Title
Development Bank of the Philippines vs. Spouses Gatal
Case
G.R. No. 138567
Decision Date
Mar 4, 2005
DBP foreclosed a mortgaged property, consolidated title, and sought a writ of possession. Respondents challenged the sale, claiming pre-emption. SC ruled writ issuance ministerial, unaffected by pending injunction case.
sale validity
writ of possession
foreclosed property
A

Case Summary (G.R. No. 138567)

Factual Background

In 1993, the Gatals obtained a loan of P1,500,000.00 from DBP. The loan was secured by a real estate mortgage over the commercial lot located at No. 3 J.A. Clarin Street, Tagbilaran City, covered by Transfer Certificate of Title No. T-22697. When the Gatals failed to pay, DBP foreclosed the mortgage in December 1994. In January 1996, the title to the property was consolidated in DBP’s name. DBP then offered the property for public auction on October 29, 1996, but no bidder met the bid price ceiling.

On November 18, 1996, DBP offered the property for negotiated sale on the condition that the buyer pay 20% of the selling price as down payment, with the balance payable under the terms offered by the interested buyer. The Gatals submitted a bid of P2,160,000.00 and made a deposit equivalent to 10% of the bid price. Another buyer, Jimmy Torrefranca, offered P2,300,000.00, which exceeded the Gatals’ bid by P140,000.00. The Gatals, upon learning of Torrefranca’s bid, wrote DBP requesting that they be allowed to match it. DBP rejected the request because Torrefranca had already been declared the preferred bidder.

Filing of the Injunction Case (Civil Case No. 5996) and Initial Injunctive Relief

Aggrieved, the Gatals filed a complaint for injunction with prayer for a temporary restraining order and preliminary injunction before the Regional Trial Court (RTC), Branch 4, Tagbilaran City. The case was docketed as Civil Case No. 5996. The complaint sought to declare the sale of the property to Torrefranca void, uphold the Gatals’ alleged right of pre-emption, and maintain the status quo pending determination of the dispute. On February 22, 1997, the RTC granted the Gatals’ application for a preliminary injunction.

DBP’s Writ of Possession Petition (Civil Case No. 6097) and Trial Court Action

While Civil Case No. 5996 was pending, DBP filed on August 27, 1997 a petition for the issuance of a writ of possession with the RTC, Branch 47, docketed as Civil Case No. 6097. On October 31, 1997, the RTC issued a writ of possession in favor of DBP. The Gatals then filed, on November 12, 1997, with Branch 47 a motion to dismiss Civil Case No. 6097 and a motion to quash the writ of possession, arguing litis pendentia because Civil Case No. 5996 for injunction was pending before Branch 4 involving the same parties, the same property, and the same legal issues.

On December 18, 1997, Branch 47 granted the motion by dismissing Civil Case No. 6097 and recalling its earlier order granting the writ of possession on the ground of litis pendentia. DBP sought reconsideration, but Branch 47 denied it in an Order dated February 10, 1998. DBP then elevated the matter to the Court of Appeals through a petition for certiorari, docketed as CA-G.R. SP No. 47736, assailing the orders dated December 18, 1997 and February 10, 1998. On January 18, 1999, the Court of Appeals dismissed the petition and thereby upheld Branch 47’s orders. DBP’s motion for reconsideration was likewise denied on April 27, 1999, prompting the present petition to the Supreme Court.

Issues Presented for Resolution

The Supreme Court identified the fundamental issue as whether the Court of Appeals committed reversible error in holding that Branch 47 correctly dismissed Civil Case No. 6097 on the ground of litis pendentia. The determination required a scrutiny of whether the requisites for litis pendentia under Section 1(e), Rule 16 of the 1997 Rules of Civil Procedure were present when DBP sought a writ of possession in one case and the Gatals pursued an injunction in another.

The Parties’ Positions on Litis Pendentia

The Gatals’ position, as reflected in their motion to dismiss and motion to quash before Branch 47, relied on the premise that the injunction case (Civil Case No. 5996) and DBP’s writ of possession petition (Civil Case No. 6097) involved the same parties and the same property, and that the issue of the validity of the sale was effectively the same. The Gatals thus urged that the later proceeding should be dismissed due to litis pendentia.

