Beruflich Dokumente
Kultur Dokumente
SUPREME COURT
Manila
EN BANC
G.R. No. L-22331
June 6, 1967
xxx
xxx
xxx
xxx
the New Civil Code, the vendor has lost all his rights to
avail himself of the right to consolidate ownership of
the property subject of the Deed of Sale." To this
petition for consolidation of ownership, the petitioners
filed their opposition upon the following grounds: (a)
there is a pending suit between the same parties
involving the same cause and subject matter; (b)
consolidation will be improper considering that the
basic document upon which it is being sought is in fact
and in law only an equitable mortgage; and (c)
consolidation cannot be effected thru the instant
petition. Accordingly, the Court of First Instance of Rizal
ordered the transfer of the petition for consolidation of
ownership to Branch XXIV of the same Court where the
petition for declaratory relief and/or reformation of
instrument was pending in order that the two cases
may be considered together.
A supplemental petition was subsequently filed by the
petitioners alleging that the private respondents'
petition for consolidation of ownership was made in
order to frustrate and render nugatory whatever orders
or judgment may be issued by the trial court in the
petition for declaration relief/or reformation of
instrument.
After the trial and presentation of the parties'
respective memoranda the trial court rendered the
decision in favor of the private respondents.
The petitioners appealed to the Court of Appeals. The
appellate court affirmed in toto the decision of the trial
court. Two motions for reconsideration having been
denied, the petitioners filed the present petition based
on the following grounds:
A.
RESPONDENT COURT OF APPEALS ERRED GRAVELY, TO
THE EXTENT OF GRAVE ABUSE OF DISCRETION, AND IN
VIOLATION OF PETITIONERS' RIGHT TO DUE PROCESS
OF LAW AT APPELLATE LEVEL, WHEN IT AFFIRMED THE
APPEALED DECISION WITHOUT ANY DISCUSSION OF
THE QUESTIONS RAISED IN THE APPEAL AND BY SIMPLY
ADOPTING THE POSITION OF THE TRIAL WHICH IS
PRECISELY QUESTIONED IN THE APPEAL.
B.
RESPONDENT COURT OF APPEAL ERRED GRAVELY TO
THE EXTENT OF GRAVE ABUSE OF DISCRETION IN
ADOPTING TOTALLY AND UNCRITICALLY THE GROSSLY
ERRONEOUS REASON AND POSITION OF THE TRIAL
COURT.
C.
RESPONDENT COURT OF APPEALS ERRED GRAVELY TO
THE EXTENT OF GRAVE ABUSE OF DISCRETION, IN
UNCERMONIOUSLY, DENYING PETITIONERS' FIRST
MOTION FOR RECONSIDERATION, MOTION FOR ORAL
ARGUMENT, MOTION TO INVITE AMICUS CURIAE, AND
SECOND MOTION FOR RECONSIDERATION.
E.
RESPONDENT COURT OF APPEALS ERRED GRAVELY TO
THE EXTENT OF GRVE ABUSE OF DISCREATION, IN NOT
REVERSING THE APPEALED JUDGMENT AND GRANTING
THE PRAYERS OF PETITIONERS-APPELLANTS,
FOREMOST OF WHICH IS TO DECLARE THE DEED OF
SALE WITH RIGHT TO REPURCHASE TO BE AN
EQUITABLE MORTGAGE.
Tell issue is this case is whether or not the deed of sale
with right to repurchase should be declared as an
equitable mortgage.
We find meritorious the petitioners' contention that
under Article 1602 of the Civil Code the deed of sale
with right to repurchase should be presumed to be an
equitable mortgage due to the following reasons.
(1)
The contracts involving the subject properties
came one after another in the space of two (2) days.
The Deed of Absolute Sale between petitioner Jose R.
