holdings and development corporation vs. planters development bank

G.R. No. 187973.January 20, 2014.*LZK HOLDINGS and DEVELOPMENT CORPORATION,petitioners, vs. PLANTERS DEVELOPMENT BANK,respondent.

Remedial Law Civil Procedure Res Judicata The doctrine ofres judicata by conclusiveness of judgment postulates that when aright or fact has been judicially tried and determined by a court ofcompetent jurisdiction, or when an opportunity for such trial hasbeen given, the judgment of the court, as long as it remainsunreversed, should be conclusive upon the parties and those inprivity with them.Under the principle of conclusiveness ofjudgment, the right of Planters Bank to a writ of possession asadjudged in G.R. No. 167998 is binding and conclusive on theparties. The doctrine of res judicata by conclusiveness of judgmentpostulates that when a right or fact has been judicially tried anddetermined by a court of competent jurisdiction, or when anopportunity for such trial has been given, the judgment of thecourt, as long as it remains unreversed, should be conclusive uponthe parties and those in privity with them.

Same Special Civil Actions Foreclosure of Mortgage Thepurchaser in foreclosure sale may take possession of the propertyeven before the expiration of the redemption period by filing an exparte motion for such purpose and upon posting of the necessarybond.LZK Holdings can no longer question Planter Banks rightto a writ of possession over the subject property because thedoctrine of conclusiveness of judgment bars the relitigation ofsuch particular issue. Moreover, the authority relied upon by LZKHoldings defeats rather than support its position. The ruling inPNB echoes the very same rationale of the judgment in G.R. No.167998 that is the purchaser in foreclosure sale may takepossession of the property even before the expiration of theredemption period by filing an ex parte motion for such purposeand upon posting of the necessary bond.

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* FIRST DIVISION.

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294 SUPREME COURT REPORTS ANNOTATED

LZK Holdings and Development Corporation vs. PlantersDevelopment Bank

Same Same Same Writ of Possession The proceeding in apetition for a writ of possession is ex parte and summary in nature.It is a judicial proceeding brought for the benefit of one party onlyand without notice by the court to any person adverse of interest.No hearing is required prior to the issuance of a writ ofpossession. This is clear from the following disquisitions inEspinoza v. United Overseas Bank Phils., 616 SCRA 353 (2010),which reiterates the settled rules on writs of possession, to wit:The proceeding in a petition for a writ of possession is ex parteand summary in nature. It is a judicial proceeding brought for thebenefit of one party only and without notice by the court to anyperson adverse of interest. It is a proceeding wherein relief isgranted without giving the person against whom the relief issought an opportunity to be heard. By its very nature, an ex partepetition for issuance of a writ of possession is a nonlitigiousproceeding. It is a judicial proceeding for the enforcement of onesright of possession as purchaser in a foreclosure sale. It is not anordinary suit filed in court, by which one party sues another forthe enforcement of a wrong or protection of a right, or theprevention or redress of a wrong.

Same Civil Procedure Appeals The allegations of incorrectcomputation of the surety bond involve factual matters within thecompetence of the trial court to address as the Supreme Court isnot a trier of facts.Anent the correct amount of surety bond, it iswell to emphasize that our task in an appeal by petition forreview on certiorari is limited, as a jurisdictional matter, toreviewing errors of law that might have been committed by theCA. The allegations of incorrect computation of the surety bondinvolve factual matters within the competence of the trial court toaddress as this Court is not a trier of facts. The RTC found theamount of P2,000,000.00 to be sufficiently equivalent to the use ofthe property for a period of twelve (12) months. We are bound bysuch factual finding especially considering the affirmationaccorded it by the CA.

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PETITION for review on certiorari of the decision of theCourt of Appeals.The facts are stated in the resolution of the Court. Pineda, Pineda, Mastura, Valencia & Associates for

petitioner.

296

296 SUPREME COURT REPORTS ANNOTATEDLZK Holdings and Development Corporation vs. Planters

Development Bank

Janda, Asia & Associates for respondent.

