Uy vs. 3Tops De Philippines Estate Corporation

When the redemption period has expired and the purchaser has consolidated ownership, the remedy of a petition to set aside the sale and cancel the writ of possession under Section 8 of Act No. 3135 is unavailable; the proper vehicle to challenge orders denying a motion to reconsider the ministerial issuance of the writ is a petition for certiorari under Rule 65 of the Rules of Court.

Respondent 3Tops De Philippines Estate Corporation acquired two parcels of land and a commercial building in Bacolod City through a Deed of Absolute Sale from Star Two, Inc., which had earlier purchased the properties at an extrajudicial foreclosure sale. The original registered owner, Lucy S. Uy, had mortgaged the properties to secure a loan, defaulted, and failed to redeem the properties within the redemption period. Star Two consolidated ownership in 2013 and sold the properties to respondent in 2014. Respondent subsequently secured new Transfer Certificates of Title in its name and paid the corresponding real property taxes.

In 2018, respondent filed an ex parte petition for a writ of possession under Section 7 of Act No. 3135, as amended, before the Regional Trial Court of Bacolod City. Petitioner Jacqueline S. Uy, daughter and representative of Lucy, opposed the petition, citing the pendency of two civil cases—one an action for injunction and annulment of the extrajudicial foreclosure and sale, the other an accion publiciana—and alleging irregularities in the foreclosure, bad faith, and forum shopping.

The Mortgage and Foreclosure: Lucy S. Uy obtained a loan from RCBC in 1995, secured by a mortgage over two parcels of land (Lot No. 7‑G‑6‑C, 169 sq m, and Lot No. 7‑6‑7‑A, 331 sq m) and the commercial building erected thereon, situated at Tindalo Avenue, Shopping Center, Barangay Villamonte, Bacolod City. In 2007, RCBC assigned its rights and interests in the mortgage to Star Two, Inc. Lucy defaulted, prompting Star Two to extrajudicially foreclose the mortgaged properties on December 27, 2011.

Acquisition by Respondent: Lucy failed to redeem the properties; on June 6, 2013, Star Two consolidated ownership in its name and obtained new TCT Nos. 092‑2013003691 and 092‑2013003692. On January 8, 2014, Star Two sold the properties to respondent 3Tops De Philippines Estate Corporation for PHP 4,700,000.00 via a Deed of Absolute Sale. Respondent caused the issuance of TCT Nos. 092‑2014000935 and 092‑2014000936 in its name, including the commercial building, and paid property taxes up to 2018.

Ex Parte Petition for Writ of Possession: On February 20, 2018, respondent filed an Ex Parte Petition for the Issuance of a Writ of Possession under Section 7 of Act No. 3135, as amended, before the RTC of Bacolod City, Branch 45, docketed as Cad. Case No. 18‑4069. Respondent prayed for the issuance of a writ of possession and a writ of demolition. In an Order dated April 24, 2018, the RTC granted the petition, holding that after the redemption period, the purchaser is entitled to possession and the court’s duty to issue the writ is ministerial. A Writ of Possession and a Notice to Vacate (directed at Lucy and all adverse occupants) were issued accordingly.

Petitioner’s Opposition: Petitioner Jacqueline S. Uy, Lucy’s daughter and an occupant of the properties, filed an Urgent Motion to Admit Opposition (with Motion to Reconsider, to Quash the Petition, and to Hold in Abeyance Implementation of the Writ and Notice to Vacate) dated May 25, 2018. She alleged that respondent acted in bad faith and committed forum shopping because two other cases involving the same properties were pending: Civil Case No. 05‑12643 (for injunction with prayer for annulment of the foreclosure and sale, filed by Lucy) before RTC Branch 53, Bacolod City, and Civil Case No. 15‑14483 (accion publiciana filed by respondent, later consolidated with Civil Case No. 05‑12643). Petitioner argued that the trial court’s duty to issue the writ ceased to be ministerial due to the irregularities in the foreclosure and titling processes.