Bundalian as vendee and Romeo S. Geluz, in his
capacity as Administratorf of the Estate of the
deceased Agapita Sarao Vda. de Virata, as vendor, was
executed on July 1, 1975 (pp. 19-26, Annex "A"). The
purported Deed of Sale with Right to Repurchase
between petitioner, Jose R. Bundalian as vendor and
respondents Juanito Littawa and Edna Camcam as
vendees was executed on July 2, 1975 (pp. 26- 32,
Annex "A").lwphl@it This already indicates, at a very
early stage, that the two transactions must be
intimately related.
(2)
Such intimate relation between the
aforementioned Deed of Absolute Sale and Deed of
Sale with Right to Repurchase is already clear in the
statement in the latter instrument that the subject
property had just been purchased by Jose R. Bundalian
from the estate of the deceased Agapita Sarao Vda. de
Virata, 'with funds loaned to him by the herein
VENDEES' the latter being no other than respondents
Littawa and Camcam (p. 28, Annex "A"). Patently,
petitioner Jose R. Bundalian was funded by private
respondents to enable him to purchase the property
from the said estate.
(3)
Having just purchased the property from the
estate by way of Deed of Absolute Sale on July 1, 1975,
for which he had just paid P499,200.00 as purchase
price, it would have been utterly senseless for
petitioner Jose R. Bundalian to sell the same property
to private respondents the very next day, July 2, 1975,
with or without the right of repurchase. No other
conclusion is possible except that the Deed of Sale with
Right to Repurchase is precisely the security the
equitable mortgage to petitioner Jose R. Bundalian
to enable the latter to purchase the property from the
aforementioned estate.
(4)
It would have been more senseless for
petitioner Jose R. Bundalian to sell the property to
private respondents at the same price of P499,200.00
he had paid the estate of the deceased Agapita Sarao
Vda. de Virata, without profit and at a sure loss. By the
terms of the Deed of Sale with Right to Repurchase he
would have to repurchase the property at a continually
increasing price, from Pl 50.00 per square meter to
P190.00 per square meter, that is, up to P133,120.00
over and above the original price of P499,200.00, in
only four (4) months. Again, no other conclusion is
possible but that the contract is an equitable
mortgage, not a sale.
(5)
It is provided in the Deed of Sale with Right to
Repurchase that 'It is agreed that the vendor (Jose R.
Bundalian) shall have the right to possess, use, and
build on, the property during the period of redemption'
(p. 30, Annex "A"). It has been held that there is a 'loan
with security' rather than a pacto de retro sale where
by agreement the vendor was to remain in possession
of the lands (Escoto vs. Arcilla, 89 Phil. 199, 204).
Where there was an acknowledgment of the vendor's
right to retain possession of the property, as in the
case at bar, the contract was one of "loan guaranteed
by a mortgage" rather than a conditional sale (Macoy
vs. Trinidad, 95 Phil. 192, 202). Indeed, there can be no
question that petitioner Jose R. Bundalian remained
legally in possession of the subject property. Again, the
conclusion is ineluctable that the Deed of Sale with
Right to Repurchase was executed as security for the
loan extended by private respondents to petitioner Jose
R. Bundalian, i.e., as equitable mortgage.
(6)
The increase per month in the alleged
redemption price is very compatible with the Idea that
the transaction was really intended by the parties to be
a mortgage. It bears emphasis, at this juncture, that
the supposed repurchase price is in the same amount
as the original "price" of P499,200.00 should
DE CASTRO, J.:
This case was certified to this Court by the former
Court of Appeals per its Resolution of November 13,
1975 the appeal thereto made having raised purely
legal question, which is whether or not the Court of
First Instance of Samar, in Civil Case No. 5325 entitled
"Hermenegildo Rosales vs. Peregrin Yboa, et al., " erred
in declaring the legality and validity of the redemption
made by the mortgagor Pedro Oliverio of his titled
property.
