Mallari vs. Government Service Insurance System

Issuance of a writ of possession to the purchaser in an extrajudicial foreclosure sale, upon consolidation of title after failure to redeem within one year from registration of the sale, is a ministerial, ex parte act that requires no prior notice to the non-redeeming mortgagor and issues as a matter of right.

Eligio P. Mallari stood as borrower-mortgagor and respondent Government Service Insurance System as lender-mortgagee-purchaser with respect to two parcels of land securing loan obligations. Extrajudicial foreclosure of real estate mortgages under special power, redemption within one year, and post-consolidation possessory rights are governed by Act No. 3135, as amended, supplemented by Rule 39 of the Rules of Court on redemption and execution.

In 1968, Eligio P. Mallari obtained two loans totaling ₱34,000.00 from respondent Government Service Insurance System, securing performance by mortgaging two parcels of land registered in his and his wife Marcelina Mallari's names. About ten years later he made only two payments, ₱10,000.00 on May 22, 1978 and ₱20,000.00 on August 11, 1978. Thereafter GSIS reminded him of the unpaid balance on May 2, 1979 and sent a telegraphic demand to update his account on November 2, 1981, to which he responded on November 10, 1981 with a request for final accounting but made no further payment.

Nearly three years later, on March 21, 1984, GSIS applied for extrajudicial foreclosure for failure to settle the account. On November 22, 1984 Mallari requested an updated computation, and on November 29, 1984 persuaded the sheriff to hold publication of the foreclosure notice in abeyance pending action on his request for final accounting taking the 1978 payments into account. GSIS rendered a detailed explanation on December 13, 1984 and sent another updated statement on May 30, 1985, but with still no further payments, it finally commenced extrajudicial foreclosure proceedings on July 21, 1986.

On August 22, 1986 Mallari sued GSIS and the Provincial Sheriff of Pampanga for injunction in the Regional Trial Court, Branch 44, San Fernando, Pampanga, docketed as Civil Case No. 7802. The RTC decided in his favor, nullifying the extrajudicial foreclosure and auction sale held on September 22, 1986, cancelling Transfer Certificate of Title No. 284272-R and No. 284273-R in GSIS's name, and reinstating TCT No. 61171-R and No. 54835-R. On appeal the Court of Appeals reversed on March 27, 1996, and this Court denied Mallari's petition for review on September 16, 1996 and his motion for reconsideration on January 15, 1997, making final the validation of the foreclosure, sale, and GSIS titles.

Following finality, GSIS filed an ex parte motion for execution and writ of possession on September 2, 1999, which the RTC granted on October 8, 1999 and implemented through a writ of execution cum writ of possession issued October 21, 1999. The sheriff failed to serve the writ, partly because GSIS acceded to Mallari's request for extension to vacate, yet Mallari did not vacate and instead filed on March 27, 2000 a motion for reconsideration and/or to quash the writ, and commenced a second suit for consignation, Civil Case No. 12053, which the RTC dismissed on November 10, 2000 on res judicata. In the meantime he filed motions dated April 5, 2000 and April 17, 2000 to hold GSIS and others in contempt for painting the fence and for causing disconnection of electric services during pendency of his motion to quash. After GSIS moved to inhibit the Branch 44 judge for alleged partiality and delay, the case was re-raffled to Branch 48, whose judge denied the contempt motions on July 30, 2001, directed re-implementation of the writ, and denied reconsideration on February 11, 2002. Mallari then assailed those four RTC orders by certiorari filed March 15, 2002, which the CA dismissed on March 17, 2003 for lack of merit as dilatory litigation of a final judgment.

• Nullity of Execution Orders: Petitioner maintained that the CA gravely erred in refusing to accept the nullity of the RTC orders dated October 8, 1999, October 21, 1999, July 30, 2001, and February 11, 2002 granting and re-implementing execution and possession in favor of GSIS.
• Lack of Notice: Petitioner argued that he had not been notified of the motion seeking issuance of the writ of execution cum writ of possession, hence the writ was invalid.
• Indirect Contempt: Petitioner insisted that the RTC gravely erred in dismissing his charges for indirect contempt against GSIS and others, and that the CA should consequently have granted certiorari.

