Title
Parents-Teachers Association of St. Mathew Christian Academy vs. Metropolitan Bank and Trust Co.
Case
G.R. No. 176518
Decision Date
Mar 2, 2010
Spouses Ilagan defaulted on a loan, leading to foreclosure. SMCA, represented by PTA, teachers, and students, sought injunction against eviction, claiming third-party possession. Courts ruled SMCA was not a third party, affirming the writ of possession; proper remedy was a separate suit, not certiorari. SC upheld the decision.

Case Digest (G.R. No. 176518)
Expanded Legal Reasoning Model

Facts:

  • Parties Involved
    • Petitioners:
      • The Parents-Teachers Association (PTA) of St. Mathew Christian Academy (SMCA)
      • Several individual petitioners (including Gregorio Inalvez, Jr., Rowena Layug, Malou Malvar, Marilou Baraquio, Gary Sinlao, Luzviminda Ocampo, Marife Fernandez, Fernando Victorio, Ernesto Aganon, and Rizalino Manglicmot)
    • Respondent:
      • The Metropolitan Bank and Trust Company (MBTC)
  • Background of the Case
    • Loan and Mortgage Transaction
      • In 2001, spouses Denivin Ilagan and Josefina Ilagan secured a loan amounting to P4,790,000.00 from MBTC.
      • The loan was secured by a real estate mortgage covering several parcels of land with various Transfer Certificates of Title (Nos. 300203, 285299, 278042, 300181, 300184, 300191, 300194, and 300202).
    • Foreclosure Sale
      • Upon default by the Ilagan spouses, an extrajudicial foreclosure sale was conducted.
      • MBTC emerged as the highest bidder, and a Certificate of Sale was issued in its favor.
    • Issuance of the Writ of Possession
      • During the redemption period following the sale, MBTC filed an ex parte petition for the issuance of a writ of possession by posting the required bond under LRC Case No. 6438.
    • Intervention and Injunction Proceedings
      • On June 30, 2005, St. Mathew Christian Academy of Tarlac, Inc. filed a Petition for Injunction with Prayer for a Restraining Order (Special Civil Action No. 9793) seeking to forestall the eviction, arguing that:
        • The academy was practically owned by the mortgagors through its connection with the Ilagan spouses.
        • The lease arrangement terminated in 1999 and, though carried on thereafter on a monthly basis, was not registered—hence it had no binding effect on third parties.
      • On August 16, 2005, a Joint Decision was issued allowing MBTC to be granted a writ of possession, while holding that SMCA, by virtue of its relationship with the mortgagors, was not a third party entitled to prevent the writ.
    • Petitioners’ Motion and Subsequent Proceedings
      • Petitioners (PTA, teachers, and students) intervened in the proceedings, initially seeking to protect their actual physical possession of the school premises.
      • The trial court initially granted a Motion for Leave to File a Petition in Intervention (Order dated November 10, 2005) but later reversed its decision on December 7, 2005, directing the implementation of the writ of possession in favor of MBTC.
      • Dissatisfied with the trial court’s Order, petitioners assailed the decision through:
        • A Petition for Certiorari and Prohibition filed before the Court of Appeals (CA), which was dismissed on November 29, 2006 for lack of merit.
        • A subsequent Motion for Reconsideration, which was denied in a Resolution dated January 29, 2007.
      • Finally, petitioners filed a Petition for Review on Certiorari, asserting that:
        • The CA committed clear and reversible errors in its failure to consider their meritorious legal grounds.
        • The proper remedy under the law was wrongly dismissed, and they should not have been required to file a motion for reconsideration before appealing.
  • Procedural and Substantive Contentions
    • Petitioners’ Arguments
      • They contended that the CA erred in not considering their substantive legal and equitable arguments, including the claim that their immediate suspension of the writ of possession was justified by urgency and a threat to their right to quality education and academic freedom.
      • They argued that the writ of possession should not have been executed because they claimed an interest in the premises based on their roles as teachers and students.
    • Respondent’s Assertions
      • MBTC argued that:
        • The issuance of the writ of possession is generally a ministerial act once the foreclosure sale is completed, as provided under Section 7 of Act No. 3135.
        • Petitioners’ interest in the school premises was derived solely from their contractual relationship with SMCA and did not confer upon them rights adverse to the mortgagors or the school itself.
        • The identifiable lapse concerning the Certificate of Non-Forum Shopping was immaterial, being merely incidental to the substance of the writ application.

Issues:

  • Whether the Court of Appeals committed reversible error by:
    • Failing to consider the substantive legal and factual bases presented by the petitioners, which they claim are firmly anchored in law and equity.
    • Incorrectly adjudicating that the proper remedy available to the petitioners was the special civil action of certiorari instead of a petition to set aside the foreclosure sale under Section 8 of Act No. 3135.
    • Requiring petitioners to file a motion for reconsideration before seeking redress via a petition for certiorari, thereby allegedly denying them an immediate remedy.
    • Deciding the case on purely technical grounds rather than addressing the broader considerations of justice and equity.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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