It appears that by virtue of the foreclosure of real
estate mortgage duly executed by the mortgagor Pedro
Oliverio in favor of the Development Bank of the
Philippines, as security for the payment of the amount
of P12,000.00, and after giving notice of the date, time
and place of sale as required by law, defendantappellee Deputy Sheriff of Samar Peregrin Yboa, sold at
public auction on January 28, 1970 to plaintiff-appellant
Rosales, the highest bidder, for the total amount of
fourteen thousand five hundred pesos (P14,500.00),
the parcel of land covered by T.C.T. No. T-646 of the
Register of Deeds for the Province of Samar. The
corresponding Sheriff's certificate of sale was issued in
favor of plaintiff-appellant, which certificate was
registered in the Office of the Register of Deeds for the
Province of Samar on February 3, 1970.
On January 23, 1971, after the mortgagor Pedro
Oliverio had served notice in writing of the redemption
and had paid on said date to defendant-appellee
Deputy Sheriff the principal amount of P14,500.00 plus
P1,691.00 representing the one (1 %) per centum
interest per month, the latter executed a Deed of
Certificate of Redemption restoring, conveying and
assigning unto the said mortgagor, his heirs and
assigns all the estate, right, title and interest on said
foreclosed property.
On March 10, 1971, plaintiff-appellant filed the instant
complaint for cancellation of certificate of redemption
alleging that no valid redemption was effected because
while the mortgagor had paid within the period of
redemption the purchase price in the sum of
P14,500.00 plus P1,691.00 representing 1 % interest
per month, he, however, failed to tender payment of 1)
the full interest on the purchase price, while should be
P1,715.84, instead of Pl,691.00 actually paid by the
mortgagor, thereby leaving a deficiency in the sum of
P24.84; 2) the sum of P3.00 representing the
registration fee of the certificate of sale, plus interest
thereon of P0.04; 3) the delinquent real estate taxes of
the subject property for the years 1960 to 1970
amounting to P745.47; and 4) the Sheriff's commission
in the sum of P99.82.
On March 22, 1971, defendants-appellees filed an
answer alleging that while it is true that mortgagor
Pedro Oliverio has tendered to defendant- appellee
Deputy Sheriff the amount of P14,500.00 plus
Pl,691.00 for redemption purpose, the sum tendered
being the amount of the auction purchase price plus
1% interest per month thereon up to the time of
redemption and the tender being timely made and in
good faith, the same is a valid one according to Section
xxx
xxx
PARAS, J.:
A petition for review by certiorari of the decision of the
respondent Intermediate Appellate Court in AC-G.R. CV
No. 68888 promulgated on December 27, 1983, as well
as of the Resolution of said appellate court
promulgated on February 13, 1984 denying the Motion
for Reconsideration of the aforesaid decision.
The facts of this case are as follows: The respondent
spouses Jose P. Villanueva and Timotea P. Villanueva
mortgaged to the Tarlac Branch of the Philippine
National Bank three lots described in OCT No. C-542
issued by the Register of Deeds of Tarlac to secure
payment of a loan of EIGHT THOUSAND SIX HUNDRED
(P8,600.00) PESOS. When they failed to comply with
the mortgage contract, the Philippine National Bank
petitioned the Provincial Sheriff of Tarlac to foreclose
upon the properties extrajudicially. The Provincial
Sheriff in the public auction he conducted on March 7,
1977 sold the lots to Leonardo Tioseco, herein
petitioner, as the highest bidder for the amount of
EIGHTEEN THOUSAND NINE HUNDRED AND SEVENTY
FIVE (P18,975.00) PESOS.
The certificate of sale dated March 7, 1977 issued by
the Provincial Sheriff to Tioseco was registered in the
Office of the Register of Deeds of Tarlac on March 8,
1977. Tioseco's ownership over the properties was
consolidated, the title of the spouses Villanueva was
cancelled and TCT No. 141194 was issued to Tioseco
by the Register of Deeds on March 7, 1978.
It is claimed by Tioseco that sometime before March 9,
1978 respondents Villanueva visited him in his house
and offered to pay the amount he had paid for the
three lots auctioned off on March 7, 1977. Tioseco told
them that they could redeem the three lots by paying
to him the amount he paid at the auction sale plus
interest. The respondents promised to return, but
never did.