Trial Court’s Ruling on the Opposition: The RTC denied the Urgent Motion in an Order dated July 17, 2018, and later denied the Motion for Reconsideration on September 17, 2018. The trial court reasoned that any question concerning the validity of the mortgage or its foreclosure cannot bar the issuance of a writ of possession; the duty remains ministerial unless a third party in adverse possession claims a right distinct from that of the debtor‑mortgagor—a circumstance not present because petitioner merely represented her mother Lucy.

Proceedings before the Court of Appeals: Petitioner filed a Rule 65 petition for certiorari with the CA, asserting grave abuse of discretion. The CA dismissed the petition, ruling that the proper remedy was an appeal under Section 8 of Act No. 3135; that issuance of the writ after consolidation is ministerial and not susceptible to a charge of grave abuse of discretion; that the pendency of a separate civil case does not bar the writ; and that respondent was not guilty of forum shopping. The CA also later noted that petitioner’s voluntary surrender of possession rendered the relief moot.

• Proper Remedy: Petitioner maintained that certiorari under Rule 65 was the correct remedy to challenge the July 17, 2018 and September 17, 2018 Orders denying her motions, because the remedy of appeal under Section 8 of Act No. 3135 applies only when the debtor files a petition to cancel the sale and the writ of possession during the redemption period—which had long since expired.
• Grave Abuse of Discretion: Petitioner argued that the trial court whimsically denied her Urgent Motion and Motion for Reconsideration and capriciously sustained the April 24, 2018 Order granting the writ of possession despite the pendency of civil cases directly questioning the validity of the mortgage, foreclosure, and subsequent sale, and despite the alleged irregularities in the foreclosure and titling processes. The duty to issue the writ could no longer be considered ministerial under those circumstances.
• Forum Shopping: Petitioner asserted that respondent committed forum shopping by filing the ex parte petition for a writ of possession while Civil Case No. 05‑12643 (annulment of foreclosure) and Civil Case No. 15‑14483 (accion publiciana) were pending.
• Mootness: Petitioner contended that her voluntary surrender of the subject properties to respondent did not render the case moot because her continued possession was not voluntary in the sense that would deprive her of the right to seek judicial review of the writ.

• Proper Remedy: Respondent maintained that the proper recourse from an order granting a writ of possession is an appeal in accordance with Section 8 of Act No. 3135, as amended, and thus the CA correctly dismissed the certiorari petition.
• No Grave Abuse of Discretion: Respondent argued that the trial court could not have acted with grave abuse of discretion because the issuance of a writ of possession in favor of a purchaser who has consolidated ownership is a purely ministerial duty, requiring no exercise of judgment; an ex parte petition is non‑litigious and does not require a hearing; and the pendency of a separate action questioning the mortgage or foreclosure does not bar the writ’s issuance.
• Mootness: Respondent alleged that petitioner’s voluntary surrender of the premises already mooted the prayer to suspend or cancel the writ, as respondent had validly acquired possession.

• Proper Remedy: Whether petitioner availed of the correct remedy of certiorari under Rule 65 in challenging the trial court’s Orders denying her Urgent Motion and Motion for Reconsideration.
• Grave Abuse of Discretion: Whether the trial court acted with grave abuse of discretion amounting to lack or excess of jurisdiction in sustaining the April 24, 2018 Order granting the writ of possession and in denying petitioner’s subsequent motions.
• Mootness: Whether the voluntary surrender of the subject properties by petitioner rendered the relief sought in the certiorari petition moot.