R E S O L U T I O NREYES,J.:

This resolves the appeal filed by petitioner LZKHoldings and Development Corporation (LZK Holdings)assailing the Decision1 dated January 27, 2009 of theCourt of Appeals (CA) in CAG.R. S.P. No. 103267affirming the Order2 dated April 8, 2008 of the RegionalTrial Court (RTC) of San Fernando City (San Fernando),La Union, Branch 66, which issued a writ of possession infavor of respondent Planters Development Bank (PlantersBank).

The facts are not disputed.LZK Holdings obtained a P40,000,000.00 loan from

Planters Bank on December 16, 1996 and secured the samewith a Real Estate Mortgage over its lot located in LaUnion. The lot measures 589 square meters and is coveredby Transfer Certificate of Title No. T45337.

On September 21, 1998, the lot was sold at a publicauction after Planters Bank extrajudicially foreclosed thereal estate mortgage thereon due to LZK Holdings failureto pay its loan. Planters Bank emerged as the highestbidder during the auction sale and its certificate of sale wasregistered on March 16, 1999.

On April 5, 1999, LZK Holdings filed before the RTC ofMakati City, Branch 150, a complaint for annulment ofextrajudicial foreclosure, mortgage contract, promissorynote and damages. LZK Holdings also prayed for theissuance of a temporary restraining order (TRO) or writ ofpreliminary

_______________1 Penned by Associate Justice Teresita DyLiacco Flores with Associate

Justices Rosmari D. Carandang and Sixto C. Marella, Jr., concurringRollo, pp. 93108.

2 Issued by Judge Alpino P. Florendo id., at pp. 109110.

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VOL. 714, JANUARY 20, 2014 297LZK Holdings and Development Corporation vs. Planters

Development Bank

injunction to enjoin the consolidation of title over the lot byPlanters Bank.

On December 27, 1999, Planters Bank filed an expartemotion for the issuance of a writ of possession with theRTCSan Fernando.

On March 13, 2000 or three (3) days before theexpiration of LZK Holdings redemption period, the RTCMakati issued a TRO effective for 20 days enjoiningPlanters Bank from consolidating its title over theproperty. On April 3, 2000, the RTCMakati ordered theissuance of a writ of preliminary injunction for the samepurpose3 but the writ was issued only on June 20, 2000upon LZK Holdings posting of a P40,000.00 bond.

In the meantime, Planters Bank succeeded inconsolidating its ownership over the property on April 24,2000. However, the proceedings for its exparte motion forthe issuance of a writ of possession was suspended by theRTCSan Fernando in an Order dated May 11, 2000 in viewof the TRO and writ of preliminary injunction issued by theRTCMakati. Planters Bank moved for reconsideration butits motion was denied by the RTCSan Fernando in anOrder dated September 1, 2000.4

Meanwhile, upon motion of LZK Holdings, the RTCMakati declared as null and void the consolidated title ofPlanters Bank in an Order5 dated June 2, 2000. Suchruling was affirmed by the CA in a Decision6 datedFebruary 26, 2004 in CAG.R. SP No. 59327. When thematter reached the Court via G.R. No. 164563, wesustained the CAs judgment in our Resolution7 datedSeptember 13, 2004.

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3 Id., at pp. 111113.4 Culled from the Courts Decision in the related case of LZK Holdings

and Development Corp. v. Planters Development Bank, 550 Phil. 825, 827828 522 SCRA 731, 734 (2007).

5 Rollo, pp. 114122.6 Id., at pp. 140151.7 Id., at p. 152.

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Planters Bank also appealed the May 11, 2000 Order ofthe RTCSan Fernando which held in abeyance theresolution of its ex parte motion for the issuance of a writ ofpossession. This time, Planters Bank was victorious. TheCA granted the appeal and annulled the assailed order ofthe RTCSan Fernando. Aggrieved, LZK Holdings soughtrecourse with the Court in a petition for review docketed asG.R. No. 167998.8 In Our Decision dated April 27, 2007, weaffirmed the CAs ruling and decreed that Planters Bankmay apply for and is entitled to a writ of possession as thepurchaser of the property in the foreclosure sale, viz.:

A writ of possession is a writ of execution employed toenforce a judgment to recover the possession of land. Itcommands the sheriff to enter the land and give possessionof it to the person entitled under the judgment. It may beissued in case of an extrajudicial foreclosure of a real estatemortgage under Section 7 of Act No. 3135, as amended byAct No. 4118.

