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SECOND DIVISION
PHILIPPINE BANK OF
COMMUNICATIONS,
Petitioner,
- versus -
MARY ANN 0. YEUNG,
Respondent.
G.R. No. 179691
Present:
CARPIO, J Chairperson,
BRION,
DEL CASTILLO,
PEREZ and
PERLAS-BERNABE, JJ.
Promulgated:
x.-----------------------------------------------------------------------------------------x.
DECISION
BRION, J.:
We resolve the petition for review on certiorari,
1
filed by the
Philippine Bank of (petitioner), to assail the decision
2
dated August 9, 2006 and the resolution
3
dated August 2, 2007 of the Court
of Appeals (CA) in CA-G.R. SP. No.' 82725. The CA decision reversed and
set aside the orders dated November 10, 2003,
4
January 20, 2004,
5
and
February 23, 2004 of the Regional Lrial Court (RTC), Davao City, Branch
16, in other Case No. 212-03 granting the issuance of a writ of possession.
Under Rule 45 of the Rules of Court; rol/o, pp. 31-51.
2
Penned by Associate Justice Antonio L. Villamor, and concurred in by Associate Justices Romulo
V. Borja and Ramon R. Garcia; id. 8-18.
3
Id. at 24-25.
4
Id. at 91-92; penned by Presiding Judge Emmanuel C. Carpio.
5
Id. at 103-104.
Decision 2 G.R. No. 179691



The Factual Antecedents

In order to secure a loan of P1,650,000.00 Mary Ann O. Yeung
(respondent), represented by her attorney-in-fact, Mrs. Le Tio Yeung,
executed on December 12, 1994 a Real Estate Mortgage over a property
located in Davao City in favor of the petitioner. The mortgaged property was
covered by Transfer Certificate of Title (TCT) No. T-187433, registered in
the respondents name. On May 2, 1996, the parties agreed to increase the
amount of the loan to P1,950,000.00 as evidenced by an Amended Real
Estate Mortgage.

After the respondent defaulted in her obligation, the petitioner
initiated a petition for extrajudicial foreclosure of the mortgage, pursuant to
Act No. 3135, as amended.
6
The mortgaged property was consequently
foreclosed and sold at public auction for the sum of P2,594,750.00 to the
petitioner which emerged as the highest bidder.

A provisional certificate of sale was issued by the sheriff and the sale
was registered with the Register of Deeds. When the respondent failed to
redeem the mortgage within the one year redemption period, the petitioner
consolidated its ownership over the property, resulting to the cancellation of
TCT No. T-187433 and to the issuance of TCT No. T-362374 in its name.

On September 15, 2003, the petitioner filed with the RTC an ex parte
petition for the issuance of a writ of possession, docketed as Other Case No.
212-03.

On November 10, 2003, the RTC granted the petition. The respondent
thereafter filed a motion for recall and/or revocation alleging that the writ of
possession should not have been issued by the RTC because the petitioner
failed to remit the surplus from the proceeds of the sale. When the motion
was denied, the respondent filed a motion for reconsideration (MR) which
the RTC likewise denied. Hence, the respondent brought the matter to the
CA on certiorari.

In its August 9, 2006 decision,
7
the CA granted the petition and ruled
that the RTC gravely abused its discretion when it ordered the issuance of a
writ of possession. It found that the P2,594,750.00 bid price far exceeded the
P1,950,000.00 mortgage obligation. Relying on the Courts pronouncement
in Sulit v. Court of Appeals,
8
the CA ruled that the petitioners failure to
remit the surplus from the proceeds of the foreclosure sale (equivalent to
33% of the mortgage debt) was a valid ground to defer the issuance of a writ
of possession for reasons of equity. It reversed the RTC orders and ordered
6
Act No. 3135 An Act to Regulate the Sale of Property Under Special Powers Inserted in or
Annexed to Real-Estate Mortgages.
7
Supra note 2.
8
G.R. No. 119247, February 17, 1997, 268 SCRA 441, 452.

Decision 3 G.R. No. 179691



the petitioner to remit the excess from the proceeds of the foreclosure sale to
the respondent.

