Spouses Marcelo v. LBC Bank
REITERATIONFacts
The Antecedents: Spouses Rogelio and Milagros Marcelo obtained two loans from LBC Bank totaling P5.3 million, secured by a real estate mortgage over a parcel of land. The Spouses Marcelo defaulted on their loan payments, prompting LBC Bank to initiate an extra-judicial foreclosure of the mortgage. Following the public auction where LBC Bank was the highest bidder, a Certificate of Sale was issued. The Spouses Marcelo failed to redeem the property within the statutory period, leading to the consolidation of title in favor of LBC Bank and the issuance of a new Transfer Certificate of Title in the bank's name. Procedural History: LBC Bank subsequently filed a petition with the Regional Trial Court (RTC) of Bulacan for the issuance of a writ of possession. The RTC granted the petition, ordering the issuance of the writ. The Spouses Marcelo moved for reconsideration, arguing that the consolidation of title was invalid due to the alleged lack of authority of the bank's representative who executed the affidavit of consolidation, and that the petition was improperly verified. The RTC denied their motion. Aggrieved, the Spouses Marcelo filed a petition for certiorari with the Court of Appeals (CA), alleging grave abuse of discretion by the RTC. Initially, the CA granted the petition, annulling the RTC's decision. However, upon LBC Bank's motion for reconsideration, supported by additional documents, the CA amended its decision, denying the petition for certiorari and affirming the RTC's ruling. The CA subsequently denied the motion for reconsideration of its amended decision. The Petition: The Spouses Marcelo filed the present petition for review under Rule 45 of the Rules of Court, assailing the amended decision and resolution of the Court of Appeals. The core of their argument is that the CA erred in admitting and considering new evidence, specifically an affidavit and secretary's certificates, in resolving LBC Bank's motion for reconsideration in a special civil action for certiorari. They contend that the CA's sole office in a certiorari proceeding is to correct errors of jurisdiction and that it cannot admit new evidence. The petition thus seeks to overturn the CA's affirmation of the RTC's order for the issuance of a writ of possession.
Issue(s)
Whether the Court of Appeals can admit new evidence in a special civil action for certiorari. Whether the consolidation of title by LBC Bank was valid. Whether the petition for the issuance of a writ of possession was sufficient in form and substance.
Ruling
The Court denies the petition and affirms the Amended Decision and Resolution of the Court of Appeals.
Ratio Decidendi
On the issue of admitting new evidence in certiorari: The Court held that in a special civil action for certiorari, the Court of Appeals possesses ample authority to receive new evidence and conduct any act necessary to resolve factual issues. This power is derived from Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902, which explicitly grants the Court of Appeals the power to try cases, conduct hearings, receive evidence, and perform all acts necessary to resolve factual issues within its jurisdiction. The Court cited Maralit v. Philippine National Bank and VMC Rural Electric Service Cooperative, Inc. v. Court of Appeals to support this proposition. Admitting the evidence showing LBC Bank's ratification of the consolidation of title was deemed necessary to serve the ends of substantial justice, preventing the defeat of such justice by a rigid adherence to procedural technicalities. The Court emphasized that admitting such evidence in a motion for reconsideration was not an error. On the validity of the consolidation of title: While the primary issue revolved around the admission of evidence, the CA, by admitting the new evidence, effectively found the consolidation of title to be valid. The Affidavit of Ma. Tara O. Aznar, Chief Finance Officer, attested to the bank's policy of authorizing Branch Managers to foreclose secured accounts and consolidate ownership. Furthermore, the Secretary's Certificates expressly confirmed and ratified the authority of the bank's representative, Ricardo B. Milan, Jr., to consolidate ownership over the foreclosed property. This ratification, considered by the CA, cured any potential defect in Milan's initial authority, validating the consolidation. On the sufficiency of the petition for a writ of possession: The RTC found the petition to be sufficient in form and substance, a finding that was ultimately upheld by the CA after considering the evidence presented by LBC Bank. The initial challenge by Spouses Marcelo regarding the verification by Rosario B. Aotriz was implicitly resolved in favor of LBC Bank when the CA affirmed the RTC's decision. The core of the dispute was the validity of the consolidation, which, once established through the admitted evidence, supported the RTC's grant of the writ of possession.
Main Doctrine
In a special civil action for certiorari, the Court of Appeals has the power to receive new evidence and perform any act necessary to resolve factual issues, including admitting evidence in a motion for reconsideration to serve the ends of substantial justice.