GR 194461; (January, 2020) (Digest)
G.R. No. 194461, January 07, 2020
ZOMER DEVELOPMENT COMPANY, INC., PETITIONER, VS. SPECIAL TWENTIETH DIVISION OF THE COURT OF APPEALS, CEBU CITY AND UNION BANK OF THE PHILIPPINES, RESPONDENTS.
FACTS
Zomer Development Company, Inc. mortgaged properties to International Exchange Bank. Upon loan default, the bank foreclosed and purchased the properties at auction. The certificates of sale provided a redemption period, referencing applicable laws, including Section 47 of the General Banking Law (R.A. No. 8791), which sets a three-month redemption period for juridical entities. Zomer Development filed a complaint before the Regional Trial Court seeking a declaration of nullity of the foreclosure sale and the unconstitutionality of Section 47, arguing it violated equal protection by providing a shorter redemption period for juridical persons compared to the one-year period for natural persons. The trial court dismissed the complaint, and Zomer Development appealed to the Court of Appeals.
The Court of Appeals dismissed the appeal without prejudice, characterizing the action as one for declaratory relief. It declined to rule on the constitutionality of Section 47, citing judicial discretion under Rule 63 of the Rules of Court and stating the novel issue was best resolved by the Supreme Court. Zomer Development then filed a Petition for Mandamus with the Supreme Court to compel the Court of Appeals to resolve the constitutional issue.
ISSUE
Whether a writ of mandamus lies to compel the Court of Appeals to rule on the constitutionality of a statute in an action it has categorized as one for declaratory relief.
RULING
No, mandamus does not lie. The Supreme Court ruled that the Court of Appeals correctly categorized the action as one for declaratory relief. Under Rule 63, Section 5 of the Rules of Court, courts have discretionary power to entertain or refuse petitions for declaratory relief. This discretion includes the authority to decline to rule on the constitutional validity of a statute, especially when the issue is novel and its resolution may have far-reaching implications. Mandamus is a remedy to compel the performance of a ministerial duty, not to control a court’s exercise of its discretionary authority. Since the Court of Appeals acted within its discretion in refusing to rule on the constitutional question, it cannot be compelled by mandamus to do so. The proper remedy for Zomer Development was to elevate the case via a petition for review on certiorari under Rule 45, not a petition for mandamus. The Supreme Court further noted that the constitutional issue had already been settled with finality in Goldenway Merchandising Corporation v. Equitable PCI Bank, which upheld Section 47 as a valid classification that does not violate equal protection.