• Timeliness of Certiorari: Whether the petition for certiorari assailing the RTC orders of October 8, 1999, October 21, 1999, July 30, 2001 and February 11, 2002 was filed beyond the 60-day reglementary period under Section 4, Rule 65.
• Writ of Possession and Notice: Whether a non-redeeming mortgagor was entitled to prior notice of the ex parte application for a writ of possession and whether issuance after consolidation of title was ministerial.
• Indirect Contempt Procedure: Whether charges for indirect contempt initiated by mere motions without verified petition and filing fees were properly dismissed.
• Lawyer Misconduct: Whether petitioner, himself a lawyer, misused procedure and delayed execution in violation of the Lawyer's Oath and Code of Professional Responsibility.

• Timeliness of Certiorari: Yes, the March 2002 certiorari petition was improper and tardy, the 60-day period under Section 4, Rule 65 having long lapsed and the August 17, 2001 reconsideration being a prohibited second motion for reconsideration.
• Writ of Possession and Notice: No, prior notice was not required, issuance being ex parte, summary and ministerial upon consolidation of ownership in the purchaser after failure to redeem under Act No. 3135.
• Indirect Contempt Procedure: Yes, dismissal was proper, Rule 71 requiring initiation by verified petition with initiatory-pleading compliance and filing fees absent motu proprio court action.
• Lawyer Misconduct: Yes, petitioner violated Rule 10.03, Canon 10 and Rule 12.04, Canon 12 and his Oath by dilatory, vexatious maneuvers to obstruct execution of a final judgment.

• Timeliness of Certiorari: The July 30, 2001 order denied only the challenge to the October 1999 execution orders, and the February 11, 2002 denial of the August 17, 2001 reconsideration was in effect a prohibited second reconsideration of those 1999 orders. Because the 60-day limitation in Section 4, Rule 65, as amended, is inextendible to avoid unreasonable delay violative of speedy disposition, the March 2002 petition could no longer attack the 1999, 2001 and 2002 orders by certiorari.
• Writ of Possession and Notice: Redemption under Act No. 3135 must be made within one year from registration of the sale, registration being the operative act; failure to redeem causes loss of all interest, consolidation of ownership and issuance of new TCT, entitling the purchaser to possession at any time as a matter of right. The application is non-litigious, ex parte and summary without notice or hearing to the adverse party, and issuance becomes purely ministerial, requiring no exercise of discretion.
• Indirect Contempt Procedure: Section 4, Rule 71 permits indirect contempt initiation only by verified petition with supporting particulars, certified copies and full initiatory-pleading compliance, unless initiated motu proprio by order or formal charge of the offended court. Petitioner's mere motions, without filing fees for what is an independent special civil action, deprived the trial court of jurisdiction and warranted dismissal, revealing vexatious disregard of orderly procedure.
• Lawyer Misconduct: Despite knowing as a lawyer that as non-redeeming mortgagor he could no longer impugn the foreclosure or the ex parte writ and could not delay its enforcement, petitioner adopted worthless maneuvers to stall possession. Such conduct misused rules of procedure to defeat justice, delayed execution, and breached the Oath not to promote groundless suits nor delay any man for money or malice, warranting referral for bar discipline investigation.

• Execution of final judgment as ministerial duty — Once a judgment becomes final and executory, the prevailing party can have it executed as a matter of right and issuance of the writ of execution becomes a ministerial duty of the court, with finality operating as a jurisdictional event not dependent on a party's convenience. Applied to sustain execution and possession after the foreclosure judgment had been affirmed with finality by the highest tribunal.
• Writ of possession in extrajudicial foreclosure; ex parte and ministerial issuance — A writ of possession commanding the sheriff to place a person in possession may issue in extrajudicial foreclosure under Section 7 of Act No. 3135, as amended; the proceeding is ex parte, summary and non-litigious, granted without notice or hearing to the adverse party. Applied to reject the non-redeeming mortgagor's lack-of-notice attack and to hold issuance upon consolidation a matter of right admitting no discretion.
• Redemption period reckoned from registration — Under Act No. 3135 and Section 28, Rule 39, the one-year redemption period is reckoned from registration of the certificate of sale, registration being the operative act conveying registered land; failure to redeem causes loss of all interest and consolidation of absolute ownership in the purchaser. Applied to treat Mallari's non-redemption as irreversible loss of interest and basis for GSIS's absolute right to possession.
• Commencement of indirect contempt — Except for motu proprio initiation by the offended court through order or formal charge, indirect contempt charges must be commenced by verified petition with supporting particulars, certified copies, full compliance with initiatory-pleading requirements, and payment of filing fees as an independent special civil action. Applied to invalidate contempt charges filed by mere motion without fees.
• Lawyer's duty against delay and misuse of process — Under Rule 10.03, Canon 10 and Rule 12.04, Canon 12 of the Code of Professional Responsibility and the Lawyer's Oath, a lawyer shall observe rules of procedure, not misuse them to defeat justice, nor unduly delay a case, impede execution, or misuse court processes, even when acting as party-litigant. Applied to refer Mallari, himself a lawyer, to the Committee on Bar Discipline for dilatory tactics.