The petitioner received a copy of the August 9, 2006 CA decision on
September 1, 2006.
9
Hence, it had up to September 16, 2006 to file an MR.

On September 13, 2006, the petitioner filed an urgent motion for
extension of time to file an MR, citing lack of material time due to change of
counsel as its ground. It contended that in light of its counsels withdrawal
from the case on September 11, 2006, or during the reglementary period of
filing an MR, it had to engage the services of another lawyer who required
an additional time to thoroughly study the case. On September 23, 2006, or
seven days from the expiry of the reglementary period to file an MR, the
petitioner, through its new counsel, filed an MR.
10


On March 7, 2007, the CA denied the petitioners motion for
extension of time to file an MR. The petitioner filed an MR dated April 10,
2007,
11
which the CA similarly denied.
12
The petitioner thereafter filed a
petition for review on certiorari before this Court to assail the August 9,
2006 decision
13
and the August 2, 2007 resolution
14
of the CA.

The Petition

The petitioner insists that the CA erred when it reversed the RTCs
decision. It argues that the Sulit case on which the CAs decision was based,
is not analogous to the present case. It submits that unlike Sulit (where the
mortgagor still had an opportunity to redeem the property at the time of the
filing of the petition for the issuance of a writ of possession), the respondent
had failed to redeem the property within the one year redemption period,
thus allowing the petitioner to consolidate its ownership over the property. It
also insists that there was no excess or surplus from the proceeds of the
foreclosure sale because the respondents obligation covered the interests,
the penalties, the attorneys fees and the foreclosure expenses.

In these lights, the petitioner maintains that the equitable
circumstances found by the Court in Sulit do not obtain in the present case
and the issuance of a writ of possession, being a ministerial duty of the
courts, should be granted.

The petitioner lastly submits that the respondent is guilty of forum
shopping because of her failure to disclose to the Court the pendency of a
civil case for nullity of mortgage and foreclosure sale.
9
Rollo, at 31.
10
Id. at 32.
11
Id. at 119-122.
12
Id. at 24.
13
Supra note 2.
14
Supra note 3.

Decision 4 G.R. No. 179691



The Case for the Respondent

The respondent maintains that the August 9, 2006 CA decision
assailed in this petition had been rendered final and executory by the
petitioners failure to seasonably file an MR within the reglementary period.
She submits that having attained finality, the decision can no longer be
modified or reviewed by this Court and the petition should thus be
dismissed.

The Issues

The petitioner raises the following issues:

I. Whether circumstances exist in this case to warrant the liberal
application of the rules on the reglementary period of filing appeals
or MRs;

II. Whether the case of Sulit is applicable to this case;

III. Whether the petitioner is liable for any excess or surplus from the
proceeds of the sale; and

IV. Whether the respondent is guilty of forum shopping.

Our Ruling

We find the petition impressed with merit.

a. Procedural Question Raised

At the outset, we note that the petitioners MR of the CA decision was
filed out of time. Nevertheless, in accordance with the liberality that
pervades the Rules of Court, and in the interest of justice under the peculiar
circumstances of this case, we opt to take another look at the petitioners
reason for the late MR and thus consider the MR before the CA to be
properly filed.

The general rule is that the failure of the petitioner to timely file an
MR within the 15-day reglementary period fixed by law renders the decision
or resolution final and executory.
15
The same rule applies in appeals. The
filing and the perfection of an appeal in the manner and within the period
prescribed by law are not only mandatory but also jurisdictional, and the
failure to perfect an appeal has the effect of rendering the judgment final and
executory.
16


Consistent with this principle is the rule that no motion for extension
of time to file an MR shall be allowed. The filing of a motion for extension
15
Hilario v. People, 574 Phil. 348, 361 (2008).
16
Almeda v. CA, 354 Phil. 600, 607 (1998).

Decision 5 G.R. No. 179691



of time does not, by itself, interrupt the period fixed by law for the
perfection of an appeal. A movant, upon filing of a motion, has no right to
assume that it would be granted and should verify its status with the court;
otherwise, he runs the risk of losing his right to appeal in the event the court
subsequently denies his motion and the period of appeal had expired.

