Source: http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/45204
Timestamp: 2019-04-20 16:52:53+00:00

Document:
METROPOLITAN BANK AND TRUST COMPANY, PETITIONER, VS. SPS. ELMOR V. BANCE AND ROSARIO J. BANCE, RESPONDENTS.
Challenged in this petition for review are the Decision  and Resolution  dated October 29, 2004 and March 3, 2005, respectively, of the Court of Appeals in CA-G.R. SP No. 78162, which had annulled the Order  dated September 11, 2000 of the Regional Trial Court (RTC) of Manila, Branch 4, in LRC Cad. Record No. 278.
Respondents Elmor and Rosario Bance obtained several loans in the amount of P24,150,954.84 from petitioner Metropolitan Bank and Trust Company, Tutuban Branch. As security for the loans, respondents mortgaged their properties in Binondo and Tondo, Manila, covered by Condominium Certificate of Title No. 20040 and Transfer Certificates of Title Nos. 179657 and 179711. Respondents failed to pay their obligations, prompting petitioner to institute extrajudicial foreclosure proceedings over the mortgage.
During the public auction held on October 2, 1998, petitioner emerged as the highest and winning bidder. It was issued a Certificate of Sale  which was registered in the Registry of Deeds of Manila on May 3, 1999.  On April 5, 2000, petitioner demanded from respondents the surrender and possession of the properties,  but the latter failed and refused to do so.
In the meantime, respondents, on May 2, 2000, instituted Civil Case No. 00-97252 in the RTC of Manila, Branch 32, and sought the declaration of nullity of promissory notes, real estate mortgages, agreements, continuing surety agreement, extrajudicial foreclosure proceedings, notices, publications, certificates of sales and the corresponding entries on titles to the subject properties with prayer for temporary restraining order (TRO) and issuance of writs of preliminary injunction and damages.  RTC Branch 32 immediately issued a TRO  dated May 15, 2000 enjoining petitioner from consolidating the titles of the subject properties; from committing acts giving effect to the subject certificates of sales and all documents thereto; and from committing acts of dispossession of the subject properties against respondents.
Meanwhile, RTC Branch 32, on October 20, 2000, issued a preliminary prohibitory and mandatory injunctive order  against petitioner. But for failure of respondents to post a bond, RTC Branch 32 recalled and set aside the order,  and accordingly dismissed the case.  Upon reconsideration, however, RTC Branch 32 ordered the issuance of the writ.  Petitioner sought reconsideration, but it was denied.
WHEREFORE, the petition is hereby GRANTED. The Order of respondent court dated September 11, 2000 is hereby ANNULLED.
…THE COURT OF APPEALS ERRED IN GIVING DUE COURSE TO RESPONDENTS SPOUSES BANCE’S PETITION FOR ANNULMENT OF THE SEPTEMBER 11, 2000 ORDER OF THE REGIONAL TRIAL COURT OF MANILA BRANCH IV (04) INSTITUTED UNDER RULE 47 OF THE 1997 REVISED RULES OF CIVIL PROCEDURE CONSIDERING THAT A WRIT OF POSSESSION CASE FILED UNDER ACT NO. 3135, AS AMENDED, IS NOT AN ORDINARY ACTION.
…THE COURT OF APPEALS ERRED IN ANNULLING THE SEPTEMBER 11, 2000 ORDER OF THE REGIONAL TRIAL COURT OF MANILA BRANCH IV (04) GRANTING THE WRIT OF POSSESSION TO PETITIONER METROBANK ON THE GROUND THAT PETITIONER METROBANK COMMITTED EXTRINSIC OR COLLATERAL FRAUD UNDER SECTION 2, RULE 47 OF THE 1997 REVISED RULES OF CIVIL PROCEDURE.
Simply, the issues are: (1) Did the Court of Appeals err in annulling the writ of possession issued by RTC Branch 4? (2) Is petitioner guilty of forum shopping?
Anent the first issue, petitioner contends that the Court of Appeals erred in annulling the writ of possession on the ground of extrinsic fraud. It avers that a petition for the issuance of the writ is ex parte in nature; hence, respondents need not be notified of the proceedings therein. It further argues that since there is already a pending civil case for declaration of nullity of mortgage, etc., the Court of Appeals should not have ruled on the validity of the loan documents and foreclosure proceedings. It adds that respondents, in instituting the annulment of judgment case, failed to pursue the proper remedy provided under Section 8  of Act No. 3135,  as amended.
Respondents counter that petitioner employed extrinsic fraud when it secured the writ because it deliberately withheld from them the foreclosure of the mortgage and institution of the petition for the issuance of the writ. They add that a petition for the issuance of the writ is an ordinary action, hence, they must be notified of the true nature of petitioner’s claims against them. They also contend that the writ was irregularly issued because petitioner was not required to post the bond mandated in Section 7  of Act No. 3135, as amended.
