G.R. No. 214727, April 19, 2017
SECOND DIVISION [ G.R. No. 214727, April 19, 2017 ] RURAL BANK OF STA. IGNACIA, INC., V. SPOUSES NATIVIDAD ROSADO PADUA AND J. ALBERT A. PADUA, AND SPOUSES ZITA J. CRUZ AND JOHN ROSADO, JR.This resolves petitioner's petition for review on certiorari assailing the Decision[1] dated January 24, 2014 and Resolution[2] dated October 9, 2014 of the Court of Appeals (CA) in CA-G.R. CV No. 97654, which reversed the Resolution[3] dated August 15, 2011 of the Regional Trial Court (RTC) of Tarlac City, Branch 64.
In its petition, the Rural Bank of Sta. Ignacia, Inc. (Bank) maintains that any question regarding the regularity and validity of the sale and consequent cancellation of the writ, including the issue on whether there is strict compliance of the law particularly on notice and publication, can be determined in a subsequent proceeding under Section 8 of Act No. 3135.[4] The Bank also claims that the presiding judge cannot overturn, overrule, countermand nor disallow the act of the executive judge who approved the certificate of sale involving the same properties for it is the CA that has the appellate jurisdiction over the decision of the executive judge approving the certificate of sale.
The Bank is incorrect.
It is settled that the debtor is provided opportunity to contest the transfer of possession during the redemption period under Section 8 of Act No. 3135, as he remains to be the owner of the foreclosed property.[5] A petition to set aside the sale and/or cancel the writ of possession under the said law is filed in the same proceedings in which possession is requested.[6] In the recent case of Roger Cabuhat v. Development Bank of the Philippines,[7] it was held that a Section 8 proceeding is narrowly designed only to set aside the sale and/or the order granting possession under Section 7. It cannot annul the validity of the foreclosure or of the mortgage. Due to its very limited scope, it cannot entertain issues beyond the procedural irregularities in the sale. The remedy of a litigant who challenges the existence of the mortgage or the validity — not the regularity — of the foreclosure is a separate action to annul them. These grounds outside Section 8 have to be threshed out in a full-blown trial.[8]
Records reveal that the respondents have already commenced the complaint for declaration of nullity of the extrajudicial foreclosure of mortgages before the Bank consolidated its ownership and acquired a writ of possession. Respondents raised the issue of validity of the extrajudicial foreclosure of properties mortgaged with rural banks for alleged non-compliance with the requirements of Act No. 3135 and R.A. No. 720 in the posting of notices. Thus, the remedy provided under Section 8 is not applicable in this case. At the time of filing of the complaint, the Bank's petition for writ of possession under Section 7 was not yet filed. Thus, the said appeal or remedy was still unavailable as the law required it to be filed in the same proceedings in which possession was requested.Besides, when the writ of possession was issued in its favor, the Bank has already consolidated its ownership over the properties, and the redemption period has already lapsed. We clarified in 680 Home Appliances, Inc. v. Court of Appeals[9] that Act No. 3135 finds no application after the lapse of redemption period. Thus:
Act No. 3135 governs only the manner of the sale and redemption of the mortgaged real property in an extrajudicial foreclosure; proceedings beyond these, i.e., upon the lapse of the redemption period and the consolidation of the purchaser's title, are no longer within its scope, x x x.Anent the issue on the jurisdiction of the RTC, settled is the rule that jurisdiction over the subject matter is determined by the allegations in the complaint. It is not affected by the pleas or the theories set up by the defendant in an answer or a motion to dismiss. Otherwise, jurisdiction would become dependent almost entirely upon the whims of the defendant.[11] The court's jurisdiction, once attached, cannot be ousted until it finally disposes of the case. When a court has already obtained and is exercising jurisdiction over a controversy, its jurisdiction to proceed to the final determination of the case is retained. A judge is competent to act on the case while its incidents remain pending for his disposition.[12]
x x x x
The writ of possession that the debtor may petition to set aside under Section 8 of Act No. 3135 undoubtedly refers to one issued pursuant to Section 7 of the same law "during the redemption period." The reference to the Section 7 proceeding underscores the position that the remedy provided in Section 8 is available only against a writ of possession during the redemption period.
Further showing Sections 7 and 8's close relation is the bond required to be filed by the purchaser in Section 7 that the debtor may proceed against in Section 8. Section 7 states that the petition for the issuance of a writ of possession should be accompanied by a bond which, under Section 8, shall "indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of [Act No. 3135].".
xxx
If a bond is no longer required to support a writ of possession issued after the consolidation of the purchaser's ownership, then no relief can be extended to the debtor under Section 8 of Act No. 3135.[10]
Section 19 of Batas Pambansa Bilang 129 provides:
SECTION 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive original jurisdiction:In determining whether the subject matter of an action is incapable of pecuniary estimation, the Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If the action is primarily for recovery of a sum of money, the claim is considered capable of pecuniary estimation. Whether the trial court has jurisdiction would depend upon the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, or where the money claim is only incidental or a consequence of the principal relief sought, the action is incapable of pecuniary estimation.[13] Applying the foregoing, this Court finds that the complaint is well within the jurisdiction of the RTC, since it is the validity of the extrajudicial foreclosure of mortgaged properties which is assailed.