Upon the other hand, it is claimed by the respondents
that they offered to redeem the three lots within the
period of redemption but Tioseco allegedly demanded
TWENTY TWO THOUSAND SIX HUNDRED FORTY ONE
PESOS AND EIGHT CENTAVOS (P22,641.08) as
redemption price. Finding the amount demanded
excessive, the respondents Villanueva filed a suit on
March 7, 1978 to annul the sale in favor of Tioseco on
the ground that it was irregular and to require both the
Philippine National Bank and Tioseco to determine the
amount they should pay to be able to redeem the three
lots.
The Philippine National Bank stated in its answer that
at the time of the auction sale of the three lots on
March 7, 1977 the amount of EIGHTEEN THOUSAND
NINE HUNDRED SEVENTY FIVE (P18,975.00) PESOS was
due from the respondents. The amount included the
principal of the loan, accrued interest, service charges,
expenses of foreclosure, and attorney's fees. The
answer also stated that the auction sale conducted by
xxx
xxx
SECOND DIVISION
ALAMPAY J.:
Civil Case No. 7927 which is an action for Annulment of
Extrajudicial Foreclosure and Sale of Real Properties
and for Damages with Prayer for Preliminary Injunction
was filed on April 26, 1975 by the private respondent
herein against the Philippine National Bank (PNB) in the
Court of First Instance of Quezon Province. On
November 27. 1979 a decision was rendered by said
court enjoining defendant Philippine National Bank
from consolidating its title over the mortgaged
properties and directing said bank to allow the private
respondent, Divina B. Alim, to redeem the mortgaged
properties by accepting payment from the latter; and
dismissing all the claims and counterclaims that the
parties may have against each other in connection with
the case.
This decision which was appealed by the defendant
PNB was affirmed on March 25, 1982 by the First
Division of the Court of Appeals in CA-G.R. No. 67131R.
As succinctly stated in the decision of the Court of
Appeals, the following material facts are not disputed.
These appear to be as follows:
... On February 2, 1968 plaintiff Divina Alim obtained a
loan in the total amount of P40,000 from defendant
Philippine National Bank secured by three (3) parcels of
land registered in the name of herein plaintiff and
covered by the following title(a) Transfer Certificate of Title No.8384 of the Register
of Deeds of Lucena City comprising a house of strong
materials located along the National Highway, Iyam
District, Lucena City, and a lot with an area of 540
square meters, more or less;
(b) Transfer Certificate of Title Nos. T-79631 and T79632 of the Registry of Deeds for the Province of
Quezon, containing an area of 58 hectares each of a
total of 116 hectares, planted with coconut trees.
For failure of the plaintiff to pay her total obligation
upon maturity date, defendant Philippine National Bank
extrajudicially foreclosed the mortgage properties and
the Provincial Sheriff of Quezon sold the properties at
public auction on February 12, 1973. The defendant
Philippine National Bank being the only bidder in said
auction sale, all the aforementioned mortgaged
properties were sold to the bank for the amount of
P59,320.00 which was the total obligation of the
plaintiff as of the date of the sale. The said amount
already included the principal obligation, attorney's
fees and other charges, interests on said amounts plus
costs of publication of the Sheriff's notice of auction
sale. "On April 26, 1975, plaintiff instituted the present
case for the annulment of the aforesaid extrajudicial
foreclosure and sale and for damages with prayer for
preliminary injunction."
From the decision rendered by the Court of First
Instance of Quezon Province, it can be noted that
(c)
Dismissing all the claims and counterclaims
that the parties may have against each other in
connection with this case.
No costs.
SO ORDERED.
