G.R. No. 210164 - Arnado vs. Commission on Elections

In May 20, 1885, the board of directors of Obras Pias held two mortgages on two houses (numbered 40 and its duplicate) located in Calle Magallanes, Intramuros.
The mortgages, executed in 1879 and 1880 by Ricardo Regidor—the then owner of the houses—amounted to an indebtedness of 12,250 pesos plus interest.

Due to the default in payment, Obras Pias filed an executive action to foreclose the mortgages on May 20, 1885.
After a protracted litigation process including a public auction on August 9, 1897 (which yielded no bidders), the houses were adjudicated to the Obras Pias on December 14, 1897.
A judicial deed transferring the houses was executed on April 30, 1898 and promptly recorded.

In December 1894, the Hongkong and Shanghai Banking Corporation, via a certificate from the property register (which included a copy of deed No. 328 executed on June 2, 1883, by Regidor), applied to be substituted as the defendant in lieu of Ricardo Regidor.
On December 31, 1894, the court issued an order substituting the bank for Regidor.
Regidor initiated an appeal against this substitution order; however, his subsequent appeals were either abandoned or deemed procedurally defective, and his objections to the order lost their effect.

On April 2, 1900, Regidor interposed a complaint in the form of an incidente of nullity challenging the order of December 31, 1894, asserting that an additional deed (No. 326) had been executed together with deed No. 328. He claimed that the two deeds were intended to provide security for a credit of 20,000 pesos and that, having repaid the debt, his ownership rights were not extinguished.
As a result of these proceedings, a default judgment was rendered on May 28, 1900, which, while not expressly nullifying the substitution order, declared null all proceedings that deprived Regidor of possession of the houses.
In the meantime, while appeals were pending (admitted by the Supreme Court of Justice in a recurso de queja on March 9, 1901), Regidor was restored to possession, and Obras Pias was compelled to repay him over 5,000 pesos collected as rent during his tenure.

During the appellate hearings, Regidor objected to the appearance of Sr. Ortigas as counsel for the Hongkong and Shanghai Banking Corporation. It was determined that Sr. Ortigas was properly authorized by a duly executed power of attorney and that, under section 26 of the Code of Civil Procedure, no written power was required in the action.
Regidor further argued that a complaint he had filed alleging the falsification of the certificate issued by the registrar (dated December 19, 1894) should suspend the proceedings. This certificate, containing copies of documents from the registry books, was found to be an accurate reproduction and did not mask any criminal act.

The motion to suspend proceedings—on the grounds of the registrar’s certification allegedly constituting an admission under article 497 of the old Code of Civil Procedure—was denied.
The Supreme Court reversed the default judgment of May 28, 1900 on the grounds that the incidente of nullity was untimely, given that the property had been adjudicated, the deed had been recorded, and possession had been long established.
It was held that Regidor’s subsequent appeals and objections (including his later intervention claiming ownership through a "tercera de dominio") amounted to a tacit consent to the substitution of the bank as defendant.
Consequently, the court ordered:

The reversal of the May 28, 1900 judgment and the annulling of all proceedings stemming from the incidente of nullity.
The restoration of possession of the property to Obras Pias.
That Regidor repay all rents, or sums received, due since he was put into possession by the invalid judgment.
The affirmation of the order from September 21, 1900 and the judgment of December 2, 1896, with appropriate costs or without especial condemnation as indicated in the decision.

Finally, an application for a writ of error was denied because the value in controversy did not meet the statutory threshold, even though the mortgages' values and interest could theoretically exceed 25,000 dollars when converted.

Whether the registrar’s act of issuing a certificate (which reproduced documents already in the registry) amounted to an admission under article 497 of the old Code of Civil Procedure, thereby justifying a suspension of proceedings.
Whether the substitution of Ricardo Regidor by the Hongkong and Shanghai Banking Corporation as defendant, effected by the December 31, 1894 order, was legally valid, especially in light of Regidor’s subsequent appeals and objections.
Whether the incidente of nullity, filed on April 2, 1900 to challenge the substitution order and other proceedings, was timely and procedurally proper given that the property had already been adjudicated and in possession for an extended period.
Whether the objections raised by Regidor regarding the representation by Sr. Ortigas and the alleged lack of sufficient power of attorney for the bank were valid under the provisions of the Code of Civil Procedure.
Whether the allegations of fraud concerning the production of the registrar’s certificate (and the supposed falsification thereof) have any merit or merit in suspending or invalidating the proceedings.
Whether the application for a writ of error is procedurally proper given that the actual value in controversy does not exceed the required threshold.