Under said provision, the writ of possession may beissued to the purchaser in a foreclosure sale either withinthe oneyear redemption period upon the filing of a bond, orafter the lapse of the redemption period, without need of abond.

We have consistently held that the duty of the trial courtto grant a writ of possession is ministerial. Such writ issuesas a matter of course upon the filing of the proper motionand the approval of the corresponding bond. No discretion isleft to the trial court. Any question regarding the regularityand validity of the sale, as well as the consequentcancellation of the writ, is to be determined in a subsequent

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proceeding as outlined in Section 8 of Act No. 3135. Suchquestion cannot be raised to oppose the issuance of the writ,since the proceeding is ex parte. The recourse is availableeven before the expira

_______________8 Entitled LZK Holdings and Development Corp. v. Planters Development Bank,

550 Phil. 825 522 SCRA 731 (2007).

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tion of the redemption period provided by law and the Rulesof Court.

To emphasize the writs ministerial character, we have inprevious cases disallowed injunction to prohibit its issuance,just as we have held that issuance of the same may not bestayed by a pending action for annulment of mortgage orthe foreclosure itself.

xxxxxxx [Planters Bank], as the purchaser in the foreclosure

sale, may apply for a writ of possession during theredemption period. In fact, it did apply for a writ onDecember 27, 1999, well within the redemption period. TheSan Fernando RTC, given its ministerial duty to issue thewrit, therefore, should have acted on the ex parte petition.The injunction order is of no moment because it should beunderstood to have merely stayed the consolidation of title.As previously stated, an injunction is not allowed to prohibitthe issuance of a writ of possession. Neither does thepending case for annulment of foreclosure sale, mortgagecontract, promissory notes and damages stay the issuanceof said writ.

Lastly, the trial on the merits has not even started. Untilthe foreclosure sale of the property in question is annulledby a court of competent jurisdiction, petitioner is bereft ofvalid title and of the right to prevent the issuance of a writof possession to [Planters Bank]. Until then, it is the trialcourts ministerial function to grant the possessory writ to[Planters Bank].9 (Citations omitted)


Armed with the above ruling, Planters Bank filed beforethe RTCSan Fernando a motion to set exparte hearing forthe issuance of a writ of possession. LZK Holdings opposedthe motion. In an Order dated April 2, 2008, the RTCSanFernando denied the opposition and set the hearing onApril 14, 2008. On April 8, 2008, the RTCSan Fernandoissued

_______________9 Id., at pp. 831834 pp. 738741.

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another Order10 declaring the scheduled hearing moot andacademic and granting Planter Banks exparte motion forthe issuance of a writ of possession which was filed as earlyas December 27, 1999. The decretal portion of the orderreads:

WHEREFORE, premises considered, the petition ishereby granted, hence the order setting the case for expartehearing on April 14, 2008 is rendered moot and academic bythis order. Let [a] Writ of Possession issue in favor ofPlanters Development Bank and the Deputy Sheriff of thisCourt is hereby directed to place Planters DevelopmentBank or any of its authorized representatives in possessionof the subject parcel of land, together with all theimprovements existing thereon, covered by TCT45337 ofthe Register of Deeds for the province of La Union againstLZK HOLDINGS AND DEVELOPMENT CORPORATION(referred to as LZK) including all other persons/occupantswho are claiming rights under them and who are depriving[Planters Bank] of its right to possess the abovedescribedproperty upon the filing of bond by [Planters Bank] in theamount of two million pesos (Php2,000,000.00).

SO ORDERED.11

In its herein assailed Decision12 dated January 27,

2009, the CA affirmed the foregoing ruling and dismissedLZK Holdings petition for certiorari docketed as CAG.R.


SP No. 103267. The CA likewise denied LZK Holdingsmotion for reconsideration in its Resolution13 dated May12, 2009.