• "The proceeding upon an application for a writ of possession is ex parte and summary in nature, brought for the benefit of one party only and without notice being sent by the court to any person adverse in interest." — States the controlling character of the possessory remedy that defeats the claim of invalidity for lack of notice.
• "The consolidation of ownership in the purchaser’s name and the issuance to him of a new TCT then entitles him to demand possession of the property at any time, and the issuance of a writ of possession to him becomes a matter of right upon the consolidation of title in his name." — Defines when the purchaser's possessory right accrues and why issuance becomes non-discretionary.
• "A purely ministerial act or duty is one that an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment upon the propriety or impropriety of the act done." — Supplies the canonical test distinguishing the court's non-discretionary duty to issue execution and possession from discretionary acts.

• Buaya vs. Stronghold Insurance Co., Inc. — Followed for the rules that execution of a final judgment is a matter of right and ministerial, and that courts must end controversies rather than permit relitigation to evade final judgments.
• De Jesus vs. Obnamia, Jr. — Cited via the CA for the rule that generally no notice or prior hearing is required before a writ of execution issues once the decision is final.
• Tag Fibers, Inc. vs. National Labor Relations Commission — Cited for the principle that finality is a jurisdictional event not dependent on party convenience.
• Philippine National Bank vs. Sanao Marketing, Inc., G.R. No. 153951, July 29, 2005 — Cited for the enumeration of proceedings in which a writ of possession may issue, including extrajudicial foreclosure.
• Garcia vs. Ocampo, 105 Phil. 1102 (1959) — Followed to hold the 12-month redemption period runs from registration of the sale, not date of sale.
• Santiago vs. Merchants Rural Bank of Talavera, Inc., G.R. No. 147820, March 18, 2005 — Cited for the ex parte, summary nature of writ-of-possession proceedings.
• Penson vs. Maranan, G.R. No. 148630, June 20, 2006 — Cited for characterizing the application under Act No. 3135 as a non-litigious proceeding.
• Land Bank of the Philippines vs. Listana, Sr., G.R. No. 152611, August 5, 2003 — Referenced on the mandatory verified-petition requirement for indirect contempt.

• Section 1, 6 and 7, Act No. 3135, as amended — Govern extrajudicial sale under special power, the one-year right of redemption, and possessory relief; applied to uphold foreclosure finality, reckon redemption, and sustain ex parte writ of possession after consolidation in GSIS.
• Section 28, Rule 39, Rules of Court — Provides redemption within one year from registration of the certificate of sale; applied to clarify the judicial construction avoiding conflict between Rule texts and Act No. 3135 and to confirm loss of interest for non-redemption.
• Section 4, Rule 65, 1997 Rules of Civil Procedure, as amended by A.M. No. 00-2-03-SC — Requires certiorari filing not later than 60 days from notice of order or denial of reconsideration, inextendible; applied to bar the March 2002 petition.
• Section 4, Rule 71, 1997 Rules of Civil Procedure — Requires indirect contempt, unless motu proprio, to be commenced by verified petition docketed and heard separately with initiatory-pleading compliance; applied to dismiss contempt sought by mere motions.
• Rule 10.03, Canon 10 and Rule 12.04, Canon 12, Code of Professional Responsibility; Lawyer's Oath, Rule 138, Section 3 — Enjoin observance of procedure, prohibit misuse to defeat justice, undue delay, and impeding execution; applied to find misconduct and order bar-discipline investigation.

Chief Justice Reynato S. Puno (Chairperson), Associate Justice Conchita Carpio Morales, Associate Justice Teresita J. Leonardo-De Castro, and Associate Justice Martin S. Villarama, Jr. No separate concurring opinions with additional reasoning appear in the text.