Spouses Teves v. Integrated Credit
Spouses Teves v. Integrated Credit
DECISION
DEL CASTILLO , J : p
This Petition for Review 1 on Certiorari assails the March 28, 2014 Decision 2 of
the Court of Appeals (CA) dismissing the Petition for Certiorari in CA-G.R. SP. No.
05483, as well as its January 7, 2015 Resolution 3 denying herein petitioners' Motion for
Reconsideration. 4
Factual Antecedents
On September 7, 2009, the RTC issued a Decision 9 in LRC Rec. No. 9468 Case
No. 12 Lot No. 32 Blk. 3 ordering the issuance of a writ of possession over the subject
property in favor of ICCS.
On July 14, 2010, the RTC issued two Orders. The rst (First Order) 10 declared in
part, thus:
To repeat, the duty of the court to grant a writ of possession is
ministerial. Any question regarding the regularity and validity of the sale as well
as the consequent cancellation of the writ is to be determined in a subsequent
proceeding as outlined in Section 8 of Act No. 3135.
In the case of Philippine National Bank vs. Court of Appeals, the Supreme
Court said:
' A n ex-parte petition for issuance of a possessory
writ under Section 7 of Act No. 3135 is not, strictly
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speaking, a 'judicial process' as contemplated above.'
xxx xxx xxx
'It should be emphasized that an ex-parte petition
for issuance of a writ of possession is a non-litigious
proceeding authorized in an extrajudicial foreclosure
proceeding pursuant to Act 3135 as amended. Unlike a
judicial foreclosure of real estate mortgage under Rule 68
of the Rules of Court, any property brought within the
ambit of the act is foreclosed by the ling of a petition,
not with any court of justice, but with the o ce of the
sheriff of the province where sale is to be made.'
This Court having found that the procedural requirements of law anent
t h e ex-parte motion for issuance of writ of possession have been dutifully
complied [with] and the documents in support thereof in order, the writ of
possession was accordingly issued.
WHEREFORE , for lack of merit, the respondents' instant Motion for
Reconsideration of this Court's Decision (should be ORDER) dated 07
September 2009 is hereby DENIED . CTIEac
Petitioners led a Petition for Certiorari 1 8 before the CA, docketed as CA-G.R.
SP. No. 05483, claiming that the RTC committed grave abuse of discretion in ordering
them to turn over the back rentals to ICCS/Aqui in a petition for a writ of possession,
and that the RTC erred in not considering the Judgment (Based on Compromise
Agreement) in Civil Case No. 06-227 before the Makati trial court.
In the assailed March 28, 2014 Decision, the CA dismissed the Petition for
Certiorari. It held:
In the instant case, the Petition led under Rule 65 of the Rules of Court
is clearly an improper remedy. The Orders [sic] subject of the petition partakes
the nature of a judgment or nal order which is appealable under Rule 41 of the
Rules of Court, which states that:
'Section 1. Subject of appeal. — An appeal may be
taken from a judgment or nal order that completely
disposes of the case, or of a particular matter therein
when declared by these Rules to be appealable .
xxx xxx xxx.
To justify the ling of the petition, Sps. Teves alleged that the assailed
orders [were] interlocutory in nature[;] hence, reviewable by certiorari.cAaDHT
Issues
Petitioners submit —
CAN COLLECTION OF BACK RENTALS BE AWARDED IN AN EX PARTE
APPLICATION FOR WRIT OF POSSESSION UNDER ACT 3135?
ARE THE ORDERS DATED JULY 14, 2010 AND SEPTEMBER 2, 2010 FINAL
ORDERS AND NOT INTERLOCUTORY WHICH CAN BE SUBJECTED TO
CERTIORARI UNDER RULE 65? 2 0
Petitioners' Arguments
Petitioners, praying that this Court set aside the July 14 and September 2, 2010
Orders of the RTC, argue that a petition for the issuance of a writ of possession is not
an action as contemplated by the Rules of Court (Rules), but a mere motion whose sole
issue to be resolved is whether the movant is entitled to the possession of real or
personal property sought to be possessed; that such a petition is "not an ordinary suit
led in court, by which one party sues another for the enforcement of a wrong or
protection of a right, or the prevention or redress of a wrong"; 2 1 and that to collect
back rentals, Aqui should le an independent action — and not simply seek the same in
her petition for issuance of a writ of possession, since (a) the RTC, sitting as a land
registration court, does not have jurisdiction to award back rentals or grant relief which
should otherwise be sought in an ordinary civil action; and (b) Act No. 3135, 2 2 as
amended by Act No. 4118, 2 3 contains no provision authorizing the award of back
rentals to the purchaser at auction.
