GR 176518; (March, 2010) (Digest)
G.R. No. 176518 , March 2, 2010
THE PARENTS-TEACHERS ASSOCIATION (PTA) OF ST. MATHEW CHRISTIAN ACADEMY, GREGORIO INALVEZ, JR., ROWENA LAYUG, MALOU MALVAR, MARILOU BARAQUIO, GARY SINLAO, LUZVIMINDA OCAMPO, MARIFE FERNANDEZ, FERNANDO VICTORIO, ERNESTO AGANON and RIZALINO MANGLICMOT, represented by their Attorney-in-Fact, GREGORIO INALVEZ, JR., Petitioners, vs. THE METROPOLITAN BANK and TRUST CO., Respondent.
FACTS
Spouses Denivin and Josefina Ilagan obtained a loan from Metropolitan Bank and Trust Co. (MBTC) secured by a Real Estate Mortgage over several parcels of land. Upon default, MBTC extrajudicially foreclosed the mortgage, emerged as the highest bidder, and was issued a Certificate of Sale. During the redemption period, MBTC filed an Ex-Parte Petition for Issuance of a Writ of Possession. St. Mathew Christian Academy of Tarlac, Inc. (SMCA), which operated a school on the mortgaged property, filed a Petition for Injunction. The trial court issued a Joint Decision affirming MBTC’s entitlement to the writ of possession, ruling that SMCA was not a third party as it was practically owned by the mortgagor-spouses Ilagan, the lease was unregistered and month-to-month, and piercing the corporate veil was warranted. Pending a motion for reconsideration, the petitioners (the PTA, teachers, and students of SMCA) filed a Motion for Leave to file Petition in Intervention. The trial court initially granted but later reversed this, holding the intervention would not affect the writ’s issuance and implementation, and directed the writ’s enforcement. Petitioners filed a Petition for Certiorari and Prohibition with the Court of Appeals without first filing a motion for reconsideration of the trial court’s order. The CA dismissed the petition, citing failure to file a motion for reconsideration and noting the proper remedy was a petition to set aside the foreclosure sale, not certiorari. Petitioners’ motion for reconsideration was denied.
ISSUE
The core issue is whether the petitioners, as teachers, students, and the PTA of SMCA, qualify as “third parties” in possession of the foreclosed property claiming a right adverse to the mortgagor, such that the issuance and implementation of the writ of possession in favor of MBTC should not be ministerial.
RULING
The Supreme Court DENIED the petition, ruling that the petitioners are NOT “third parties” against whom the writ of possession cannot be issued.
1. General Rule and Exception on Writ of Possession: The issuance of a writ of possession after a foreclosure sale and during the redemption period is ministerial upon the court under Act No. 3135 . The exception is when a third party is in possession of the property claiming a right adverse to the debtor/mortgagor.
2. Petitioners are Not Third Parties: The Court held petitioners do not claim a right adverse to the judgment debtor (spouses Ilagan/SMCA). The teachers’ possession is based on employment contracts with SMCA, and the students’ possession stems from their contractual school-student relationship with SMCA. Their interest in the premises is inferior to and dependent on SMCA; they do not hold the property independently or adversely to the school. Since the trial court validly found SMCA itself was not a third party (being owned by the mortgagors), the petitioners’ derivative possession cannot be considered adverse.
3. Other Contentions Rejected:
* The lack of authority to sign the certificate of non-forum shopping in MBTC’s ex-parte petition was deemed an insignificant lapse.
* The alleged violation of the constitutional right to education was not a valid ground to quash the writ, as the foreclosure was a valid exercise of MBTC’s property rights, and the right to education does not grant immunity from legal processes.
* The petitioners’ proper remedy was indeed a separate action to assert their claims, not a certiorari petition against the writ of possession.
* The failure to file a motion for reconsideration before seeking certiorari was fatal to their petition, as none of the exceptions to this rule were applicable.
Thus, the writ of possession was rightfully issued and implemented in favor of MBTC.