In Juanito M. Gopiao v. Metropolitan Bank & Trust Co., the Supreme Court addressed the enforcement of a writ of possession against a third party claiming ownership of foreclosed property. The Court ruled that while the issuance of a writ of possession is typically a ministerial duty, it is not absolute. It ceases to be ministerial when a third party is in actual possession, asserting a right adverse to that of the debtor-mortgagor. However, the Court emphasized that the third party must provide substantial evidence to support their claim of possession; a mere unnotarized and unregistered deed of sale is insufficient to halt the writ’s execution. This decision clarifies the criteria for third-party intervention in writ of possession cases, ensuring a balance between the mortgagee’s rights and the protection of legitimate adverse claims.

Foreclosure Face-Off: Can an Unproven Claim Halt a Bank’s Possession?

This case revolves around a dispute over real properties in San Fernando, Pampanga, initially owned by the Spouses Legaspi. Metropolitan Bank & Trust Co. (Metrobank) foreclosed on these properties after the Spouses Legaspi defaulted on their loan. After purchasing the properties at a public auction, Metrobank sought a writ of possession. Juanito M. Gopiao then intervened, claiming ownership based on a Deed of Sale from the Spouses Legaspi predating the mortgage. Gopiao argued that his alleged possession, stemming from this sale, should prevent the enforcement of the writ.

The central legal question is whether Gopiao’s claim, supported by an unnotarized and unregistered deed, is sufficient to qualify him as a third party in adverse possession, thereby halting Metrobank’s right to the writ of possession. The RTC and the CA both ruled against Gopiao, finding his claim unsubstantiated. Gopiao elevated the case to the Supreme Court, asserting that the lower courts had erred in disregarding his right as an adverse possessor and in considering Metrobank’s good faith as a mortgagee.

The Supreme Court began its analysis by reiterating the general rule regarding writs of possession. A writ of possession is a writ of execution used to enforce a judgment to recover land possession. Sections 6 and 7 of Act 3135, as amended, allow the issuance of a writ in favor of a purchaser at a foreclosure sale, either during the redemption period (with a bond) or after the redemption period (without a bond). The Court emphasized that issuing a writ of possession is typically a ministerial function, not subject to restraint, even if the foreclosure’s validity is challenged in a separate civil case. This principle is based on the idea that once the title is consolidated in the buyer’s name after the redemption period, the right to possession becomes absolute.

However, the Court also acknowledged an exception to this rule, drawing from Section 33 of Rule 39 of the Rules of Court, which states:

SEC. 33. Deed and possession to be given at expiration of redemption period; by whom executed or given.

Upon the expiration of the right of redemption, the purchaser or redemptioner shall be substituted to and acquire all the rights, title, interest and claim of the judgment obligor to the property as of the time of the levy. The possession of the property shall be given to the purchaser or last redemptioner by the same officer unless a third party is actually holding the property adversely to the judgment obligor.

The Supreme Court clarified that this exception applies when a third party possesses the property, claiming a right adverse to the debtor-mortgagor. Gopiao argued that this exception should apply to his case. He cited previous rulings where the Court prevented the enforcement of writs against adverse third-party possessors. The Court distinguished the current case from those precedents, highlighting a crucial difference: the certainty of possession. In the cases Gopiao cited, the third party’s actual possession was undisputed, and the mortgagee-banks were even aware of it. The banks insisted on obtaining writs instead of pursuing independent actions to assert their claims.

In Gopiao’s case, the Court found his possession to be questionable. The Deed of Absolute Sale he presented was neither complete nor in due form. It lacked essential details such as the tax account numbers of the parties and the names of witnesses. Furthermore, the document was not notarized. As the Court of Appeals noted, Gopiao failed to prove the due execution and authenticity of the deed. Apart from the unnotarized and unrecorded Deed, Gopiao presented no other convincing evidence to support his claim of ownership or possession.

Building on this, the Court noted that the titles covering the properties showed no trace of Gopiao’s claim. The unnotarized Deed of Sale was not annotated on the titles. There was also no notice or adverse claim inscribed on the back of the titles. Upon verification, Metrobank found that the titles and tax declarations were still registered under the names of the Spouses Legaspi, with no indication of a sale to Gopiao. The Court questioned why, if Gopiao had purchased the properties in 1995, he had not taken steps to obtain the titles or register his ownership. He also failed to provide evidence of paying real estate taxes under his name.

