Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 193919               June 15, 2015

BINAN RURAL BANK, Petitioner,
vs.
JOSE WILLELMINO G. CARLOS and MARTINA ROSA MARIA LINA G. CARLOS-TRAN, represented by their Attorney-in-fact, ATTY. EDWIN D. BALLESTEROS, Respondents.

D E C I S I O N

BRION, J.:

We resolve the present petition for review on certiorari1 assailing the January 28, 2010 decision2 and September 30, 2010 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 109157.

The CA dismissed the appeal filed by Bifian Rural Bank (petitioner) from the Regional Trial Court's (RTC) denial of its motion to dismiss the complaint for reconveyance (and annulment of absolute sale, real estate ē mortgage, certificate of sale, title, with damages) filed by Jose Willelmino G. Carlos and Martina Rosa Maria Lina G. Carlos-Tran (respondents)4

Brief Statement of Facts

The respondents filed a complaint5for reconveyance, annulment of absolute sale, real estate mortgage, certificate of sale, title, with damages against the petitioner-bank and its co-defendants, Purita A. Sayo, Elmar G. Cristobal, the Register of Deeds of Quezon City, and Notary Public Atty. Al Harith D. Sali, before the RTC, Branch 83, Quezon City.

The petitioner moved to dismiss6 the complaint alleging that: (a) the bank is not a real-party-in-interest in the case, (b) in so far as the bank was concerned, the complaint failed to state a cause of action, and(c) the respondentsí cause of action against the bank was barred by the equitable principle of estoppel.

In an order7 dated August 26, 2008, the RTC denied the petitionerís motion to dismiss:

Section 2, Rule 3 of the 1997 Rule s of Civil Procedure require ( sic) that every action must be prosecuted and defended in the name of the real party in interest.1‚wphi1 A " real party in interest " is one who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. " Interest" within the meaning of the rule means material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest. A cursory reading of the complaint will readily show that defendant bank herein is a real party in interest since complainants seek to annul, among others, the certificate of sale in the name of defendant bank and the title in the name of Purita Sayo and it is only in this action that the former can raise the defense of mortgagee in good faith.

As to defendant-bankís allegations that the complaint fails to state a cause of action for the averment of fraud or bad faith allegedly committed was not stated with particularity in the complaint, making it defective and that plaintiffís purported cause of action is barred by the equitable principle of estoppels hence, must be ignored for what is required by the rules for the sufficiency of the complaint are allegations of ultimate facts (Rule 8, Sec. 1 Civil Procedure). Hence, details of probative matters should not be alleged. The defense of defendant bank that it acted in good faith are matters of defense that should be threshed out in a full-blown trial. [Footnote omitted.]

x x x x8

The petitioner moved for the reconsideration of the ruling,9 but the RTC denied its motion in a subsequent order10 dated May 26, 2009.

The petitioner then filed a petition for certiorari11 before the CA assailing the RTCís orders dated August 26, 2008, and May 26, 2009.

In its decision, the CA dismissed the petitionerís certiorari petition for lack of merit. It found that the RTC did not gravely abuse its discretion when it issued the assailed orders; that the respondent judge, in fact, clearly stated in his orders the reasons for denying the petitionerís motion to dismiss.

The CA denied the petitionerís subsequent motion for reconsideration;12 opening the way for the petitionerís present petition for review on certiorari with this Court. The petition presents the same issues raised before the RTC and the CA.

Our Ruling

We DENY the petition for lack of merit.

An order denying a motion to dismiss is interlocutory and neither terminates nor finally disposes of a case; it is interlocutory as it leaves something to be done by the court before the case is finally decided on the merits.

