Sierra Grande Realty Corp. vs. Ragasa

Factual Background and Underlying Ejectment Case

On October 25, 2012, Sierra Grande filed a complaint for unlawful detainer before the MeTC of Pasay City against Elmer, Nancy, Bernardino, Golden Apple, and Rosvibon. The case was docketed as Civil Case No. M-PSY-12-15305CV. After a failed judicial dispute resolution, it was re-raffled to another branch.

Sierra Grande alleged that it was the registered owner of a property at No. 2280 Roberts Street, Pasay City, covered by TCT No. 19801 (the Roberts property). It claimed that the property had been purchased in 1975 by one of its incorporators, the late Sochi Villanueva, to house his ailing mother; that Sochi’s brothers Richard Villanueva and Bernardino were allowed to temporarily stay; that Richard moved out in 1979; and that in 1984, Elmer and Nancy were also allowed to occupy the property after having been evicted from an apartment in Ermita, Manila.

Sierra Grande further alleged that when Sochi died in 1985, Bernardino, Elmer, and Nancy conspired to simulate contracts to sell and deeds of absolute sale over portions of the property in favor of Golden Apple and Rosvibon. It relied on a prior Supreme Court ruling in Golden Apple Realty and Devt. Corp. v. Sierra Grande Realty Corp., et al., where the Court invalidated those contracts for fraud and declared the decision final and executory. Sierra Grande averred that it sent a letter on September 28, 2012 demanding that the private respondents vacate and peacefully turn over possession, but they refused.

In their answer, Elmer, Nancy, Bernardino, Golden Apple, and Rosvibon denied Sierra Grande’s allegations. They asserted that the complaint failed to state a genuine cause of action for unlawful detainer because they allegedly never received the demand to vacate. They claimed that the property was heavily mortgaged to Manphil Investment Corporation and that they had redeemed the property for and in behalf of Sierra Grande, as indicated by an annotation on TCT No. 19801 under Entry No. 06-48179. They therefore claimed a right to the property.

MeTC Decision and RTC Review

In its Decision dated September 10, 2013, the MeTC ruled in favor of Sierra Grande. It found Sierra Grande to be the lawful owner and held that the private respondents occupied the property by mere tolerance. The MeTC ordered the private respondents and all persons claiming under them to immediately vacate and surrender possession, pay attorney’s fees of Php20,000.00, and pay costs of suit.

On appeal, public respondent Judge Ragasa of the RTC issued a Decision dated April 30, 2014 affirming the MeTC in toto. A further motion for reconsideration was denied in an Order dated August 15, 2014 for lack of merit.

Motions for Execution Pending Appeal and Their Denial

Before the appellate review, Sierra Grande filed a motion for execution pending appeal on September 10, 2014. Judge Ragasa denied the motion in an Order dated October 29, 2014. The denial was anchored on the premise that execution pending appeal is an exception requiring “good reasons”, meaning compelling circumstances that justify immediate execution so that the judgment does not become illusory. Judge Ragasa expressed that it would be prudent to wait for the final resolution of the petition for review pending with the Court of Appeals (CA).

Sierra Grande moved for reconsideration, but Judge Ragasa denied it in an Order dated April 8, 2015, reiterating the view that the case should be awaited until final resolution by the CA. These orders were the subject of the certiorari petition.

Proceedings in the Certiorari Case: Jurisdiction Over Parties and Supervening Circumstance

The Supreme Court treated the petition as meritorious. It first clarified that a certiorari proceeding is an original and independent action, not part of the trial that produced the challenged judgment or order. Consequently, jurisdiction over the person of the parties was required before resolving the petition on the merits.

The Court recognized that it acquired jurisdiction over Sierra Grande upon filing of the petition. It then relied on Section 4, Rule 46, in relation to Section 2, Rule 56, of the Rules of Court, which requires acquisition of jurisdiction over the respondent by service of the resolution indicating the court’s initial action, or by the respondent’s voluntary submission.

The Court noted that it served its Resolution dated August 3, 2015 requiring the respondents to file comments within ten days. Elmer and Golden Apple filed their comments. Rosvibon likewise filed its comment. Bernardino did not file a comment despite notice. Nancy could not be served because her whereabouts were unknown.

