SERVICE INSURANCE SYSTEM,
G. R. No. 101632
January 13, 1997
COURT OF APPEALS and
E C I S I O N
PHILIPPINE VILLAGE HOTEL, INC.,
petition for review on certiorari
assails the reversal by the Court of Appeals, in a resolution of 14
1991, of its earlier 24th May 1990 decision
that dismissed for lack of merit the petition for certiorari in CA-G.R.
SP No. 20336 of respondent Philippine Village Hotel, Inc. ("PVHI"),
the order of the Regional Trial Court ["RTC"] of Pasay City which threw
out, for lack of jurisdiction, PVHI's petition to set aside the
of its properties by the Government Service Insurance System ["GSIS"].cralaw
respondent PVHI, then also known as the
"Sulo ng Nayon, Inc.," obtained, on 18 September 1972, a loan in the
of twenty-two million pesos [P22,000,000.00] from the GSIS for the
of a hotel on a land leased to PVHI by the Nayong Pilipino Foundation.
In order to guarantee payment of the loan, PVHI hypothecated the hotel
and its contents to the GSIS.
On 24 April 1974 and 11 June 1975, the GSIS granted to PVHI two
loan accommodations in the respective amounts of eight million pesos
and six million five hundred thousand pesos [P6,500,000.00] subject to
the same terms and conditions as the initial loan.cralaw
some time in June of 1980, PVHI
and GSIS entered into a lease-purchase agreement over a building
to the hotel [then under construction] for sixty-seven million eight
thousand pesos [P67,800,000.00]. Under the agreement, PVHI was to pay
installments to the GSIS until the cost of the building would have been
fully paid for. Meanwhile, PVHI secured from the GSIS debenture bonds
seven million pesos [P7,000,000.00].cralaw
Over the period
from 15 December 1972 to 30 June
1986, PVHI paid to the GSIS the sum of ninety-eight million nine
twenty-four thousand two hundred twenty-seven pesos and eighty centavos
[P98,924,227.80] but, when applied to PVHI's various liabilities in
of GSIS, the loan obligation covered by the mortgage still remained in
arrears. The demands for payment made by GSIS having been met instead
PVHI's constant requests for extension of time to pay, the GSIS finally
instituted with the Sheriff of Pasay City separate foreclosure
of real estate and chattel mortgages.cralaw
In the interim,
or on 06 June 1986, the Presidential
Commission on Good Government ["PCGG"] issued a writ of sequestration
"all assets, properties, records and documents" of the PVHI. On 23 July
1987, the Republic of the Philippines commenced in the Sandiganbayan
Case No. 0014 [PCGG Case No. 0015] an action against PVHI President
Panlilio and his wife Erlinda for reconveyance of the encumbered
plus damages. PVHI, through the Panlilios, thereupon sought to restrain
the impending foreclosure proceedings, aforesaid, by filing with the
an ex-parte motion for the issuance of a temporary restraining
["TRO"] and preliminary injunction on the ground that the PVHI hotel
by now a PCGG-sequestered property, was claimed to be beyond the reach
of PVHI's creditors.cralaw
issued, on 15 May 1988, the
TRO, prompting the GSIS to file, on 01 June 1988, a petition for
with this Court, docketed G. R. No. 83385, questioning the action of
Sandiganbayan. Later, acting on the manifestation of the PCGG that it
no objection to the foreclosure of the hotel by the GSIS, the
ultimately denied PVHI's motion to enjoin the foreclosure; accordingly,
the GSIS scheduled the foreclosure sale on 25 August 1988.cralaw
On 16 August
1988, or before the scheduled foreclosure
of the property by the GSIS, PVHI filed with the Manila RTC [Branch
docketed Civil Case No. 88-45876, a complaint against the GSIS, the
and Register of Deeds of Pasay City, for a declaration of the release
mortgage of the property, injunction and damages. Judge Sergio Mabunay
of the Manila RTC issued, on 24 August 1988, a TRO thereby constraining
the GSIS to so include him as an additional respondent in G. R. No.
for alleged abuse of discretion.cralaw
On 11 October
1989, Judge Mabunay issued a writ
of preliminary injunction against the foreclosure sale. On even date,
this Court, in G. R. No. 83385, issued a TRO "ordering the respondent
Sergio D. Mabunay, xxx to CEASE and DESIST from further proceeding with
Civil Case No. 88-45876, xxx more particularly from issuing any
against the foreclosure sale by petitioner GSIS of the Philippine
[Hotel] and its contents, xxx rescheduled for October 13, 1988."
