G.R. No. 157660 - Mallari vs. Banco Filipino Savings and Mortgage Bank

Case Summary (G.R. No. 157660)

Factual Background

Petitioner obtained the loan and, as security, mortgaged the Pampanga property to respondent. When petitioner failed to pay, respondent proceeded with extrajudicial foreclosure. Respondent purchased the property at the public auction and, on May 20, 1999, the certificate of sale was issued and annotated on the property’s title. Petitioner did not redeem before the redemption period lapsed on May 20, 2000. After expiration of redemption, respondent consolidated its title and caused petitioner’s title to be cancelled and a new one to be issued in respondent’s name on August 30, 2000.

Respondent then sought possession through an ex-parte petition under Act No. 3135. Petitioner opposed the petition by invoking a pending action for declaration of nullity of the foreclosure proceedings, filed on May 16, 2000. The RTC nevertheless granted the request and issued the writ of possession on May 18, 2001.

Trial Court’s Grant of the Writ of Possession

The RTC issued the order granting the writ of possession on May 18, 2001 despite petitioner’s opposition premised on the existence of a pending nullity case involving the extrajudicial foreclosure. Petitioner sought reconsideration, but the RTC denied it. Petitioner then elevated the matter to the CA through certiorari, challenging the RTC’s issuance of the writ of possession and the refusal to reconsider.

Court of Appeals Disposition

On March 14, 2003, the CA dismissed petitioner’s petition for certiorari for lack of merit. The CA ruled that the law required the purchaser in foreclosure to be placed in possession without delay. It further held that the trial courts’ duty to uphold the mortgagee’s right to possession is ministerial. The CA also stated that appeal was available and that petitioner could not resort to certiorari in view of that adequate remedy.

Issues Raised Before the Supreme Court

Petitioner’s Petition for Review on Certiorari asserted that the CA committed reversible error in: first, upholding the RTC’s grant of the writ of possession; second, affirming the denial of reconsideration and the implementation of the writ; and third, ruling that certiorari would not lie because appeal remained available.

Certiorari Under Rule 65: Adequate Remedy as a Threshold

The Court first addressed whether petitioner could use certiorari to assail the RTC orders granting the writ of possession. It restated the “well-trenched rule” under Section 1, Rule 65 as elucidated in Metropolitan Bank and Trust Co., Inc. v. National Wages and Productivity Commission, requiring that certiorari be directed against a tribunal exercising judicial or quasi-judicial functions, that it be issued without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction, and that there be no appeal or any plain, speedy and adequate remedy in the ordinary course of law.

The Court acknowledged that in some exceptional instances certiorari could still prosper even when an appeal was available, such as when public welfare or policy requires it, when the broader interest of justice so requires, when the writs issued are null, or when the questioned order constitutes an oppressive exercise of judicial authority. It then held that none of these justifying circumstances existed in the case at hand. In particular, there was no public welfare or policy issue, and the procedural path provided by Section 8 of Act No. 3135 afforded petitioner an expeditious remedy within the same writ-of-possession proceeding.

Act No. 3135, Section 8 as the Plain, Speedy and Adequate Remedy

The Court emphasized the procedure under SEC. 8, Act No. 3135. It explained that the debtor may petition, within the proceeding for possession but not later than thirty days after the purchaser was given possession, to set aside the sale and cancel the writ of possession. The debtor had to specify damages suffered because the mortgage was not violated or because the sale was not made in accordance with the provisions of the law. The court was to take cognizance of the petition under the summary procedure. If the court found the debtor’s complaint justified, it would dispose in the debtor’s favor of all or part of the bond furnished by the person who obtained possession. The order on such petition was appealable, while the order of possession continued during the pendency of the appeal.

The Court held that this scheme provided the most expeditious way to resolve conflicts regarding the writ of possession alone. It further ruled that the cases cited by petitioner were not applicable because those decisions involved writs of possession issued in the course of execution of judgment, which differed from the situation where the writ stemmed from an extra-judicial foreclosure.

Green Asia and the Required Route: Petition to Set Aside and Cancel the Writ, Then Appeal

The Court relied on Green Asia Construction & Development Corp. v. Court of Appeals, where it had categorically held that under Section 8 of Act No. 3135, the remedy of the aggrieved party from an order granting issuance of a writ of possession was to file a petition to set aside the sale and cancel the writ of possession within the same proceeding, and then to appeal from the order denying or granting that petition. The Court characterized this as the plain, speedy and adequate remedy contemplated by Rule 65. Because petitioner could have availed himself of this statutory procedure, the Court held that he was not entitled to resort to certiorari. On that ground alone, the Court declared that the CA correctly dismissed petitioner’s certiorari petition.

Ministerial Character of the Writ of Possession After Consolidation

To ensure petitioner’s concerns were addressed beyond procedural disposition, the Court also examined whether the RTC acted with grave abuse of discretion in issuing the writ of possession. It held that the writ was issued in accordance with law and jurisprudence. It ruled that the writ of possession was not a nullity and that its issuance did not amount to an oppressive exercise of judicial authority.

The Court invoked Espiridion v. Court of Appeals, a closely analogous case. There, it had explained that issuance of a writ of possession to a purchaser at a public auction is a ministerial act. After consolidation of title in the buyer’s name due to the mortgagor’s failure to redeem, the writ becomes a matter of right. When the foreclosure is extrajudicial, the court’s function is likewise merely ministerial. The Court reiterated the doctrinal distinction between ministerial and discretionary acts: a ministerial duty is performed in a prescribed manner without regard to the court’s own judgment; discretion is exercised only when the law grants decision-making authority over the propriety or timing of the act. Since the RTC’s issuance of the writ did not involve an exercise of discretion, the Court held that no abuse of discretion could be found.