August 8, 1975
MAKALINTAL, C.J.:
This appeal was originally taken to the Court of
Appeals, which certified it here because it involves
purely legal questions. The appealed decision was
rendered by the Court of First Instance of Davao on
May 14, 1963 in its Civil Case No. 3762, and modified
by its Order of July 1, 1963. It directed the defendant,
now appellant, to pay the plaintiff Development Bank
of the Philippines, now appellee, the sum of P16,013.13
plus 6% interest per annum from July 30, 1957 1 up to
the date of payment, but deducting therefrom the sum
of P360.00 representing the value of an engine,
referred to in paragraph 11 of the stipulation of facts.
The defendant was likewise ordered to pay P500.00 as
attorney's fees, plus the costs of the suit.
From the stipulation submitted to the trial court it
appears that on September 7, 1950 the appellant
obtained approval of a loan of P14,000.00 from the
Rehabilitation Finance Corporation, 2 secured by a first
mortgage on defendant's homestead, for the following
purposes:
P1,000 for purchase of work animals and farm
implements;
P1,500 for construction of farmhouse and laborers'
quarters; and
P11,500 for development and maintenance of 18.5
hectares of abaca land.
The loan was released gradually to the appellant up to
a total of P13,000.00. Thereafter the appellee refused
to make any further releases because the plantation
which was being financed was attacked by mosaic
disease, which destroyed the abaca plants. The
appellant, on his part, failed to pay the yearly
amortizations; so in accordance with the terms of the
promissory notes he had signed and the mortgage
contract itself, the provincial sheriff of Davao, upon
request of the appellee, foreclosed the mortgage
extrajudicially under the provisions of Act 3135, as
amended, and sold the mortgaged property at public
auction on July 30, 1957. By that time the appellant's
indebtedness, including interest, had reached
P19,714.35, besides the expenses of the auction sale
and registration fees, which amounted to P101.00. The
appellee, as the highest bidder for P2,010.00, acquired
ownership of the mortgaged property. The appellant
was duly advised of the sale, with the information that
the same was subject to his right of redemption within
one year from July 30, 1957. This right he had not
exercised when the complaint was filed by the appellee
on May 29, 1962.
In his brief the appellant assigns five (5) errors, which
may be condensed into the following issues:
(1)
Whether or not the creditor Development Bank
of the Philippines has a right to recover the balance of
the indebtedness after the mortgaged property was
sold for less than the amount thereof under
extrajudicial foreclosure pursuant to Act 3135, as
amended:
(2)
Whether or not the debtor, appellant Mirang,
may be exempted from paying the loan on the ground
that it had been granted to him for the purpose of
developing his homestead by planting it to abaca, and
that said abaca was destroyed by mosaic disease; or,
failing that, whether or not his obligation may be
reduced by this Court; and
(3)
Whether or not the mortgage debtor who
wishes to repurchase his homestead should pay
therefor only the price paid by the purchaser at the
auction sale, or the total obligation incurred by him and
still outstanding.
On the first issue, the appellant contends that because
the mortgage was extrajudicially foreclosed and sold at
less than the mortgage debt under Act 3135 the
appellee is not entitled to recover the deficiency
because neither this Act, as amended, nor the
mortgage contract itself, contains any provision giving
such right to the mortgagee.
The same question has been settled by this Court in
the case of Philippine Bank of Commerce vs. Tomas de
Vera, 3 where We held:
The sole issue to be resolved in this case is whether
the trial Court acted correctly in holding appellee Bank
entitled to recover from appellant the sum of
P99,033.20 as deficiency arising after the extrajudicial
foreclosure, under Act No. 3135, as amended, of the
mortgaged properties in question. It is urged, on
appellant's part, that since Act No. 3135, as amended,
is silent as to the mortgagee's right to recover
deficiency arising after an extrajudicial foreclosure sale
of mortgage, he (Mortgagee) may not recover the
same.
A reading of the provisions of Act No. 3135, as
amended, (re extrajudicial foreclosure) discloses
nothing, it is true, as to mortgagee's right to recover
such deficiency. But neither do we find any provision
thereunder which expressly or impliedly prohibits such
recovery.
