grave abuse of discretion as the MTC Decision had become final and executory.
Issue(s)
Whether the Court of Appeals committed grave abuse of discretion in issuing the Writ of Preliminary Injunction. Whether the Metropolitan Trial Court had jurisdiction over the ejectment suits and whether the remedy of ejectment was proper for the Bank. Whether the MTC Decision had become final and executory. Whether the foreclosure sale was illegal.
Ruling
The petition is granted. The Resolutions of the Court of Appeals dated 22 September 1988 and 18 October 1988, enjoining the enforcement of the Metropolitan Trial Court Decision, are set aside.
Ratio Decidendi
On the Court of Appeals' issuance of injunctive relief: With the MTC Decision having attained finality, execution in favor of the Bank, as the prevailing party, was a matter of course. Consequently, the injunctive relief granted by the Court of Appeals was uncalled for and constituted grave abuse of discretion. On the propriety of the remedy of ejectment and the jurisdiction of the MTC; and the Nerys' argument of lack of MTC jurisdiction: The MTC's jurisdiction is sustained. The Nerys' continued stay in the property, after failing to redeem it and requesting more time to repurchase while obligating themselves to pay rentals, converted their possession to one by tolerance or permission. This created an implied lease, making an ejectment suit the proper remedy. The one-year period for ejectment actions was complied with, as the cause of action accrued from the last demand to vacate, which was made by letter dated 25 July 1984, not 9 September 1983 as alleged by the Nerys. Furthermore, with the consolidation of title, the Bank became the owner and could bring an action for ejectment. While in ordinary extra-judicial foreclosure cases, the remedy is a Writ of Possession, the circumstances here created an implied landlord-tenant relationship, making ejectment appropriate, especially considering other tenants in the premises not privy to the foreclosure. The Nerys argued that certiorari to the RTC was proper because the core issue was the MTC's lack of jurisdiction. While it is true that lack of jurisdiction can be raised at any stage, the Supreme Court concluded that, given the circumstances, the MTC had properly assumed jurisdiction over the ejectment actions. Therefore, this argument lost its legal basis. On whether the MTC Decision had become final and executory: The MTC Decision dated 11 July 1988 had become final and executory because the Nerys failed to file a timely appeal. Instead of appealing, they filed a Petition for certiorari with the Regional Trial Court, assailing the MTC's jurisdiction. However, Section 22 of BP 129 clearly states that Regional Trial Courts exercise appellate jurisdiction over cases decided by Metropolitan Trial Courts. The proper remedy to review a judgment of an inferior court is an appeal, not a special civil action of certiorari. The perfection of an appeal within the statutory period is mandatory and jurisdictional; failure to do so renders the decision final and executory. On the alleged illegality of the foreclosure sale: The Nerys' allegations of an illegal foreclosure sale due to premature foreclosure and irregularities were deemed factual in nature and not sufficiently substantiated. The trial court found no such flaws, and these issues were not raised in the Nerys' Answer before the MTC, appearing to be an afterthought. Moreover, if the Nerys believed the foreclosure was irregular, their remedy was to file an action for annulment of the sale, which they failed to do. Thus, they could not evade the judgment in the ejectment suits on this ground.
Main Doctrine
The Court of Appeals committed grave abuse of discretion in issuing a writ of preliminary injunction enjoining the enforcement of a Metropolitan Trial Court decision in an ejectment suit that had become final and executory due to the failure of the respondents to file a timely appeal. A petition for certiorari to the Regional Trial Court is not a substitute for an appeal, especially when the issue of jurisdiction is predicated on circumstances that the lower court had properly assumed jurisdiction.