Dayot v. Shell Chemical Company
REITERATIONFacts
The Antecedents: The underlying dispute concerns the possession of several parcels of land in Iloilo City. Panay Railways, Inc. (PRI) mortgaged six parcels of land to Traders Royal Bank (TRB) to secure loan obligations. Upon PRI's failure to pay, the properties were foreclosed and consolidated in TRB's name. Subsequently, TRB filed a petition for a writ of possession. Later, TRB sold five parcels of land, which are portions of the foreclosed properties, to spouses Edmundo and Candelaria Dayot. Candelaria Dayot (petitioner) then sought to be substituted as petitioner in the writ of possession case and for an alias writ to be issued in her favor. Separately, the spouses Dayot filed a complaint for recovery of ownership and possession, among other reliefs, against TRB, Petron Corporation, and Shell Chemical Company (Phils.), Inc. (respondent), alleging that Shell was possessing a portion of Lot No. 6153 and seeking its ejectment, along with Petron's surrender of other parcels. Procedural History: Following the substitution and issuance of an alias writ of possession in favor of Candelaria Dayot, she filed an amended supplemental motion for the issuance of a writ of possession to eject Shell from a portion of Lot 6153. Shell opposed this motion, arguing forum shopping and disputing the inclusion of the occupied area. The Regional Trial Court (RTC) initially denied the motion for a writ of possession concerning Shell. However, after the case was re-raffled, the RTC, Branch 29, issued an Amended Order on January 8, 2002, directing the issuance of an alias writ of possession to place petitioner in possession of affected portions of Lots 3834, 1-A, and 6153 occupied by Shell and Petron. This was followed by an Alias Writ of Possession and a Notice to Vacate served on Shell. After the RTC denied their motion for reconsideration, Shell filed a petition for certiorari and prohibition with the Court of Appeals (CA), seeking to nullify the RTC's orders and processes. The CA granted Shell's petition, declaring the RTC's rulings void. The CA subsequently denied petitioner's motion for reconsideration. The Petition: Petitioner Candelaria Dayot filed a Petition for Review on Certiorari with the Supreme Court, assailing the CA's decision and resolution. Petitioner argues that the respondent (Shell) was barred from filing a petition for certiorari with the CA because it had lost its right to appeal and certiorari cannot substitute for a lost appeal. Petitioner also contends that she is entitled to possession of the entire lots, including the area occupied by respondent, asserting that respondent is a mere intruder. The petition raises questions of substance not in accordance with law and applicable decisions. The core of the petition is to reverse the CA's decision which nullified the RTC's orders granting an alias writ of possession, thereby preventing Shell's ejectment through an ex-parte writ.
Issue(s)
Whether the Court of Appeals erred in giving due course to Shell's petition for certiorari despite the availability of appeal. Whether petitioner is guilty of forum shopping. Whether petitioner is entitled to an alias writ of possession to eject Shell from the disputed portion of Lot No. 6153.
Ruling
The petition is dismissed. The Court of Appeals' Decision and Resolution are affirmed insofar as respondent Shell Chemical Company (Phils.), Inc. is concerned.
Ratio Decidendi
On the propriety of the certiorari petition: The Court held that while certiorari generally cannot substitute for a lost appeal, this rule is not strictly enforced if the petition is genuinely meritorious and its rigid application would frustrate substantial justice. The Court found Shell's case meritorious because the RTC's order for an alias writ of possession, in effect, collaterally attacked Shell's title and sought to dispossess it without due process. The equities of the case warranted giving due course to the certiorari petition to prevent a miscarriage of justice. On forum shopping: The Court agreed with the petitioner that she was not guilty of forum shopping. It explained that forum shopping occurs when a party avails of multiple judicial remedies simultaneously or successively, founded on the same transactions and raising the same issues. The Court applied the test of litis pendentia and res judicata, finding that neither was present. The proceedings for a writ of possession are ex parte and summary, not a judgment on the merits, and the issues in the writ of possession case (possession) differ from those in the civil case for ownership. Therefore, no forum shopping existed. On the entitlement to an alias writ of possession against a third-party possessor: The Court ruled that petitioner is not entitled to an alias writ of possession to eject Shell. Citing Article 433 of the Civil Code, the Court stated that actual possession under a claim of ownership raises a disputable presumption of ownership, and the true owner must resort to judicial process, such as an ejectment or reivindicatory action, to recover the property. The ex-parte writ of possession under Act 3135 is not the proper judicial process for dispossessing a third party in adverse possession. The second paragraph of Section 33, Rule 39 of the Rules of Court explicitly states that possession shall be given unless a third party is actually holding the property adversely. The Court emphasized that Shell has been in possession since 1975, claims ownership, and has its own title (TCT No. 47484), making it a stranger to the foreclosure proceedings between PRI and TRB. Dispossessing Shell via a mere ex-parte possessory writ would violate due process. The Court noted that the mortgage contract itself excluded areas already sold to Shell. Therefore, the RTC was without authority to grant the ex-parte writ against Shell, and the proper forum to resolve the conflicting claims of ownership and possession is Civil Case No. 21957.
Main Doctrine
A writ of possession may not be issued to eject a third party in possession of the foreclosed property who claims ownership adverse to the mortgagor, as this would violate due process; the proper recourse is an ejectment or reivindicatory action.