In foreclosure proceedings, a writ of possession is generally issued as a ministerial duty of the court, allowing the purchaser to take control of the foreclosed property. However, this duty is not absolute. It becomes discretionary when a third party is in possession of the property, claiming a right adverse to that of the debtor or mortgagor. This ruling ensures that the rights of third parties are protected and that they are not dispossessed without due process. The Supreme Court clarifies that to be considered a third party, one must assert a right independent of the debtor, a principle crucial in safeguarding the interests of those legitimately occupying foreclosed properties.

Navigating Foreclosure: Can a School and Its Community Block a Bank’s Possession?

This case revolves around the foreclosure of a property owned by spouses Denivin and Josefina Ilagan, which was mortgaged to Metropolitan Bank and Trust Company (MBTC). The spouses defaulted on their loan, leading to the extrajudicial foreclosure of the mortgaged properties. During the redemption period, MBTC filed an ex-parte petition for a writ of possession. The Parents-Teachers Association (PTA) of St. Mathew Christian Academy (SMCA), along with teachers and students, sought to intervene, claiming their rights would be affected by the writ’s implementation. The central legal question is whether the PTA, teachers, and students of SMCA qualify as third parties with rights adverse to the mortgagor, thus preventing the issuance and implementation of the writ of possession.

The trial court initially allowed the intervention but later reversed its decision, directing the implementation of the writ. The Court of Appeals (CA) dismissed the PTA’s petition for certiorari, stating that they should have filed a petition to set aside the sale and cancel the writ. Dissatisfied, the PTA elevated the case to the Supreme Court, arguing that their rights as possessors of the property were being violated. The Supreme Court, however, sided with MBTC, clarifying the scope and limitations of third-party rights in foreclosure proceedings.

The Supreme Court emphasized that the issuance of a writ of possession is a ministerial duty unless a third party is claiming a right adverse to that of the debtor or mortgagor. The Court cited Section 7 of Act No. 3135, which explicitly authorizes the purchaser in a foreclosure sale to apply for a writ of possession during the redemption period. However, it also acknowledged the exception carved out in Barican v. Intermediate Appellate Court, which states that this duty ceases to be ministerial when a third party possesses the property and claims an adverse right.

Ordinarily, a purchaser of property in an extrajudicial foreclosure sale is entitled to possession of the property. Thus, whenever the purchaser prays for a writ of possession, the trial court has to issue it as a matter of course. However, the obligation of the trial court to issue a writ of possession ceases to be ministerial once it appears that there is a third party in possession of the property claiming a right adverse to that of the debtor/mortgagor.

In this case, the Supreme Court found that the PTA, teachers, and students did not qualify as third parties with adverse rights. The teachers’ possession was based on their employment contracts with the school, and the students’ presence was rooted in their contractual relationship with the school. These relationships, the Court reasoned, did not create rights independent of or adverse to SMCA. The Court noted that their interests were necessarily inferior to that of the school, and their contracts did not attach to the school premises.

The Court further addressed the PTA’s argument regarding the lack of authority to sign the certificate of non-forum shopping attached to MBTC’s petition for the writ of possession. The Court dismissed this argument, citing Green Asia Construction and Development Corporation v. Court of Appeals, which clarified that a certification on non-forum shopping is required only in initiatory pleadings. Since the petition for a writ of possession is considered a motion, it does not require such certification. This is because the purpose of a motion is not to initiate litigation but to bring up a matter arising in the progress of the case where the motion is filed.

Petitioners argued that the students’ right to quality education and academic freedom was being violated. The Court found this argument unconvincing, stating that the constitutional mandate to protect and promote the right to quality education is directed to the State, not to the school. The Court also clarified that academic freedom, as enshrined in Article XIV, Section 5(2) of the Constitution, pertains to the freedom of intellectual inquiry and the autonomy of institutions of higher learning, and does not extend to preventing the implementation of a valid writ of possession. The court held that the students failed to show how the right to quality education was violated by the Order granting the writ of possession.