On 12 October 1988, this Court also set aside the 11th October 1988
of Judge Mabunay. PVHI and the Panlilios sought, albeit unsuccessfully,
a reconsideration of this Court's twin orders. On 13 and 14 of October
1988, the hotel was finally sold at public auction with the GSIS
being declared the winning bidder.cralaw
In a move to
obtain possession of the hotel, on
11 May 1989, the GSIS filed with the RTC of Pasay City an ex-parte
entitled "Philippine Village Hotel, Inc. vs. Government Service
System, Sheriff of Pasay City and Register of Deeds of Pasay City," for
a writ of possession in LRC Case No. 3079. PVHI, in turn, filed a
to dismiss or suspend the proceedings before said court pending the
resolution of G. R. No. 83385 and Civil Case No. 88-45876 with the RTC
of Manila. PVHI averred that the newly filed petition by the GSIS was
since other issues had yet to be resolved, i.e., in Civil Case No.
whether or not PVHI had fully paid its mortgage obligation to the GSIS
and, in G. R. No. 83385, whether it was the RTC of Manila or the
which had the proper jurisdiction over the sequestered property.cralaw
Judge Sofronio G.
Sayo, Presiding Judge of RTC
Pasay City, directed, on 16 August 1989, the issuance of a writ of
in LRC Case No. 3079 upon the posting of a bond of two million pesos
by the GSIS. PVHI filed a motion for reconsideration and a supplemental
motion for reconsideration of the order but both motions were, on 14
1989, denied by the court. On even date of 14 September 1989, PVHI
with the same Pasay City RTC a petition to set aside the foreclosure
with an application for the issuance of a temporary restraining order
preliminary injunction, asserting that the foreclosure sale was illegal
not only because PVHI had supposedly paid in full its mortgage
to the GSIS but also because of alleged procedural infirmities that had
attended the foreclosure.cralaw
In time, PVHI and
the GSIS executed a Memorandum
of Agreement ["MOA"] providing, among other matters, that, until 01
1990 ["completion date"], GSIS should not consolidate ownership over
hotel nor enforce or implement the writ of possession issued in LRC No.
3079. The MOA, however, failed to get the approval of the President and
the Commission on Audit before 01 March 1990 [a condition under the
The GSIS thereupon requested the city sheriff of Pasay City to serve
writ of possession on PVHI. Upon receipt of the writ, PVHI filed a
to hold in abeyance its implementation. The GSIS opposed the motion.cralaw
On 05 March 1990,
PVHI and the Panlilios filed
another complaint against the GSIS, docketed Civil Case No. 90-52276,
the RTC of Manila, Branch 2, presided over by Judge Napoleon Flojo, for
the enforcement of the MOA.cralaw
In LRC Case No.
3079, Judge Sofronio G. Sayo,
dismissed, on 14 March 1990, PVHI's petition to set aside the
sale on the ground of lack of jurisdiction as the court was said to be
acting under a limited capacity as a land registration or cadastral
On 22 March 1990, PVHI filed with the Court of Appeals a petition for
docketed CA-G. R. SP No. 20336, contending that Judge Sayo gravely
his discretion in dismissing the petition to have the foreclosure sale
set aside. In its comment, the GSIS prayed for the dismissal of the
on various grounds, i.e., that PVHI engaged in forum-shopping,
the petition for certiorari could not be so used as a substitute for
which was the proper remedy available to PVHI, and that PVHI was barred
by estoppel since it itself sought relief in Civil Case No. 90-52272.cralaw
In Civil Case No.
