Metropolitan Bank v. Bance
REITERATIONFacts
The Antecedents: Respondents Spouses Elmor and Rosario Bance obtained loans totaling P24,150,954.84 from Metropolitan Bank and Trust Company (Petitioner). As security, they mortgaged properties in Binondo and Tondo, Manila. Upon failure to pay, Petitioner initiated extrajudicial foreclosure proceedings, becoming the highest bidder at the public auction held on October 2, 1998. Petitioner registered the Certificate of Sale on May 3, 1999, and subsequently demanded possession of the properties on April 5, 2000, which Respondents refused. Procedural History: While the foreclosure was pending, Respondents filed Civil Case No. 00-97252 on May 2, 2000, seeking the nullity of various loan documents, mortgages, and the foreclosure proceedings. A Temporary Restraining Order (TRO) was initially issued. On June 23, 2000, Petitioner filed a separate petition for a writ of possession (LRC Cad. Record No. 278) with RTC Branch 4, which was granted on September 11, 2000. The writ of possession was implemented in stages between March 2001 and July 2003. Meanwhile, RTC Branch 32, after initially recalling an injunctive order due to the Respondents' failure to post a bond, eventually dismissed Respondents' case, though it later ordered the issuance of the writ upon reconsideration. On July 22, 2003, Respondents filed a petition with the Court of Appeals (CA-G.R. SP No. 78162) seeking to annul the September 11, 2000 Order of RTC Branch 4, alleging extrinsic fraud. The Court of Appeals granted this petition, annulling the order and declaring the foreclosure void. Petitioner sought reconsideration, which was denied, leading to the present petition. The Petition: Petitioner seeks review of the Court of Appeals' Decision and Resolution, arguing that the appellate court erred in annulling the writ of possession on the ground of extrinsic fraud. Petitioner contends that a petition for a writ of possession under Act No. 3135 is an ex parte proceeding and not an ordinary action, thus Respondents were not entitled to notice. Petitioner also argues that the Court of Appeals should not have delved into the validity of the mortgage or foreclosure proceedings, as the sole issue was the propriety of the writ's issuance. Furthermore, Petitioner asserts that Respondents failed to pursue the proper remedy under Section 8 of Act No. 3135. Regarding forum shopping, Petitioner claims it was not required to disclose the pendency of the writ of possession case in its certification of non-forum shopping, as it is not an initiatory pleading. The petition raises the following issues: (1) whether the Court of Appeals erred in annulling the writ of possession on grounds of extrinsic fraud, and (2) whether Petitioner was guilty of forum shopping.
Issue(s)
Whether the Court of Appeals erred in annulling the writ of possession issued by RTC Branch 4 on the ground of extrinsic fraud. Whether petitioner Metrobank committed forum shopping by filing a petition for the issuance of a writ of possession while a civil case for the declaration of nullity of mortgage was pending. Whether the Court of Appeals erred in giving due course to the petition for annulment of judgment under Rule 47 of the Revised Rules of Civil Procedure.
Ruling
The Supreme Court granted the petition, reversed and set aside the Decision and Resolution of the Court of Appeals. It reinstated the September 11, 2000 Order of the RTC Branch 4 granting the writ of possession.
Ratio Decidendi
On the issue of extrinsic fraud and the annulment of the writ of possession: The Court held that no extrinsic fraud was employed by Metrobank in not informing respondents of the institution of the writ of possession case. A petition for the issuance of a writ of possession under Section 7 of Act No. 3135, as amended, is not an ordinary action but is in the nature of an ex parte motion heard only on one side. It is taken or granted at the instance and for the benefit of one party, and without notice to or consent by any party adversely affected. Accordingly, upon the filing of a proper motion by the purchaser in a foreclosure sale and the approval of the corresponding bond, the writ of possession issues as a matter of course, and the trial court has no discretion on this matter. The Court further clarified that the writ of possession was not irregular despite the absence of a bond because the posting of a bond is necessary only if the application is made within one year from the registration of the sale, which is during the redemption period. In this case, the application was made after the expiration of the redemption period, and respondents had already lost their rights over the properties. The Court also emphasized that the Court of Appeals need not delve into alleged defects or irregularities in the foreclosure, as the only issue was the propriety of the issuance of the writ. Any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of the writ, and the issuance of the writ may not be stayed by a pending action for annulment of mortgage or the foreclosure itself. Furthermore, respondents failed to pursue the proper remedy under Section 8 of Act No. 3135, as amended, which requires filing a petition to set aside the sale and cancel the writ within 30 days after the purchaser-mortgagee was given possession. On the issue of forum shopping: The Court ruled that there was no forum shopping. The essence of forum shopping is the filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. It exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in another. Since the issuance of a writ of possession is a ministerial function and summary in nature, it cannot be said to be a judgment on the merits but simply an incident in the transfer of title. Hence, regardless of whether or not there is a pending suit for annulment of the mortgage or the foreclosure itself, Metrobank is entitled to the writ, subject to the final outcome of the case. Moreover, a certificate of non-forum shopping is required only in complaints or other initiatory pleadings, and a petition or motion for the issuance of the writ under Section 7 of Act No. 3135, as amended, is not a complaint or an initiatory pleading. Therefore, any insignificant lapse in the certification of non-forum shopping filed by petitioner does not render the writ irregular, as no verification and certification on non-forum shopping need be attached to the motion at all. On the issue of the Court of Appeals giving due course to the petition for annulment of judgment: The provided text does not contain any ratio decidendi related to this issue. Therefore, there is no corresponding ratio to provide.
Main Doctrine
A petition for a writ of possession under Act No. 3135 is an ex parte proceeding and its issuance is a ministerial function, not subject to a pending action for annulment of mortgage or foreclosure. Failure to notify the mortgagor of such a petition does not constitute extrinsic fraud, and the issuance of the writ cannot be stayed by such a pending action. Furthermore, a petition for a writ of possession is not an initiatory pleading, thus, a certificate of non-forum shopping is not required.