• Proper Remedy: The petition for certiorari was the proper remedy. Section 8 of Act No. 3135 allows the debtor to petition for the setting aside of the sale and cancellation of the writ of possession, and permits either party to appeal from the judge’s order. However, based on the clear teaching of 680 Home Appliances, Inc. v. Court of Appeals, Section 8 applies exclusively to writs of possession obtained “during the redemption period.” The bond required under Section 7, which the debtor may proceed against under Section 8, confirms this temporal limitation. When the redemption period lapses without the debtor exercising the right of redemption and the purchaser consolidates title, the purchaser’s right to possession becomes absolute, the bond is no longer required, and the debtor’s remedy under Section 8 is no longer available. The debtor’s recourse is a separate action (e.g., for annulment of mortgage or reconveyance). Because no appeal under Section 8 lay from the denial of petitioner’s motions, her only recourse was a special civil action for certiorari under Rule 65, which may be availed of when there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law.

• Grave Abuse of Discretion: No grave abuse of discretion attended the trial court’s orders. After the redemption period expired and respondent consolidated its ownership, the issuance of a writ of possession became a ministerial duty. The nature of the ex parte proceeding is non‑litigious and summary; no hearing is required, and a pending action for annulment of mortgage or foreclosure does not stay the issuance of the writ. The trial court need not examine the validity of the mortgage or the manner of foreclosure and is justified in relying on the face of the purchaser’s title, which enjoys a presumption of regularity. The ministerial duty ceases only when a third party in adverse possession claims a right adverse to that of the debtor‑mortgagor, and the third party’s claim must be held in his or her own right, not merely as a successor or transferee of the debtor. Petitioner brought her opposition on behalf of her mother, the debtor‑mortgagor Lucy, aligning her interest with that of Lucy rather than asserting a title adverse to her. Hence, the exception did not apply, and the trial court’s denial of the motions and sustenance of the writ could not be characterized as a capricious or arbitrary exercise of judgment equivalent to lack of jurisdiction.

• Mootness: The voluntary surrender of possession rendered the specific relief of cancelling or suspending the writ of possession moot. Respondent had already validly acquired actual possession of the properties, and cancelling or suspending the implementation of the writ would not disturb that possession. The appropriate remedy for petitioner going forward would be the main action for annulment of foreclosure and/or reconveyance of the properties, not the revocation of a possessory writ that had already been fully implemented.

• Section 8 of Act No. 3135 applies only during the redemption period — The remedy of a petition to set aside the sale and cancel the writ of possession, together with the attendant remedy of appeal, is limited to writs issued under Section 7 for possession during the redemption period. Once the redemption period expires without redemption and the purchaser consolidates title, the purchaser’s right to possession becomes absolute, a bond is no longer required, and the debtor’s recourse under Section 8 is cut off. The debtor must instead pursue a separate action such as annulment of mortgage, annulment of foreclosure, or recovery of ownership.

• Ministerial duty to issue writ of possession after consolidation — After the lapse of the redemption period and consolidation of title in the purchaser’s name, the court’s duty to issue a writ of possession upon proper application and proof of title is ministerial. The issuance may not be enjoined or stayed even by a pending suit for annulment of the mortgage or foreclosure. The trial court is not required to examine the validity of the mortgage or the manner of foreclosure; it is sufficient that the purchaser presents valid Torrens titles that are presumed regular.

• Exception to ministerial duty: third‑party adverse possessor — The court’s ministerial duty ceases only where a third party, distinct from the debtor‑mortgagor, is in possession of the property under a claim of title adverse to that of the applicant‑purchaser. For the exception to apply, the third party must hold the property in his or her own right, not merely as a successor or transferee of the debtor‑mortgagor. A family member who asserts rights consistent with, and on behalf of, the debtor‑mortgagor does not qualify as an adverse third‑party possessor.

• Nature of an ex parte petition for writ of possession — The proceeding under Act No. 3135 for the issuance of a writ of possession is non‑litigious, summary in nature, and may be granted without notice to, or participation of, the person against whom the relief is sought. No hearing is necessary, and the court may act solely on the verified petition and the applicant’s proof of title.