LZK Holdings then filed a motion before the Court for a30day extension within which to file a petition for reviewreckoned from the date of its receipt of the resolutiongranting such extension. In our Resolution dated July 15,2009 we

_______________10 Rollo, pp. 109110.11 Id., at p. 110.12 Id., at pp. 93108.13 Id., at pp. 175176.

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granted the motion but we ordered that the 30dayextended period shall be counted from the expiration of theoriginal reglementary period.14 As such, LZK Holdings haduntil July 23, 2009 to file its petition and not August 24,2009 or the date when the petition was actually filed.

In our Resolution dated August 26, 2009, we denied thepetition for being filed beyond the extended periodpursuant to Section 5(a), Rule 56 of the Rules of Court andfor lack of reversible error in the assailed judgment of theCA.15 LZK Holdings moved for reconsideration16explaining that it was able to obtain a copy of the CourtsJuly 15, 2009 Resolution on July 29, 2009 when Lourdes Z.Korshak, LZK Holdings Chief Executive Officer, went tothe Office of the Clerk of Court of the Third Division andthat she still had to confront and get the case records fromthe companys previous counsel and then look for asubstitute lawyer. LZK Holdings also claimed that the writof possession issued to Planters Bank should be annulledfor the following reasons, to wit:

(a)with the cancellation of Planters Banksconsolidated title, LZK Holdings remain to be theregistered owner of the property and as such, the formerhad no right to apply for a writ of possession pursuant to

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PNB v. Sanao Marketing Corporation,17 which held thatright of possession is based on the ownership of the subjectproperty by the applicant

(b)LZK Holdings was deprived of due process becausethe RTC did not conduct a hearing on Planter Banksmotion for the issuance of a writ of possession

(c)the P2,000,000.00 bond posted by LZK Holdingsdoes not conform with Section 7 of Act No. 3135 whichmandates that the bond amount shall be equivalent totwelve (12)

_______________14 Id., at p. 12.15 Id., at pp. 344345.16 Id., at pp. 350372.17 503 Phil. 260 465 SCRA 287 (2005).

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months use of the subject property which in this caseamounted to P7,801,472.28 at the time the writ was issued.

In a Resolution18 dated October 13, 2010 the Court tooka liberal stance on the late filing of LZK Holdings petitionfor review. Accordingly, its motion for reconsideration wasgranted and the petition for review reinstated.

However, after a reexamination of the substantivemerits of the petition, the Court finds and stands by itsinitial determination that the CA committed no reversibleerror in affirming the issuance of a writ of possession bythe RTC in favor of Planters Bank.

Under the principle of conclusiveness of judgment, theright of Planters Bank to a writ of possession as adjudgedin G.R. No. 167998 is binding and conclusive on the parties.

The doctrine of res judicata by conclusiveness ofjudgment postulates that when a right or fact has beenjudicially tried and determined by a court of competentjurisdiction, or when an opportunity for such trial has beengiven, the judgment of the court, as long as it remainsunreversed, should be conclusive upon the parties andthose in privity with them.19


All the elements of the doctrine are present in this case.The final judgment in G.R. No. 167998 was rendered by theCourt pursuant to its jurisdiction over the review ofdecisions and rulings of the CA. It was a judgment on themerits of Planters Banks right to apply for and be issued awrit of possession. Lastly, the parties in G.R. No. 167998are the same parties involved in the present case.20

_______________18 Rollo, p. 401.19 Spouses Noceda v. ArbizoDirecto, G.R. No. 178495, July 26, 2010,

625 SCRA 472, 480.20 The elements of res judicata are: (1) the judgment sought to bar the

new action must be final (2) the decision must have been rendered by acourt having jurisdiction over the subject matter and the parties (3) thedisposition of the case must be a judgment on the merits and (4) theremust be as between the first and second action,

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Hence, LZK Holdings can no longer question PlanterBanks right to a writ of possession over the subjectproperty because the doctrine of conclusiveness ofjudgment bars the relitigation of such particular issue.