Rejection of the Nullity Case as a Ground to Refuse Possession

The Court then addressed petitioner’s central contention: that the pendency of an action for nullity of the extrajudicial foreclosure should bar issuance of the writ of possession. The Court held that the issue of nullity was of no moment for purposes of refusing issuance of possession. It reaffirmed the rule that questions regarding the validity of the mortgage or foreclosure are not legal grounds to refuse issuance of a writ of execution/writ of possession. The Court also stated that the absence of a bond was not consequential in the context described in the cited jurisprudence. It explained that posting of a bond as a condition for issuance becomes necessary only when the writ is sought within one year from registration of the sale, i.e., during the redemption period when ownership has no

Case Syllabus (G.R. No. 157660)

The case arose from a Petition for Review on Certiorari under Rule 45 seeking reversal of a Court of Appeals decision dismissing petitioner’s petition for certiorari.
The parties were Eligio P. Mallari as petitioner and Banco Filipino Savings and Mortgage Bank as respondent.
The dispute concerned the RTC’s grant of an ex-parte petition for the issuance of a writ of possession under Act No. 3135, following extra-judicial foreclosure of a mortgaged property.

Parties and Procedural Posture

The RTC issued an order granting the respondent’s ex-parte petition for issuance of a writ of possession after respondent consolidated ownership following petitioner’s failure to redeem.
Petitioner filed a Motion to Dismiss/Opposition to the petition, but the RTC still granted the writ of possession.
Petitioner sought reconsideration, which the RTC denied.
Petitioner filed a petition for certiorari with the CA challenging the RTC orders.
The CA dismissed the certiorari petition for lack of merit, holding that appeal was the proper remedy and that issuance of the writ was supported by law.
Petitioner then filed the present Rule 45 petition, asserting reversible errors in the CA’s treatment of certiorari and the propriety of the writ of possession.

Key Factual Allegations

Petitioner obtained a loan from respondent and executed a Deed of Mortgage over a parcel of land in Pampanga.
Petitioner failed to pay the loan, prompting respondent to conduct an extra-judicial foreclosure of the mortgaged property.
Respondent was the highest bidder at the foreclosure sale.
The Certificate of Sale was issued and annotated on the title on May 20, 1999.
Petitioner failed to redeem within the redemption period, which expired on May 20, 2000.
Respondent consolidated its title after the lapse of the redemption period.
Petitioner’s title was cancelled and a new title was issued in respondent’s name on August 30, 2000.
On January 18, 2001, respondent filed an ex-parte petition with the RTC for the issuance of a writ of possession under Act No. 3135.
On March 22, 2001, petitioner filed a Motion to Dismiss/Opposition, alleging a pending action between the parties for declaration of nullity of the extra-judicial foreclosure proceedings filed on May 16, 2000.
On May 18, 2001, the RTC issued an order granting the petition for issuance of a writ of possession.
Petitioner’s motion for reconsideration was denied, and petitioner proceeded to challenge the RTC action through certiorari in the CA.

Core Issues Presented

The first issue was whether petitioner could avail himself of certiorari to assail the RTC orders granting the writ of possession despite the availability of appeal.
The second issue was whether the RTC acted with grave abuse of discretion in issuing the writ of possession while a separate action for nullity of the extra-judicial foreclosure was allegedly pending.
The third issue was whether the CA erred in ruling that certiorari would not lie because appeal was the appropriate remedy.

Statutory Framework

The Court applied the Rule 65, Rules of Court standard for when certiorari may issue.
The Court emphasized the essential requisites under Section 1, Rule 65 for certiorari to prosper: (a) the act is directed against a tribunal or officer exercising judicial or quasi-judicial functions; (b) the tribunal or officer acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (c) there is no appeal or plain, speedy, and adequate remedy in the ordinary course of law.
The Court measured adequacy by whether the remedy would promptly relieve the petitioner from injurious effects.
The Court relied on Section 8, Act No. 3135, as amended, which allows a debtor to petition within a specified period in the same proceedings for the sale to be set aside and the writ of possession cancelled, and provides that either party may appeal from the judge’s order.
The Court treated Act No. 3135 as authorizing a summary, ex-parte proceeding for possession, while preserving the debtor’s remedy through the mechanism in Section 8.

Parties’ Arguments

Petitioner contended that the CA committed reversible error when it upheld the RTC’s issuance of a writ of possession in favor of respondent against the Mallaris.
Petitioner argued that the RTC should not have issued the writ given the alleged pendency of an action for declaration of nullity of the extra-judicial foreclosure.
Petitioner further contended that the CA erred in affirming the denial of the RTC’s reconsideration order and the implementation of the writ of possession.
Petitioner also asserted that the CA committed an error when it ruled that certiorari will not lie because appeal was still available.

Rule 65 and Remedy Adequacy

The Court reiterated the well-trenched rule that certiorari requires, among others, the absence of appeal or a plain, speedy, and adequate remedy in the ordinary course of law.
The Court recognized that it had allowed certiorari in some situations despite the availability of appeal, including when public welfare and public policy demand, when the broader interest of justice so requires, when the writs issued are null, or when the questioned order amounts to an oppressive exercise of judicial authority.
The Court held that petitione