Government Service Insurance System v. Court of Appeals
REITERATIONFacts
The Antecedents: Private respondent Philippine Village Hotel, Inc. (PVHI) obtained several loans from petitioner Government Service Insurance System (GSIS) for hotel construction and expansion, hypothecating the hotel and its contents as collateral. PVHI also entered into a lease-purchase agreement and secured debenture bonds from GSIS. Despite substantial payments, PVHI remained in arrears. GSIS initiated foreclosure proceedings. Subsequently, the Presidential Commission on Good Government (PCGG) issued a writ of sequestration over PVHI's assets, and the Republic filed an action against PVHI's president and wife. PVHI sought to restrain the foreclosure, initially with the Sandiganbayan and later with the RTC of Manila, obtaining TROs and injunctions that were eventually set aside by the Supreme Court. The hotel was sold at public auction with GSIS as the winning bidder. Procedural History: GSIS filed an ex-parte petition for a writ of possession. PVHI moved to dismiss, arguing prematurity. The RTC of Pasay City granted the writ of possession. PVHI then filed a petition to set aside the foreclosure sale with the same RTC, asserting full payment and procedural infirmities. The RTC dismissed this petition for lack of jurisdiction, considering itself a land registration court. PVHI filed a petition for certiorari with the Court of Appeals (CA), which initially dismissed PVHI's petition, citing PNB v. Adil, the propriety of appeal under Act No. 3135, and the existence of an injunction in another case. However, following a Supreme Court decision in a related case (G.R. No. 83385), the CA reversed its earlier ruling, ordering the RTC of Pasay City to take cognizance of PVHI's petition to set aside the foreclosure sale, finding that the RTC judge gravely abused his discretion. The Petition: GSIS filed the instant petition for review on certiorari with the Supreme Court, assailing the CA's resolution that reversed its own earlier decision, arguing that the CA violated rules against second motions for reconsideration, reversed a final and executory decision, and undermined the intent of the Supreme Court's ruling in GSIS v. Sandiganbayan to end the parties' disputes.
Issue(s)
Whether the Court of Appeals erred in issuing a resolution in violation of rules prohibiting second motions for reconsideration and reversing its own final and executory decision. Whether the Court of Appeals erred in violating the intent and spirit of the ruling in GSIS v. Sandiganbayan to put a stop to the parties' disputes. Whether the RTC of Pasay City gravely abused its discretion in dismissing PVHI's petition to set aside the foreclosure sale on the ground of lack of jurisdiction.
Ruling
The petition is DENIED. The Regional Trial Court of Pasay City shall resolve with dispatch the petition to have the foreclosure sale in LRC No. 3079 set aside. No costs.
Ratio Decidendi
On the propriety of the Court of Appeals' resolution and the prohibition against second motions for reconsideration: The Court held that while rules generally prohibit second motions for reconsideration, these rules are not inflexible and can be relaxed in favor of substantial justice. The Court of Appeals still had jurisdiction over the case when PVHI filed its manifestation and motion, as the period for appeal had not yet expired. Furthermore, the CA could not disregard the Supreme Court's decision in G.R. No. 83385, which directly impacted the issues before it. The appellate court's duty was to obey the Supreme Court's ruling for the orderly administration of justice. On the violation of the intent of GSIS v. Sandiganbayan: The Court clarified that the decision in G.R. No. 83385 was precisely aimed at bringing order to the proceedings that had become complicated by multiple cases filed by the parties. The Supreme Court's ruling in that case recognized the propriety of PVHI's recourse to have the foreclosure sale set aside, as provided under Section 8 of Act No. 3135. Therefore, the CA's subsequent action was consistent with the Supreme Court's intent to resolve the underlying issues. On the RTC's dismissal for lack of jurisdiction and the propriety of certiorari: The Court found that the RTC of Pasay City gravely abused its discretion in dismissing PVHI's petition to set aside the foreclosure sale solely on the ground of lack of jurisdiction. The Supreme Court, in G.R. No. 83385, had indicated that there was nothing objectionable with such a recourse under Section 8 of Act No. 3135. While PVHI should have filed an ordinary appeal, certiorari was deemed a proper remedy in meritorious cases, especially when filed within the appeal period and the dismissal was based on a jurisdictional issue, not the merits. The dismissal prevented PVHI from having the legality of the foreclosure sale resolved, potentially causing irreparable damage, thus justifying the use of certiorari to prevent such damage against the inadequacy of an ordinary appeal.
Main Doctrine
A petition to set aside a foreclosure sale, filed in a proceeding for a writ of possession, is a proper remedy under Section 8 of Act No. 3135, and a petition for certiorari may be allowed to prevent irreparable damage, especially when filed within the period for appeal and the dismissal was based on a jurisdictional issue rather than the merits.