Moreover, the authority relied upon by LZK Holdingsdefeats rather than support its position. The ruling inPNB21 echoes the very same rationale of the judgment inG.R. No. 167998 that is the purchaser in foreclosure salemay take possession of the property even before theexpiration of the redemption period by filing an ex partemotion for such purpose and upon posting of the necessarybond.22

The pronouncement in PNB that right of possession isbased on the ownership of the subject property by theapplicant pertains to applications for writ of possessionafter the expiration of the redemption period, a situationnot contemplated within the facts of the present case.

We cannot also uphold the contentions of LZK Holdingsthat the RTC, in issuing the writ of possession,transgressed Act No. 3135.23

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No hearing is required prior to the issuance of a writ ofpossession. This is clear from the following disquisitions inEspinoza v. United Overseas Bank Phils.,24 whichreiterates the settled rules on writs of possession, to wit:

_______________identity of parties, subject matter, and causes of action. Should identity ofparties, subject matter, and causes of action be shown in the two cases,then res judicata in its aspect as a bar by prior judgment would apply. Ifas between the two cases, only identity of parties can be shown, but notidentical causes of action, then res judicata as conclusiveness ofjudgment applies. Social Security Commission v. Rizal Poultry andLivestock Association, Inc., G.R. No. 167050, June 1, 2011, 650 SCRA 50,5758.

21 Supra note 17.22 Id., at p. 272.23 AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS

INSERTED IN OR ANNEXED TO REALESTATE MORTGAGES.24 G.R. No. 175380, March 22, 2010, 616 SCRA 353.

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The proceeding in a petition for a writ of possession is exparte and summary in nature. It is a judicial proceedingbrought for the benefit of one party only and without noticeby the court to any person adverse of interest. It is aproceeding wherein relief is granted without giving theperson against whom the relief is sought an opportunity tobe heard.

By its very nature, an ex parte petition for issuance of awrit of possession is a nonlitigious proceeding. It is ajudicial proceeding for the enforcement of ones right ofpossession as purchaser in a foreclosure sale. It is not anordinary suit filed in court, by which one party sues anotherfor the enforcement of a wrong or protection of a right, orthe prevention or redress of a wrong.25 (Citations omitted)


Given the ex parte nature of the proceedings for a writ of

possession, the RTC did not err in cancelling the previouslyscheduled hearing and in granting Planters Banks motionwithout affording notice to LZK Holdings or allowing it toparticipate.

Anent the correct amount of surety bond, it is well toemphasize that our task in an appeal by petition for reviewon certiorari is limited, as a jurisdictional matter, toreviewing errors of law that might have been committed bythe CA.26 The allegations of incorrect computation of thesurety bond involve factual matters within the competenceof the trial court to address as this Court is not a trier offacts. The RTC found the amount of P2,000,000.00 to besufficiently equivalent to the use of the property for aperiod of twelve (12) months. We are bound by such factualfinding especially considering the affirmation accorded itby the CA.

_______________25 Id., at p. 358.26 Baldueza v. Hon. Court of Appeals, et al., 590 Phil. 150, 154 569

SCRA 135, 139 (2008).

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In fine, the decision of the CA is in accordance with thelaw and jurisprudence on the matter. It correctly sustainedthe Order of the RTC in issuing a writ of possession infavor of Planters Bank.

WHEREFORE, premises considered, the petition ishereby DENIED. The Decision dated January 27, 2009 ofthe Court of Appeals in CAG.R. S.P. No. 103267 isAFFIRMED.

SO ORDERED.

Sereno (CJ., Chairperson), LeonardoDe Castro,Bersamin and Villarama, Jr., JJ., concur.

Petition denied, judgment affirmed.

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Notes.In extrajudicial foreclosure of real estatemortgage, the rule is upon the expiration of the one yearredemption period, it forecloses the obligors right toredeem and that the sale thereby becomes absolute.(Erdenberger vs. Aquino, 656 SCRA 44 [2011])

The remedy of a party from the trial courts ordergranting the issuance of a writ of possession is to file apetition to set aside the sale and cancel the writ ofpossession, and the aggrieved party may then appeal fromthe order denying or granting said petition. (ProducersBank of the Philippines vs. Excelsa Industries, Inc., 669SCRA 470 [2012])

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