This Supreme Court decision affirms the protection afforded to agricultural tenants against the issuance of a writ of possession following a property foreclosure. The Court underscored that a claim of agricultural tenancy constitutes a valid third-party claim that suspends the ministerial duty of a trial court to issue a writ of possession. This ruling ensures that the rights of farmers and farmworkers are given utmost consideration, preventing their displacement without due process, and emphasizing the state’s commitment to agrarian reform.

Foreclosure vs. Farmers: Who Has the Stronger Claim to the Land?

The case revolves around a parcel of land in Santiago, Isabela, originally owned by Julia R. Perez, who mortgaged it to Land Bank of the Philippines (Land Bank). Upon Julia’s default, the property was foreclosed and sold at public auction, with Land Bank emerging as the highest bidder. Subsequently, Land Bank sought a writ of possession to take control of the property. However, Mary Basilan, Raul Basilan, and Benjamin Camiwet, claiming to be agricultural tenants of the land, contested the writ, asserting their right to peaceful possession.

The legal battle ensued when Land Bank filed an ex-parte petition for the issuance of a writ of possession. The tenants then filed a Petition for the Maintenance of Peaceful Possession as Agricultural Lessee/Farmer Beneficiaries before the Department of Agrarian Reform Adjudication Board. This administrative claim put into question the bank’s right to take immediate possession of the land. The Regional Trial Court initially granted Land Bank’s petition but later faced the issue of the tenants’ claim, leading to a denial of Land Bank’s motion to cite the tenants in contempt for continuing to cultivate the land. The core legal question was whether the agricultural tenancy constituted a valid third-party claim that could prevent the implementation of the writ of possession.

The Supreme Court, in its analysis, emphasized the significance of Rule 39, Section 33 of the Rules of Court, which addresses the rights of a purchaser at a foreclosure sale. This section typically entitles the purchaser to possession of the property upon the expiration of the redemption period. However, an exception exists when a third party is in adverse possession of the property. The court has consistently held that the issuance of a writ of possession is no longer a ministerial duty if a third party is holding the property adversely to the judgment obligor. The crucial determination, therefore, rested on whether the agricultural tenants’ claim qualified as adverse possession.

SECTION 33. Deed and possession to be given at expiration of redemption period; by whom executed or given. — If no redemption be made within one (1) year from the date of the registration of the certificate of sale, the purchaser is entitled to a conveyance and possession of the property; or, if so redeemed whenever sixty (60) days have elapsed and no other redemption has been made, and notice thereof given, and the time for redemption has expired, the last redemptioner is entitled to the conveyance and possession; but in all cases the judgment obligor shall have the entire period of one (1) year from the date of the registration of the sale to redeem the property. The deed shall be executed by the officer making the sale or by his successor in office, and in the latter case shall have the same validity as though the officer making the sale had continued in office and executed it.

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 Court referenced its earlier ruling in China Banking Corp. v. Spouses Lozada, where it reiterated the exception to the general rule, stating that possession may be awarded to a purchaser unless a third party is actually holding the property adversely to the judgment debtor. The key factor is not merely the possession by a third party but the adverse nature of that possession, meaning that the third party’s claim must be independent of and superior to the debtor’s right. This principle ensures that individuals with legitimate claims to the property are not summarily dispossessed without due process.

In the case at hand, the Court determined that the respondents, as agricultural tenants, indeed held the property adversely to the judgment obligor. The Municipal Agrarian Reform Office had even certified that the respondents were qualified farmer-beneficiaries of the property. Furthermore, the respondents claimed that they have been cultivating the lands since 1995. Such continuous and open cultivation, coupled with the recognition from the relevant agrarian authority, established a strong case for adverse possession rooted in agricultural tenancy.

The Supreme Court underscored the independent nature of an agricultural tenant’s possession, stating that it is distinct from and independent of the landowner’s possession. Citing St. Dominic Corp. v. The Intermediate Appellate Court, the Court emphasized that granting a writ of possession in such cases would deny the third person’s rights without giving them their day in court. Particularly, when the question of title is involved, the matter should be resolved in a separate action rather than in a motion for a writ of possession.

Furthermore, the Court deferred to the expertise of the Department of Agrarian Reform (DAR) on matters pertaining to agrarian laws. The DAR, through its adjudication board, had affirmed the agricultural tenancy of the respondents, a finding that the Regional Trial Court respected, and the Court of Appeals later affirmed. The Supreme Court found no reason to disturb these administrative findings, highlighting the presumption of regularity and expertise accorded to administrative agencies in their respective fields.

In conclusion, the Supreme Court upheld the lower courts’ decisions, denying Land Bank’s petition for the issuance of an alias writ of possession. The Court underscored that the rights of agricultural tenants must be protected. This ruling aligns with the constitutional mandate for the just distribution of agricultural lands and the state’s policy of according the welfare of landless farmers and farmworkers the highest consideration. The Court’s decision serves as a significant victory for agrarian reform and the protection of farmers’ rights against undue displacement.

FAQs

What was the key issue in this case?	The key issue was whether the claim of agricultural tenancy constitutes a valid third-party claim that prevents the issuance of a writ of possession to a purchaser of a foreclosed property.
What is a writ of possession?	A writ of possession is a court order directing the sheriff to place someone in possession of a property. It is typically issued to the winning bidder in a foreclosure sale to take control of the foreclosed property.
What is an agricultural tenant?	An agricultural tenant is a person who cultivates land belonging to another, with the latter’s consent, for purposes of agricultural production and who receives a share of the harvest or pays rent.
What is the significance of Rule 39, Section 33 of the Rules of Court?	Rule 39, Section 33 states that the purchaser in a foreclosure sale is entitled to possession unless a third party is holding the property adversely to the judgment obligor. This provision was central to the Supreme Court’s analysis.
Why did the Supreme Court side with the agricultural tenants?	The Supreme Court sided with the tenants because they were deemed to be in adverse possession of the property, a recognized exception to the general rule allowing the purchaser to take possession. They had a valid claim of tenancy supported by the Department of Agrarian Reform.
What is the role of the Department of Agrarian Reform (DAR) in this case?	The DAR, through its adjudication board, affirmed the agricultural tenancy of the respondents. The courts gave deference to the expertise of the DAR on agrarian matters, supporting the claim of the tenants.
What does this ruling mean for other agricultural tenants in the Philippines?	This ruling reinforces the protection afforded to agricultural tenants, preventing their displacement without due process and emphasizing the state’s commitment to agrarian reform. It establishes a precedent for similar cases involving foreclosure and tenancy claims.
Can a bank still foreclose on a property with agricultural tenants?	Yes, a bank can still foreclose on a property. However, if there are legitimate agricultural tenants, the bank cannot simply evict them without due process, and the tenants’ rights must be respected.
What should a landowner do if they want to contest the tenant’s claim?	The landowner must file a separate case questioning the validity of the agricultural tenancy and the matter would well be threshed out in a separate action and not in a motion for a writ of possession.

This decision underscores the judiciary’s commitment to agrarian reform and the protection of the rights of landless farmers and farmworkers. It serves as a reminder that while property rights are important, they must be balanced against the state’s constitutional mandate to promote social justice and uplift the lives of the peasantry.

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: LAND BANK OF THE PHILIPPINES VS. MARY BASILAN, RAUL BASILAN, AND BENJAMIN CAMIUIT A.K.A. BENJAMIN CAMIWET, G.R. No. 229438, June 13, 2022