Adding to the doubt, both the RTC and CA found that Metrobank had discovered no occupants on the properties when they inspected them before approving the Spouses Legaspi’s loan. In light of all these facts, the Supreme Court held that the lower courts had not acted with grave abuse of discretion in denying Gopiao’s intervention. Because Gopiao had failed to substantiate his claim of possession, the general rule applied, allowing the writ of possession to be enforced.

The Court then addressed Gopiao’s argument that the CA had erred in invoking the rule on double sales and considering Metrobank’s good faith. Gopiao argued that the rule on double sales under Article 1544 of the Civil Code was inapplicable because the first transaction was a sale and the second was a mortgage, not another sale. Article 1544 of the Civil Code states:

Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.

The Supreme Court disagreed, noting that jurisprudence applies the double sales rule to cases where one sale occurs in a public auction. The Court cited Express credit Financing Corporation v. Spouses Velasco, a case with similar facts, where the double sales rule was used to determine preferential rights over a property sold first by deed and then through foreclosure. The Court also affirmed the CA’s finding of Metrobank’s good faith, noting that the bank checked the property records and found no occupants before approving the loan.

The Court clarified that the CA’s discussion of double sale and good faith was based on the assumption, for the sake of argument, that the Spouses Legaspi had indeed sold the properties to both Gopiao and Metrobank. The Court suggested that, even if Gopiao could establish his possession, he would still face the challenge of the double sale rule and the need to overcome Metrobank’s good faith. The Supreme Court emphasized that an independent civil action remains an available remedy for Gopiao to further vindicate his claim of ownership, despite the current ruling. The Court ultimately affirmed the decisions of the lower courts, denying Gopiao’s petition.

FAQs

What was the key issue in this case?	The key issue was whether Juanito Gopiao’s claim of ownership, based on an unnotarized and unregistered deed of sale, was sufficient to prevent Metropolitan Bank & Trust Co. from obtaining a writ of possession over foreclosed properties.
What is a writ of possession?	A writ of possession is a court order directing the sheriff to deliver possession of property to the person entitled to it, typically the purchaser in a foreclosure sale.
Under what circumstances can a writ of possession be issued?	A writ of possession can be issued in favor of a purchaser in a foreclosure sale either within the one-year redemption period (upon filing a bond) or after the lapse of the redemption period (without a bond).
Is the issuance of a writ of possession always a ministerial duty?	Generally, yes, the issuance of a writ of possession is a ministerial duty of the court. However, this duty ceases to be ministerial if a third party is in actual possession, asserting a right adverse to the debtor-mortgagor.
What evidence is required to prove adverse possession by a third party?	More than just a claim is needed; sufficient evidence is required to substantiate the third party’s possession. An unnotarized and unregistered deed of sale, without more, is generally insufficient.
What is the significance of the Deed of Sale being unnotarized and unregistered?	An unnotarized and unregistered Deed of Sale raises doubts about its authenticity and due execution, making it difficult to prove a valid transfer of ownership and actual possession.
What is the rule on double sales under Article 1544 of the Civil Code?	Article 1544 provides rules for determining ownership when the same property is sold to different vendees. Ownership goes to the first possessor in good faith (if movable), the first to register in good faith (if immovable), or the first possessor in good faith (if no registration).
What is the relevance of good faith in this case?	The good faith of Metropolitan Bank as a mortgagee is relevant under the assumption that a double sale occurred (i.e., the property was sold to both Gopiao and Metrobank). Good faith is determined by whether the bank had knowledge of the prior sale.
What recourse does Juanito Gopiao have after this decision?	The Court noted that Gopiao can still pursue an independent civil action to vindicate his claim of ownership, despite the adverse findings in this case.

In conclusion, Gopiao v. Metrobank underscores the importance of providing concrete evidence of possession when claiming adverse rights against a writ of possession. While the law recognizes exceptions to the ministerial duty of issuing a writ, these exceptions require solid proof of actual, adverse possession. This case serves as a reminder to properly document and register property transactions to protect one’s ownership rights.

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: JUANITO M. GOPIAO vs. METROPOLITAN BANK & TRUST CO., G.R. No. 188931, July 28, 2014