Article 2131 of the new Civil Code, on the contrary,
expressly provides that 'The form, extent and
consequences of a mortgage, both as to its
constitution, modification and extinguishment, and as
to other matters not included in this Chapter, shall be
governed by the provisions of the Mortgage Law and of
the Land Registration Law.' Under the Mortgage Law,
which is still in force, the mortgagee has the right to
claim for the deficiency resulting from the price
obtained in the sale of the real property at public
auction and the outstanding obligation at the time of
the foreclosure proceedings. (See Soriano vs. Enriquez,
24 Phil. 584; Banco de las Islas Filipinas vs. Concepcion
e Hijos, 53 Phil. 806; Banco Nacional vs. Barreto, 53
Phil. 955.) Under the Rules of Court (Section 6, Rule 70
* ), 'Upon the sale of property, under an order for a sale
to satisfy a mortgage or other incumbrance thereon, if
there be a balance due to the plaintiff after applying
the proceeds of the sale, the Court, upon motion,
should render a judgment against the defendant for
any such balance for which, by the record of the case,
he may be personally liable to the plaintiff, ....' It is true
that this refers to a judicial foreclosure, but the
underlying principle is the same, that the mortgage is
but a security and not a satisfaction of indebtedness.
Appellant invites the attention of this Court to the new
provisions of the Civil Code on pledge, particularly
Article 2115, which provides:
BARREDO, J:
Direct appeal to this Supreme Court pursuant to
Republic Act 5440 from the decision of the Court of
First Instance of Rizal, Branch XXI in its Civil Case No.
23101 entitled "Citadel Insurance & Surety Co., Inc. vs.
Philippine National Bank", the dispositive portion of
which reads:
WHEREFORE, this Court finds that plaintiff has validly
exercised the right of redemption herein-before
discussed and orders the defendant to:
(a)
Accept the amount consigned and deposited
pursuant to the Order of this Court on March 11, 1976;
(b)
Execute and specifically comply to the effects
of the exercise of the right of redemption so that
whatever title is due to the plaintiff after redemption
may properly accrue to plaintiff;
(c)
Deliver and surrender to plaintiff possession
over the property in question.
Considering that this case has been submitted for
decision based upon four (4) limited questions of law
and there being no evidence presented and submitted
to support any claim for damages, there is no
pronouncement and award of damages as well as
costs.
SO ORDERED. (Pp. 180-181, Record on Appeal.)
It goes without saying that under the Act
aforementioned by virtue of which this appeal is before
Us, the issues We are called upon to resolve are only
questions of law.
Briefly stated, the undisputed material facts of this
case, as may be culled from the decision of the trial
court and elsewhere in the record, are as follows:
On November 10, 1961, the Standard Parts
Manufacturing Corporation, hereinafter to be referred
to simply as STANDARD, executed a real estate
mortgage in favor of herein defendant-appellant
Philippine National Bank, hereinafter to be referred to
simply as PNB, over properties covered by Transfer
Certificates of Title Nos. T-5108 and T-5320, both
situated in Baguio City, as collateral for a loan
consideration of P500,000.00. On February 20, 1963,
the same debtor corporation executed an amended
real estate mortgage to include as collateral for the
increase of the above loan to P1,000,000.00 a property
located at Pasong Tamo Extension within the
Municipality of Makati (then part of Rizal Province and
now of Metro Manila) covered by Transfer Certificate of
Title No. 54474. Additionally, on February 20, 1963, the
same corporation executed in favor of PNB a chattel
mortgage of its personal properties listed on pages 96
to 108 of the Record on Appeal. On pages 6-7 of
appellant's brief it is stated that as of July 19, 1974, the
"borrowed loan" of STANDARD totalled P4,296,803.56,
and that the said obligation was secured, as
aforementioned, by the mortgages on the Baguio and
6.
On March 11, 1976, CITADEL filed the instant
action in the court below with the following prayer:
5.
The Certificate of Sale dated August 8, 1974
covering TCT No. 54474 was issued by the Sheriff of
Rizal and registered on March 14, 1976 in the Registry
of Deeds. (Page 8, PNB's brief) Notably, however,
according to the decision of the trial court, the
certificate of sale was registered on March 11, 1976.