90-52272, Judge Flojo of RTC
Manila, on 26 March 1990 following a hearing, issued a writ of
injunction, subject to the filing by PVHI of a bond for two million
[P2,000,000.00], to restrain the enforcement of the writ of possession
issued by Judge Sayo of the Pasay City RTC.cralaw
In CA-G. R. SP
No. 20336, the Court of Appeals
meanwhile rendered, on 24 May 1990, its decision upholding the GSIS and
dismissing PVHI's petition against the order of RTC of Pasay City
for lack of jurisdiction PVHI's petition to set aside the foreclosure
the GSIS. The motion for reconsideration and a supplemental motion for
reconsideration were denied in the resolution of 21 November 1990. The
appellate court (a) cited PNB vs.Adil
to say that possession of a foreclosed property by a government
was mandatory under Presidential Decree No. 385; (b) held that under
8 of Act No. 3135, an appeal was the proper remedy available to PVHI;
(c) ruled that there was no urgent need for the issuance of a writ of
since PVHI itself was able to obtain a writ of preliminary injunction
Civil Case No. 90-52272. On the issue of forum-shopping, the Court of
after noting that there were altogether eight (8) cases then pending
the parties of which two (2) were instituted by the GSIS (G. R. No.
and LRC Case No. 3079), said:
Let it be
observed that common to all of these
cases involving the petitioner PVHI and respondent GSIS is the attempt
of the GSIS to foreclose the mortgage executed over the Philippine
Hotel by petitioner and GSIS's subsequent attempt to take possession
and on the part of PVHI, its repeated attempts to stop the foreclosure
and take over of the possession thereof. Furthermore, although the
prayed for in all these cases filed by PVHI's counsel are ostensibly
the essence of all of them is the same the ultimate objective of
preventing GSIS from foreclosing the mortgage and thereafter from
possession of theHotel.
Barely five days
after the promulgation of the
appellate court's resolution, or on 26 November 1990, this Court, en
banc, rendered its decision
in G. R. No. 83385. The decretal portion read:
"WHEREFORE, the Court renders judgment as
"1. The proceedings in Civil Case No.
[RTC, Manila, Sergio Mabunay, Presiding Judge] are moot and academic,
having been implemented and now a fait accompli;
"2. Neither PVHI, Rebecco Panlilio,
counsel are guilty of forum-shopping in connection with the said Civil
Case No. 88-45876, or CA-G. R. SP No. 20336 [Court of Appeals];
"3. The Temporary Restraining Order
the Resolution dated October 11, 1989, enjoining Judge Sergio Mabunay
further proceedings in Civil Case No. 88-45876 is made permanent; and
"4. The prayer for contempt is DENIED.
A motion for
clarification/modification of the decision
by GSIS was, in its 26th February 1991 resolution, treated by this
as one for reconsideration and so then denied with finality. Entry of
was made on 26 December 1990. On 11 February 1991, the records of the
were remanded to the Sandiganbayan. A motion to quash/set aside the
of judgment filed by the GSIS was denied on 18 April 1991.
With this Court's
decision in G. R. No. 83385,
PVHI, on 13 December 1990, filed in CA-G. R. SP No. 20336 a
and motion to rectify the appellate court's resolution of 21 November
asseverating that the decision in G. R. No. 83385 "completely overhauls
and virtually reverses this Court's (the Court of Appeals) subject
as regards the propriety of PVHI's filing of its Petition to Set Aside
Foreclosure Sale dated 13 September 1989 in LRC Case No. 3079 with the
court a quo, as well as the issue of forum-shopping."
Filing a counter-manifestation and opposition, the GSIS questioned
position which, allegedly, was in reality a second or substituted
for reconsideration proscribed by Batas Pambansa Blg. 129 and the
Rules of the Court of Appeals.cralaw
On 14 June 1991,
the Court of Appeals issued the
now assailed resolution ordering Judge Sayo to take cognizance of the
to set aside the foreclosure sale and thereby reversing, in effect, its
decision of 24 May 1990 and resolution of 21 November 1990. The
"A perusal of the body of the Supreme
decision indicates that the issue of forum shopping was raised only as
to petitioner PVHI's twin actions in the Sandiganbayan (Civil Case No.
