DIGEST/CHARLES GILAGA/ ZOMER DEVELOPMENT COMPANY, INC., PETITIONER, VS. SPECIAL TWENTIETH DIVISION OF THE COURT OF APPEALS, CEBU CITY AND UNION BANK OF THE PHILIPPINES, RESPONDENTS.

ZOMER DEVELOPMENT COMPANY, INC., PETITIONER, VS. SPECIAL TWENTIETH DIVISION OF THE COURT OF APPEALS, CEBU CITY AND UNION BANK OF THE PHILIPPINES, RESPONDENTS.

G.R. No. 194461, January 07, 2020

Facts:

                Zomer Development Company, Inc. (Zomer Development owned three (3) parcels of land in Cebu City. The properties were mortgaged to International Exchange Bank as security for its loan. When Zomer Development failed to pay its indebtedness, International Exchange Bank foreclosed on the properties.

When the auction was conducted, International Exchange Bank emerged as the highest bidder. Thus, the Sheriff issued to it Certificates of Sale on November 19, 2001. The Certificates of Sale provided for a period of redemption of twelve months from registration, "or sooner and/or later, as provided for under applicable laws."

International Exchange Bank registered the Certificates of Sale in the Register of Deeds.

Zomer Development filed a Complaint for Declaration of Nullity of Notice of Sale, Certificate of Sale  &  TCTs and Declaration  as Unconstitutional Sec. 47, RA No. 8791. It argued that Section 47 of Republic Act No. 8791, or the General Banking Law of 2002, violates its right to equal protection since the law provides a shorter period for redemption of three (3) months or earlier to juridical entities compared to the one (1) year redemption period given to natural persons. This discrimination, it argued, gives "undue advantage to lenders who are non-banks."

The Regional Trial Court dismissed the Complaint. The trial court refused to rule on the constitutionality of Republic Act No. 8791, Section 47. According to the trial court, to rule on the issue will deprive the Republic of its right to due process since it was not heard on the issue and was not impleaded as party defendant in the case.

Zomer Development appealed this Decision to the Court of Appeals, arguing that the Republic was not required to be impleaded when questions regarding the constitutionality of a statute are raised.

The Court of Appeals rendered a Decision dismissing the appeal.

Zomer Development now files this Petition for Mandamus before the SC, praying that the Court of Appeals be compelled to resolve the issue on the constitutionality of Republic Act No. 8791, Section 47 in CA­ G.R. CV No. 00288.

 

ISSUE: Whether or not the Petition for Mandamus was the proper remedy, or more succinctly, whether the Court of Appeals can be compelled to rule on the constitutionality of a statute by writ of mandamus.

 

 

Ruling:

 

The grant of declaratory relief is discretionary on the courts. Courts may refuse to declare rights or to construe instruments if it will not terminate the controversy or if it is unnecessary and improper under the circumstances. A discretionary act cannot be the subject of a petition for mandamus.

While Petitioner's Complaint before the trial court was captioned as one for Declaration of Nullity of Notice of Sale, Certificate of Sale  &  TCTs and Declaration as Unconstitutional Sec. 47, RA No. 8791, it was, as the Court of Appeals correctly found, a petition for declaratory relief. Petitioner sought the declaration of Republic Act No. 8791 unconstitutional so that, in effect, the foreclosure proceedings of the properties now held by private respondent would be declared void.  

Courts, however, have the discretion of whether to entertain an action for declaratory relief. In Chan v. Galang :

Declaratory relief is discretionary upon the court to entertain. It may refuse to exercise the power to declare rights and to construe instruments in any case where the declaration or construction is not necessary and proper at the time under all the circumstances.

Rule 63, Section 5 of the Rules of Court:

SECTION 5. Court Action  Discretionary. - Except in actions falling under the second paragraph of section 1 of this Rule, the court, motu proprio or upon motion, may refuse to exercise the power to declare rights and to construe instruments in any case where a decision would not terminate the uncertainty or controversy which gave rise to the action, or in any case where the declaration or construction is not necessary and proper under the circumstances.

 

Mandamus, however, may issue only to compel the performance of a ministerial duty.  It cannot be issued to compel the performance of a discretionary act. In Metro Manila Development Authority v. Concerned  Residents of Manila Bay.

Petitioner cannot file a petition for mandamus to compel what is essentially a discretionary act on the Court of Appeals. What Petitioner should have done was to file a petition for certiorari to question the exercise of the Court of Appeals' discretion. Unfortunately, Petitioner filed the wrong remedy. As such, the Petition must be denied.