The Court also addressed the issue of due process, rejecting the PTA’s claim that the trial court should have conducted a trial before denying their motion to intervene. The Court reiterated that the issuance of a writ of possession is a ministerial duty, and an ex parte petition for its issuance under Section 7 of Act No. 3135 is not a judicial process requiring a full-blown trial. The Court cited Idolor v. Court of Appeals, which described the nature of the ex parte petition as a non-litigious proceeding that is summary in nature.

The Supreme Court upheld the CA’s decision that the proper remedy for the petitioners was a separate, distinct, and independent suit, as provided for in Section 8 of Act No. 3135. This section allows the debtor to petition that the sale be set aside and the writ of possession canceled, specifying the damages suffered. The Court cited De Gracia v. San Jose, emphasizing that questions regarding the regularity and validity of the sale should be determined in a subsequent proceeding, not as a justification for opposing the issuance of the writ of possession.

SEC. 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty days after the purchaser was given possession, petition that the sale be set aside and the writ of possession canceled, specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in accordance with the provisions hereof…

The Court also affirmed the CA’s ruling that a motion for reconsideration must generally be filed before resorting to the special civil action of certiorari. This allows the trial court an opportunity to correct any errors it may have committed. While there are exceptions to this rule, such as when the filing of a motion for reconsideration would serve no useful purpose, the Court found that the PTA had not demonstrated that their case fell under any of these exceptions. Petitioners had the burden to substantiate that their immediate resort to the appellate court was based on any of the exceptions to the general rule.

The Court rejected the petitioners’ plea for considerations of equity, emphasizing that equity is applied only in the absence of, and never against, statutory law or judicial rules of procedure. The Court held that justice demanded conformity to the positive mandate of Act No. 3135, as amended, and that equity could not be invoked to overrule or supplant the express provisions of the law. Positive rules prevail over all abstract arguments based on equity contra legem.

FAQs

What was the key issue in this case?	The key issue was whether the PTA, teachers, and students of SMCA could be considered third parties with rights adverse to the mortgagor, preventing the issuance of a writ of possession to MBTC.
What is a writ of possession?	A writ of possession is a court order that directs the sheriff to place a person in possession of a property. In foreclosure cases, it allows the purchaser to take control of the foreclosed property.
When is the issuance of a writ of possession considered ministerial?	The issuance of a writ of possession is considered ministerial after the foreclosure sale and during the period of redemption, meaning the court must issue it as a matter of course. However, it ceases to be ministerial if a third party is in possession, claiming a right adverse to the debtor.
Who is considered a third party in relation to a writ of possession?	A third party is someone in possession of the property who is claiming a right adverse to that of the debtor or mortgagor. This means they have a claim of ownership or possession that is independent of the debtor’s rights.
Why were the PTA, teachers, and students not considered third parties in this case?	The Court found that their possession was based on their contractual relationships with the school (employment or enrollment), which did not create rights independent of the school’s rights as the debtor. Their interests were deemed inferior to the school’s, and their contracts did not attach to the property.
What is the proper remedy for a third party who believes their rights are being violated by a writ of possession?	The proper remedy is to file a separate, distinct, and independent suit under Section 8 of Act No. 3135, petitioning that the sale be set aside and the writ of possession canceled. This allows the court to determine the validity of the sale and the third party’s rights.
What is the significance of a certificate of non-forum shopping?	A certificate of non-forum shopping is a sworn statement that the party filing a case has not filed any other case involving the same subject matter in any other court. It is required only in initiatory pleadings, not in motions like a petition for a writ of possession.
Can a court consider equity in deciding whether to issue a writ of possession?	Equity can be considered only in the absence of law, not against it. In this case, because Act No. 3135 provides a clear legal framework, equity could not be used to overrule or supplant the express provisions of the law.

The Supreme Court’s decision reaffirms the importance of adhering to established legal procedures in foreclosure cases, particularly concerning the issuance of writs of possession. It clarifies that while the process is generally ministerial, the rights of third parties must be carefully considered. This ensures a balance between the rights of the mortgagee and the protection of individuals legitimately occupying the property. This case serves as a reminder that claims of adverse possession must be substantiated with rights independent of the mortgagor to prevent the implementation of a writ of possession.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: PTA vs. MBTC, G.R. No. 176518, March 02, 2010