(Page 176, Record on Appeal.)
PRAYER
(a)
Ordering defendant to accept the amount so
deposited, and/or such amount as may be found by
this Honorable Court to be the lawful redemption price
for the particular property in question;
(b)
Ordering defendant to turn over the title and
possession of the property in question to plaintiff
together with its fruits from March 11, 1976 up to the
time possession is actually surrendered to the plaintiff,
plus the interests thereon counted from the date of
filing of this complaint;
(c)
Ordering defendant to execute such documents
and papers that may be necessary for the transfer of
the title and possession of the property in question to
plaintiff;
(d)
Ordering defendant to pay plaintiff damages in
the form of attorney's fees and expenses of litigation,
the amount of which is left to the sound discretion of
this Honorable Court;
(e)
Limitation of issues
2.
What is the correct redemption amount
required under the law?
3.
Whether there was a valid and effective tender
of payment.
4.
Whether the Deed of Assignment is binding
and enforceable against
5.
xxx
xxx
ART. 2142.
Certain lawful, voluntary and unilateral
acts give rise to the juridical relation of quasi-contract
to the end that no one shall be unjustly enriched or
benefited at the expense of another.
Although the report of the Code Commission states
that:
SECOND DIVISION
[G.R. No. L-26274 : July 31, 1981.]
ALPHA INSURANCE AND SURETY CO., INC., PlaintiffAppellant, vs. ESPERANZA C. REYES, ARTURO R. REYES
and DEVELOPMENT BANK OF THE PHILIPPINES,
Defendants-Appellees.
DECISION
BARREDO, J.:
BARREDO, J.:
Petitions for review of the decision of the Court of
Appeals in CA-G. R. No. 47519-R, entitled Petra Farin, et
al., vs. Hon. Walfrido de los Angeles, etc. et al.,
granting a petition for certiorari of herein private
respondents, the spouses Benjamin and Petra Farin,
and annulling and setting aside the orders separately
issued by the Court of First Instance of Quezon City in
its Civil Case No. Q-9384 and in L. R. C. Record No.
7681, the first being an order dated December 9, 1970
denying private respondents' motion to stop the Sheriff
of Quezon City from proceeding with the extrajudicial
foreclosure sale of the properties herein involved which
said private respondents had mortgaged to herein
petitioner Marcelo Steel Corporation, after the said
court had already rendered judgment dismissing the
complaint for prohibition to enjoin said foreclosure, but
pending the appeal thereof, and the second being the
order dated February 4, 1971 granting the same
petitioner's motion for a writ of possession of the said
properties which it had acquired in the foreclosure sale
which the court had refused to restrain in the other
case.
The background facts are stated in the decision of the
Court of Appeals thus:
This is a petition for certiorari to annul the order dated
December 9, 1970, issued in Civil Case No. Q-9384 of
the Court of First Instance of Quezon City, Branch IV,
and the writ of possession issued in L.R.C. Rec. No.
7681 of said court.
It appears that on October 30, 1964, the petitioner
spouses executed a deed of real estate mortgage, in
favor of respondent Marcelo Steel Corporation,
hereinafter referred to as respondent corporation over
a parcel of land covered by T.C.T. No. 42689 of the
Register of Deeds of Quezon City, as security for the
payment of a promissory note in the sum of
P600,000.00.
On July 24, 1965, the respondent corporation filed with
the Sheriff of Quezon City a verified letter-petition for
the extra-judicial foreclosure of the afore-mentioned
real estate mortgage. Accordingly, the respondent
Sheriff of Quezon City advertised and scheduled the
extra-judicial foreclosure sale of the mortgaged
property for August 26, 1965.