1114 [sic]) and before Judge Mabunay, Branch 24, of the Regional Trial
Court of Manila in Civil Case No. 88-45876. Nonetheless, since the
Court, in its final judgment included the case pending before this
[CA-G.R. SP No. 20336], the latter is left without any alternative but
to submit to the Supreme Court's ruling, for the orderly administration
of justice and to give deferance to [the] highest judicial organ, the
Court. The Supreme Court having spoken, this Court's duty is to obey
"xxx xxx xxx
"The Regional Trial Court of Pasay, in
No. 3079 denied petitioner PVHI's petition to set aside Foreclosure
on the ground that it had no jurisdiction. The Supreme Court held
ruling that there is nothing objectionable with petitioner PVHI's
This Court denied the petition for Certiorari filed by petitioner PVHI
directed against the Regional Trial Court's denial on the ground that
is not the proper remedy.
In the light of the Supreme Court's
Regional Trial Court of Pasay had jurisdiction, the respondent judge
abused his discretion in dismissing the case. Indeed, he acted
and capriciously when he ignored the explicit mandate of Section 8 of
The motion for
reconsideration filed by the GSIS
having been denied on 21 August 1991,
the instant petition for review on certiorari which, in the main,
the Court of Appeals' resolution of 14 June 1991 has been here
Petitioner GSIS contends that
A.chanrobles virtual law library
COURT OF APPEALS ERRED IN ISSUING
A RESOLUTION IN VIOLATION OF BATAS PAMBANSA BLG. 129, THE INTERIM RULES
OF COURT, AND ITS OWN REVISED INTERNAL RULES, ALL OF WHICH PROHIBIT THE
FILING OF SECOND MOTIONS FOR RECONSIDERATION, ESPECIALLY ONE WITHOUT
OF COURT.chanrobles virtual law library
B.chanrobles virtual law library
COURT OF APPEALS ERRED IN REVERSING
ITS OWN DECISION WHICH HAD ALREADY BECOME FINAL AND EXECUTORY.chanrobles virtual law library
C.chanrobles virtual law library
COURT OF APPEALS ERRED IN VIOLATING
THE INTENT AND SPIRIT OF THE RULING IN "GSIS VS. SANDIGANBAYAN" (119
655) TO PUT A STOP TO THE HEREIN PARTIES' "BICKERINGS" WHICH WILL
TO FESTER AT THE EXPENSE OF THE ORDERLY ADMINISTRATION OF JUSTICE.
paragraph of Section 11 of Batas Pambansa
Blg. 129, as amended by Executive Order No. 33, dated 28 July 1986,
A motion for
reconsideration of its decision or
final resolution shall be resolved by the Court within ninety (90) days
from the time it is submitted for resolution, and no second motion for
reconsideration from the same party shall be entertained
proscription is reflected in the Interim
Rules and Guidelines for the implementation of B.P. Blg. 129; hence:
"4. Motions for reconsideration. No party
be allowed a second motion for reconsideration of a final order or
Internal Rules of the Court of Appeals
echoes a like rule in Rule 9 thereof; thus
"Sec. 3. Second Motion for
No second or subsequent motion for reconsideration from the same party
shall be entertained. However, if the decision or resolution is
or substantially modified, the party adversely affected thereby, may in
turn file a motion for reconsideration of the amended decision within
(15) days from notice."
against the filing of a second motion
for reconsideration is justified by public policy which demands that at
the risk of occasional errors, judgments of courts must become final at
some definitive date fixed by law.
The rule, however, is certainly not inflexible. Procedural laws are
which are adopted not as ends in themselves but as means conducive to
realization of law and justice.
The rules of procedure are not to be applied with severity and rigidity
when such application would clearly defeat the very rationale for their
conception and existence.
In Mauna vs. Civil Service Commission,
the Court said:
"xxx (I)t is within the power of
to temper rigid rules in favor of substantial justice. While it is
that the Rules of Court be faithfully and even meticulously observed,
should not be so strict about procedural lapses that do not really
the proper administration of justice. If the rules are intended to
the orderly conduct of litigation, it is because of the higher
they seek which is the protection of substantive rights of the
of procedural rules, or saving a particular
case from the operation of technicalities when substantial justice
it, should no longer be subject to cavil.
surrounding the controversy
between the parties, not to mention the various cases pending before
courts heretofore recited, justified the acceptance and due
by the Court of Appeals, in the same CA-G. R. SP No. 20336, of PVHI's
and motion. The appellate court, it should be stressed, still had full
jurisdiction over the case.
