Villarico v. Court of Appeals
REITERATIONFacts
The Antecedents: Spouses Diosdado and Lolita Azarraga owned a house and lot. Lolita obtained a loan from Teofilo Villarico and mortgaged the property as security. Upon Lolita's failure to pay, Villarico extrajudicially foreclosed the mortgage, became the highest bidder, and obtained a Sheriff's Certificate of Sale, leading to the transfer of the title to his name. Procedural History: Diosdado Azarraga filed a Civil Case to nullify the real estate mortgage, alleging it was simulated as he did not sign it and was abroad at the time of its alleged execution. He also alleged irregularities in the foreclosure. Villarico insisted Lolita and someone claiming to be Diosdado signed the mortgage. Lolita admitted receiving a loan but claimed she only gave the title as a pledge and signed a blank paper. The Regional Trial Court (RTC) declared the real estate mortgage null and void, denied the writ of possession, ordered the cancellation of Villarico's title and re-issuance of the original title to Diosdado Azarraga, ordered Lolita to pay Villarico a sum, and awarded attorney's fees to Diosdado. Both parties appealed. The Court of Appeals (CA) affirmed the RTC decision in toto. The Petition: Villarico filed a petition for review, assailing the CA's affirmation of the RTC's decision, arguing he was a mortgagee-purchaser in good faith, that Diosdado was negligent, that the mortgage and writ of possession denial were erroneous, and that the award of attorney's fees was baseless.
Issue(s)
Whether petitioner Teofilo C. Villarico is a mortgagee-purchaser in good faith and for value. Whether the trial court erred in denying the petition for a writ of possession. Whether petitioner is liable for attorney's fees.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The real estate mortgage was declared null and void, the denial of the writ of possession was upheld, and the award of attorney's fees was sustained.
Ratio Decidendi
On the issue of whether petitioner is a mortgagee-purchaser in good faith and for value: The Court held that the determination of whether petitioner was a mortgagee-purchaser in good faith and for value is a factual issue. In a petition for review, only questions of law may be raised, and petitioner failed to demonstrate that this case falls under any of the exceptions. Therefore, the Court declined to disturb the findings of the trial court, as affirmed by the Court of Appeals, that petitioner was not acting in good faith. The claims of Lolita Azarraga regarding the amount of the loan obligation were also considered factual and thus not subject to review. On the issue of whether the trial court erred in denying the petition for a writ of possession: The Court found this issue to be moot, if not superfluous. Both the trial court and the Court of Appeals had already declared the deed of mortgage invalid. Consequently, there was no longer any factual or legal basis for the issuance of a writ of possession. The Court reiterated that it will not pass upon a moot question when no practical relief can be granted, citing City Sheriff, Iligan City vs. Fortunado. On the issue of whether petitioner is liable for attorney's fees: The Court affirmed the award of attorney's fees to private respondent Diosdado Azarraga. Both the trial court and the Court of Appeals found petitioner to have acted in bad faith in causing the execution of the mortgage deed and the extrajudicial foreclosure. These prejudicial acts compelled Diosdado Azarraga to incur expenses to protect his interests, thereby justifying the award of attorney's fees, consistent with jurisprudence like Ching Sen Ben vs. Court of Appeals.
Main Doctrine
A writ of possession may not be issued if the basis for the petition, such as the real estate mortgage and the subsequent extrajudicial foreclosure, has been declared null and void by the courts.