SPS. GODFREY TEVES AND MA. TERESA TEVES, PETITIONER, – VERSUS – HON. SYLVIA G. AGUIRRE-PADERANGA, PRESIDING JUDGE, RTC, BRANCH 16 AND INTEGRATED CREDIT & CORPORATE SERVICES, CO.…

Teves versus Aguirre-Paderanga

The Case

This is a special civil action for certiorari brought by Spouses Godfrey and Ma. Teresa Teves against Judge Sylvia Aguirre-Paderanga, presiding judge of the Regional Trial Court of Cebu City, Branch 16, and against Integrated Credit and Corporate Services Company, later substituted by Carol Aqui. The Teves spouses asked the Supreme Court to annul two orders of the trial court in a petition for a writ of possession: one denying their motion for reconsideration on the writ of possession, and the other directing the turnover of monthly rentals from May 2007 until the property is surrendered. The case matters to a reviewee because it is a clean teaching vehicle on two points: the distinction between a final order and an interlocutory order, and the rule that certiorari is not a substitute for appeal.

Procedural History

The dispute began in the Regional Trial Court of Makati, Branch 149, where the Teves spouses filed a case for declaration of nullity of contract against Standard Chartered Bank. Meanwhile, in the Regional Trial Court of Cebu City, Branch 16, Integrated Credit and Corporate Services Company filed a petition for a writ of possession over the foreclosed property, and possession was ultimately awarded to Carol Aqui, who substituted as petitioner. On July 14, 2010, the Cebu court issued two orders: one denied the Teves spouses' motion for reconsideration on the writ of possession, and the other directed the delivery of monthly rentals. The Teves spouses filed a partial motion for reconsideration, which the court denied in its order dated September 2, 2010. Aggrieved, the spouses went directly to the Supreme Court by a special civil action for certiorari under Rule 65, rather than appealing the orders.

Facts

Sometime in 1996, the Teves spouses entered into a dollar loan contract with Standard Chartered Bank, secured by a real estate mortgage. When the 1997 economic crisis struck, the peso to dollar exchange rate nearly doubled, from about 26 pesos to about 40 pesos. Because of the unexpected collapse of the economy, the spouses had difficulty catching up with their obligation, hoping to pay at the prevailing rate at the time the loan was incurred.

In 2006, the spouses filed a case for declaration of nullity of contract against the bank before the Makati court. While that case was pending, the bank extrajudicially foreclosed the property, also in 2006, and sold it to Integrated Credit and Corporate Services Company. To secure possession, that company filed a petition for a writ of possession before the Cebu court, and possession was ultimately awarded to Carol Aqui.

While the resolution of the possession case and the motion to turn over monthly rentals was pending, the spouses and the bank amicably settled the Makati case through a compromise agreement. On July 14, 2010, the Cebu court issued the two orders now challenged: one denying reconsideration on the writ of possession, and the other directing the delivery of monthly rentals from May 24, 2007 until the property is surrendered. The spouses' partial motion for reconsideration was denied on September 2, 2010, prompting the petition for certiorari.

Issues

• Whether or not the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction in granting the motion to turn over the back rentals in a petition for a writ of possession, whose sole concern is whether the petitioner is entitled to possession.
• Whether or not the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction in brushing aside the judgment on compromise agreement in the Makati case between the spouses and Standard Chartered Bank, the source of the rights of Integrated Credit and Corporate Services and Carol Aqui.

Applicable Provisions

Section 1 of Rule 65 of the Rules of Court provides:

SECTION 1. Petition for certiorari. – When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of its or his jurisdiction, and there is no appeal, or any plain, speedy and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

This provision supplies the requisites of certiorari, including the absence of appeal or other plain, speedy and adequate remedy, which the Court found wanting here.

Section 1 of Rule 41 of the Rules of Court provides:

Section 1. Subject of appeal. – An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable.

This provision is the basis for the Court's holding that the challenged orders, being final, should have been appealed rather than brought up by certiorari.

Ruling

On the first issue, the Court held that the petition was an improper remedy. A writ of certiorari may issue only when three requirements are set out in the petition and established: first, the writ is directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions; second, such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and third, there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law. The challenged orders, the Court found, partake of the nature of a judgment or final order, appealable under Rule 41. The spouses had argued that the orders were interlocutory and thus reviewable by certiorari, but the Court disagreed. Quoting its own ruling, the Court restated the test:

The distinction between a final order and an interlocutory order is well known. The first disposes of the subject matter in its entirety or terminates a particular proceeding or action, leaving nothing more to be done except to enforce by execution what the court has determined, but the latter does not completely dispose of the case but leaves something else to be decided upon. An interlocutory order deals with preliminary matters and the trial on the merits is yet to be held and the judgment rendered. The test to ascertain whether or not an order or a judgment is interlocutory or final is: does the order or judgment leave something to be done in the trial court with respect to the merits of the case? If it does, the order or judgment is interlocutory; otherwise, it is final.

Applying that test, the Court found that the assailed orders do not refer to preliminary matters but dispose of the subject matter in its entirety, leaving nothing more to be done except to enforce them by execution. They are final orders subject to appeal under Rule 41. The Court stressed that where appeal is available to the aggrieved party, the action for certiorari will not be entertained, and that appeal and certiorari are mutually exclusive, not alternative or successive. Certiorari is not and cannot be a substitute for appeal, especially where one's own negligence or error in the choice of remedy occasioned the loss. Where an appeal is available, certiorari will not prosper, even if the ground is grave abuse of discretion. Having thus resolved the threshold procedural question, the Court found the petition improperly brought and dismissed it, and it did not reach the merits of the second issue on the compromise agreement.

Doctrine

A final order is one that disposes of the subject matter in its entirety or terminates a particular proceeding or action, leaving nothing more to be done except to enforce by execution what the court has determined; an interlocutory order does not completely dispose of the case but leaves something else to be decided upon. The test is whether the order or judgment leaves something to be done in the trial court with respect to the merits of the case; if it does, the order is interlocutory, otherwise it is final. Under Section 1 of Rule 41, an appeal may be taken from a judgment or final order that completely disposes of the case, and under Section 1 of Rule 65, certiorari lies only where there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law. Appeal and certiorari are mutually exclusive, not alternative or successive; certiorari is not a substitute for appeal, and where an appeal is available, certiorari will not prosper even if the ground is grave abuse of discretion.

Disposition

The petition was dismissed for lack of merit, and the challenged orders of the Cebu court stand.

Remember This

Memorize the test: does the order leave something to be done in the trial court on the merits? If yes, it is interlocutory; if no, it is final and appealable, and certiorari will not lie. Examiners use this case to test the final versus interlocutory distinction and the mutual exclusivity of appeal and certiorari, especially where a party skips appeal and goes straight to certiorari.