Respondent's Arguments
Our Ruling
Thus, if petitioners leased out the property to third parties after their period for
redemption expired, as was in fact the case here, 2 6 the rentals collected properly
belonged to ICCS or Aqui, as the case may be. Petitioners had no right to collect them.
Aqui acquired the subject property from ICCS only in 2010. Thus, Aqui cannot claim the
subject rental collections from 2007, because she was not yet the owner of the subject
property at the time; they belonged to ICCS. She is entitled to rentals collected only
from the time she became the owner of the property. However, as the substituted party
in these proceedings, this Court will allow her to collect the award of rentals collected
by petitioners but which pertain to ICCS — with the obligation to remit the same to the
latter. After all, she is merely ICCS's successor-in-interest. Procedurally, the RTC should
not have allowed Aqui to substitute for ICCS, but should have simply ordered her to be
impleaded as additional necessary party in the proceedings, since ICCS still had a claim
for unremitted rentals that was pending resolution in the case. On the other hand, it
cannot simply be ignored that petitioners unlawfully collected rentals from the property
that did not belong to there, but to ICCS without doubt; between this substantive issue
and the court and parties' procedural faux pas, the latter should be overlooked so that
the former may be corrected. The parties' substantive rights weigh more than
procedural technicalities. "In rendering justice, courts have always been, as they ought
to be, conscientiously guided by the norm that on the balance, technicalities take a
backseat against substantive rights, and not the other way around." 2 7
In China Banking Corporation v. Spouses Lozada, 2 8 this Court held that —
I n IFC Service Leasing and Acceptance Corporation v. Nera , the Court
reasoned that if under Section 7 of Act No. 3135, as amended, the RTC has the
power during the period of redemption to issue a writ of possession on the ex
parte application of the purchaser, there is no reason why it should not also
have the same power after the expiration of the redemption period, especially
where a new title has already been issued in the name of the purchaser. Hence,
the procedure under Section 7 of Act No. 3135, as amended, may be availed of
by a purchaser seeking possession of the foreclosed property he bought at the
public auction sale after the redemption period has expired without redemption
having been made. ScHADI
Given the above-cited rule and the pronouncement in China Banking Corporation
v. Spouses Lozada , 3 0 it can be understood why the RTC issued the two separate
Orders of July 14, 2010 — one on the issue covering the propriety of issuing the writ of
possession sought, and another resolving the prayer for the surrender of rentals
unlawfully collected by petitioners, who ceased to be the owners of the subject
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property and thus had no right to collect rent from the lessee of the property. The First
Order was issued relative to the main remedy sought by ICCS — that is, for the court to
issue a writ of possession. The Second Order was issued pursuant to the court's
authority under Section 6 of Rule 135 of the Rules, to the end that a patent inequity may
be immediately remedied and justice served in accordance with the objective of the
Rules to secure a just, speedy and inexpensive disposition of every action and
proceeding. In the eyes of the law, petitioners clearly had no right to collect rent from
the lessee of the subject property; they were no longer the owners thereof, yet they
continued to collect and appropriate for themselves the rentals on the property to
which ICCS was entitled. This is a clear case of unjust enrichment that the courts may
not simply ignore.