This rule however, is not absolute. In exceptional and meritorious
cases, the Court has applied a liberal approach and relaxed the rigid rules of
technical procedure.

In Republic v. Court of Appeals,
17
we allowed the perfection of the
appeal of the Republic, despite the delay of six days, in order to prevent a
gross miscarriage of justice. In that case, the Court considered the fact that
the Republic stands to lose hundreds of hectares of land already titled in its
name.

In Ramos v. Bagasao,
18
we permitted the delay of four days in the
filing of a notice of appeal because the appellants counsel of record was
already dead at the time the trial courts decision was served.

In Olacao v. National Labor Relations Commission,
19
we also allowed
the belated appeal of the appellant because of the injustice that would result
if the appeal would be dismissed. We found that the subject matter in issue
in that case had already been settled with finality in another case and the
eventual dismissal of the appeal would have had the effect of ordering the
appellant to make reparation to the appellee twice.

In Siguenza v. Court of Appeals,
20
we gave due course to the appeal
and decided the case on the merits inasmuch as, on its face, it appeared to be
impressed with merit.

Also in Barnes v. Padilla,
21
we allowed the liberal construction of the
Rules of Court and suspended the rule that the filing of a motion for
extension of time to file an MR does not toll the period of appeal, to serve
substantial justice. We ruled that the suspension of the rules was not entirely
attributable to the petitioner and the allowance of the petition would not in
any way prejudice the respondents.

The reasons that the Court may consider in applying a liberal
construction of the procedural rules were reiterated in Sanchez v. Court of
Appeals,
22
to wit:

17
379 Phil. 92, 94-102 (2000).
18
No. L-51552, February 28, 1980, 96 SCRA 395, 396-397.
19
G.R. No. 81390, August 29, 1989, 177 SCRA 38, 49.
20
G.R. No. L-44050 July 16, 1985, 137 SCRA 570, 576-579.
21
G.R. No. 160753, September 30, 2004, 439 SCRA 675.
22
452 Phil. 665, 674 (2003).

Decision 6 G.R. No. 179691



Aside from matters of life, liberty, honor or property which would
warrant the suspension of the Rules of the most mandatory character and
an examination and review by the appellate court of the lower courts
findings of fact, the other elements that should be considered are the
following: (a) the existence of special or compelling circumstances, (b) the
merits of the case, (c) a cause not entirely attributable to the fault or
negligence of the party favored by the suspension of the rules, (d) a lack of
any showing that the review sought is merely frivolous and dilatory, and
(e) the other party will not be unjustly prejudiced thereby.

Moreover, the Court has the discretion to suspend its rules when the
circumstances of the case warrant. In Aguam v. Court of Appeals,
23
we held:

The court has discretion to dismiss or not to dismiss an appellant's appeal.
It is a power conferred on the court, not a duty. The "discretion must be a
sound one, to be exercised in accordance with the tenets of justice and fair
play, having in mind the circumstances obtaining in each case. xxx
Litigations must be decided on their merits and not on technicality.
xxx It is a far better and more prudent course of action for the court
to excuse a technical lapse and afford the parties a review of the case
on appeal to attain the ends of justice rather than dispose of the case
on technicality and cause a grave injustice to the parties, giving a false
impression of speedy disposal of cases while actually resulting in more
delay, if not a miscarriage of justice.

In the present case, we find the delay of 7 days, due to the withdrawal
of the petitioners counsel during the reglementary period of filing an MR,
excusable in light of the merits of the case. Records show that the petitioner
immediately engaged the services of a new lawyer to replace its former
counsel and petitioned the CA to extend the period of filing an MR due to
lack of material time to review the case. There is no showing that the
withdrawal of its counsel was a contrived reason or an orchestrated act to
delay the proceedings; the failure to file an MR within the reglementary
period of 15 days was also not entirely the petitioners fault, as it was not in
control of its former counsels acts.

