G.R. No. 573 : April 21, 1903

FACTS:
The La Junta Administradora de Obras Pias (Obras Pias) held two mortgages on properties owned by Ricardo Regidor. In 1885, Obras Pias filed an executive action to foreclose these mortgages due to non-payment. During the proceedings, The Hongkong and Shanghai Banking Corporation (the Bank) presented a deed showing it had acquired the properties from Regidor in 1883 under a pacto de retro sale. The court, by order of December 31, 1894, substituted the Bank as the defendant in place of Regidor. Regidor’s attempts to appeal this substitution order were unsuccessful. The properties were eventually adjudicated to Obras Pias at a public auction in 1897, and a deed was executed in its favor in 1898.

In 1900, while Obras Pias was in possession, Regidor filed an incidente de nulidad (incident of nullity) in the same executory action, seeking to annul the 1894 substitution order and all subsequent proceedings. He claimed the deed to the Bank was merely security for a loan that had been paid. Default judgment was rendered against Obras Pias and the Bank on May 28, 1900, which effectively restored possession to Regidor and required Obras Pias to repay collected rents. Obras Pias and the Bank successfully appealed this default judgment to the Supreme Court via a recurso de queja. The case was elevated to the Supreme Court for final decision on the merits of these appeals and various ancillary motions, including a motion by Regidor to suspend proceedings due to an alleged pending criminal complaint for falsification of the 1898 deed.

ISSUE:
The primary issues for resolution were:
1. Whether the proceedings in the main foreclosure case should be suspended due to a pending criminal complaint.
2. Whether the recurso de queja was a proper remedy and whether the Supreme Court of Justice had jurisdiction to admit the appeals from the default judgment.
3. Whether the default judgment of May 28, 1900, and the incidente de nulidad commenced by Regidor were valid.
4. The propriety of various ancillary motions, including challenges to legal representation and requests for suspension for criminal investigation.
5. Whether a writ of error to the United States Supreme Court was available.

RULING:
The Supreme Court ruled in favor of Obras Pias and the Bank.
1. On the Motion to Suspend Proceedings: The motion was denied. The court held that the prior referral of a criminal complaint to the fiscal and a request for the document did not constitute a formal “admission” of the complaint under the old Code of Civil Procedure that would warrant suspension of the civil case.
2. On Jurisdiction and the Recurso de Queja: The court held that the Supreme Court of Justice properly had jurisdiction to entertain the recurso de queja and admit the appeals. Act No. 75 did not abolish this remedy, and that court was the final arbiter of whether such recourse was properly brought.
3. On the Merits (Nullity Incident): The judgment of May 28, 1900, was reversed. The court annulled the entire incidente de nulidad and the complaint that initiated it. The court found no merit in Regidor’s claim of nullity. The order substituting the Bank as defendant was valid, and Regidor’s earlier appeal from the substitution order was not suspensive and was later abandoned, thus it did not invalidate the subsequent foreclosure sale and adjudication to Obras Pias.
4. On Ancillary Matters: The court affirmed the right of the Bank’s lawyer to appear, denied motions for suspension to investigate alleged crimes (finding no evidence thereof), and affirmed related lower court orders. The court also ordered that Obras Pias be restored to possession of the properties and that Regidor must repay all rents he had collected since the 1900 judgment, as he was not a possessor in good faith.
5. On the Application for a Writ of Error: The application was denied. The court held that the value in controversy did not exceed $25,000 as required by the Act of July 1, 1902, for appeals to the U.S. Supreme Court. The core dispute involved the mortgage debt (approximately 12,000 pesos plus interest), not the full title to the property valued over $25,000.