Certainly, the appellate court was hardly in any position to disregard
the decision in G. R. No. 83385. In Ang Ping vs. Regional Trial Court
Manila, Br. 40,
the Court, quoting from the ruling in Tugade vs. Court of Appeals,
"Respondent Court of Appeals really was
of any choice at all. It could not have ruled in any other way on the
question raised. This Tribunal having spoken, its duty was to obey. It
is as simple as that. There is relevance to this excerpt from Barrera
Barrera (L-31589, July 31, 1970, 34 SCRA 98). "The delicate task of
the significance that attaches to a constitutional or statutory
an executive order, a procedural norm or a municipal ordinance is
to the judiciary. It thus discharges a role no less crucial than that
to the other two departments in the maintenance of the rule of law. To
assure stability in legal relations and avoid confusion, it has to
with one voice. It does so with finality, logically and rightly,
the highest judicial organ, this Court. What it says then should be
and authoritative, binding on those occupying the lower ranks in the
hierarchy. They have to defer and to submit (Ibid., 107. The opinion of
Justice Laurel in People vs. Vera, 65 Phil. 56  was cited.) The
paragraph of the opinion in Barrera further emphasizes the point: Such
a thought was reiterated in an opinion of Justice J.B.L. Reyes and
emphasized in these words: "Judge Gaudencio Cloribel need not be
that the Supreme Court, by tradition and in our system of judicial
has the last word on what the law is; it is the final arbiter of any
controversy. There is only one Supreme Court from whose decisions all
courts should take their bearings." (Justice J.B.L. Reyes spoke thus in
Albert vs. Court of First Instance of Manila [Br. VI], L-26364, May 29,
1968, 23 SCRA 948, 961.) "
decision in G. R. No. 83385 by this
Court was aimed at putting the proceedings in good order which were
up by the filing of several cases by the parties with various courts on
initially not too complex a matter affecting the same property.
As regards the
issue of forum-shopping, the Court,
in rejecting the move to have private respondent and the Panlilios held
in contempt of court, recognized that in the Sandiganbayan case, the
of private respondent had been predicated, albeit erroneously, that
assets in the custody of the Sandiganbayan were beyond the reach of
whereas its action at the RTC Manila had been aimed at having the loan
obligation itself declared extinguished by payment.cralaw
Court en banc in G. R.
No. 83385 said:
"Anent PVHI's motion to annul the
sale, filed in LRC Case No. 3079 (in which the GSIS asked for a writ of
possession), the Court finds nothing objectionable in such a recourse.
Under Section 8, of Art. No. 3135, the remedy of a party aggrieved by
is indeed, to have the sale set aside "
that the foreclosure was a fait accompli,
private respondent's remedy was to nullify the sale in LRC No. 3079,
petitioner had sought an issuance of a writ of possession of the
Private respondent's recourse conformed with Section 8 of Act No. 3135;
"Sec. 8. The debtor may, in the
which possession was requested, but not later than thirty days after
purchaser was given possession, petition that the sale be set aside and
the writ of possession canceled, specifying the damages suffered by
because the mortgage was not violated or the sale was not made in
with the provisions hereof, and the court shall take cognizance of this
petition in accordance with the summary procedure provided for in
one hundred and twelve of Act Numbered Four hundred and ninety-six; and
if it finds the complaint of the debtor justified, it shall dispose in
his favor of all or part of the bond furnished by the person who
possession. Either of the parties may appeal from the order of the
in accordance with section fourteen of Act Numbered Four hundred and
but the order of possession shall continue in effect during the
of the appeal." (Emphasis supplied.)
respondent, however, wrongly elevated the
order of Judge Sayo dismissing the petition (to nullify the foreclosure
sale) via a petition for certiorari instead of an ordinary appeal.
certiorari may in meritorious cases be allowed
particularly when the
is filed while the period for appeal has not yet expired. Judge Sayo
private respondent's petition to set aside the foreclosure sale on 14
1990, and private respondent filed CA-G. R. SP No. 20336 on 22 March
well within the reglementary period for appeal. Most importantly, the
was founded not on the merits of the petition to annul the foreclosure
sale but on a jurisdictional issue. It was petitioner, in fact, which
the ex-parte petition for a writ of possession in LRC Case No. 3079.