The denial of a motion to dismiss generally cannot be questioned in a special civil action for certiorari, as this remedy is designed to correct only errors of jurisdiction and not errors of judgment.13 Neither can a denial of a motion to dismiss be the subject of an appeal which is available only after a judgment or order on the merits has been rendered.14 Only when the denial of the motion to dismiss is tainted with grave abuse of discretion can the grant of the extraordinary remedy of certiorari be justified.15

Grave abuse of discretion is the capricious or whimsical exercise of judgment that effectively brings the acting entity outside the exercise of its proper jurisdiction.16 The abuse of discretion must be grave, as when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and the abuse must be so patent and gross so as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined, or to act at all in contemplation of law, as to be equivalent to having acted without jurisdiction.17

We agree with the CA that using this standard, the RTC did not commit any grave abuse of discretion when it acted as it did. No arbitrariness or despotism attended the issuance of the assailed orders, as the RTC Ė particularly its August 26, 2008 order Ė adequately provided and discussed the reasons and legal bases for denying the petitionerís motion to dismiss. Mere error of judgment on the part of the RTC, if any, is insufficient ground to reverse the CA's dismissal of the petitioner's certiorari petition.

As heretofore clarified, a special civil action for certiorari is for the correction of errors of jurisdiction (where the act complained of was issued by the court without or in excess of jurisdiction, or with grave abuse of discretion), and not errors of judgment; in the latter case, the court may have been legally in error in its conclusion, but was still acting in the exercise of its jurisdiction.18

The issues that the petitioner raised are more properly ventilated during the trial of the reconveyance case. Questions of whether the complaint states a cause of action or is barred by estoppel, for instance, require the presentation and/or determination of facts, and can best be resolved in the trial on the merits of the case.19

WHEREFORE, we DENY the petition for review on certiorari for lack of merit. The decision dated January 28, 2010 and resolution dated September 30, 2010 of the Court of Appeals in CA-G.R. SP No. 109157 are hereby AFFIRMED. Costs against the petitioner.

SO ORDERED.

ARTURO D. BRION
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

MARIANO C. DEL CASTILLO
Associate Justice
JOSE CATRAL MENDOZA
Associate Justice

MARVIC M.V.F. LEONEN
Associate Justice

A T T E S T A T I O N

I attest 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 Courtís Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersonís Attestation, I certify that the conclusions in the above Decision had been reached in consultation before case was assigned to the writer of the opinion of the Courtís Division.

MARIA LOURDES P.A. SERENO
Chief Justice

Footnotes

1 Rollo, pp. 3-18.

2 Penned by Associate Justice Amelita G. Tolentino, with Associate Justices Arturo G. Tayag and Elihu A. Ybanez, concurring; id. at 67-73.

3 Id. at 87-89.

4 Represented by their Attorney-in-fact, Atty. Edwin D. Ballesteros.

5 Docketed as Civil Case No. Q-06-58431; rollo, pp. 23-28.

6 In a motion dated December 5, 2007; id. at 30-37.

7 Issued by Judge Ralph S. Lee; id. at 39-40.

8 Id. at 40.

9 In a motion dated September 21, 2008; id. at 41-46.

10 Id. at 48.

11 With application for the issuance of a writ of preliminary injunction and/or temporary restraining order; id. at 49-63

12 Id. at 74-83.

13 Rimbunan Hijau Group of Companies v. Oriental Wood Processing Corporation, 507 Phil. 631, 645 (2005).

14 See Bernardo v. CA, 388 Phil. 793 (2000); Diaz v. Diaz , 387 Phil. 314 (2000).

15 NM Rothschild & Sons (Australia) Limited v. Lepanto Consolidated Mining Company, G.R. No. 175799, November 28, 2011, 661 SCRA 328, 337, citing Global Business Holdings, Inc. v. Surecomp Software, B.V. , G.R. No. 173463, October 13, 2010, 633 SCRA 94, 102.

16 Feliciano v. Villasin, G.R. No. 174929, June 27, 2008, 556 SCRA 348; Uy v. Office of the Ombudsman, G.R. Nos. 156399-400, June 27, 2008, 556 SCRA 73.

17 Vergara v. Ombudsman, G.R. No. 174567, March 12, 2009, 580 SCRA 693; Nationwide Security and Allied Services, Inc. v. Court of Appeals, G.R. No. 155844, 14 July 2008, 558 SCRA 148.

18 See First Corporation v. Former Sixth Division of the Court of Appeals, G.R. No. 171989, July 4, 2007, 526 SCRA 564, 578.

19 See Paranaque Kings Enterprises, Inc. v. Court of Appeals, 335 Phil 1184 (1997).


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