Metrobank v. Tan
REITERATIONFacts
The Antecedents: This case concerns a dispute arising from the extra-judicial foreclosure of several real estate mortgages. Metropolitan Bank and Trust Company (Metrobank) and Rogelio T. Uy initiated foreclosure proceedings on properties owned by Jose B. Tan and Ariel Tan, allegedly to satisfy a debt of P48,311,003.39. The properties were subsequently auctioned off. However, Jose B. Tan and his wife, Eliza Go Tan, filed a separate case alleging that the mortgages on Eliza's property were void due to her lack of consent, and that Jose B. Tan had not executed the mortgages on his property. They also claimed the principal obligations had been fully paid. Procedural History: The initial dispute led to Civil Case No. 98-225 before the Regional Trial Court (RTC) of Misamis Oriental, Branch 38, where the Tan spouses sought to nullify the mortgages and the foreclosure proceedings. This court declared the mortgages and foreclosure proceedings void. Concurrently, Metrobank and Uy filed an ex parte petition for a writ of possession (Miscellaneous Case No. 2000-117) before RTC Branch 21, concerning properties covered by new titles resulting from the foreclosure. Branch 21 granted the writ of possession. The Tan respondents appealed this decision to the Court of Appeals (CA), which initially reversed the RTC Branch 21 decision, finding no basis for the writ of possession given the co-equal court's ruling in Civil Case No. 98-225. However, the CA later amended its decision, holding the issuance of the writ in abeyance pending the final resolution of the appeal in Civil Case No. 98-225. The Petition: Metropolitan Bank and Trust Company and Rogelio T. Uy filed this petition for review on certiorari under Rule 45 of the Rules of Court, assailing the CA's decision and resolution. They argue that the CA erred in reversing the RTC's grant of the writ of possession and in holding its implementation in abeyance. Petitioners contend that the issuance of a writ of possession is a ministerial duty of the court once the foreclosure sale is registered, and that the pendency of a separate case questioning the mortgage's validity does not bar its issuance. They also assert that the CA should not have entertained a petition for certiorari as an appeal was the proper remedy and that the RTC did not commit grave abuse of discretion.
Issue(s)
Whether the Court of Appeals erred in not dismissing the petition on the ground that the respondents had squandered the remedy of appeal and that certiorari cannot be a substitute for a lost appeal. Whether the Court of Appeals erred in not dismissing the petition on the ground that the respondents had two adequate remedies under Section 8 of Act 3135 and in Civil Case No. 98-225. Whether the Court of Appeals erred in not dismissing the petition on the ground that the trial court did not gravely abuse its discretion in issuing the writ of possession. Whether the Court of Appeals erred in holding in abeyance the implementation of the writ of possession to await the outcome of Civil Case No. 98-225.
Ruling
The Supreme Court granted the petition, set aside the Decision dated 21 March 2003 and the Resolution dated 1 September 2003 of the Court of Appeals in CA-G.R. SP No. 68523, and reinstated the trial court's order granting the writ of possession.
Ratio Decidendi
On the propriety of the remedy: The Court found that the respondents' proper remedy was an appeal, not a petition for certiorari, as the trial court acted within its jurisdiction in issuing the writ of possession. Any alleged errors in the exercise of its discretion, or in this case, its ministerial duty, would constitute mere errors of judgment correctable by appeal. The appellate court erred in entertaining the petition for certiorari and in holding the writ in abeyance, as this interfered with the finality of the trial court's order, which is considered final and executory once issued ministerially. The appellate court's attempt to hold the writ in abeyance pending the outcome of another appeal was an improper exercise of its certiorari jurisdiction. On the propriety of the remedy: The Court found that the respondents' proper remedy was an appeal, not a petition for certiorari, as the trial court acted within its jurisdiction in issuing the writ of possession. Any alleged errors in the exercise of its discretion, or in this case, its ministerial duty, would constitute mere errors of judgment correctable by appeal. The appellate court erred in entertaining the petition for certiorari and in holding the writ in abeyance, as this interfered with the finality of the trial court's order, which is considered final and executory once issued ministerially. The appellate court's attempt to hold the writ in abeyance pending the outcome of another appeal was an improper exercise of its certiorari jurisdiction. On the issuance of a Writ of Possession: The Court reiterated that the issuance of a writ of possession in extra-judicial foreclosure proceedings is a ministerial duty of the trial court under Sections 7 and 8 of Act 3135. This duty is performed upon the filing of a proper motion, approval of the bond, and absence of any third-party claim. The trial court commits no grave abuse of discretion when it performs this ministerial function, as no discretion is actually exercised. The pendency of a separate action to annul the mortgage does not divest the court of its ministerial duty to issue the writ, nor does it convert this duty into a discretionary act. The Court emphasized that its prior ruling in Metropolitan Bank and Trust Company v. Tan (G.R. No. 163712) had already set aside the appellate court's decision in CA G.R. CV No. 70742, which declared the mortgages void, and affirmed the validity of the extra-judicial foreclosure and sale. This prior ruling effectively removed a key basis for the respondents' argument that the writ of possession should not issue from a void mortgage. On the issuance of a Writ of Possession and the propriety of holding it in abeyance: The Court reiterated that the issuance of a writ of possession in extra-judicial foreclosure proceedings is a ministerial duty of the trial court. The appellate court's attempt to hold the writ in abeyance pending the outcome of another appeal was an improper exercise of its certiorari jurisdiction.
Main Doctrine
The issuance of a writ of possession in extra-judicial foreclosure proceedings is a ministerial duty of the court, and the pendency of a separate civil suit questioning the validity of the mortgage does not bar its issuance, unless specific equitable considerations or grave abuse of discretion are present.