Metropolitan Bank & Trust Company v. Court of Appeals
REITERATIONFacts
The Antecedents: Metropolitan Bank & Trust Company (Metrobank) initiated a collection case against Pacific Multi Commercial Corporation and Alfonso Roxas Chua, Jr. for an unpaid loan balance. The respondents failed to file an answer, leading to their default and a subsequent judgment in favor of Metrobank. The trial court ordered the respondents to jointly and severally pay Metrobank the principal amount, plus interest, penalty charges, attorney's fees, and costs. Following the finality of the judgment, Metrobank sought its execution. Procedural History: During the execution phase, the sheriff garnished Alfonso Roxas Chua, Jr.'s shares in Club Filipino and subsequently sold them at public auction to Metrobank. Roxas Chua, Jr. then filed a motion to halt the delivery of the certificate of ownership and to nullify the sale, asserting the property was conjugal. The trial court denied this motion, and a subsequent motion for reconsideration was also denied. Roxas Chua, Jr. filed a notice of appeal from these denials. Metrobank moved to strike out the appeal, arguing that a party declared in default has no standing to appeal. The trial court denied Metrobank's motion, prompting Metrobank to file a petition for certiorari with the Court of Appeals (CA). The CA dismissed Metrobank's petition, affirming the trial court's orders and ruling that a defaulted party may appeal without the default order being lifted. The Petition: Metrobank filed a Petition for Review under Rule 45 of the Rules of Court, challenging the CA's decision. Metrobank argued that the CA erred in allowing the appeal of the trial court's orders denying the motion to nullify the auction sale, contending that the orders were interlocutory and that Roxas Chua, Jr., having been declared in default, lacked the standing to appeal. Metrobank also raised issues regarding the CA allegedly evading the core issue of Roxas Chua, Jr.'s loss of standing and the propriety of raising these issues in a certiorari petition. The core issue before the Supreme Court was the propriety of respondent's appeal to the CA of the RTC Orders.
Issue(s)
Whether the Court of Appeals erred in sustaining the trial court's orders allowing private respondent's appeal despite being declared in default. Whether the Court of Appeals erred in not ruling on the issue of the private respondent's continuous loss of standing throughout the execution stage, and whether the issue that the February 18, 1992 Order is not appealable can be raised in a petition for certiorari. Whether the February 18, 1992 Order, which denied the motion to hold in abeyance the delivery of the certificate of ownership and to declare the sale void, is an interlocutory order and thus not appealable.
Ruling
The petition is not meritorious. The assailed Decision and Resolution of the Court of Appeals are affirmed.
Ratio Decidendi
On the propriety of the appeal by a party declared in default: The Court held that a party declared in default may appeal a judgment or order against him without the need for the order of default to be lifted. This is explicitly provided for in Section 2, Rule 41 of the pre-1997 Rules of Court, which states that a party who has been declared in default may appeal from the judgment rendered against him as contrary to the evidence or to the law, even if no petition for relief to set aside the order of default has been presented. Therefore, the mere fact that the trial court had not lifted its default order did not bar the private respondent from filing an appeal. The petitioner ought to have challenged the default status of the private respondent when he filed his motion to hold in abeyance the delivery of the certificate of sale. On the issue of loss of standing and the propriety of certiorari: The Court noted that the grounds raised by the petitioner regarding the private respondent's standing and the non-appealability of the order were not proper for a petition for certiorari. The CA correctly pointed out that these grounds were not proper for a petition for certiorari, as they did not involve grave abuse of discretion or jurisdiction. Instead, these questions should have been raised either in the petitioner's brief on appeal or in a motion to dismiss the appeal. The function of a writ of certiorari is to keep a lower court within its jurisdiction, and only jurisdictional questions may be raised; mere errors of judgment may be corrected by appeal. The CA also correctly disallowed the new grounds raised before it by the petitioner, as the trial court had no opportunity to pass on them. On whether the order denying the motion to hold in abeyance is interlocutory or final: The Court reiterated the test to determine if an order is interlocutory or final: "Does it leave something to be done in the trial court with respect to the merits of the case? If it does, it is interlocutory; if it does not, it is final." In this case, the April 10, 1992 Order denied the private respondent's motion to hold in abeyance the delivery of the certificate of sale and to declare the sale void. After rendering this order, the trial court had nothing more to do to settle the rights of the parties concerning the sale; the certificate of sale was to be delivered to the petitioner as the new owner. Thus, the order was final in character and subject to appeal. While appeal does not lie against the execution of a judgment, it is available in case of an irregular implementation of a writ of execution, which was the factual scenario here.
Main Doctrine
An order denying a motion to hold in abeyance the delivery of a certificate of sale and to declare the sale void is a final order, not an interlocutory one, and is therefore appealable. A party declared in default may appeal a judgment or order without the default order being lifted.