Moreover, after a review of the contentions and the submissions of the
parties, we agree that suspension of the technical rules of procedure is
warranted in this case in view of the CAs erroneous application of legal
principles and the substantial merits of the case. If the petition would be
dismissed on technical grounds and without due consideration of its merits,
the registered owner of the property shall, in effect, be barred from taking
possession, thus allowing the absurd and unfair situation where the owner
cannot exercise its right of ownership. This, the Court should not allow. In
order to prevent the resulting inequity that might arise from the outright
denial of this recourse that is, the virtual affirmance of the writs denial to
the detriment of the petitioners right of ownership we give due course to
this petition despite the late filing of the petitioners MR before the CA.

23
388 Phil. 587, 593-594; emphases ours, citations omitted.

Decision 7 G.R. No. 179691



b. On the Issuance of a Writ of Possession

We have consistently held that the purchaser can demand possession
of the property even during the redemption period for as long as he files an
ex parte motion under oath and post a bond in accordance with Section 7 of
Act No. 3135, as amended.
24
Upon filing of the motion and the approval of
the bond, the law also directs the court in express terms to issue the order for
a writ of possession.

When the redemption period has expired and title over the property
has been consolidated in the purchasers name, a writ of possession can be
demanded as a matter of right. The writ of possession shall be issued as a
matter of course even without the filing and approval of a bond after
consolidation of ownership and the issuance of a new TCT in the name of
the purchaser. As explained in Edralin v. Philippine Veterans Bank,
25
the
duty of the trial court to grant a writ of possession in these instances is also
ministerial, and the court may not exercise discretion or judgment:

Consequently, the purchaser, who has a right to possession after
the expiration of the redemption period, becomes the absolute owner of
the property when no redemption is made. In this regard, the bond is no
longer needed. The purchaser can demand possession at any time
following the consolidation of ownership in his name and the issuance to
him of a new TCT. After consolidation of title in the purchasers name for
failure of the mortgagor to redeem the property, the purchasers right to
possession ripens into the absolute right of a confirmed owner. At that
point, the issuance of a writ of possession, upon proper application and
proof of title becomes merely a ministerial function. Effectively, the court
cannot exercise its discretion.
26


It is not disputed that the respondent failed to exercise her right of
redemption within one year from the time of the registration of the sale.
There is also no question that the propertys title had already been
transferred to the petitioner. As the actual owner of the property, it is not
only necessary, but also just, to allow the petitioner to take possession of the
property it owns. It is illogical if the person already owning the property will
be barred from possessing it, in the absence of compelling and legitimate
reasons to deny him possession.
27
Thus, we feel that the issuance of a writ of
possession is in order.

c. On the Exemption under Sulit v. Court of Appeals

In setting aside the questioned RTC orders granting the petitioner a
writ of possession, the CA relied on the Courts ruling in Sulit v. Court of
24
BPI Family Savings Bank, Inc. v. Golden Power Diesel Sales Center, Inc., G.R. No. 176019,
J anuary 12, 2011, 639 SCRA 405, 415.
25
G.R. No. 168523, March 9, 2011, 645 SCRA 75, 86.
26
Id. at 85-86.
27
Id. at 90.

Decision 8 G.R. No. 179691



Appeals
28
where we held that the failure of the mortgagee to return to the
mortgagor the surplus proceeds of the foreclosure sale carves out an
exception to the general rule that a writ of possession should issue as a
matter of course.

To have a better grasp of the reasons for the Courts ruling in the said
case, below is a brief summary and analysis of Sulit.

c.1 Summary of Sulit v. CA

The case stemmed from the extra-judicial foreclosure conducted by
the notary public where Sulit (creditor-mortgagee) emerged as the highest
bidder for the amount of P7,000,000.00. It appears that Sulit failed to deliver
the sale prices surplus equivalent to at least 40% of the mortgage debt to the
notary public. Instead, he credited it to the satisfaction of the P4,000,000.00
debt. During redemption period, he petitioned for the issuance of a writ of
possession which the trial court granted. From the order of the court, the
debtor-mortgagor filed a petition for certiorari with the CA. The CA
granted the writ of certiorari and directed Sulit to remit to the debtor the
excess amount of his bid price.

