GR 163735; (November, 2006) (Digest)
G.R. No. 163735; November 24, 2006
Green Asia Construction and Development Corporation and Sps. Renato and Delia Legaspi, Petitioners, vs. The Honorable Court of Appeals and PCI Leasing and Finance, Inc., Respondents.
FACTS
Petitioner Green Asia Construction and Development Corporation (GACDC), represented by its president Renato Legaspi, obtained a loan from respondent PCI Leasing and Finance, Inc. (PCILFI). As security, the petitioner spouses executed a real estate mortgage over three parcels of land. Upon GACDC’s failure to pay the loan, the mortgage was extrajudicially foreclosed, with PCILFI emerging as the highest bidder. A certificate of sale was issued and registered. Subsequently, PCILFI filed a petition for a writ of possession with the Regional Trial Court (RTC), which was granted.
Petitioners then filed motions to set aside the certificate of sale and cancel the writ, arguing the petition for the writ was defective because the verification and certification against forum shopping was signed by PCILFI’s lawyer without proof of authority. The RTC denied these motions, a decision affirmed by the Court of Appeals.
ISSUE
The core issues were: (1) whether the petition for a writ of possession was defective due to an improperly executed verification and certification against forum shopping; and (2) whether an appeal was the appropriate remedy from the RTC order granting the writ.
RULING
The Supreme Court denied the petition, affirming the Court of Appeals. On the first issue, the Court held that a petition for a writ of possession following an extrajudicial foreclosure is not an initiatory pleading that commences an original action. It is properly characterized as a mere motion in a proceeding that is summary in nature. The right to possession arises from the purchaser’s ownership acquired at the foreclosure sale. Consequently, the stringent requirements for a verification and certification against forum shopping, which apply only to initiatory pleadings, are inapplicable. The signature of PCILFI’s lawyer on the certification thus did not render the petition defective.
On the second issue, the Court clarified that the appeal mechanism under Section 8 of Act No. 3135 applies only when the debtor, within thirty days after the purchaser obtains possession, petitions to set aside the foreclosure sale on specific grounds (e.g., that the mortgage was not violated or the sale was not conducted in accordance with the law). Here, petitioners’ motions were filed years after the issuance of the writ and were based on a claim of the mortgage’s nullity—a substantive challenge not falling within the limited scope of Section 8. Therefore, an ordinary appeal from the order granting the writ was not the proper remedy for their belated collateral attack. The RTC correctly denied their motions, and the appellate court committed no error.