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;
Moreover, Section 1,[14] Rule 16 of the Rules provides for the period within which to file a motion to dismiss under the grounds enumerated, which is within the time for, but before the filing of, the answer to the complaint or pleading asserting a claim. Equally important is Section 1, Rule 9 of the Rules which states that defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived, except for the following grounds: 1) the court has no jurisdiction over the subject matter; 2) litis pendencia; 3) res judicata; and 4) prescription. Thus, the grounds not falling under these four exceptions may be considered as waived in the event that they are not timely invoked.[15] In the case at bar, the Bank only specified Section 8 as the remedy in its second motion to dismiss on June 21, 2011. It now alleged that if there is a petition for extrajudicial foreclosure under Act No. 3135, in relation to Section 7 thereof, then the remedy of debtors is to file a petition under Section 8. The same should not have been entertained in the subsequent motion to dismiss, and be deemed waived.
As to the nature of a petition for a writ of possession, it is well to state that it is ex parte and summary in nature. It is brought for the benefit of one party only and without notice by the court to any person adverse of interest, and is granted without giving the person against whom the relief is sought an opportunity to be heard.[16] By its very nature, an ex parte petition for issuance of a writ of possession is a non-litigious proceeding authorized under Act No. 3135 as amended, and is not, strictly speaking, a judicial process as contemplated in Article 433[17] of the Civil Code.[18] Moreover, the possessory proceeding under Section 7[19] of Act No. 3135 is not a judgment on the merits, but simply an incident in the transfer of title.[20]
From the foregoing, a decision on the nullity of extrajudicial foreclosure of mortgage does not overturn, countermand or overrule the approval of a judge of the certificate of sale. Likewise, it is not an appellate action over a decision on the issuance of writ of possession. As mentioned above, the latter is not a judgment on the merits, which would have produced the effect of res judicata. In fact, the trial court, where the application for a writ of possession is filed, does not need to look into the validity of the mortgage or the manner of its foreclosure. Furthermore, the purchaser is entitled to a writ of possession without prejudice to the outcome of the pending annulment case.[21]
Since this Court is not a trier of facts, the issue in this case should be threshed out in a full-blown trial.
WHEREFORE, premises considered, the petition is hereby DENIED. The assailed Decision and Resolution, dated January 24, 2014 and October 9, 2014, respectively, of the Court of Appeals in CA-G.R. CV No. 97654, are AFFIRMED. The Civil Case is REMANDED to the RTC, Tarlac City, Branch 64, for trial on the merits with utmost dispatch.
SO ORDERED.
[1] Penned by Associate Justice Rodil V. Zalameda, with Associate Justices Ramon M. Bato, Jr. and Agnes Reyes-Carpio, concurring; rollo pp. 32-40.
[2] Id. at 41-42.
[3] Penned by Acting Presiding Judge Jose S. Vallo; id. at 226-229.
[4] Id. at 22. I
[5] 680 Home Appliances, Inc. v. Court of Appeals, et al, G.R. No. 206599, September 29, 2014, 737 SCRA 127, 141.
[6] Roger Cabuhat v. Development Bank of the Philippines.G.K. No. 203924, June 29, 2016.
[7] Id. (Emphasis in the original).
[8] Id.
[9] Supra note 7.
[10]Id. at 139-142.
[11] Eristingcol v. Court of Appeals, 601 Phil. 136, 152 (2009), as cited in Medical Plaza Makati Condominium Corp. v. Cullen, 720 Phil. 732, 741 (2013).
[12]Tung Ho Steel Enterprises Corp. v. Ting Guan Trading Corp., 731 Phil. 446, 456 (2014).
[13]Far East Bank and Trust Company v. Shemberg Marketing Corporation, 540 Phil. 7, 21 (2006), citing Singson v. Isabela Sawmill, 177 Phil. 575, 588 (1979).
[14] SECTION 1. Grounds. — Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:
(a) That the court has no jurisdiction over the person of the defending party;[15]Pacaña-Contreras v. Rovila Water Supply, Inc., 722 Phil. 460, 474 (2013).
(b) That the court has no jurisdiction over the subject matter of the claim;
(c) That venue is improperly laid;
(d) That the plaintiff has no legal capacity to sue;
(e) That there is another action pending between the same parties for the same cause;
(f) That the cause of action is barred by a prior judgment or by the statute of limitations;
(g) That the pleading asserting the claim states no cause of action;
(h) That the claim or demand set forth in the plaintiffs pleading has been paid, waived, abandoned, or otherwise extinguished; (i) That the claim on which the action is founded is unenforceable under the provisions of the statute of frauds;
(j) That a condition precedent for filing the claim has not been complied with.
[16]Santiago v. Merchants Rural Bank of Talavera, Inc., 493 Phil. 862, 869 (2005),
[17] Art. 433. Actual possession under claim of ownership raises a disputable presumption of ownership. The true owner must resort to judicial process for the recovery of the property.
[18] Spouses Oliveros v. Presiding Judge, RTC, Br. 24, Biñan, Laguna, 558 Phil. 715, 726 (2007).
[19] SEC. 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.
[20] Roger Cabuhat v. Development Bank of the Philippines, supra note 6, citing Ong v. Court of Appeals,3SS Phil. 857, 867-868 (2000).
[21] BPI Family Savings Bank v. Golden Power Diesel Sales Center, Inc., 654 Phil. 382, 394 (2011).
