Carniyan vs. Home Guaranty Corporation

An order denying a motion to dismiss is interlocutory and cannot be challenged via certiorari under Rule 65 except where issued without or in excess of jurisdiction or with grave abuse of discretion; the proper remedy is to file an answer, proceed to trial, and appeal any adverse judgment. Likewise, the proper remedy against an order of default is a motion under oath to set it aside with an affidavit of merit, not certiorari.

Home Guaranty Corporation (HGC) sought to evict the petitioners—Edilberto P. Carniyan, Ricardo P. Camiyan, and Sherly R. Carniyan—from a portion of a 7,113-square-meter parcel of land in Constitution Hills, Quezon City, covered by Transfer Certificate of Title No. 262715. The assessed value of the property was ₱50,000.00. The case was filed before the Quezon City RTC, which under the prevailing jurisdictional rules had cognizance over actions involving title to or possession of real property regardless of assessed value thresholds applicable to ordinary civil actions.

On September 7, 2010, Home Guaranty Corporation (HGC) filed before the Quezon City RTC a complaint for recovery of possession against Edilberto P. Carniyan, Ricardo P. Camiyan, and Sherly R. Carniyan, seeking their eviction from a portion of a 7,113-square-meter parcel of land situated in Constitution Hills, Quezon City, covered by Transfer Certificate of Title No. 262715. The complaint was docketed as Civil Case No. Q-09-64015 and raffled to Judge Tita Marilyn Payoyo-Villordon of Branch 224.

Instead of filing an answer, the petitioners filed a Motion to Dismiss on October 8, 2010, arguing that the RTC lacked jurisdiction because HGC had not yet acquired ownership over the contested property and because the assessed value fell below ₱400,000.00, the alleged jurisdictional amount for civil actions in Metro Manila. They subsequently filed a Motion to Archive the Case on December 10, 2010, seeking to hold the proceedings in abeyance until HGC submitted a certified true copy of TCT No. 262715. On March 18, 2011, Judge Villordon denied both motions, ruling that the case involved title to or possession of real property with an assessed value of ₱50,000.00, over which the RTC had jurisdiction, and that the motion to archive was merely dilatory.

On June 29, 2011, the petitioners filed a Motion to Expunge/Rescind the Interlocutory Order with Motion for Inhibition, contending that the trial court failed to pass upon their allegation of non-existence of a cause of action and that their previous motions were not intended to delay. They prayed that Judge Villordon inhibit herself and that the case be re-raffled. However, the petitioners had previously sought Judge Villordon's inhibition, which was denied through an order dated August 2, 2010. On February 8, 2012, Judge Villordon denied the motion, treating it as a motion for reconsideration of the March 18, 2011 order and reiterating her earlier denial of inhibition, and directed the petitioners to file an answer within a non-extendible period of 10 days.

Despite this directive, the petitioners failed to file an answer. On August 23, 2012, HGC moved to declare them in default. Before the RTC could resolve that motion, the petitioners filed another motion on October 8, 2012, styled as a Motion to Amend the February 8, 2012 Order, which again included a prayer for inhibition. On October 31, 2012, Judge Villordon denied this motion as a second motion for inhibition proscribed under A.M. No. 11-6-10-SC, struck it from the records as a mere scrap of paper, and granted HGC's motion to declare the petitioners in default, allowing HGC to present its evidence ex parte. On November 21, 2012, the ex parte hearing was rescheduled from December 9, 2012 (a Sunday) to December 14, 2012. The petitioners then challenged all four orders before the CA via a petition for certiorari, prohibition, and mandamus, which the CA dismissed as an improper remedy, a ruling affirmed by the Supreme Court.

• Lack of Jurisdiction: Petitioners argued that the RTC had no jurisdiction over the complaint because HGC had not yet acquired ownership over the contested property and because the assessed value thereof fell below ₱400,000.00, the alleged jurisdictional amount for civil actions filed in Metro Manila.
• Failure to Present Title: Petitioners contended that in actions for recovery of possession, the identity of the subject land must be established through the presentation of a certificate of title, and that absent a certified true copy of TCT No. 262715, the trial court was bereft of jurisdiction.
• Grave Abuse of Discretion: Petitioners maintained that Judge Villordon acted with grave abuse of discretion in issuing the challenged orders, including denying their motions, declaring them in default, and scheduling and rescheduling the ex parte hearing in a hasty and preemptive manner.
• Premature Default Order: Petitioners asserted that the October 31, 2012 order declaring them in default was prematurely issued by Judge Villordon.

• Propriety of Certiorari: Whether the challenged trial court orders dated March 18, 2011, February 8, 2012, October 31, 2012, and November 21, 2012 were issued with grave abuse of discretion such that certiorari under Rule 65 was the proper remedy.

• Propriety of Certiorari: No. The challenged orders were interlocutory in nature and were issued in accordance with the rules and established jurisprudence; none of the exceptions to the rule that certiorari does not lie against interlocutory orders applied, and the proper remedies were available to the petitioners but were not availed of.

