Ramos vs. Mañalac

A final and regular foreclosure judgment cannot be collaterally attacked; defective service of summons is cured by voluntary appearance through counsel; and a writ of possession in foreclosure is a ministerial and complementary duty that may issue even after five years, provided the statute of limitations and the rights of third persons have not intervened.

The petitioners are the Ramos siblings, who executed a power of attorney in favor of their brother Eladio Ramos over a parcel of land in Bayambang, Pangasinan. The dispute concerns the finality of a foreclosure judgment and the authority of a Court of First Instance to issue a writ of possession in favor of a purchaser or transferee of mortgaged property.

On August 31, 1933, Victoriano, Leonardo, Vicenta, Isabina, Gregoria, Ceferina, Jose, and Geronimo, all surnamed Ramos, executed a power of attorney in favor of their brother Eladio Ramos, authorizing him to encumber, mortgage, and transfer in favor of any person a parcel of land situated in Bayambang, Pangasinan. On August 9, 1934, pursuant to that power, Eladio executed in favor of Romualdo Rivera a mortgage over the said property, together with another parcel, to guarantee payment of a loan of 300, with interest at 12% per annum.

When Eladio failed to pay the obligation at maturity, Romualdo Rivera filed an action to foreclose the mortgage, impleading as defendants the petitioners, Eladio's brothers and sisters, in civil case No. 7668. Summons was served only upon Eladio Ramos, who acknowledged service in his own behalf and in that of Attorney Lauro C. Maiquez; Maiquez entered his appearance for all the defendants and submitted an answer in their behalf. After trial, at which both parties presented evidence, the court rendered decision on August 24, 1939 ordering Eladio Ramos to pay the plaintiff the obligation of 300, with interest at 12% per annum from August 9, 1934 until full payment, plus 100 as attorney's fees, and ordering foreclosure of the mortgage upon failure of Eladio to pay the judgment within ninety days from the date the decision became final.

Eladio failed to pay the judgment within the period specified. On motion of the plaintiff, the court ordered the sale at public auction of the mortgaged properties, which were sold to the plaintiff as the highest bidder, and the provincial sheriff issued the corresponding deed of sale in his favor. The sale was confirmed by the court on April 1, 1941. On August 21, 1947, Romualdo Rivera sold the properties to Felipe Lopez, also referred to in the text as Felipa Lopez, who later filed a motion praying that she be placed in possession thereof. This motion was granted on September 22, 1947.

As the petitioners did not heed the order, they were summoned by the court to explain why they should not be punished for contempt for their refusal to comply with the writ of possession. They answered contending that the writ partook of the nature of an action and, having been issued after more than five years, the court acted in excess of its jurisdiction, and that the sale conducted by the sheriff was illegal because petitioners were not properly served with summons as defendants in the foreclosure suit. The explanation given by petitioners was found unsatisfactory; the court insisted on its order and threatened to punish the petitioners for contempt of court if they failed to obey the order. Hence the petition for certiorari.

The lower court found petitioners' explanation unsatisfactory and maintained its order. The record shows that Attorney Maiquez appeared for all the defendants at all stages of civil case No. 7668, and that the foreclosure decision had become final and the auction sale had been confirmed on April 1, 1941.

• Collateral Attack on Foreclosure Judgment: Petitioners challenged the validity of the August 24, 1939 decision in civil case No. 7668, contending that the sheriff's sale was illegal because they were not properly served with summons as defendants in the foreclosure suit.
• Writ of Possession After Five Years: Petitioners contended that the writ of possession partook of the nature of an action and, having been issued after more than five years from the judgment, was beyond the court's jurisdiction.

• Validity of Foreclosure Decision: Whether the August 24, 1939 decision in civil case No. 7668 ordering foreclosure of the mortgage executed by Eladio Ramos is valid despite the alleged improper service of summons on petitioners.
• Validity of Order Issuing Writ of Possession: Whether the September 22, 1947 order directing issuance of a writ of possession to place Felipe Lopez in possession of the properties purchased from the mortgagee is valid despite issuance more than five years after the judgment.

• Validity of Foreclosure Decision: No. The foreclosure judgment is valid and final; it cannot be collaterally attacked, and any defect in service of summons was cured by petitioners' voluntary appearance through Attorney Maiquez.
• Validity of Order Issuing Writ of Possession: Yes. A writ of possession in foreclosure is not execution of judgment under section 6, Rule 39, but a ministerial and complementary duty that may issue even after five years, absent intervening statute of limitations or third-party rights.

