G.R. No. 121494 - Spouses Ong vs. Court of Appeals

Case Summary (G.R. No. 121494)

Factual Background

Petitioners executed a real estate mortgage over their property to secure a promissory note issued by Kenlene Laboratories, Inc. (the debtor company) in favor of Premiere Development Bank (the mortgagee-bank), first under promissory note No. 275-Z and later No. 285-W. Upon the debtor company’s failure to pay its amortizations, the mortgagee-bank extrajudicially foreclosed the mortgage under Act No. 3135, as amended by Act No. 4118. The mortgagee-bank emerged as the highest bidder.

During the one-year redemption period, the mortgagee-bank filed with the Regional Trial Court of Pasig City, Branch 159 a petition for issuance of a writ of possession, docketed as LRC Case No. R-4874. After petitioners’ filing of a bond requirement, the trial court issued the writ of possession. Petitioners then sought reconsideration and recall of the writ, but the trial court denied those motions.

Petitioners’ Separate Case and the Prohibition Action

Petitioners filed with the Court of Appeals a petition for prohibition with an application for a writ of preliminary mandatory injunction to enjoin the implementation of the writ of possession. They alleged that a separate case for annulment of extrajudicial foreclosure of real estate mortgage with an application for preliminary injunction and temporary restraining order (TRO) was pending in the RTC, Pasig City, Branch 157, docketed as Civil Case No. 64604.

Petitioners argued that enforcing the writ of possession would render the trial court’s eventual judgment in Civil Case No. 64604 ineffectual, because the property’s possession would already have been transferred. The Court of Appeals initially granted a TRO but later dismissed the prohibition petition for lack of merit based on (a) petitioners’ failure to allege the absence of appeal or any plain, speedy, and adequate remedy in the ordinary course of law, (b) forum-shopping, and (c) the doctrine of Veloso v. IAC (205 SCRA 22 [1992]), which held that mere pendency of a civil case for annulment of sale or reformation of contract is not sufficient to deny the issuance of a writ of possession or suspend its resolution. The Court of Appeals likewise denied reconsideration.

Issues Raised in the Supreme Court

Petitioners sought review on certiorari, maintaining that the Court of Appeals should have enjoined implementation of the writ of possession pending resolution of their annulment case. They reasoned that if Civil Case No. 64604 was resolved in their favor, the RTC Branch 157 could not enforce its judgment against a co-equal court that had issued the writ of possession, thereby allegedly necessitating recourse to the Court of Appeals and then to the Supreme Court.

Petitioners relied on Allied Bank v. Court of Appeals (G.R. No. 109253, February 7, 1994), asserting that Allied involved the nullification of extrajudicial foreclosure proceedings due to prematurity of foreclosure and lack of publication, and that, therefore, Allied supported intervention to prevent implementation of possession when the foreclosure was defective. They argued that their circumstances differed but still warranted equitable relief. They further insisted that appeal under Act No. 496 was not an available remedy because it referred only to orders and decisions in “registration proceedings,” and that even if appeal were available, it would not stop the sheriff’s implementation of the writ of possession. Petitioners also argued that the writ of possession had not attained finality because the prohibition petition remained pending, and that since the foreclosure proceedings were void, issuance of the writ was in excess of jurisdiction, correctible by certiorari or prohibition.

For its part, Premiere Development Bank argued that prohibition would not lie because petitioners had two remedies: (1) an appeal from the order issuing the writ of possession under Sec. 8 of Act 3135, as amended by Act 4118, and (2) their separate action for annulment. It also contended that petitioners’ failure to avail of the first remedy rendered the possession issue final. The bank conceded, however, that its possession would remain subject to the outcome of Civil Case No. 64604. It also maintained that filing both the prohibition case and the annulment case aimed at preventing implementation of the writ constituted forum-shopping.

The Supreme Court framed the controversy into two core issues: (one) whether prohibition could be used to enjoin the implementation of a writ of possession; and (two) whether petitioners were guilty of forum-shopping.

Legal Framework on Writs of Possession Under Act No. 3135

The Court explained that a writ of possession is a writ used to enforce a right to recover land possession and commands the sheriff to enter the land and deliver possession to the person entitled. It identified three instances when a writ may be issued, including extrajudicial foreclosure of a real estate mortgage under Sec. 7 of Act No. 3135 as amended by Act 4118—which the Court deemed applicable to petitioners’ case.

