In Jacqueline S. Uy v. 3Tops De Philippines Estate Corporation, the Supreme Court clarified the scope of a court’s ministerial duty to issue a writ of possession in extrajudicial foreclosure cases. The Court held that after the redemption period expires and the buyer consolidates ownership, the court’s duty to issue a writ of possession becomes ministerial. This duty ceases only when a third party possesses the property under a claim of title adverse to the debtor-mortgagor. This decision emphasizes the purchaser’s right to possess the property, reinforcing the security of foreclosure sales and providing clarity for property owners and occupants.

Foreclosure Fallout: When Does a Court’s Duty to Issue a Writ of Possession End?

The case revolves around a property in Bacolod City previously owned by Lucy S. Uy, who mortgaged it to RCBC in 1995. RCBC later assigned its rights to Star Two, Inc. When Lucy defaulted, Star Two foreclosed the property in 2011 and eventually sold it to 3Tops De Philippines Estate Corporation (respondent) in 2014. After acquiring the property, the respondent filed an Ex Parte Petition for the issuance of a writ of possession. Jacqueline S. Uy (petitioner), Lucy’s daughter and occupant of the property, opposed the petition, citing pending cases questioning the foreclosure’s validity and the titling of the property. The Regional Trial Court (RTC) granted the writ of possession, a decision affirmed by the Court of Appeals (CA). The central legal question is whether the RTC acted with grave abuse of discretion in issuing the writ despite the pending cases and the petitioner’s claim of irregularities in the foreclosure proceedings.

The Supreme Court (SC) addressed whether the appellate court erred in dismissing the certiorari petition, stating that an appeal is the correct remedy to assail an order granting a writ of possession. The SC clarified the application of Section 8 of Act No. 3135, as amended, which governs the procedure for extrajudicial foreclosure. It emphasized that this provision applies only when the debtor contests the transfer of possession during the redemption period. Once the redemption period expires and the purchaser consolidates ownership, the debtor can no longer avail of the remedy under Section 8. Instead, the debtor must pursue a separate action, such as an action for recovery of ownership or annulment of the mortgage.

Building on this principle, the SC explained that the purchaser’s right to possess the property becomes absolute after the redemption period expires. The issuance of the writ of possession at this point becomes a ministerial duty of the court. This duty ceases only when a third party, not the debtor-mortgagor, is in possession of the property under a claim of title adverse to that of the applicant. The Court cited 680 Home Appliances, Inc. v. Court of Appeals, which clarified that Act No. 3135 governs only the manner of the sale and redemption of the mortgaged real property in an extrajudicial foreclosure; proceedings beyond these, i.e., upon the lapse of the redemption period and the consolidation of the purchaser’s title, are no longer within its scope.

The Court emphasized that the pendency of a civil case questioning the mortgage or foreclosure does not bar the issuance of a writ of possession. The trial court need not look into the validity of the mortgage or the manner of foreclosure. This is because the ex parte petition for the issuance of a possessory writ under Act No. 3135 is considered a non-litigious proceeding, summary in nature, brought for the benefit of one party only, without notice to or consent by any person adversely interested. The nature of an ex parte petition for issuance of the possessory writ under Act No. 3135 has been described as a non-litigious proceeding and summary in nature.

The SC elucidated the concept of “grave abuse of discretion,” which is central to determining whether the trial court erred in issuing the writ. Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. Applying this standard, the SC found no grave abuse of discretion on the part of the trial court.

The Court distinguished the present case from situations where a third party claims adverse possession. To be considered in adverse possession, the third party possessor must have done so in his or her own right and not merely as a successor or transferee of the debtor-mortgagor. In this case, the petitioner, as the daughter of the debtor-mortgagor, did not possess the property under a claim of title adverse to her mother. Therefore, the exception to the ministerial duty to issue a writ of possession did not apply.

The Supreme Court also noted that the relief sought by the petitioner, i.e., the cancellation or suspension of the Writ of Possession, had already been rendered moot by her surrender of the subject properties to the respondent. Having validly acquired possession of the subject properties, respondent can no longer be disturbed in its possession by mere cancellation or suspension of the implementation of the Writ of Possession. The Court emphasized that its right being absolute, respondent is entitled to the possession of the Subject Properties by virtue of its ownership. Petitioner’s remedy would already have to be the annulment of the foreclosure and/or reconveyance of the Subject Properties.

FAQs

What is a writ of possession?	A writ of possession is a court order that directs the sheriff to deliver possession of property to the person who is legally entitled to it, such as the purchaser in a foreclosure sale.
When is a court required to issue a writ of possession?	After the consolidation of titles in the buyer’s name, for failure of the mortgagor to redeem, entitlement to a writ of possession becomes a matter of right. There is even no need for him to post a bond, and it is the ministerial duty of the courts to issue the same upon proper application and proof of title.
What is an ex parte petition?	An ex parte petition is a request made to the court by one party without requiring notice to the other party. In the context of a writ of possession, the purchaser can file an ex parte petition to obtain possession of the foreclosed property.
Can the issuance of a writ of possession be stopped if there is a pending case questioning the foreclosure?	No, a pending action for annulment of mortgage or foreclosure sale does not stay the issuance of the writ of possession. The trial court need not look into the validity of the mortgage or the manner of foreclosure.
What happens if a third party is occupying the foreclosed property?	The ministerial duty ceases once it appears that a third party, not the debtor-mortgagor, is in possession of the property under a claim of title adverse to that of the applicant.
What does “grave abuse of discretion” mean?	“Grave abuse of discretion” implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility.
What is the effect of surrendering the property on the case?	If the occupant of the property voluntarily surrenders it to the purchaser, the issue of the writ of possession becomes moot. The remedy would already have to be the annulment of the foreclosure and/or reconveyance of the Subject Properties.
What law governs the sale of property under special powers?	Act No. 3135, as amended, governs the sale of property under special powers inserted in or annexed to real-estate mortgages.

This case reaffirms the ministerial duty of courts to issue writs of possession to purchasers of foreclosed properties after the redemption period, emphasizing the importance of a clear title. It also clarifies the exception when a third party claims adverse possession, ensuring that property rights are protected while respecting the finality of foreclosure sales.

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: Jacqueline S. Uy, vs. 3Tops De Philippines Estate Corporation, G.R. No. 248140, January 16, 2023