Indeed, to deprive a court of power to give substantial justice is to render
the administration thereof impotent and ineffectual. The prevailing precept is
currently embodied in Section 6, Rule 135 of the Rules of Court, which
categorically provides:
Sec. 6. Means to carry jurisdiction into effect. — When
by law, jurisdiction is conferred on a court or judicial o cer, all
auxiliary writs, processes and other means necessary to carry it
into effect may be employed by such court or o cer; and if the
procedure to be followed in the exercise of such jurisdiction is not
speci cally pointed out by law or by these rules, any suitable
process or mode of proceeding may be adopted which appears
conformable to the spirit of said law or rules. 3 1
In a manner of speaking, courts have not only the power to maintain their
life, but they have also the power to make that existence effective for the
purpose for which the judiciary was created. They can, by appropriate means,
do all things necessary to preserve and maintain every quality needful to make
the judiciary an effective institution of Government. Courts have therefore
inherent power to preserve their integrity, maintain their dignity and to insure
effectiveness in the administration of justice. 3 2 EHaASD
Besides, the matter of remitting collected rentals to ICCS and Aqui does not
involve the litigation and resolution of a complex legal issue. It proceeds from the
simple fact that after the redemption period expired without petitioners redeeming the
subject property, ICCS became the absolute owner thereof, and petitioners lost all their
rights thereto, including the right to lease out the same and collect rentals on said
lease. And when Aqui acquired the property and became the owner thereof, she as well
became entitled to the said rentals that petitioners unduly collected. Petitioners simply
hold the amounts collected in trust — with the obligation to return the same to their
rightful owners. These amounts and the periods during which they were collected also
appear on record — as shown by the lease agreement presented and the respective
admissions of the parties — and are thus liquidated and determinable, without need of
further litigation or proof.
Contrary to petitioners' stance, the compromise agreement they executed
together with Standard before the Makati trial court in Civil Case No. 06-227 did not
cover the subject rentals collected from leasing the subject property; it referred only to
a waiver of de ciency claims rooted in the original loan transaction between them. 3 3
As owner of the subject property, ICCS is entitled to the fruits thereof — the rentals —
which were wrongly collected by petitioners after losing their ownership; this has
nothing to do with the previous loan transaction between petitioners and Standard, to
which ICCS was a complete stranger.
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Finally, the Court deems it unnecessary to resolve the other issues raised by the
parties. They are irrelevant in the context of the foregoing disquisition; their resolution
contributes nothing to the validity and integrity of the Court's opinion.
WHEREFORE , the Petition is DENIED .
SO ORDERED .
Leonardo-de Castro, ** Jardeleza and Tijam, JJ., concur.
Sereno, * C.J., is on leave.
Footnotes
* On Leave.
** Designated as Acting Chairperson pursuant to Special Order No. 2540 dated February 28,
2018.
1. Rollo, pp. 11-25.
4. Id. at 123-128.
5. Id. at 63-68.
6. Id. at 52.
7. Id. at 52-53; "Manifestation and Ex-Parte Motion" for substitution of parties.
13. Id.
14. Id. at 56-59.
15. Id. at 45-47; penned by Presiding Judge Sylvia G. Aguirre-Paderanga.
16. Id.
17. Id. at 55; penned by Presiding Judge Caesar O. Untalan.
23. AN ACT TO AMEND ACT NUMBERED THIRTY-ONE HUNDRED AND THIRTY-FIVE ENTITLED
"AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS INSERTED
IN OR ANNEXED TO REAL ESTATE MORTGAGES" Approved December 7, 1933.
24. Rollo, pp. 146-159.
25. Section 32. Rents, earnings and income of property pending redemption. — The purchaser
or a redemptioner shall not be entitled to receive the rents, earnings and income of the
property sold on execution, or the value of the use and occupation thereof when such
property is in the possession of a tenant. All rents, earnings and income derived from the
property pending redemption shall belong to the judgment obligor until the expiration of
his period of redemption.
26. Rollo. pp. 69-73.
27. 7107 Islands Publishing, Inc. v. The House Printers Corporation, 771 Phil. 161, 168 (2015).
28. 579 Phil. 454, 472-473 (2008).
29. Durisol Philippines, Inc. v. Court of Appeals, 427 Phil. 604, 615 (2002).
30. Supra note 28.
31. Go Lea Chu v. Gonzales, 130 Phil. 767, 777 (1968).
32. The Province of Bataan v. Hon. Villafuerte, Jr., 419 Phil. 907, 916 (2001), citing People v.
Hon. Gutierrez, 146 Phil. 761 (1970).
33. Rollo, p. 55. The Makati trial court's July 23, 2010 Judgment (Based on Compromise
Agreement) declares, among others:
3. That the Second party shall absolutely waive its claim for deficiency against First
parties relative to the contracts of loan executed on November 21 & 28, 1996,
respectively.