On August 21, 1965, the petitioners filed against the
respondent corporation and the respondent Sheriff of
Quezon City a petition captioned "Prohibition with
Injunction and Damages" docketed as Civil Case No. Q9384 of the Court of First Instance of Rizal, wherein
they prayed that the respondent sheriff be
DE CASTRO, J:
This is a special civil action for certiorari which seeks to
annul the several injunctive orders issued by
respondent judge, and praying that, instead, the writ of
possession issued in favor of petitioner, as purchaser in
the foreclosure sale, dated April 20, 1979, be
immediately enforced.
It appears that on 'August 2, 1974, respondent
Angelina Lobaton Melliza, for herself and as judicial
administratrix of the estate of Teodoro Uy Melliza,
obtained a loan from petitioner in the amount of
P80,000.00 which was secured by a mortgage over two
parcels of land covered by TCT Nos. 8266 and T-8267,
For failure of said respondent to pay the loan on
maturity, the mortgage was foreclosed extrajudicially
on February 16, 1976 at which foreclosure sale,
petitioner purchased the properties for P97,923.73. The
properties were not redeemed within the period, hence
the title over the same were consolidated in the name
of petitioner, and consequently TCT .Nos. T-50422 and
T-50423 were issued in its name on June 26, 1978.
On April 19, 1979, petitioner filed an ex-parte petition
for issuance of a writ of possession before the Court of
First Instance of Iloilo, Branch II, which was granted by
an order dated April 20, 1979. Upon issuance of the
writ, the Deputy Sheriff served the same upon private
respondents, but the latter requested for a grace
period of seven (7) days to vacate the premises in
question to which the Sheriff agreed. On May 8, 1979,
the Sheriff returned to the premises in question and
finding that private respondents are still staying in the
premises and had not complied with the writ of
possession, immediately ordered their ejectment. At
around one o'clock in the afternoon, before the
ejectment was completed, the Sheriff received an order
dated May 8, 1979, issued motu proprio by respondent
judge, suspending the implementation of the writ of
possession for "humanitarian reasons" for a period of
fifteen (15) days. Before the expiration of the fifteen
(15) day period, private respondents filed a complaint
dated May 14, 1979 for the annulment of the
extrajudicial foreclosure, writ of possession and
consolidation of ownership on ground that the
properties were foreclosed without personal notice to
any of the private respondents. The complaint was
docketed as Civil Case No. 12894 and was assigned to
the Court of First Instance of Iloilo, Branch V. Upon
motion of private respondents "to consolidate the trial
of the two cases," the Presiding Judge of said Branch, in
an order dated May 24, 1979, transferred the case of
Branch II, presided by respondent judge.
In the proceeding for the writ of possession, private
respondents filed a motion for reconsideration of the
order granting the writ of possession, while petitioner
filed a motion to declare private respondents in
EN BANC
G.R. No. L-21011
parties."9 Directly applicable is paragraph (b) abovequoted. By that provision, the confirmation order in the
foreclosure case is, "with respect to the matter directly
adjudged or as to any other matter that could have
been raised in relation thereto, conclusive between the
parties" and their privies.
As we view this case from another standpoint, we
reach the same result. It is true that the cause of action
in the first suit is not exactly identical to the cause of
action in the second. For, the latter merely challenges
the legality of the sheriff's sale in the first proceeding.
We do say, however, that such legality of sale is an
issue which could have been, and was in fact raised
and rejected in the first case. Thus, coming into play
also is paragraph (c) above-quoted. Therefore, the
question raised by appellant in the present suit should
be "deemed to have been adjudged in a former
judgment which appears upon its face to have been so
adjudged, or which was actually and necessarily
included therein or necessary thereto."
It is thus beyond doubt that the present action is
barred by the conclusiveness of judgment in the
anterior suit. 10 This case must be dismissed.
Conformably to the foregoing, the lower court's order
of November 9, 1962 dismissing this case, and the
order of November 21, 1962 denying reconsideration
thereof, are hereby affirmed.
Costs against plaintiff-appellant. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal,
Bengzon, J.P., Sanchez, Castro, Angeles and Fernando,
JJ., concur.