• Grave abuse of discretion in the context of certiorari — “Grave abuse of discretion” denotes a capricious and whimsical exercise of judgment equivalent to lack of jurisdiction; it must be so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform the duty enjoined by law. An act taken pursuant to a ministerial duty cannot constitute grave abuse of discretion.

• “However, upon the lapse of the redemption period without the debtor exercising his [or her] right of redemption and the purchaser consolidates his [or her] titles, it becomes unnecessary to require the purchaser to assume actual possession thereof before the debtor may contest it. Possession of the land becomes an absolute right of the purchaser, as this is merely an incident of his [or her] ownership. In fact, the issuance of the writ of possession at this point becomes ministerial for the court.” — This passage, quoting 680 Home Appliances, Inc. v. Court of Appeals, encapsulates the pivotal doctrinal shift from conditional to absolute right to possession and the corresponding ministerial character of the writ.

• “It is a time‑honored legal precept that 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. As the confirmed owner, the purchaser’s right to possession becomes absolute. 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.” — Cited from Asia United Bank v. Goodland Company, this excerpt underscores the non‑discretionary nature of the writ after consolidation.

• “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.” — The formulation of the exception to the ministerial duty, drawn from China Banking Corporation v. Spouses Lozada, which was dispositive in rejecting petitioner’s claimed adverse interest.

• 680 Home Appliances, Inc. v. Court of Appeals, 744 Phil. 481 (2014) — Controlling precedent; defined the temporal scope of Section 8 of Act No. 3135, confining it to the redemption period, and clarified that after consolidation, the debtor’s remedy is a separate plenary action.
• Laureano v. Bormaheco, Inc., 404 Phil. 80 (2001) — Followed; established that the purchaser’s right to a writ of possession extends to a subsequent transferee, who succeeds to all rights of the original foreclosure purchaser.
• Asia United Bank v. Goodland Company, 650 Phil. 174 (2010) — Followed; articulated the ministerial duty of courts to issue a writ of possession after consolidation, the non‑litigious character of the ex parte petition, and the sufficiency of verified petition and proof of title.
• BPI Family Savings Bank, Inc. v. Golden Power Diesel Sales Center, Inc., 654 Phil. 382 (2011) — Followed; reaffirmed that a pending action for annulment of mortgage or foreclosure does not stay the issuance of a writ of possession.
• China Banking Corporation v. Spouses Lozada, 579 Phil. 454 (2008) — Followed; delimited the exception to the ministerial duty when a third‑party possessor claims a title adverse to the debtor‑mortgagor, requiring that the possession be in the third party’s own right.
• Spouses Cabasal v. BPI Family Savings Bank, Inc., G.R. No. 233846, November 18, 2020 and In Re: Ex Parte Petition for Issuance of Writ of Possession Philippine National Bank v. Fontanoza, G.R. No. 213673, March 2, 2022 — Cited for the non‑necessity of a hearing in an ex parte petition for a writ of possession.

• Section 1, Act No. 3135 — Delimits the scope of the Act to the manner of sale and redemption in extrajudicial foreclosure; the Supreme Court relied on this provision to hold that proceedings beyond the redemption period, including possession after consolidation, are outside the Act’s regulatory ambit.
• Section 7, Act No. 3135 — Grants the purchaser the right to petition for a writ of possession during the redemption period upon posting of a bond; the bond requirement serves as the link to the debtor’s remedy under Section 8 and confines Section 8’s applicability to the redemption period.
• Section 8, Act No. 3135 — Affords the debtor the right to petition to set aside the sale and cancel the writ, and to appeal from the judge’s order; held inapplicable to writs issued after expiration of the redemption period and consolidation of title, thus the remedy of appeal was unavailable to petitioner.
• Section 1, Rule 65, Rules of Court — Defines the availability of the special civil action of certiorari when any tribunal, board, or officer has acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law; this provision validated petitioner’s resort to certiorari after appeal under Section 8 proved unavailable.

Gesmundo, C.J. (Chairperson), Zalameda, Rosario, and Marquez, JJ., concur.