The Court further noted a supervening circumstance: when Sierra Grande filed the motion for execution pending appeal on September 10, 2014, the private respondents had not yet interposed an appeal before the CA. As reflected in the CA Decision dated September 30, 2015, only Elmer, Golden Apple, and Rosvibon filed petitions for review challenging the RTC decision. Bernardino and Nancy apparently did not appeal, so the RTC decision became final and executory as to them. Given this, the Supreme Court held that resolving the propriety of denying execution pending appeal no longer concerned Nancy in light of her lack of appeal; thus, the Court could dispose of the petition on the merits even without acquiring jurisdiction over Nancy.

Capacity to Sue and Authority of the Signatory

Elmer and Golden Apple raised objections to Sierra Grande’s standing to sue, alleging that its certificate of registration had been revoked. The Supreme Court rejected this contention by examining the SEC history: Sierra Grande’s certificate of registration was initially revoked on May 27, 2003 for non-filing of required reports, but the revocation was lifted on December 20, 2012; it was later revoked again on June 21, 2013 for failure to comply with SEC directives within the given period.

The Court invoked Section 122 of the Corporation Code, which provides that a corporation continues as a body corporate for three years after dissolution or termination for the purpose, among others, of prosecuting and defending suits. It held that Sierra Grande had until June 21, 2016 to prosecute suits after the second revocation. Since the certiorari petition was filed on June 29, 2015, it was within the statutory period.

On the authority of Frank Villanueva (Frank) to sign the verification and certification against forum shopping and to sue for Sierra Grande, Elmer and Golden Apple argued that Frank lacked a board resolution authorizing him. The Supreme Court sustained Frank’s authority by applying jurisprudence recognizing that, in corporate practice, certain officials may sign without a board resolution, including positions such as President, General Manager, or Acting General Manager in the contexts recognized by Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue. The Court found that Frank, as General Manager of Sierra Grande, qualified to sign the verification and forum shopping certification for the petition.

The Court also addressed whether Frank had authority to file the petition absent a board resolution attached to the petition. It relied on Societe des Produits Nestle, S.A. v. Puregold Price Club, Inc., to the extent that lack of board resolution and/or secretary’s certificate is not fatal when corporate authority is shown through other instruments, particularly a Special Power of Attorney (SPA) appointing Frank as attorney-in-fact with authority to file the petition. The Court distinguished the Nestle situation by noting that, in the present case, the SPA was executed and signed by the majority of the directors, constituting an act of the board contemplated by law.

Direct Resort to the Supreme Court: Hierarchy of Courts and Exceptions

Elmer and Golden Apple further contended that the petition should have been filed with the CA rather than directly with the Supreme Court. The Court acknowledged the principle that although jurisdiction among the Supreme Court, CA, and RTCs for certiorari may be concurrent in proper cases, the hierarchy of courts generally requires that petitions for extraordinary writs against RTCs be filed with the CA first. Direct resort to the Supreme Court is improper absent recognized exceptions.

The Court reiterated the jurisprudential exceptions to the hierarchy rule, including, among others, cases involving time element or exigency, transcendental importance, first impression, or where the petition includes issues better decided by the Supreme Court, or where no plain, speedy, and adequate remedy exists. The Supreme Court held that the present case fell under the exception relating to the time element. It stressed that the controversy originated from an ejectment case, which is inherently a summary proceeding intended to restore social order expeditiously. It also observed that the issue raised—whether there should be execution pending appeal in an unlawful detainer case—posed a pure question of law, thereby supporting direct resort.

Nature of the Challenged Orders and the Proper Remedy

The Supreme Court clarified that the assailed Orders denying execution pending appeal were interlocutory and therefore not appealable. Still, certiorari lies to assail an interlocutory order issued without jurisdiction, in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, when no appeal or plain, speedy, and adequate remedy exists.

Accordingly, the Court treated the petition as a proper vehicle under Section 1, Rule 65.

Substantive Issue: Grave Abuse of Discretion in Denying Execution Pending Appeal

Sierra Grande argued that Judge Ragasa committed grave abuse of discretion when she denied execution pending appeal despite rules and jurisprudence mandating execution in ejectment cases. Elmer and Golden Apple relied on Eudela v. Court of Appeals, asserting that denial was correct