Under Sec. 7 of Act No. 3135, as amended by Act No. 4118, the purchaser may petition the court for possession during the redemption period upon filing a bond equivalent to the use of the property for twelve months, to indemnify the debtor if the sale was made without violating the mortgage or without complying with statutory requirements. The Court emphasized that the court, upon approval of the bond, orders a writ of possession addressed to the sheriff, who executes the order immediately.

The Court further discussed Sec. 8 of Act No. 3135, as amended by Act No. 4118, which allows the mortgagor to petition to set aside the sale and cancel the writ within thirty days after the purchaser is given possession, specifying damages and invoking summary procedure. If the petition has merit, the court disposes in favor of the mortgagor regarding all or part of the bond. The statute also provides that either party may appeal, while the order of possession continues during the pendency of the appeal.

The Court articulated the controlling rule that the purchaser must first be placed in possession pending resolution of any proceeding assailing the writ or the foreclosure, because such possession is founded on the purchaser’s right following the foreclosure sale and is intended to prevent delay in the transfer of ownership.

The Nature of Issuing a Writ of Possession as a Ministerial Act

In addressing petitioners’ challenge to the writ, the Court held that the issuance of a writ of possession is ministerial and follows “as a matter of course” upon the filing of the proper motion and the approval of the corresponding bond. Accordingly, the judge cannot be charged with acting without jurisdiction or with grave abuse of discretion when issuing the order in accordance with the law. By the same logic, the sheriff’s implementation of the writ is also characterized as ministerial.

The Court rejected petitioners’ attempt to limit the relevance of Veloso v. IAC to situations after the redemption period had lapsed. The Court noted that Veloso did not draw the distinction petitioners urged. It reiterated that the pendency of a civil action challenging the mortgage, foreclosure, or related transactions does not bar the issuance of a writ of possession when the mortgagee has acquired title as highest bidder through a duly pursued foreclosure and has complied with statutory requisites. The Court reiterated that as a rule, questions on the validity of the mortgage or foreclosure cannot justify refusing issuance of the writ, and any eventual relief should be pursued without suspending possession that is already anchored on the purchaser’s right.

Ruling on Prohibition: No Remedy Without the Requisites

On the first issue, the Court held that prohibition requires compliance with Rule 65, Sec. 2 of the Rules of Court, which allows the remedy only when there is no appeal or no other plain, speedy, adequate remedy in the ordinary course of law. The Court found that petitioners had an appeal available under Sec. 8 of Act No. 3135, as amended by Act No. 4118, and also had a plain, speedy, and adequate remedy through their separate annulment action. The Court thus ruled that the petition for review assailing the Court of Appeals’ dismissal of prohibition failed on the threshold procedural ground.

The Court also held that prohibition was misdirected as a vehicle to enjoin the implementation of a writ of possession. Citing PNB v. Adil (118 SCRA 116 [1982]), the Court stressed that once the writ of possession had been issued, the trial court had no alternative but to enforce it without delay, and the suspension of its implementation on unpersuasive grounds was a gross error. The Court accordingly regarded the CA’s refusal to stop implementation as legally correct.

Forum-Shopping Analysis and the Prematurity of the Prohibition Petition

On the second issue, the Court explained that the essence of forum-shopping lies in filing multiple suits involving the same parties for the same cause of action, either simultaneously or successively, in order to secure a favorable judgment. It further stated that forum-shopping exists where the requisites of litis pendentia are present or where a final judgment in one case would amount to res judicata in another.

Applying these principles, the Court ruled that the ministerial nature and summary character of writ issuance prevented the conclusion that the writ order const

Case Syllabus (G.R. No. 121494)

Parties and Procedural Posture

Spouses Victor Ong and Grace Tiu Ong (petitioners) sought review on certiorari assailing the Court of Appeals decision that dismissed their special civil action for prohibition with preliminary injunction.
The Court of Appeals dismissal covered petitioners’ attempt to enjoin public respondents from implementing a writ of possession issued in favor of Premiere Development Bank (private respondent).
The Court of Appeals likewise denied petitioners’ Motion for Reconsideration.
The case reached the Court on petitioners’ petition for review on certiorari.
The public respondents included Hon. Rodolfo R. Bonifacio in his capacity as Presiding Judge, RTC, Pasig City, Branch 159, as well as the Provincial Sheriff of Rizal and Deputy Sheriff.