When the case reached this Court, we considered Sulits failure to
deliver the surplus proceeds of the foreclosure sale an exception to the
general rule that it is ministerial upon the court to issue a writ of possession
even during the period of redemption upon the filing of a bond. We found
that such failure was a sufficient justification for the non-issuance of the
writ. We also ruled that equitable considerations demanded the deferment of
the issuance of the writ as it would be highly unfair for the mortgagor, who
as a redemptioner might choose to redeem the foreclosed property, to pay
the equivalent amount of the bid clearly in excess of the total mortgage debt.
We said:

The general rule that mere inadequacy of price is not sufficient to
set aside a foreclosure sale is based on the theory that the lesser the price
the easier it will be for the owner to effect the redemption. The same thing
cannot be said where the amount of the bid is in excess of the total
mortgage debt. The reason is that in case the mortgagor decides to
exercise his right of redemption, Section 30 of Rule 39 provides that
the redemption price should be equivalent to the amount of the
purchase price, plus one [percent] monthly interest up to the time of
the redemption, together with the amount of any assessments or taxes
which the purchaser may have paid thereon after purchase, and
interest on such last-named amount at the same rate.

Applying this provision to the present case would be highly
iniquitous if the amount required for redemption is based on
P7,000,000.00, because that would mean exacting payment at a price
unjustifiably higher than the real amount of the mortgage obligation. We
28
Supra note 8, at 452.


Decision 9 G.R. No. 179691



need not elucidate on the obvious. Simply put, such a construction will
undeniably be prejudicial to the substantive rights of private respondent
and it could even effectively prevent her from exercising the right of
redemption.
29


The said ruling cannot be applied in the present case. A proper
appreciation and analysis of Sulit show that it cannot be cited in the present
case because the factual milieu obtaining therein are not analogous or similar
to those involved in the case before us.

c.2 Comparative Analysis of Sulit and the Present Case

As correctly noted by the petitioner, the one year redemption period in
Sulit has not yet expired when the purchaser petitioned the trial court for the
issuance of a writ of possession. In the present case, the redemption period
has already expired and the title over the property had already been
consolidated in the petitioners name. In Sulit, the inequity the court
perceived to justify the deferment of the issuance of a writ of possession was
present because the mortgagor, who at that time still had the right to exercise
his right of redemption, was prevented from doing so. No such inequity
appears in this case inasmuch as the mortgagor no longer has a right of
redemption. In Sulit, the policy of the law to aid the redemptioner can still be
upheld. The policy is no longer relevant in the present case since the
mortgagee herself, allowed the redemption period to lapse without
exercising her right.

We emphasize that for the Sulit exception to apply, the evil sought to
be prevented must be present and the reason behind the exception should
clearly exist. It should not be carelessly applied in cases where the reasons
that justified it do not appear, more so where the factual milieu is different.
As discussed above, the Sulit reasons and circumstances are not present here.
The resulting injustice that we tried to avoid in Sulit does not exist. In the
absence of any justification for the exception, the general rule should apply.

d. On the Issue of Surplus

The petitioner contends that there was no excess or surplus that needs
to be returned to the respondent because her other outstanding obligations
and those of her attorney-in-fact were paid out of the proceeds.

The relevant provision, Section 4 of Rule 68 of the Rules of Civil
Procedure, mandates that:

Section 4. Disposition of proceeds of sale. The amount realized
from the foreclosure sale of the mortgaged property shall, after deducting
the costs of the sale, be paid to the person foreclosing the mortgage, and
when there shall be any balance or residue, after paying off the mortgage
29
Id. at 453-454; citations omitted.

Decision 10 G.R. No. 179691



debt due, the same shall be paid to junior encumbrancers in the order of
their priority, to be ascertained by the court, or if there be no such
encumbrancers or there be a balance or residue after payment to them,
then to the mortgagor or his duly authorized agent, or to the person
entitled to it. [emphases and underscores ours)

Thus, in the absence of any evidence showing that the mortgage also
covers the other obligations of the mortgagor, the proceeds from the sale
should not be applied to them.

