Manalo v. Court of Appeals
REITERATIONFacts
1. The Antecedents: S. Villanueva Enterprises, represented by Therese Villanueva Vargas, obtained loans from PAIC Savings and Mortgage Bank and Philippine American Investments Corporation. To secure these loans, Vargas executed a Joint First Mortgage over two parcels of land, including a 919 sq.m. lot in Pasay City. The mortgage contract stipulated that it included all existing and future buildings and improvements on the property. S. Villanueva Enterprises defaulted on its loan obligations, leading PAIC Savings and Mortgage Bank to initiate extrajudicial foreclosure proceedings. The Pasay City property was sold at public auction to the bank, and after the redemption period expired without redemption, title was consolidated in the bank's name. 2. Procedural History: Following the consolidation of title, PAIC Savings and Mortgage Bank petitioned the Regional Trial Court (RTC) of Pasay City for a writ of possession. While this petition was pending, Vargas sold the property to Armando Angsico, who subsequently assigned his rights to petitioner Domingo R. Manalo. Vargas also leased a portion of the property to Manalo. The RTC granted the writ of possession, ordering Vargas, S. Villanueva Enterprises, and all persons claiming rights under them to vacate the premises. Manalo sought to intervene, claiming rights as a lessee and assignee, but his motion was denied by the RTC. The Court of Appeals affirmed the RTC's denial of intervention and the order granting the writ of possession. 3. The Petition: Petitioner Domingo R. Manalo filed a petition for certiorari with the Supreme Court, seeking to annul the Court of Appeals' decision. He argues that the appellate court erred in affirming the denial of his motion for intervention, asserting he has a legal interest as a lessee and assignee. He also contends that the RTC lacked jurisdiction to issue the writ of possession, as such matters should be handled by the liquidation court. Furthermore, he raises the issue of a pending mandamus case he filed, arguing it presents a prejudicial question. The Supreme Court, however, found no grave abuse of discretion, ruling that the RTC had jurisdiction to issue the writ of possession as it was an action by the bank to preserve its assets, not a claim against the bank. The Court also held that Manalo's motion to intervene was filed too late and that his rights could be protected in the separate mandamus case.
Issue(s)
Whether the respondent Court of Appeals committed grave abuse of discretion in affirming the denial of petitioner's motion for intervention. Whether the Regional Trial Court (RTC) had jurisdiction to hear the petition for a writ of possession, or if it should have been filed with the liquidation court. Whether the pendency of Civil Case No. 98-0868 (mandamus) constitutes a prejudicial question that should have stayed the proceedings for the writ of possession. Whether the respondent bank, being under liquidation, retained the legal personality to file the petition for a writ of possession. Whether petitioner Manalo is estopped from questioning the respondent's ownership due to entering into a lease agreement.
Ruling
The Supreme Court denied the petition for review and affirmed the decision of the Court of Appeals. The Court held that the RTC had jurisdiction to issue the writ of possession, that the petitioner's motion for intervention was filed out of time, and that the pendency of the mandamus case did not constitute a prejudicial question.
Ratio Decidendi
On the denial of the motion for intervention: The Court affirmed the denial of petitioner's motion to intervene, finding it was filed too late. The motion was submitted after the RTC had already granted the petition for the writ of possession and issued the writ itself. Intervention is allowed before the rendition of judgment, and a motion filed at the execution stage is considered out of time. Allowing intervention at this point would unduly delay the execution of the writ, which becomes a matter of right after the consolidation of title in the buyer's name following the expiration of the redemption period. The Court also noted that petitioner's rights could be fully protected in the separate mandamus case. On the jurisdiction of the RTC and the role of the liquidation court: The Court clarified that Section 29 of Republic Act No. 265 (The Central Bank Act) grants exclusive jurisdiction to the liquidation court only for the adjudication of disputed claims against the bank. It does not preclude the bank, through its liquidator, from filing actions to preserve its assets. The petition for a writ of possession is an action instituted by the bank for the preservation of its asset, not a claim against it. Furthermore, Act 3135 mandates that a petition for a writ of possession must be filed with the court of the province or city where the property is situated, which in this case was the Pasay City RTC. The Court also found no forum shopping as only one case for the writ of possession was filed by the respondent. On the issue of prejudicial question: The Court ruled that the mandamus case filed by petitioner did not constitute a prejudicial question. A prejudicial question typically arises when a civil action must be resolved before a criminal action can proceed, to avoid conflicting decisions. In this instance, both cases were civil in nature, and the issues were distinct: one concerned the right to possess foreclosed property, while the other involved compelling a repurchase or resale. The Court noted that the mandamus case was filed after the writ of possession was granted, suggesting it was a maneuver to delay execution. On the legal personality of the bank under liquidation: The Court held that a bank under liquidation retains its juridical personality and can sue and be sued through its liquidator. The liquidator is empowered to institute necessary actions to collect and recover assets or defend the institution. Therefore, PAIC Savings and Mortgage Bank, through its liquidator, was legally capacitated to petition the RTC for the writ of possession. On the petitioner's rights derived from Vargas: The Court emphasized that petitioner Manalo's rights, whether as lessee or assignee, emanated from Vargas. However, Vargas had already been stripped of all her rights over the land upon failure to redeem it within the statutory period after the foreclosure sale. Consequently, she could not validly convey any rights to Angsico or lease the property to Manalo. The Court reiterated the principle that one cannot transmit what one does not possess. Therefore, petitioner acquired no valid right or interest from Vargas.
Main Doctrine
A petition for a writ of possession filed by a bank, even if under liquidation, is a matter of preservation of its asset and protection of its property, and falls under the jurisdiction of the court where the property is situated, not exclusively the liquidation court, unless it involves adjudication of disputed claims against the bank. Intervention in a writ of possession proceeding is a matter of discretion and must be timely filed; a motion filed after the writ has been granted and issued is considered too late.