In foreclosure cases, a writ of possession is generally issued as a matter of right to the purchaser after the redemption period expires. This case clarifies that while the issuance of a writ of possession is typically a ministerial duty of the court, exceptions exist where equitable considerations, such as the mortgagor’s claim of repurchase, may warrant setting aside the order. Despite the usual ministerial nature, courts must consider the specific circumstances to ensure justice prevails, particularly when the mortgagor claims rights beyond their original status.

Delay and Alleged Repurchase: Can a Bank’s Writ of Possession Be Denied?

Spouses Salvador and Alma Fontanoza obtained a loan from Philippine National Bank (PNB), secured by a mortgage on their land. When they defaulted, PNB foreclosed the property and acquired it as the sole bidder in 2002. Despite registering the sale, PNB only filed an ex-parte petition for a writ of possession in 2011, more than nine years later. Alma opposed, claiming a repurchase agreement with PNB and pending payments, which PNB denied, asserting they returned her deposits. The Regional Trial Court (RTC) initially granted PNB’s petition, but Alma appealed, leading the Court of Appeals (CA) to set aside the RTC’s order, citing the delay and Alma’s claim as a purchaser, not just a mortgagor.

The Supreme Court (SC) reversed the CA’s decision, holding that PNB was entitled to the writ of possession. The SC emphasized that once the redemption period expires and the purchaser’s title is consolidated, the writ becomes a matter of right. While the CA relied on Barican v. Intermediate Appellate Court, the SC distinguished this case, noting that Alma, as the original mortgagor, could not be considered a third party holding the property adversely to the judgment debtor. The general rule stands: after foreclosure and failure to redeem, the purchaser is entitled to possess the property.

However, this entitlement is not without exceptions. Jurisprudence recognizes instances where the ministerial duty to issue a writ of possession ceases. These exceptions include gross inadequacy of the purchase price, a third party claiming a right adverse to the mortgagor/debtor, and failure to pay the surplus proceeds of the sale to the mortgagor. In this case, only the second exception—a third party holding the property adversely—was relevant. The court clarified that for this exception to apply, the possessor must indeed be a third party, distinct from the original mortgagor.

Building on this principle, the Supreme Court underscored that Alma, being the mortgagor who failed to redeem the property, could not claim the rights of a third party. The Court stated,

To emphasize, a third party should hold possession of the subject property adversely to the judgment debtor or mortgagor. Here, Alma cannot be considered as a third party since she herself was the mortgagor who failed to redeem the property during the foreclosure proceeding and the redemption period.

This distinction is crucial because it clarifies that the exceptions to the ministerial duty of issuing a writ of possession are narrowly construed to protect the rights of legitimate third-party claimants, not to allow defaulting mortgagors to prolong the inevitable transfer of possession after a valid foreclosure.

Furthermore, the Supreme Court addressed Alma’s claim of a pending case for the declaration of the extra-judicial foreclosure as null and void, asserting her supposed right to repurchase the property. The Court reiterated that the validity of the mortgage or foreclosure is not a legal ground to refuse the issuance of a writ of possession. The duty of the court to issue the writ is ministerial and cannot be stayed by a pending action for annulment, except when a true third party is adversely holding the property.

The Court also addressed Alma’s contention that PNB accepted her offer to repurchase the property. It clarified that such an allegation cannot be resolved in an ex parte proceeding for a writ of possession. Moreover, her failure to present concrete evidence of an approved repurchase agreement weakened her claim. Given that she was dealing with a bank, the absence of a formalized, written agreement with the necessary approvals raised doubts about the validity of her repurchase claim.

The Supreme Court also noted the timing of Alma’s opposition and the filing of her civil case, suggesting a strategic move to delay the issuance of the writ of possession. This underscored the importance of adhering to established legal procedures and timelines in foreclosure cases. Most importantly, the Court emphasized that the RTC’s order issuing the writ had already become final and executory, solidifying PNB’s right to possession. Final judgments are immutable and unalterable, serving to avoid delays and ensure judicial controversies reach a definitive end.

Finally, the Court dismissed Alma’s claim of a due process violation, clarifying that no hearing is required for the issuance of a writ of possession in an ex parte proceeding. The Court quoted,

To be sure, no hearing is necessary prior to the issuance of a writ of possession, as it is a proceeding wherein relief is granted without giving the person against whom the relief is sought an opportunity to be heard. By its very nature, an ex-parte petition for issuance of a writ of possession is a non-litigious proceeding.

The Court emphasized that the ex parte nature of the proceeding did not violate Alma’s rights, as it is designed for the enforcement of the purchaser’s right to possession following a valid foreclosure sale.

FAQs

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 after the redemption period has expired.
Is the issuance of a writ of possession always guaranteed to the purchaser?	Generally, yes. The issuance of a writ of possession is a ministerial duty of the court, meaning it must be issued as a matter of course, provided the legal requirements are met. However, exceptions exist.
What are the exceptions to the rule that the issuance of a writ of possession is ministerial?	The exceptions include gross inadequacy of the purchase price, a third party claiming a right adverse to the mortgagor/debtor, and failure to pay the surplus proceeds of the sale to the mortgagor.
Who is considered a third party with an adverse claim?	A third party is someone other than the mortgagor who is in possession of the property and claiming ownership or a right to possess it independently of the mortgagor’s rights. This does not include the mortgagor themselves.
Can a pending case questioning the validity of the foreclosure stop the issuance of a writ of possession?	No. The existence of a pending action for annulment of the mortgage or foreclosure sale does not prevent the issuance of a writ of possession. The purchaser is still entitled to the writ.
What if the mortgagor claims to have a repurchase agreement with the bank?	Such claims are not typically resolved in an ex parte proceeding for a writ of possession. The mortgagor must pursue a separate action to enforce the repurchase agreement.
Is a hearing required before a writ of possession is issued?	No, a hearing is not required. The proceeding is ex parte, meaning it is conducted without the need for the person against whom the relief is sought to be heard.
What recourse does the mortgagor have if a writ of possession is issued?	The mortgagor can pursue legal remedies, such as a separate action to annul the foreclosure or enforce a repurchase agreement, but these actions do not automatically stay the enforcement of the writ of possession.

In conclusion, while the issuance of a writ of possession is generally a ministerial duty, the Supreme Court clarified the exceptions, particularly emphasizing that the mortgagor cannot claim the rights of a third party to prevent the writ’s issuance. The case underscores the importance of adhering to established legal procedures in foreclosure cases while allowing avenues for separate legal actions to address claims of repurchase or impropriety.

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: Philippine National Bank vs. Alma T. Placencia Fontanoza, G.R. No. 213673, March 02, 2022