CGP Transportation and Services Corporation v. PCI Leasing and Finance, Incorporated
REITERATIONFacts
The Antecedents: CGP Transportation and Services Corporation (CGP) obtained two loans from PCI Leasing and Finance, Incorporated (PCI), totaling Sixteen Million pesos (P16,000,000.00). These loans were secured by real estate mortgages over two parcels of land owned by CGP. CGP defaulted on its loan payments, prompting PCI to initiate extra-judicial foreclosure proceedings for the mortgaged properties. PCI emerged as the highest bidder in the subsequent public auction, and the Certificates of Sale were registered. CGP failed to exercise its right of redemption within the stipulated period. Procedural History: Following CGP's failure to redeem the properties, PCI demanded actual possession, which CGP refused. Consequently, PCI filed a petition for an ex-parte issuance of a Writ of Possession with the Regional Trial Court (RTC) of Muntinlupa City, Branch 256, docketed as LRC Case No. 99-020. The RTC initially granted PCI's petition, scheduling an ex-parte reception of evidence. However, upon CGP's motion for reconsideration, the RTC reconsidered its earlier order, set aside the ex-parte proceedings, and reinstated a preliminary injunction that had been issued in a separate case (Civil Case No. 99-234) concerning the annulment of the foreclosure proceedings. PCI then filed a Petition for Certiorari with the Supreme Court, arguing grave abuse of discretion by the RTC. The Supreme Court, finding factual issues involved, referred the petition to the Court of Appeals (CA) for appropriate action. The CA granted PCI's petition, setting aside the RTC's orders and directing the RTC to proceed with the case. The Petition: CGP filed the present Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court. CGP's petition does not dispute the substantive findings of the Court of Appeals regarding the writ of possession. Instead, CGP's sole argument is whether the Court of Appeals erred in giving due course to PCI's petition for certiorari, given the Supreme Court's prior resolution in G.R. No. 150483 which purportedly found that the petition raised questions of fact, making certiorari an improper remedy. CGP contends that this finding by the Supreme Court was final and could not be disturbed by the Court of Appeals.
Issue(s)
Whether the Court of Appeals gravely erred in giving due course to the petition for certiorari filed by respondent PCI, considering the Supreme Court's prior Resolution finding that the petition raised questions of fact. Whether the RTC gravely abused its discretion amounting to lack or excess of jurisdiction when it nullified and set aside the ex-parte proceedings, reinstated the preliminary injunction, and suspended the proceedings.
Ruling
The Supreme Court denied the petition and affirmed the Decision and Resolution of the Court of Appeals. The Court held that while the initial petition before it was a special civil action for certiorari which may have been an incorrect mode of appeal due to factual issues, the Court, in the interest of substantial justice, treated it as an appeal by certiorari and referred it to the Court of Appeals. The Court found no grave abuse of discretion on the part of the Court of Appeals in its ruling.
Ratio Decidendi
On the propriety of the Court of Appeals taking cognizance of the petition: The Supreme Court clarified that while the initial petition filed by PCI before the Supreme Court was a special civil action for certiorari, which might have been an improper mode of appeal given the factual issues, this Court, in the exercise of its discretion and in the interest of substantial justice, referred the case to the Court of Appeals for appropriate action. This referral is sanctioned by Section 6, Rule 56 of the 1997 Revised Rules of Civil Procedure, which allows the Supreme Court to refer appeals involving factual issues to the Court of Appeals. The Court emphasized that procedural rules should not override substantial justice, and deviations from rigid enforcement are permissible to achieve this objective. Therefore, the Court of Appeals did not err in giving due course to the petition as directed by the Supreme Court's referral. On the RTC's Orders and Grave Abuse of Discretion: The Supreme Court agreed with the Court of Appeals that the RTC gravely abused its discretion. The Court reiterated that a petition for a writ of possession is a ministerial act that the court must issue once the title to the property has been consolidated in the mortgagee. Any question regarding the validity of the mortgage or the foreclosure proceedings cannot be a legal basis to refuse the issuance of the writ. The RTC's reinstatement of the preliminary injunction and suspension of proceedings were erroneous. The Court noted that the dismissal of Civil Case No. 99-234, which involved the annulment of foreclosure proceedings, was on a technicality, not on the merits. While the general rule is that the dismissal of a complaint on the merits automatically dissolves an injunction, this rule does not strictly apply when the dismissal is not on the merits and the dismissal order is under appeal. However, the RTC's reliance on this exception to suspend the writ of possession proceedings was misplaced, as the primary issue in LRC Case No. 99-020 was the ministerial issuance of a writ of possession, not the validity of the foreclosure itself. The RTC's actions effectively allowed the annulment case to obstruct the writ of possession proceedings, contrary to established jurisprudence.
Main Doctrine
A petition for a writ of possession is a ministerial act that the court must issue after title has been consolidated in the mortgagee, and any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of possession. Furthermore, the dismissal of a complaint on a technicality, not on the merits, does not automatically dissolve an injunction, especially when the dismissal order is under appeal.