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680 HOME APPLIANCES v. CA

FACTS:

The case involves a petition for certiorari filed by petitioner 680 Home Appliances, Inc. (680 Home) against the Court of Appeals (CA). The CA decision affirmed the orders of the Regional Trial Court (RTC) of Makati City in a land registration case. The case arose from the extrajudicial foreclosure proceedings initiated by creditor Deutsche Bank AG London against 680 Home due to its default on a loan secured by a real estate mortgage.

The respondent, First Sovereign Asset Management, Inc. (FSAMI), emerged as the highest bidder in the foreclosure sale and obtained ownership of the mortgaged properties. 680 Home sought to annul the mortgage and foreclosure, while respondent Aldanco Merlmar, Inc. (Aldanco), as the current occupant of the property, filed a motion to intervene.

The RTC granted FSAMI's application for a writ of possession, which prompted 680 Home to file a petition to cancel the writ. The RTC denied 680 Home's petition, and this was affirmed by the CA. The CA ruled that the 30-day period to file a petition to cancel the writ had not yet commenced because FSAMI did not obtain possession of the property.

680 Home now seeks the reversal of the CA's decision through a certiorari petition. Both Aldanco and FSAMI argue that the petition is procedurally defective. FSAMI rebuts 680 Home's claim that Aldanco's adverse possession of the property constitutes an exception to the possession requirement under Section 8 of Act No. 3135.

ISSUES:

  1. Whether or not 680 Home availed of the wrong remedy in questioning the CA decision before the Supreme Court.

  2. Whether or not the delay in filing the certiorari petition indicates that 680 Home resorted to the petition as a substitute for a lost appeal.

  3. Whether or not the CA committed a grave abuse of discretion in interpreting the law.

  4. Whether or not the remedy under Section 8 of Act No. 3135 is available to cancel a writ of possession issued after the lapse of the redemption period.

  5. Whether the debtor can contest the transfer of possession during the redemption period.

  6. Whether the debtor can petition to set aside the writ of possession issued during the redemption period.

  7. Whether a bond is required in support of a petition for writ of possession filed after the redemption period.

  8. Whether or not the remedy under Section 8 of Act No. 3135 is available to the debtor after the purchaser consolidates his ownership and acquires a writ of possession.

  9. Whether or not 680 Home Appliances, Inc. (680 Home) can assail the writ of possession by filing a petition.

  10. Whether or not the rule against forum shopping is violated by allowing 680 Home to resort to a Section 8 remedy.

RULING:

  1. Yes. 680 Home availed of the wrong remedy in questioning the CA decision before the Supreme Court. A motion for reconsideration is recognized as an adequate remedy against a decision, and the proper remedy from a decision of the CA is an appeal by certiorari under Rule 45.

  2. Yes. The delay in filing the certiorari petition indicates that 680 Home resorted to the petition as a substitute for a lost appeal.

  3. No. The alleged erroneous interpretation of the law committed by the CA does not amount to grave abuse of discretion.

  4. No. The remedy under Section 8 of Act No. 3135 is not available to cancel a writ of possession issued after the lapse of the redemption period.

  5. Yes, the debtor can contest the transfer of possession during the redemption period. The debtor may petition to set aside the writ of possession issued during the redemption period under Section 8 of Act No. 3135.

  6. No, the debtor cannot petition to set aside the writ of possession issued after the redemption period has expired without the exercise of the right of redemption. The remedy provided in Section 8 is only available against a writ of possession issued during the redemption period.

  7. No, a bond is no longer required in support of a petition for writ of possession filed after the redemption period. The bond requirement under Section 7 of Act No. 3135 is applicable only during the redemption period. After the consolidation of ownership in the name of the purchaser, a bond is no longer necessary for the issuance of a writ of possession.

  8. The remedy under Section 8 of Act No. 3135 is no longer available to the debtor after the purchaser consolidates his ownership and acquires a writ of possession. FSAMI's consolidation of ownership makes the remedy under Section 8 of Act No. 3135 unavailable for 680 Home.

  9. 680 Home cannot assail the writ of possession by filing a petition. The debtor contesting the purchaser's possession should pursue a separate action such as an action for recovery of ownership, annulment of mortgage, or annulment of foreclosure.

  10. Allowing 680 Home to resort to a Section 8 remedy would violate the rule against forum shopping. 680 Home has already commenced an action for the annulment of the foreclosure before the RTC of Makati City. Authorizing 680 Home to have the sale and the writ set aside would lead to two pending actions grounded on the same cause, contrary to the rules against forum shopping.

PRINCIPLES:

  • A petition for certiorari under Rule 65 of the Rules of Court is availed of only when there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law.

  • A motion for reconsideration is recognized as an adequate remedy against a decision, resolution, or order of a lower court, as it provides the court an opportunity to correct any error it might have committed.

  • The availability of the remedy of reconsideration generally precludes immediate recourse to a certiorari petition.

  • The remedy provided under the Rules of Court from a decision of the CA is an appeal by certiorari under Rule 45.

  • The filing of a motion for reconsideration is a prerequisite to the filing of a certiorari petition.

  • A writ of possession may be issued either within or after the redemption period in extrajudicial foreclosure cases.

  • The remedy under Section 8 of Act No. 3135 to set aside a writ of possession is applicable only when the writ is issued during the redemption period.

  • Act No. 3135 governs only the sale and redemption of mortgaged real property in extrajudicial foreclosure, and proceedings after the lapse of the redemption period are no longer within its scope.

  • During the redemption period, the purchaser's title is merely inchoate.

  • The purchaser may acquire possession of the property during the redemption period by petitioning the court for a writ of possession, accompanied by a bond.

  • The debtor has the right to contest the transfer of possession during the redemption period by petitioning to set aside the writ of possession.

  • The bond filed by the purchaser under Section 7 of Act No. 3135 may be proceeded against by the debtor under Section 8.

  • After the redemption period has expired without the exercise of the right of redemption, the purchaser becomes the absolute owner of the property and is entitled to possess it without the need for a bond.

  • The remedy under Section 8 of Act No. 3135 to the debtor becomes available only after the purchaser acquires actual possession of the property. Until then, the debtor, as the owner, does not lose his right to possess.

  • Upon the lapse of the redemption period without the debtor exercising his right of redemption and the purchaser consolidates his title, it becomes unnecessary to require the purchaser to assume actual possession before the debtor may contest it. The debtor should pursue a separate action e.g., action for recovery of ownership, for annulment of mortgage and/or annulment of foreclosure.

  • The rule against forum shopping would be violated if two pending actions grounded on the same cause, contrary to the rules against forum shopping, are allowed.