In the present case, while the petitioner claims that it was not obliged
to pay any surplus because the balance from the proceeds was applied to the
respondents other obligations and to those of her attorney-in-fact, it failed,
however, to show any supporting evidence showing that the mortgage
extended to those obligations. The petitioner, as mortgagee/purchaser cannot
just simply apply the proceeds of the sale in its favor and deduct from the
balance the respondents outstanding obligations not secured by the
mortgage. Understood from this perspective, no reason exists to depart from
the CAs ruling that the balance or excess, after deducting the mortgage debt
of P1,950,000.00 plus the stipulated interest and the expenses of the
foreclosure sale, must be returned to the respondent.

e. On the Issue of Forum Shopping

The petitioners argument that the respondent is guilty of forum
shopping by not disclosing the pendency of the case for nullity of
foreclosure sale deserves scant consideration. Forum shopping is committed
by a party who, having received an adverse judgment in one forum, seeks
another opinion in another court, other than by appeal or the special civil
action of certiorari. It is the institution of two or more suits in different
courts, either simultaneously or successively, in order to ask the courts to
rule on the same or related causes and/or to grant the same or substantially
the same reliefs.
30


The test for determining whether a party has violated the rule against
forum shopping is whether in the two (or more) cases, there is identity of
parties, rights, causes of action, and reliefs sought, or whether the elements
of litis pendentia are present. It is also material to determine whether a final
judgment in one case, regardless of which party is successful, will amount to
res judicata in the other.
31


The motion for recall and to revoke the order for a writ of possession
filed by the respondent before the trial court and the civil case for nullity of
foreclosure sale are poles apart. This is also true with the petition for
certiorari before the CA and the nullity case. Thus, even if the writ of
possession is cancelled or revoked, as what happened in this case, the
30
Young v. John Keng Seng, 446 Phil. 823, 832 (2003).
31
Id. at 833.

Decision 11
G.R. No. 179691
respondent will not be prevented from pursuing the nullity of the foreclosure
sale, since the ruling of the court in the former does not amount to res
judicata in the latter. Similarly, the filing of the petition for certiorari will
not affect the pending civil case for nullity because the two actions may
proceed independently and without prejudice to the outcome of each case.
Furthermore, there is no identity in the issues, causes of action and
reliefs sought between the two cases. The issues in the two cases are
different, as well as the reliefs prayed for by the respondent. In the motion,
the respondent prays for the cancellation of the writ of possession, while in
the civil case for nullity, the cancellation of the foreclosure sale itself. The
same thing can be said of a petition for certiorari - where the respondent
seeks to nullify the proceedings in the trial court on the ground of grav:e
abuse of discretion - and the nullity of the foreclosure sale. We, therefore,
rule that no forum shopping has been committed by the respondent.
WHEREFORE, the petition is GRANTED. The August 9, 2006
decision and the August 2, 2007 resolution of the Court of Appeals in CA-
G.R. SP. No. 82725 are MODIFIED by ordering the Regional Trial Court
of Davao City, Branch 16, to issue the corresponding writ of possession. The
Court of Appeals' order to the Philippine Bank of Communications to remit
to Mary Ann 0. Yeung the balance or excess of the proceeds of the
foreclosure sale, after deducting the mortgage debt of Pl,950,000.00 plus
stipulated interest and the expenses of the foreclosure sale, is hereby
AFFIRMED.
SO ORDERED.

I
WE CONCUR:
ARTURO D.:BRION
Associate Justice
ANTONIO T. CARPIO
Associate Justice
Chairperson

MARIANO C. DEL CASTILLO
Associate Justice
. A.10. f/v.N/ .
ESTELA M. 'PtRLAS-BERNABE
Associate Justice
Decision 12 G.R. No. 179691
ATTEST AT ION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the o p ~ n i o n of the
Court's Division.
~
ANTONIO T. CA
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the
Division Chairperson's Attestation, it is hereby certified that the conclusions
in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.
MARIA LOURDES P.A. SERENO
Chief Justice