• Validity of Foreclosure Decision: The challenge is a collateral attack on a judgment valid and regular on its face and long final. Under Gomez vs. Concepcion, such a judgment can only be attacked in a separate action brought principally for that purpose. Even assuming improper service, the defect was cured when petitioners voluntarily appeared and answered through Attorney Lauro C. Maiquez, who appeared for them at all stages. An attorney who appears for a party is presumed authorized; the security and finality of judicial proceedings were invoked against the belated challenge, especially because it came more than nine years after the judgment. The first issue therefore fails.
• Validity of Order Issuing Writ of Possession: The issuance of a writ of possession in foreclosure is not execution of judgment under section 6, Rule 39; it is a ministerial and complementary duty of the court and may be undertaken even after five years, provided the statute of limitations and the rights of third persons have not intervened (Rivera vs. Rupac). This is the correct interpretation of section 6, Rule 39 in relation to section 3, Rule 70. Here the judgment was final and executed, the mortgaged properties were sold by court order, and the purchaser transferred them to a third person who sought possession. The court may issue a peremptory order to place the ultimate purchaser in possession to end litigation and avoid multiplicity of actions. The general rule is that after a sale under a foreclosure decree, the court has the power to give possession to the purchaser, who need not be driven to an action at law; the power rests on the court's authority to enforce its own decrees and avoid circuitous action and vexatious litigation (Rovero de Ortega vs. Natividad). Under section 257 of the Code of Civil Procedure, now section 3, Rule 70, confirmation of the sale divests all parties of their rights and vests them in the purchaser, and the competent court has the duty to issue a writ so that the purchaser may be placed in possession (Rivera vs. Rupac). American authorities also support the foreclosure court's retention of jurisdiction to put the purchaser in possession. The second issue therefore fails.

• Collateral attack on a final judgment — A judgment that is valid and regular on its face can only be attacked in a separate action brought principally for that purpose; it cannot be collaterally attacked. The Court applied this to the August 24, 1939 foreclosure decision, which had long become final.
• Cure of defective service by voluntary appearance — A defect in the service of summons is cured when the defendants voluntarily appear and answer through counsel. An attorney who appears for a party is presumed authorized to do so. The Court applied this because Attorney Lauro C. Maiquez appeared for all defendants at all stages, and the jurisdictional challenge came more than nine years after judgment.
• Writ of possession in foreclosure as ministerial and complementary duty — The issuance of a writ of possession in foreclosure is not execution of judgment under section 6, Rule 39, but a ministerial and complementary duty of the court. It may issue even after five years, provided the statute of limitations and the rights of third persons have not intervened. The Court applied this to uphold the order placing Felipe Lopez in possession.
• Power of foreclosure court to place purchaser in possession — After a sale under a foreclosure decree, the court retains jurisdiction and has the power to give possession to the purchaser; the purchaser need not be driven to an action at law. The power rests on the court's authority to enforce its own decrees and avoid circuitous action and vexatious litigation. The Court applied this to the ultimate purchaser or transferee.

• "It is a well-known rule that a judgment, which on its face is valid and regular, can only be attacked in separate action brought principally for the purpose (Gomez vs. Concepcion, 47 Phil., 717)." — This is the majority's canonical statement of the collateral-attack rule, used to reject petitioners' challenge to the 1939 foreclosure judgment.
• "Granting for the sake of argument that petitioners were not properly served with summons in civil case No. 7668, as they claim, the defect in the service was cured when the petitioners voluntarily appeared and answered the complaint thru their attorney of record, Lauro C. Maiquez who appeared in their behalf in all stages of the case." — This passage establishes that defective service of summons is cured by voluntary appearance through counsel, a key reason the belated jurisdictional challenge failed.
• "The second issue raised by the petitioners is not also taken, for the simple reason that the issuance of a writ of possession in a foreclosure proceedings is not an execution of judgment within the purview of section 6, Rule 39, of the Rules of Court, but is merely a ministerial and complementary duty of the court can undertake even after the lapse of five (5) years, provided the statute of limitations and the rights of third persons have not intervened in the meantime (Rivera vs. Rupac, 61 Phil., 201)." — This is the ratio decidendi on the writ of possession, distinguishing it from execution of judgment and allowing issuance beyond five years.
• "The general rule is that after a sale has been made under a decree in a foreclosure suit, the court has the power to give possession to the purchaser, and the latter will not be driven to an action at law to obtain possession." — This states the general rule on the foreclosure court's power to place the purchaser in possession, which the Court applied to Lopez as transferee.