Second, the writ of possession was not irregular despite the fact that petitioner did not post a bond. The posting of a bond as a condition for the issuance of the writ of possession becomes necessary only if it is applied for within one year from the registration of the sale with the register of deeds, i.e., during the redemption period inasmuch as ownership has not yet vested on the creditor-mortgagee. After the one-year period, and no redemption was made, the mortgagor loses all interest over it.  In this case, respondents were already stripped of their rights over the properties when they failed to redeem the same within one year from May 3, 1999, the date of registration of the sale.  Hence, when petitioner applied for the writ after the expiration of the redemption period there was even more reason to issue the writ.
Third, the Court of Appeals, in CA-G.R. SP No. 78162, need not delve on any alleged defect or irregularity in the foreclosure, inasmuch as the only issue therein was the propriety of the issuance of the writ.  Any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of the writ.  If only to stress the writ’s ministerial character, we have, in several cases,  disallowed injunctions prohibiting its issuance, just as we have held that the issuance of the writ may not be stayed by a pending action for annulment of mortgage or the foreclosure itself.
Fourth, respondents failed to pursue the proper remedy. Under Section 8 of Act No. 3135, as amended, in case it is disputed that the writ of possession was irregularly issued, the mortgagor may file with the trial court that issued the writ a petition to set aside the sale and to cancel the writ of possession within 30 days after the purchaser-mortgagee was given possession.  Based on the records, the subject properties were turned over to petitioner on March 19, 2001, sometime in 2002 and July 2003. Respondents should have assailed the writ within 30 days therefrom, but they failed to do so.
On the issue of forum shopping, respondents contend that petitioner’s filing of the petition for the issuance of a writ of possession constitutes forum shopping because there is already a pending case in RTC Branch 32 involving the subject properties. Petitioner, on the other hand, avers that it was not duty bound to disclose to respondents the pendency of the writ of possession case and a certificate of non-forum shopping is not required in a petition for the issuance of the writ under Section 7 of Act No. 3135, as amended because it is not a complaint or initiatory pleading.
WHEREFORE, the instant petition is GRANTED. The challenged Decision and Resolution dated October 29, 2004 and March 3, 2005, respectively, of the Court of Appeals in CA-G.R. SP No. 78162 are hereby REVERSED AND SET ASIDE. Costs against the respondents.
 Rollo, pp. 31-42. Penned by Associate Justice Eloy R. Bello, Jr., with Associate Justices Regalado E. Maambong and Lucenito N. Tagle concurring.
 Id. at 43-44. Penned by Associate Justice Regalado E. Maambong, with Associate Justices Elvi John S. Asuncion and Lucenito N. Tagle concurring.
 Id. at 46-47. Penned by Presiding Judge Socorro B. Inting.
 Id. at 22-23 and 28-31.
 Id. at 152-155. As to the property with Condominium Certificate of Title No. 20040, the Notice to Vacate was served on February 21, 2001 and possession was turned over to petitioner on March 19, 2001. On the other hand, the Notice to Vacate the property with TCT Nos. 179657 and 179711 was served upon the occupants on March 22, 2001. The property with TCT No. 179711 was voluntarily turned over to petitioner in 2002, but as to TCT No. 179657, possession was turned over to petitioner sometime in July 2003, after the latter has secured a “break-open” order from the said court which issued the writ.
 An Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real Estate Mortgages, approved on March 6, 1924 (as amended by Act No. 4118, approved on December 7, 1933).
 De Vera v. Agloro, G.R. No. 155673, January 14, 2005, 448 SCRA 203, 215.
 Arquiza v. Court of Appeals, G.R. No. 160479, June 8, 2005, 459 SCRA 753, 766.
 Yulienco v. Court of Appeals, G.R. No. 141365, November 27, 2002, 393 SCRA 143, 153.
 Espiridion v. Court of Appeals, G.R. No. 146933, June 8, 2006, 490 SCRA 273, 278.
 See Yulienco v. Court of Appeals, supra at 152.
 See Vda. de Zaballero v. Court of Appeals, G.R. No. 106958, February 9, 1994, 229 SCRA 810, 814.
 De Vera v. Agloro, supra.
 Chailease Finance Corporation v. Ma, G.R. No. 151941, August 15, 2003, 409 SCRA 250, 253; Yulienco v. Court of Appeals, supra at 154.
 Ong v. Court of Appeals, G.R. No. 121494, June 8, 2000, 333 SCRA 189, 196.
 SEC. 5. Certification against forum shopping. – The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.
 Ancheta v. Metropolitan Bank & Trust Company, Inc., G.R. No. 163410, September 16, 2005, 470 SCRA 157, 164.
 See Arquiza v. Court of Appeals, supra note 27, at 762-763.

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