G.R. No. 206599, September 29, 2014.
680 HOME APPLIANCES, INC., Petitioner, vs. THE HONORABLE COURT OF APPEALS, THE HONORABLE MARYANNE CORPUS-MAÑALAC, in her capacity as the PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF MAKATI CITY, BRANCH 141, ATTY. ENGRACIO ESCASINAS, JR., in his capacity as THE EX-OFFICIO SHERIFF/CLERK OF COURT VII, OFFICE OF THE CLERK OF COURT, REGIONAL TRIAL COURT, MAKATI CITY, FIRST SOVEREIGN ASSET MANAGEMENT (SPV-AMC), INC. and ALDANCO MERLMAR, INC., Respondents.

FACTS

The case arose from the extrajudicial foreclosure of a real estate mortgage by Deutsche Bank AG London due to petitioner 680 Home Appliances, Inc.’s loan default. Respondent First Sovereign Asset Management, Inc. (FSAMI) emerged as the highest bidder at the foreclosure sale. A certificate of sale was issued on March 13, 2009, and after petitioner failed to redeem the property, FSAMI consolidated its ownership, and a new title was issued in its name in June 2009. Petitioner had earlier filed an action to annul the mortgage and foreclosure. On October 26, 2010, FSAMI filed a petition for the ex parte issuance of a writ of possession. The RTC granted the writ on July 8, 2011. Respondent Aldanco Merlmar, Inc., the current occupant and lessee of petitioner, intervened. Petitioner filed a petition to cancel the writ of possession, invoking Section 8 of Act No. 3135, alleging the nullity of the foreclosure and the adverse possession of Aldanco. The RTC denied the petition. The Court of Appeals affirmed, ruling that under Section 8 of Act No. 3135, a petition for cancellation can only be filed within 30 days after the purchaser has obtained possession. Since Aldanco remained in possession, FSAMI had not obtained possession, and thus the 30-day period had not commenced. The CA relied on Ong v. CA.

ISSUE

Whether the Court of Appeals committed grave abuse of discretion in affirming the denial of petitioner’s petition to cancel the writ of possession, based on its interpretation that the remedy under Section 8 of Act No. 3135 is premature because the purchaser (FSAMI) had not yet obtained possession of the property due to the lessee’s (Aldanco’s) occupancy.

RULING

The Supreme Court denied the petition. Procedurally, the petition for certiorari under Rule 65 was erroneous. A motion for reconsideration of the CA decision was an available and adequate remedy which petitioner did not avail. Furthermore, the proper remedy from a CA decision is an appeal by certiorari under Rule 45. Petitioner’s resort to Rule 65, filed 58 days after receiving the CA decision, indicated it was used as a substitute for a lost appeal. Substantively, even disregarding procedural defects, the petition failed. The Court clarified that the rule in Ong v. CA—that a petition to cancel a writ under Section 8 of Act No. 3135 can only be filed after the purchaser obtains possession—applies only to a unique factual situation: when the writ is issued during the redemption period. Act No. 3135 governs proceedings only up to the redemption. Once the redemption period lapses and the purchaser consolidates title, the basis for issuing the writ shifts from a statutory privilege to a right arising from confirmed ownership. In such a case, the issuance is ministerial, and the remedy under Section 8 of Act No. 3135 is no longer applicable. Here, the writ was issued after the lapse of the redemption period and after consolidation of title. Therefore, the CA’s reliance on Ong was misplaced, but its error did not constitute grave abuse of discretion correctible by certiorari, as it involved an erroneous interpretation of law, not a capricious or whimsical exercise of judgment.