San Fernando Rural Bank v. Pampanga Omnibus Development
REITERATIONFacts
The Antecedents: Pampanga Omnibus Development Corporation (PODC) mortgaged a 61,579-square-meter lot to San Fernando Rural Bank, Inc. (Petitioner) to secure loans. Upon PODC's default, Petitioner extrajudicially foreclosed the mortgage and emerged as the winning bidder on April 23, 2001. The Certificate of Sale was registered on June 7, 2001. PODC assigned its right of redemption to Dominic G. Aquino (Aquino). A dispute arose regarding the redemption price: Petitioner demanded over P16 Million (including a separate loan of the Garbes spouses), while Aquino and the Sheriff computed the price at approximately P5.19 Million based on the General Banking Act of 2000 (RA 8791). Aquino paid the lower amount to the Sheriff, who issued a Certificate of Redemption on June 7, 2002. Petitioner, claiming the redemption was invalid and the period had expired, filed an Affidavit of Consolidation on June 10, 2002. Procedural History: The Register of Deeds, uncertain whether to issue a title to Petitioner or annotate Aquino's redemption, filed a 'consulta' with the Land Registration Authority (LRA). Meanwhile, Petitioner filed a petition for a writ of possession (LRC No. 890) in the Regional Trial Court (RTC). The RTC granted the writ on December 20, 2002, ruling that its duty was ministerial and that disputes over redemption validity should be settled in a separate case. Respondents (PODC and Aquino) filed a petition for certiorari under Rule 65 with the Court of Appeals (CA). The CA set aside the RTC orders, holding that the order was interlocutory and that Aquino had validly redeemed the property. The Petition: Petitioner filed a Petition for Review on Certiorari under Rule 45 before the Supreme Court. Petitioner argued that: (a) the RTC order granting the writ of possession was a final order, making appeal the correct remedy, not certiorari; (b) the CA erred in applying the one-year redemption period of Act No. 3135 instead of the shorter period for juridical persons under Section 47 of RA 8791; and (c) the RTC's duty to issue the writ was ministerial regardless of the pending LRA 'consulta'.
Issue(s)
Whether an order granting a writ of possession under Act No. 3135 is a final or interlocutory order. Whether a petition for certiorari under Rule 65 is the proper remedy to challenge the issuance of a writ of possession in foreclosure proceedings. Whether the ministerial duty of the RTC to issue a writ of possession is suspended by a pending 'consulta' before the LRA or a dispute over the redemption price; and the effect of Section 47 of RA 8791 on the redemption period.
Ruling
The Supreme Court GRANTED the petition and SET ASIDE the Decision of the Court of Appeals. The RTC orders were reinstated.
Ratio Decidendi
On Issue 1: The Supreme Court held that an order granting a writ of possession in an extrajudicial foreclosure under Act No. 3135 is a final order. A final order is one that disposes of the whole matter or terminates the particular proceedings, leaving nothing to be done but to enforce execution. In this case, the RTC's order resolved the Petitioner's right to possession as the purchaser at the auction sale. Because it finally disposed of the pending action in the lower court, it was not merely interlocutory. The Court emphasized that the nature of the order determines the available remedy. On Issue 2: Since the order granting the writ of possession was final, the proper remedy for the Respondents was an ordinary appeal under Rule 41 of the Rules of Court. Certiorari under Rule 65 is an extraordinary remedy available only when there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law. The Court of Appeals erred in applying the ruling in City of Manila v. Serrano, which involved expropriation proceedings where writs of possession are indeed interlocutory. In foreclosure cases, errors in the grant of the writ are errors of judgment correctible by appeal, not errors of jurisdiction correctible by certiorari. On Issue 3: The duty of the RTC to issue a writ of possession to the purchaser in a foreclosure sale is ministerial. This duty is not stayed by the fact that the Register of Deeds elevated a 'consulta' to the LRA regarding the registrability of conflicting documents. The LRA's jurisdiction is limited to the registrability of instruments and does not extend to resolving substantive issues like the validity of redemption or the correct redemption price. Such substantive disputes must be litigated in an ordinary civil action (e.g., Civil Case No. 12785). Therefore, the RTC correctly performed its ministerial duty by issuing the writ despite the pending administrative and civil disputes. Regarding the redemption period, the Court noted that Section 47 of RA 8791 provides that juridical persons whose property is sold pursuant to an extrajudicial foreclosure shall have the right to redeem only until the registration of the certificate of foreclosure sale, which shall in no case be more than three months after foreclosure. While the CA claimed Petitioner changed its theory by invoking RA 8791 only on appeal, the Supreme Court ruled that courts are not precluded from applying the correct law. However, the Court declined to make a final determination on the validity of Aquino's redemption, leaving that specific issue to be resolved in the pending Civil Case No. 12785 where evidence can be fully presented.
Main Doctrine
An order granting a petition for a writ of possession under Act No. 3135, as amended, is a final order that disposes of the whole matter or terminates the particular proceedings, leaving nothing to be done but to enforce execution. Consequently, the proper remedy to challenge such an order is an ordinary appeal under Rule 41, not a special civil action for certiorari under Rule 65. Furthermore, the duty of the trial court to issue said writ is ministerial and cannot be stayed by a pending 'consulta' before the Land Registration Authority (LRA) or disputes regarding the redemption price, which must be litigated in a separate, ordinary civil action.