The court did not dismiss the ex-parte petition, sought by
respondent, but ordered the issuance of the writ of possession prayed
by petitioner. The denial of the motion for the reconsideration of that
order left the private respondent with the remaining alternative of
a petition to set aside the foreclosure sale in accordance with Section
8 of Act No. 3135. Under these circumstances, certiorari could be
in order to prevent any possible irreparable damage to private
as against an ordinary appeal which may prove to be tedious and
A reversal of the
resolution of 14 June 1991 proposed
by petitioner and the eventual dismissal of the petition in CA-G. R. SP
No. 20336 would not necessarily end the "bickerings" between the
In fact, it may spawn yet another controversy. The value of the
at stake is such that private respondent may not be expected to just
go of any opportunity to resolve, once and for all, the legality of the
foreclosure sale. The pendency in the Manila RTC of Civil Case No.
wherein, according to the petitioner, private respondent takes a view
to that of the nullification of the foreclosure sale notwithstanding, a
resolution of the petition to set aside the foreclosure sale in itself
appears to be a separate key to the full and final settlement of the
between the parties.cralaw
instant petition for review on
certiorari is DENIED. The Regional Trial Court of Pasay City shall
with dispatch the petition to have the foreclosure sale in LRC No. 3079
set aside. No costs.cralaw
Bellosillo, Kapunan and Hermosisima,
Jr., JJ., concur.
Penned by Associate Justice Gloria C. Paras and concurred in by
Justices Bonifacio A. Cacdac, Jr. and Serafin V.C. Guingona.
CA-G.R. No. 20336 Records, p. 49. The facts herein stated, until the
of the petition in G.R. No. 83385, "GSIS vs. Sandiganbayan," are also
in the November 26, 1990 Decision in said case which is published in
GSIS vs. Sandiganbayan, 191 SCRA 544, at p. 658.
118 SCRA 110.
Rollo, p. 142.
Per Sarmiento, J., GSIS vs. Sandiganbayan, supra.
At p. 662.
Rollo, p. 149.
Ibid., pp. 193-195.
Ibid., p. 214.
Ibid., p. 19.
Calalang vs. Register of Deeds of Quezon City, 231 SCRA 88, citing
vs. Savellano, 158 SCRA 194.
Blanco vs. Bernabe, 63 Phil. 124.
McEntee vs. Manotok, 113 Phil. 249.
232 SCRA 388, citing Rinconada Telephone Company, Inc. vs. Buenviaje,
SCRA 701; Seriña vs. Court of Appeals, 170 SCRA 421 and Leyte
Cusi, Jr., 152 SCRA 496.
At page 398.
See Aguilar vs. Court of Appeals, 250 SCRA 371.
Private respondent received a copy of the Resolution denying its motion
for the reconsideration of the appellate court's Decision on November
1990. The fifteen-day period for filing an appeal with this Court would
have expired on December 14, 1990. Hence, when private respondent filed
the manifestation and motion on December 13, 1990, the appellate court
still had jurisdiction over the case simply because private respondent
did not interpose an appeal within the fifteen-day reglementary period
to do so. Finality of a judgment or order becomes a fact upon the lapse
of the reglementary period to appeal if no appeal is perfected. The
dismissing the petition to annul the foreclosure sale was by no means a
final order in LRC No. 3079. The main case was a land registration or
case and therefore the said petition was merely an incidental matter.
154 SCRA 77.
85 SCRA 226.
At page 86.
GSIS vs. Sandiganbayan, 191 SCRA 655, 662.
See Oriental Media, Inc. vs. Court of Appeals, 250 SCRA 647; citing
Commission on Good Government vs. Sandiganbayan, 210 SCRA 136.
Sec. 7 of Act. No. 3135 allows the filing of a petition for possession
over the property sold in the "form of an ex parte motion in the
or cadastral proceedings if the property is registered."
Rodriguez vs. Court of Appeals, 245 SCRA 150.