State Investment House v. Active Wood Products
REITERATIONFacts
The Antecedents: Active Wood Products Co., Inc. (private respondent) obtained a loan from State Investment House, Inc. (petitioner), secured by two parcels of land via a real estate mortgage. Private respondent alleged that this mortgage had undergone novation and later claimed it was null and void, securing not a loan but an assignment of receivables. The dispute escalated when petitioner sought to extrajudicially foreclose the mortgaged properties. Procedural History: The case originated in the Regional Trial Court (RTC) of Malolos, Bulacan, where private respondent filed a case for injunction to prevent foreclosure. The RTC initially issued a TRO and later a writ of preliminary injunction, but the foreclosure sale proceeded, with petitioner as the highest bidder. The RTC subsequently nullified the auction sale. Petitioner challenged this, but the Supreme Court ultimately upheld the RTC's orders nullifying the sale and issuing the injunction. Separately, a petition for a writ of possession filed by petitioner was ordered consolidated with the main case. The RTC denied private respondent's omnibus motion seeking to declare the mortgages and agreements as paid, barred by prescription, or null and void. Private respondent then filed a petition for certiorari with the Court of Appeals (CA) questioning the RTC's denial of its omnibus motion. The Petition: Petitioner filed this petition for certiorari under Rule 65 of the Rules of Court, assailing the resolutions of the Court of Appeals. Petitioner argued that private respondent's motion for reconsideration before the CA was filed out of time and that the CA had no jurisdiction to rule on the issue of prescription, which should have been left to the trial court. The Supreme Court disagreed, finding that the motion for reconsideration was timely filed and that the CA had not yet made a final ruling on prescription, thus deeming the petition premature and an abuse of discretion to bring before the Court at this stage.
Issue(s)
Whether the Court of Appeals committed grave abuse of discretion amounting to lack of jurisdiction in its resolutions. Whether Active Wood's motion for reconsideration before the Court of Appeals was filed out of time. Whether the Court of Appeals could resolve the issue of prescription in the certiorari proceedings, and whether the petition for certiorari was premature.
Ruling
The petition is DISMISSED. The resolutions of the Court of Appeals in CA-G.R. SP No. 55616 are AFFIRMED. Costs against petitioner.
Ratio Decidendi
On whether the Court of Appeals committed grave abuse of discretion: The Court held that the CA did not commit grave abuse of discretion. The CA had not yet made a final ruling on the issue of prescription; it merely declared that it was in a position to rule on the matter and required the parties to submit memoranda. Grave abuse of discretion implies a capricious and whimsical exercise of power, which was not demonstrated here. The CA's actions were within its jurisdiction, and any potential errors in its findings or conclusions would be errors of law, not grounds for certiorari. Furthermore, the assailed resolutions were interlocutory, and certiorari is not intended to correct every controversial interlocutory ruling. On the timeliness of the motion for reconsideration: The Court found that the 15-day reglementary period for Active Wood to file its motion for reconsideration began not on March 6, 2000, but on March 21, 2000, when it received a copy of the formal resolution issued by the CA on March 9, 2000. The assurance from the CA justices during the March 6 hearing that they would issue a "formal order" was not itself a formal order, but a suggestion that was to take effect only when formally issued. Therefore, Active Wood's motion for reconsideration, filed on April 4, 2000, was within the reglementary period. On whether the Court of Appeals could resolve the issue of prescription in the certiorari proceedings, and on the prematurity of the petition: The Court concluded that the petition for certiorari filed by State Investment was premature. The CA had not yet made a final decision on the issue of prescription. Any objections State Investment had to a potential ruling on prescription should be raised only after such a ruling has been promulgated. The Court noted that State Investment, while lamenting the delay, contributed to it by filing the premature petition instead of submitting the required memorandum to the CA.
Main Doctrine
A petition for certiorari under Rule 65 is not the proper remedy to assail interlocutory orders or rulings of a lower court, especially when the issue raised has not yet been finally decided by the appellate court and the petition is filed prematurely.