DBP maintained the opposite view before the Supreme Court. It asserted that its petition for a writ of possession was proper after the property’s title had been consolidated in its name, and that the pendency of a separate suit questioning the sale’s validity could not bar the issuance of the writ. It further argued that the trial court’s dismissal and recall of the writ were legally erroneous.

Legal Standards Applied: Requisites for Litis Pendentia

The Supreme Court framed the governing standard by citing Section 1(e), Rule 16 of the 1997 Rules of Civil Procedure, which allows a motion to dismiss on the ground that “there is another action pending between the same parties for the same cause.” It reiterated that litis pendentia requires three requisites: first, that the parties to the actions are the same; second, that there is substantial identity in the causes of action and the reliefs sought; and third, that the result of the first action is determinative of the second, regardless of which party prevails.

Determination of Non-Identity of Causes of Action and Reliefs

The Supreme Court accepted that both cases involved the same parties and the same property. However, it stressed that Civil Case No. 5996 was an action for injunction filed by the Gatals against DBP. The Gatals there sought (a) to declare the sale of the property to Torrefranca void and (b) to uphold their asserted right of pre-emption, along with an order to maintain status quo.

By contrast, Civil Case No. 6097 was DBP’s petition for the issuance of a writ of possession as the purchaser, supported by its status as the mortgagee to whom title had been consolidated. The Court held that the rights asserted and the reliefs sought in the two actions were not identical. Accordingly, the Gatals’ invocation of litis pendentia failed for want of the required substantial identity in the causes of action and the reliefs sought.

Statutory and Procedural Authority for Writ of Possession After Consolidation

The Supreme Court then anchored DBP’s remedy on the procedural rules governing possession after foreclosure and redemption. It cited Section 33, Rule 39 of the 1997 Rules of Civil Procedure, which provides for conveyance and possession at the expiration of the redemption period, and states that on expiration of the right of redemption, the purchaser or redemptioner acquires all rights, title, interest, and claim of the judgment obligor. It also cited Section 7 of Act 3135, as amended by Act 4118, which authorizes the purchaser in any sale under the act to petition the court for possession during the redemption period upon furnishing the required bond.

Relying on Tan Soo Huat vs. Ongwico, the Supreme Court reasoned that once the mortgaged estate has been extrajudicially sold and not redeemed within the reglementary period, the purchaser does not need a separate independent action to obtain possession. Instead, the purchaser must file a petition for issuance of a writ of possession pursuant to Section 33, Rule 39. The Court emphasized that the purchaser must invoke the court’s aid by asking for the writ, and that this does not require bringing a separate suit for the purpose of obtaining possession.

The Supreme Court noted that the property’s title had been consolidated in DBP’s name. It therefore held that DBP’s petition for a writ of possession was in order. The Court concluded that Branch 47 erred when it dismissed Civil Case No. 6097 and recalled the earlier writ it had issued.

Ministerial Duty to Issue the Writ and Effect of Pending Injunction Proceedings

The Supreme Court further held that where the title is consolidated in the name of the mortgagee, the writ of possession becomes a matter of right for the mortgagee and a ministerial duty of the trial court to issue. It ruled that the pendency of a separate civil suit questioning the validity of the sale cannot bar issuance of the writ. The Court stated that the same rule applies even when the separate suit questions the validity of the mortgage, its foreclosure, or the validity of the public auction sale.

Rejection of Non-Interference Between Courts of Equal Rank

Given its conclusion that there was no litis pendentia, the Supreme Court held that the Court of Appeals also erred in applying the doctrine of non-interference between courts of equal rank. Under that doctrine, a trial court has no authority to interfere with the proceedings of a court of equal jurisdiction. The Supreme Court explained that when Branch 47 issued the writ of possession, it did not interfere with Branch 4’s injunction case. Rather, Branch 47 merely exercised its ministerial function of issuing the writ of possession.

Forum Shopping Argument Deemed Unavailing

The Gatals also contended that DBP violated the rule against forum shop

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