Manalo v. Paic Savings Bank and Vargas
REITERATIONFacts
The Antecedents: S. Villanueva Enterprises, Inc., represented by Therese Villanueva Vargas, obtained a ₱3,000,000.00 loan from PAIC Savings and Mortgage Bank, secured by a mortgage on two lots in Pasay City. Vargas failed to pay the loan, leading to the foreclosure and public auction sale of the lots to PAIC Bank as the highest bidder. A Certificate of Sale was issued to PAIC Bank on December 4, 1984. Procedural History: On October 14, 1991, Vargas filed a complaint for annulment of mortgage and extrajudicial foreclosure, which was dismissed by the RTC and affirmed by the Court of Appeals. Meanwhile, PAIC Bank filed a petition for a writ of possession, which was granted by the RTC on April 2, 1998. Earlier, on December 23, 1992, Vargas sold the lots to Armando Angsico for ₱18,000,500.00. On August 24, 1994, Vargas leased a portion of the lots to Domingo R. Manalo (petitioner). On June 29, 1997, Angsico assigned his rights to Manalo. The Petition: On May 7, 1998, Manalo filed a complaint for specific performance and damages, seeking a writ of mandamus to compel PAIC Bank to allow him to redeem/repurchase the lots for ₱18,000,000.00 and to release the title. PAIC Bank moved to dismiss, arguing lack of jurisdiction and failure to state a cause of action, asserting that title consolidated in its name after Vargas failed to redeem within the period. The RTC dismissed Manalo's complaint for lack of an enforceable cause of action. The Court of Appeals affirmed, holding that Manalo's complaint failed to state a cause of action and that mandamus was not the correct remedy.
Issue(s)
Whether the Court of Appeals erred in holding that the petitioner failed to establish a cause of action regarding the validity of the transactions and ownership of the lots. Whether mandamus is the correct remedy to compel the bank to accept redemption money and release the title, considering the expiration of the redemption period and the nature of the bank's duty.
Ruling
The petition is denied. The assailed Decision of the Court of Appeals is affirmed.
Ratio Decidendi
On the issue of cause of action: The Court held that the petitioner failed to establish a cause of action because the transactions he relied upon were void. On December 4, 1985, after the expiration of the one-year redemption period following the foreclosure sale, PAIC Bank ipso facto became the absolute owner of the lots. Consequently, Vargas, petitioner's predecessor-in-interest, could no longer legally sell or lease the property to Angsico and petitioner, respectively, as she was no longer the lawful owner. The Court emphasized that one can only sell what one owns, and a buyer acquires only what the seller can offer. The subsequent sale by Angsico to Manalo and the lease by Vargas to Manalo were thus without legal basis. On the issue of mandamus as a remedy: The Court reiterated that mandamus is not the proper recourse to enforce contractual obligations or to compel a course of conduct, nor to review the exercise of discretion. It is an extraordinary remedy available only to compel the performance of a ministerial duty when a petitioner has a clear legal right to the thing demanded and the respondent has an imperative duty to perform the act required. In this case, petitioner Manalo did not have a clear legal right to redeem the property, as the redemption period had long expired and ownership had vested in PAIC Bank. Therefore, compelling the bank to accept redemption money and release the title was not a ministerial duty. The Court cited Commission on Elections vs. Quijano-Padilla and Quiogue vs. Romualdez to support the principle that mandamus does not lie to enforce private contracts or ordinary breach of contract claims.
Main Doctrine
Mandamus is not the proper recourse to enforce a right of redemption or any contractual obligation, as it only compels the performance of a ministerial duty and requires a clear legal right to the thing demanded. Furthermore, a party cannot sell what they do not own, especially after the expiration of the redemption period following a foreclosure sale, which vests absolute ownership in the mortgagee.