Reyes v. Chung
REITERATIONFacts
The Antecedents: Petitioners Spouses Rosalino and Sylvia Reyes obtained a loan from Export and Industry Bank, Inc. (EIBI), secured by a mortgage on their property. Upon default, the property was extrajudicially foreclosed and EIBI became the highest bidder. After the redemption period expired, title was consolidated in EIBI's name, and subsequently, EIBI sold the property to LNC (SPV-AMC) Corporation. LNC then sold the property to respondents Spouses Herbert Bun Hong and Wienna Chung. When the Reyes spouses refused to vacate the property despite demands, the Chungs filed an ejectment case, which was dismissed for insufficiency of evidence. The Chungs appealed this dismissal. Procedural History: While the ejectment appeal was pending, the respondents (Chungs) filed an Ex Parte Petition for Issuance of a Writ of Possession under Act No. 3135 with the Regional Trial Court (RTC) of Quezon City, Branch 226. The RTC granted the petition, issuing a writ of possession and a notice to vacate. The petitioners (Reyes spouses) refused to comply, leading the respondents to seek an order to break open the property. The petitioners, in turn, filed a motion to quash the writ of possession, arguing lack of jurisdiction and forum shopping. The RTC denied both parties' motions, upholding the validity of the writ of possession for subsequent purchasers after a hearing, and later granted a break-open order. The Court of Appeals affirmed the RTC's decision, and the Reyes spouses filed a petition for review on certiorari with the Supreme Court. The Petition: The petitioners, Spouses Rosalino R. Reyes, Jr. and Sylvia S. Reyes, seek review on certiorari under Rule 45 of the Rules of Court, challenging the Court of Appeals' decision that affirmed the RTC's issuance of a writ of possession and a break-open order. They argue that the respondents committed forum shopping by filing the petition for a writ of possession while their ejectment appeal was pending, and that the RTC lacked jurisdiction to issue the writ as they did not purchase the property directly from the foreclosure sale. The Supreme Court is asked to determine if the respondents engaged in forum shopping and if the trial court correctly issued the writ of possession and break-open order.
Issue(s)
Whether the respondents committed forum shopping. Whether the trial court correctly issued the Writ of Possession and Break Open Order in favor of the respondents.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court found that the respondents did not commit forum shopping and that the trial court correctly issued the Writ of Possession and Break Open Order.
Ratio Decidendi
On the issue of forum shopping: The Court held that the respondents did not commit forum shopping. Forum shopping exists when a party avails of multiple judicial remedies simultaneously or successively, founded on the same transactions and raising the same issues. The test is whether the elements of litis pendentia or res judicata are present. In this case, the ejectment case and the petition for writ of possession were not founded on the same cause of action, and a judgment in one would not amount to res judicata in the other. Furthermore, the respondents withdrew their appeal in the ejectment case before the petition for writ of possession was filed, indicating they were correcting a procedural error rather than simultaneously pursuing multiple remedies. The Court emphasized that the remedies of appeal and an ex-parte petition for writ of possession are mutually exclusive, and resorting to the correct remedy after realizing an error does not constitute forum shopping. On the issue of the Writ of Possession and Break Open Order: The Court upheld the respondents' right to a writ of possession as subsequent purchasers. While a writ of possession is generally issued ex parte under Section 7 of Act No. 3135 for the original mortgagee-purchaser, the Court clarified that for a subsequent purchaser, the issuance must be "after hearing and after determining that the subject property is still in the possession of the mortgagor." The Court noted that the RTC erred in issuing the writ ex parte in favor of the respondents. However, the Court was "loath to abate the writ of possession already issued and implemented" because the petitioners were eventually given an opportunity to be heard through their Motion to Quash. The Court reasoned that annulling the writ and requiring a new petition would only prolong proceedings and unduly deny the respondents their right to possession as owners. The Court also agreed with the trial court that the "Break Open Order" was proper given that the property was padlocked and the sheriff could not otherwise execute the writ.
Main Doctrine
A subsequent purchaser of a property foreclosed extrajudicially may apply for a writ of possession, but this application, unlike that of the original mortgagee-purchaser, must be made after hearing, to determine if the property is still in the possession of the mortgagor. However, where the mortgagor was given the opportunity to be heard through a Motion to Quash, and the property was eventually relinquished, the writ of possession, even if initially issued ex parte, will not be abated to avoid prolonging proceedings and unduly denying the subsequent purchaser possession.