• Propriety of Certiorari: An order denying a motion to dismiss is interlocutory, not final, and therefore may not be questioned on appeal except as part of an appeal from the final judgment. The appropriate remedy upon denial of a motion to dismiss is to file an answer, proceed to trial, and interpose an appeal in case of an adverse judgment, assigning as errors the grounds raised in the motion to dismiss. Certiorari under Rule 65 lies only in the absence of appeal or any plain, speedy, and adequate remedy in the ordinary course of law. While exceptions exist—when the order is issued without or in excess of jurisdiction, when there is patent grave abuse of discretion, or when appeal would not prove speedy and adequate—none applied here. The petitioners' jurisdictional argument failed because jurisdiction is conferred by law and determined by the allegations in the pleadings, not by the presentation of evidence; a motion to dismiss is filed before the parties have an opportunity to present evidence, so the absence of a certified true copy of TCT No. 262715 could not deprive the RTC of jurisdiction. The motion for inhibition was properly denied as a second motion for inhibition proscribed under A.M. No. 11-6-10-SC, which allows each party only one motion for inhibition strictly on grounds under Rule 137. As to the order of default, the proper remedy was a motion under oath to set aside the order of default upon showing that the failure to answer was due to fraud, accident, mistake, or excusable negligence, accompanied by an affidavit of merit showing a meritorious defense, pursuant to Section 3(b), Rule 9 of the Rules of Court. No judgment had yet been rendered, so certiorari was premature. Finally, regarding the rescheduling of the ex parte hearing, the petitioners failed to allege and prove any circumstance indicative of grave abuse of discretion, offering only bare allegations that the scheduling was hasty and preemptive.

• Interlocutory vs. Final Orders — A final order is one that finally disposes of a case, leaving nothing more to be done by the court, whereas an interlocutory order does not finally dispose of the case and indicates that other things remain to be done. An order denying a motion to dismiss is interlocutory and may not be questioned on appeal except as part of an appeal from the final judgment. The proper remedy is to file an answer, proceed to trial, and appeal any adverse judgment.
• Exceptions to the Rule Against Certiorari for Interlocutory Orders — Certiorari may lie against an interlocutory order when (a) the trial court issued the order without or in excess of jurisdiction; (b) there is patent grave abuse of discretion by the trial court; or (c) appeal would not prove to be a speedy and adequate remedy.
• Jurisdiction Determined by Allegations, Not Evidence — Jurisdiction is conferred by law and determined by the allegations in the pleadings, not by the presentation or absence of evidence. A motion to dismiss based on lack of jurisdiction is not dependent on the evidence of the parties, as it is filed before the parties have an opportunity to present evidence.
• Requisites to Lift an Order of Default — To set aside an order of default, the following requisites must be met: (a) a motion must be filed under oath by one who has knowledge of the facts; (b) the defending party's failure to file an answer was due to fraud, accident, mistake, or excusable negligence; and (c) the defending party shows the existence of a meritorious defense through an affidavit of merit.
• Single Motion for Inhibition — Under A.M. No. 11-6-10-SC, each party shall only be allowed to file one motion for inhibition in any case, strictly on grounds provided under Rule 137 of the Rules of Court.

• "A petition for certiorari under Rule 65 of the Rules of Court is a special civil action that may be resorted to only in the absence of appeal or any plain, speedy, and adequate remedy in the ordinary course of law." — This passage states the fundamental principle governing the availability of certiorari, anchoring the Court's conclusion that the remedy was improper.
• "Jurisdiction is conferred by law and determined by the allegations in the pleadings." — This formulation articulates the controlling rule on jurisdiction that defeated the petitioners' argument that the absence of a certified true copy of title deprived the RTC of jurisdiction.
• "Petitioners cannot mask their failure to file a Motion under Oath to Set Aside the Order of Default by the mere expedient of conjuring grave abuse of discretion to avail of a Petition for Certiorari." — Quoted from the CA and adopted by the Supreme Court, this passage underscores that certiorari cannot substitute for the plain, adequate remedy of a motion to lift default under Rule 9.

• Denso (Phils.), Inc. vs. Intermediate Appellate Court, 232 Phil. 256 (1987) — Followed for the distinction between final and interlocutory orders, specifically that an order denying a motion to dismiss is interlocutory and may not be separately appealed.
• Emergency Loan Pawnshop, Inc. vs. Court of Appeals, 405 Phil. 524 (2001) — Followed for the recognized exceptions to the rule that certiorari does not lie against an order denying a motion to dismiss: lack or excess of jurisdiction, patent grave abuse of discretion, or inadequacy of appeal.
• Lina vs. CA, et al., 220 Phil. 311 (1985) — Followed for the enumeration of alternative remedies available to a defendant declared in default, including motion for new trial, petition for relief, and appeal.
• City of Dumaguete vs. Philippine Ports Authority, 671 Phil. 610 (2011) — Followed for the principle that jurisdiction is conferred by law and determined by the allegations in the pleadings.

• Rule 65, Rules of Court — Governs the special civil action of certiorari, available only in the absence of appeal or any plain, speedy, and adequate remedy in the ordinary course of law. Applied to hold that certiorari was improper where the petitioners had available remedies such as filing an answer and appealing, or moving to lift the order of default.
• Rule 16, Sections 1 and 4, Rules of Court — Section 1 enumerates the grounds for a motion to dismiss, which must be filed before the answer; Section 4 provides that upon denial, the defendant may file an answer within the remaining reglementary period but not less than five days from notice of denial. Applied to show that the motion to dismiss was premature as a vehicle for challenging the absence of evidence.
• Rule 9, Section 3(b), Rules of Court — Provides the remedy for a party declared in default: a motion under oath to set aside the order of default upon showing that the failure to answer was due to fraud, accident, mistake, or excusable negligence, with an affidavit of merit demonstrating a meritorious defense. Applied to hold that the petitioners should have availed of this remedy rather than certiorari.
• A.M. No. 11-6-10-SC — Administrative matter specifically applicable to litigations in Quezon City trial courts, prohibiting the filing of multiple motions for inhibition by one party. Applied to uphold the denial of the petitioners' second motion for inhibition.

Peralta (Chairperson), Leonen, Hernando, and Inting, JJ., concurred.