LZK Holdings and Development Corporation v. Planters Development Bank
REITERATIONFacts
The Antecedents: LZK Holdings and Development Corporation (LZK Holdings) obtained a P40,000,000.00 loan from Planters Development Bank (Planters Bank) on December 16, 1996, secured by a Real Estate Mortgage over a 589-square-meter lot in La Union. Due to non-payment, Planters Bank extrajudicially foreclosed the mortgage, and it emerged as the highest bidder at the public auction held on September 21, 1998. Planters Bank's certificate of sale was registered on March 16, 1999. Procedural History: LZK Holdings filed a complaint for annulment of the foreclosure, mortgage, and promissory note on April 5, 1999, seeking injunctive relief. Meanwhile, Planters Bank filed an ex-parte motion for a writ of possession on December 27, 1999. Despite an injunction issued by the RTC-Makati, which was later affirmed by the CA and this Court, Planters Bank consolidated its ownership on April 24, 2000. The RTC-San Fernando initially suspended its proceedings on the writ of possession but, following a favorable ruling for Planters Bank in G.R. No. 167998, eventually issued the writ on April 8, 2008. The Court of Appeals affirmed this order in a decision dated January 27, 2009, which LZK Holdings now assails. The Petition: LZK Holdings filed a petition for review on certiorari seeking to annul the Court of Appeals' decision affirming the issuance of a writ of possession. LZK Holdings argued that its consolidated title was cancelled, it was deprived of due process as no hearing was conducted, and the bond posted was insufficient. The Supreme Court, however, denied the petition, holding that the doctrine of res judicata by conclusiveness of judgment bars relitigation of Planters Bank's right to a writ of possession, as previously determined in G.R. No. 167998. The Court also reiterated that a hearing is not required for the issuance of a writ of possession and that the sufficiency of the bond was a factual matter affirmed by the lower courts.
Issue(s)
Whether the doctrine of conclusiveness of judgment bars LZK Holdings from questioning Planters Bank's right to a writ of possession. Whether LZK Holdings was deprived of due process when the RTC issued the writ of possession without a hearing. Whether the bond posted by Planters Bank for the writ of possession was insufficient.
Ruling
The Supreme Court denied the petition, affirming the Court of Appeals' decision. The Court held that the issuance of a writ of possession in extrajudicial foreclosure is a ministerial duty of the court. The doctrine of conclusiveness of judgment, as established in G.R. No. 167998, bars LZK Holdings from relitigating Planters Bank's right to a writ of possession. The Court also reiterated that no hearing is required for the issuance of a writ of possession as the proceeding is ex parte and summary in nature. Finally, the Court found no reversible error in the CA's affirmation of the RTC's factual finding regarding the sufficiency of the bond.
Ratio Decidendi
On the issue of conclusiveness of judgment: The Court held that the principle of conclusiveness of judgment, a form of res judicata, applies in this case. The prior decision in G.R. No. 167998 had already judicially determined Planters Bank's right to a writ of possession as the purchaser in the foreclosure sale. All the elements of the doctrine were present: a final judgment on the merits by a court of competent jurisdiction between the same parties. Therefore, LZK Holdings could no longer question Planters Bank's right to the writ, as this particular issue had been conclusively settled. On the issue of due process: The Court reiterated that the proceeding for a writ of possession is ex parte and summary in nature. It is not an ordinary suit where parties are afforded the full procedural due process of a full-blown trial. The RTC did not err in cancelling the scheduled hearing and granting the motion without affording notice to LZK Holdings, as this is consistent with the nature of an ex parte petition for a writ of possession. The purpose is to enforce the purchaser's right of possession, not to adjudicate ownership disputes. On the issue of the surety bond: The Court emphasized that its task on a petition for review on certiorari is limited to reviewing errors of law, not factual matters. The allegation regarding the incorrect computation of the surety bond involves factual determination within the competence of the trial court. Since the RTC found the ₱2,000,000.00 bond to be sufficient and this finding was affirmed by the CA, the Supreme Court is bound by such factual determination. The Court is not a trier of facts and will not substitute its judgment for that of the lower courts on matters of fact.
Main Doctrine
The duty of the trial court to grant a writ of possession in extrajudicial foreclosure is ministerial, and any question regarding the validity of the sale must be determined in a subsequent proceeding. The doctrine of conclusiveness of judgment bars the relitigation of the right to a writ of possession once it has been judicially determined.