• Gomez vs. Concepcion, 47 Phil. 717 — Cited for the rule that a judgment valid and regular on its face can only be attacked in a separate action brought principally for that purpose; used to reject the collateral attack on the foreclosure judgment.
• Tan Lua vs. O'Brien, 55 Phil. 53 — Cited for the presumption that an attorney appearing for a party is authorized, and for the security and finality of judicial proceedings.
• Rivera vs. Rupac, 61 Phil. 201 — Cited for the rule that issuance of a writ of possession in foreclosure is not execution under section 6, Rule 39; may issue after five years; and that under section 257 of the Code of Civil Procedure, now section 3, Rule 70, confirmation of sale divests parties and vests rights in the purchaser, making it the court's duty to issue the writ.
• Rovero de Ortega vs. Natividad, 71 Phil. 340 — Cited for the general rule that after a sale under a foreclosure decree, the court has the power to give possession to the purchaser, resting on the power to enforce its own decrees and avoid circuitous action and vexatious litigation.
• Kershew vs. Thompson, 4 Johns. Ch. 609 — Cited as American authority that a court of equity retains jurisdiction and authority to put the purchaser in possession without compelling an action at law.
• U.S. vs. Ramayrat, 22 Phil. 183 — Cited in Tuason, J.'s separate opinion for the rule that refusal to surrender property under a writ of execution addressed to the sheriff is not contempt; the disobedience contemplated is refusal to obey a direct judicial order, not an order merely declaratory of rights.

• Section 6, Rule 39, Rules of Court — Petitioners invoked the five-year limitation for execution of judgment; the Court held it does not apply to a writ of possession in foreclosure, which is not execution but a ministerial and complementary duty.
• Section 3, Rule 70, Rules of Court — Cited in relation to section 6, Rule 39; confirmation of sale by judicial decree divests all parties of their rights and vests them in the purchaser, and the competent court has the duty to issue a writ placing the purchaser in possession.
• Section 257, Code of Civil Procedure — Predecessor of section 3, Rule 70; quoted in Rivera vs. Rupac for the same rule on confirmation of sale and writ of possession.
• Article 1, Rule 67, Rules of Court — Cited in Pablo, J.'s concurring opinion: certiorari lies only when there is no appeal or other plain, speedy, and adequate remedy in the ordinary course.
• Section 232, Code of Civil Procedure, as amended by Act 3170 — Cited in Tuason, J.'s separate opinion: added a paragraph allowing contempt punishment for a defeated party who re-enters or disturbs possession after eviction, but not before eviction.
• Article 252, P.C. — Cited in U.S. vs. Ramayrat, as quoted in Tuason, J.'s separate opinion, on disobedience to an agent of authority; a writ of execution addressed to the sheriff is not a direct order to the defendant.

Paras, C.J., Feria, Bengzon, Montemayor, and Jugo, JJ., concurred. Pablo, J., filed a separate concurring opinion, reasoning that certiorari was improper because petitioners could appeal from any resolution on the contempt incident and had a plain, speedy, and adequate remedy; Article 1, Rule 67 limits certiorari to cases without such remedy. Tuason, J., filed a separate opinion concurring in part and dissenting in part; see Notable Dissenting Opinions.

• Tuason, J. — Concurred with the majority on the two main propositions: that the foreclosure of the mortgage and the sale of the mortgaged property were in accordance with law, and that placing Felipa Lopez in possession was a natural corollary. Dissented insofar as the appealed order threatened petitioners with contempt if they refused to vacate, a feature he considered the most important and which the majority ignored or brushed aside. By denying the petition, the Court would sanction the impending punishment. Citing U.S. vs. Ramayrat, 22 Phil. 183, a writ of execution to the sheriff directing him to place the plaintiff in possession and the defendant's failure or refusal to surrender the property does not constitute contempt or disobedience to an agent of authority under Article 252, P.C.; a person cannot be punished for disobedience of an order not addressed to him. The disobedience contemplated is failure or refusal to obey a direct judicial order, not an order merely declaratory of rights. Act 3170 added Section 232(5) to the Code of Civil Procedure, allowing contempt for a defeated party who re-enters or disturbs possession after eviction, but it did not give courts power to punish the recalcitrant loser before eviction. Here the purchaser had never been placed in possession by the sheriff, and the occupants had not been evicted. Although petitioners were defendants in the foreclosure suit, the dispositive part of the judgment imposed no duty on them to pay the debt or deliver the property. Thus their refusal was not punishable as contempt.