Certiorari and Evidence: Court of Appeals Can Receive New Proof in Special Civil Actions

In a foreclosure dispute between the Spouses Marcelo and LBC Bank, the Supreme Court settled an important question in Philippine remedial law: may the Court of Appeals receive new evidence in a special civil action for certiorari? The answer is yes, and the ruling clarifies the appellate court's broad authority to resolve factual issues even in cases questioning a trial court's jurisdiction.

The Case Background

In 1997 and 1998, the Spouses Marcelo obtained two loans from LBC Bank totaling P5.3 million, secured by a real estate mortgage over their property in Baliuag, Bulacan. When they defaulted, LBC Bank extra-judicially foreclosed the mortgage in October 1998. The property was sold at public auction on 25 November 1998, with LBC Bank as the highest bidder. The spouses failed to redeem the property within the prescribed period.

On 5 December 2000, Ricardo B. Milan, Jr., LBC Bank's Meycauayan Branch Manager, executed an Affidavit of Consolidation of Title. On 1 February 2001, the title was cancelled and a new one issued in LBC Bank's name. On 12 October 2004, LBC Bank filed a petition for a writ of possession with the Regional Trial Court of Bulacan, Branch 11, which granted the petition on 1 December 2004.

The Dispute Over Authority

The Spouses Marcelo moved for reconsideration, arguing that the consolidation of title was invalid because Milan allegedly lacked authority to execute the affidavit. They also claimed the petition for writ of possession was improperly verified. The trial court denied their motion.

The spouses then filed a petition for certiorari with the Court of Appeals, claiming the trial court gravely abused its discretion. Initially, the Court of Appeals granted the petition on 16 June 2006, annulling the trial court's decision.

The Court of Appeals Reconsiders

LBC Bank moved for reconsideration, attaching new documents: an affidavit from its Chief Finance Officer attesting to the bank's practice that branch managers have full authority to consolidate ownership, and two Secretary's Certificates confirming and ratifying Milan's authority. On 26 March 2008, the Court of Appeals granted the motion "in the interest of substantial justice," affirmed the trial court, and denied the spouses' subsequent motion for reconsideration.

The Supreme Court's Ruling

The sole issue was whether the Court of Appeals could admit new evidence in a special civil action for certiorari. The Supreme Court ruled that it could.

Citing Maralit v. Philippine National Bank (G.R. No. 163788, 24 August 2009) and VMC Rural Electric Service Cooperative, Inc. v. Court of Appeals (G.R. No. 153144, 12 October 2006), the Court pointed to Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902. This provision explicitly grants the Court of Appeals "the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings."

The Court held that the Court of Appeals did not err in admitting evidence showing LBC Bank's express ratification of Milan's authority to consolidate title. Admitting such evidence in resolving a motion for reconsideration was likewise proper. To rule otherwise, the Court said, "will certainly defeat the ends of substantial justice."

Practical Takeaways

• The Court of Appeals has broad evidentiary powers in certiorari cases. It may receive new evidence to resolve factual issues, not just review the records below.
• Ratification cures defects in authority. Even if a corporate officer acted without prior authority, a subsequent express ratification by the corporation can validate the act.
• Motions for reconsideration can introduce new evidence. The appellate court may consider newly submitted documents when deciding whether to amend its decision.
• Certiorari is not strictly limited to jurisdictional errors in practice. The appellate court can examine evidence to determine whether grave abuse of discretion occurred.
• For parties before the Court of Appeals, be prepared to present complete evidence early, but know that belated submissions may still be considered in the interest of substantial justice.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.