Key Factual Allegations

Petitioners were the mortgagors of an 857 square meter lot and residential house in San Juan, Metro Manila, evidenced by TCT No. (53788) 030-R.
The mortgage secured a promissory note issued by Kenlene Laboratories, Inc. (debtor company) in favor of Premiere Development Bank.
The promissory note was identified as No. 275-Z and later 285-W.
After failure of the debtor company to pay its amortizations, the mortgagee-bank extrajudicially foreclosed the real estate mortgage under Act 3135, as amended by Act 4118.
The mortgagee-bank was the highest bidder at the public auction.
During the one-year redemption period, the mortgagee-bank filed with the Regional Trial Court of Pasig City, Branch 159 a petition for a writ of possession, docketed as LRC Case No. R-4874.
Upon filing of a bond, the trial court issued the writ of possession.
Petitioners filed a Motion for Reconsideration and to Recall Writ of Possession, which the trial court denied.
Petitioners then filed with the Court of Appeals a petition for prohibition with an application for a writ of preliminary mandatory injunction to enjoin implementation of the writ of possession.
Petitioners alleged that a separate annulment case with application for preliminary injunction and TRO, docketed as Civil Case No. 64604 before RTC Pasig, Branch 157, was pending.
Petitioners contended that implementing the writ of possession would render nugatory the judgment that could be issued in Civil Case No. 64604.
The Court of Appeals initially granted a TRO, but later dismissed the prohibition petition for lack of merit.
Petitioners invoked Allied Bank v. Court of Appeals, contending that their situation was comparable on grounds relating to the alleged nullity of the foreclosure and prematurity.
Petitioners maintained that the writ of possession had not yet become final due to the pending prohibition petition.
Private respondent asserted that petitioners had remedies available and that forum shopping existed due to parallel efforts to prevent the writ’s implementation.
Private respondent also conceded that its possession of the property would remain subject to the outcome of Civil Case No. 64604.

Relief Sought and Issues Framed

Petitioners sought prohibition and an injunction to stop implementation of the writ of possession issued in LRC Case No. R-4874.
Petitioners anchored their request on the pendency of Civil Case No. 64604, which they claimed would annul the foreclosure and thereby negate the basis for the writ of possession.
The issues before the Court were stated as: whether prohibition lies to enjoin the issuance or implementation of a writ of possession, and whether petitioners were guilty of forum shopping.
The controversy centered on the proper interaction between the summary issuance and ministerial enforcement of a writ of possession under mortgage foreclosure law and the separate action to annul foreclosure.

Statutory and Doctrinal Framework

The Court characterized a writ of possession as an execution tool that commands the sheriff to place the entitled party in possession of land.
The Court identified three situations where a writ of possession may issue: (1) land registration proceedings under Sec. 17 of Act 496, (2) judicial foreclosure where the debtor remains in possession and no third person intervenes, and (3) extrajudicial foreclosure of a real estate mortgage under Sec. 7 of Act 3135 as amended by Act 4118.
The case fell under the third instance: extrajudicial foreclosure.
Under Sec. 7 of Act 3135 as amended by Act 4118, a purchaser may petition for possession either within the one-year redemption period upon filing a bond, or after the lapse of the redemption period without bond.
Sec. 7 required that the petition be made under oath and filed in the proper procedural form and forum, and it directed the court, upon approval of the bond, to order issuance of the writ of possession addressed to the sheriff.
Under Sec. 8 of Act 3135 as amended by Act 4118, the mortgagor could petition to set aside the sale and cancel the writ within thirty days after the purchaser-mortgagee was given possession, and the court was to proceed under the summary procedure.
Sec. 8 provided that any appeal from the judge’s order could be taken under Sec. 14 of Act 496, while maintaining that the order of possession continues in effect during the pendency of the appeal.
The Court emphasized the law’s mandate that the purchaser must first be placed in possession pending proceedings attacking the writ.
The Court relied on the rationale that the purchaser’s possession is grounded on a right derived from ownership conferred through the foreclosure sale and the purchaser’s standing as mortgagee-bidder.
The Court treated the issuance of the writ of possession as a ministerial function, noting that the judge issues the writ as a matter of course upon filing of the proper motion and approval of the corresponding bond.
The Court extended the ministerial character to the sheriff’s implementation of the writ of possession.
The Court held that challenges to the mortgage’s validity or the foreclosure’s compliance with procedural requirements generally could not serve as legal grounds to refuse issuance of the writ.
The Court distinguished the effect of