The Supreme Court ruled in this case that once a foreclosure sale becomes final, the issuance of a writ of possession is a ministerial duty of the court. This means the court must grant the purchaser (typically the bank) possession of the property, and the previous owner cannot delay or prevent this process by raising old issues or filing new cases. This decision underscores the importance of understanding mortgage obligations and redemption rights to avoid losing property and facing eviction after foreclosure proceedings conclude.

Losing the Farm: Can Endless Litigation Block a Bank’s Right to Foreclosed Property?

This case revolves around Eligio P. Mallari’s attempt to retain possession of land that had been foreclosed by the Government Service Insurance System (GSIS) due to unpaid loans. After years of unsuccessful legal challenges, Mallari sought to prevent the execution of a writ of possession, arguing procedural defects. The central legal question is whether a mortgagor can indefinitely delay the execution of a final foreclosure decision through repeated motions and lawsuits.

In 1968, Mallari obtained two loans from GSIS, securing them with a mortgage on two parcels of land. Despite making some payments, he defaulted, leading GSIS to initiate extrajudicial foreclosure proceedings. What followed was a protracted legal battle, with Mallari filing multiple actions to impede the foreclosure. He initially succeeded in the Regional Trial Court (RTC), which nullified the foreclosure. However, GSIS appealed, and the Court of Appeals (CA) reversed the RTC’s decision, validating the foreclosure and the subsequent transfer of title to GSIS. Mallari’s appeal to the Supreme Court was denied, making the CA’s decision final.

Despite the finality of the foreclosure, Mallari continued to challenge GSIS’s attempts to take possession of the property. He filed motions to reconsider, motions to quash the writ of execution, and even a new case for consignation, all aimed at preventing his eviction. These efforts were ultimately unsuccessful, as the RTC and the CA consistently ruled in favor of GSIS. The Supreme Court affirmed these rulings, emphasizing the ministerial duty of the court to issue a writ of possession once a foreclosure becomes final. The Court also noted the pattern of dilatory tactics employed by Mallari, aimed at frustrating the execution of a valid judgment.

The Supreme Court underscored the importance of adhering to procedural rules and respecting the finality of judgments. The Court noted that Mallari’s petition for certiorari was filed beyond the reglementary period, rendering it improper and tardy. Specifically, the Court cited Section 4, Rule 65 of the 1997 Rules of Civil Procedure, as amended, which requires a petition for certiorari to be filed within sixty (60) days from notice of the judgment, order, or resolution. The Court stated, “It is worth emphasizing that the 60-day limitation is considered inextendible, because the limitation has been prescribed to avoid any unreasonable delay that violates the constitutional rights of parties to a speedy disposition of their cases.”

The Court explained the nature of a writ of possession and its ministerial issuance in foreclosure cases. It emphasized that a writ of possession is issued to place a person in possession of real property. This can occur in land registration proceedings, judicial foreclosure (if the debtor is in possession), extrajudicial foreclosure pending redemption, and execution sales. The Court clarified that under Act 3135, as amended, a defaulting mortgagor is not entitled to prior notice of the application for a writ of possession.

The court emphasized the importance of the redemption period in foreclosure cases. The mortgagor or their successor-in-interest has one year from the date of the registration of the sale to redeem the property. Failure to do so results in the loss of all interest in the foreclosed property. Once the redemption period expires without redemption, the purchaser becomes the absolute owner of the property. The Court cited Section 28 of Rule 39 of the current Rules of Court, which states that the judgment obligor or redemptioner may redeem the property from the purchaser “at any time within one (1) year from the date of the registration of the certificate of sale.”

The Supreme Court reaffirmed the principle that the issuance of a writ of possession in an extrajudicial foreclosure sale is a ministerial function of the court. This means that the court has no discretion to determine whether or not to issue the writ. Once the title is consolidated in the purchaser’s name, the court must issue the writ of possession upon request. The Court underscored the ex parte nature of the proceedings, brought for the benefit of one party without requiring notice to the adverse party.

Mallari also challenged the dismissal of his charges for indirect contempt against GSIS. However, the Court found that his insistence was plainly unwarranted because Section 4, Rule 71, 1997 Rules of Civil Procedure requires indirect contempt charges to be commenced by a verified petition. Because Mallari initiated his charges by mere motions, he failed to meet the established procedures set by the Rules of Court.

Moreover, the court addressed Mallari’s misconduct as a lawyer in this case. The Court of Appeals deemed it unavoidable to observe that Mallari brought the petition for certiorari to the CA as part of his dilatory tactics. Because he wittingly adopted worthless and vexatious legal maneuvers for the purpose of delay, despite knowing that as a non-redeeming mortgagor he could no longer impugn the writ of execution cum writ of possession, the Court found his actions to be in contravention to Rule 10.03, Canon 10 of the Code of Professional Responsibility.

FAQs

What was the key issue in this case?	The key issue was whether a mortgagor can indefinitely delay the execution of a final foreclosure decision through repeated motions and lawsuits, and whether the court has discretion in issuing a writ of possession after the foreclosure sale has become final.
What is a writ of possession?	A writ of possession is a court order that commands the sheriff to place a person (usually the purchaser in a foreclosure sale) in possession of real property. It is a legal remedy to enforce the right of ownership and possession.
What does “ministerial duty” mean in this context?	“Ministerial duty” means that the court has no discretion but to perform the act. In this case, once the foreclosure sale is final and the purchaser’s title is consolidated, the court must issue the writ of possession upon request; it cannot refuse or delay the issuance.
How long does a mortgagor have to redeem their property after foreclosure?	The mortgagor has one year from the date of the registration of the certificate of sale to redeem the property. If the property is not redeemed within this period, the mortgagor loses all rights to the property.
Is the mortgagor entitled to notice of the application for a writ of possession?	No, the mortgagor is not entitled to prior notice of the application for a writ of possession in an extrajudicial foreclosure. The proceeding is ex parte, meaning it is brought for the benefit of one party only, without requiring notice to the adverse party.
What happens if the mortgagor fails to redeem the property within the redemption period?	If the mortgagor fails to redeem the property within the redemption period, the purchaser becomes the absolute owner of the property. The title is consolidated in the purchaser’s name, and the purchaser is entitled to demand possession of the property at any time.
What is indirect contempt?	Indirect contempt involves disobedience or resistance to a lawful court order, or any act that disrupts the administration of justice. The Supreme Court in this case stated that indirect contempt charges shall be commenced by a verified petition with supporting particulars, or by the court against which the contempt was committed by an order or any other formal charge requiring the respondent to show cause why he should not be punished for contempt.
What are the ethical responsibilities of a lawyer who is also a party to a case?	A lawyer who is also a party to a case must still adhere to the Code of Professional Responsibility. This includes observing the rules of procedure, avoiding dilatory tactics, and conducting themselves with fidelity to both the court and their client (in this case, themselves).

This case serves as a reminder of the importance of fulfilling financial obligations and respecting the finality of court decisions. Engaging in dilatory tactics and abusing court processes not only wastes judicial resources but can also lead to sanctions for legal professionals. Understanding the rights and responsibilities of both mortgagors and mortgagees is crucial in navigating the complex landscape of foreclosure law.

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: Eligio P. Mallari v. Government Service Insurance System and the Provincial Sheriff of Pampanga, G.R. No. 157659, January 25, 2010