Philippine National Bank v. Fontanoza
REITERATIONFacts
The Antecedents: Spouses Salvador and Alma Fontanoza obtained a loan from the Philippine National Bank (PNB), securing it with a mortgage on a parcel of land. Upon their failure to pay, PNB foreclosed the mortgage, and as the sole bidder, acquired the property at a public auction on January 8, 2002. PNB registered the sale and the Fontanozas failed to redeem the property within the statutory period. Procedural History: More than nine years after the foreclosure sale, on July 18, 2011, PNB filed an ex-parte petition for a writ of possession with the Regional Trial Court (RTC). The RTC granted the petition, and its order became final and executory on September 15, 2011. Subsequently, Alma Fontanoza filed an opposition and a motion to recall the writ, alleging a repurchase agreement with PNB and lack of notice. The RTC denied her motion, reaffirming its earlier order. On appeal, the Court of Appeals (CA) set aside the RTC's order, citing the delay in PNB's petition and Alma's continued possession under a claimed repurchase agreement, likening the situation to the exception in Barican v. Intermediate Appellate Court. The Petition: PNB seeks review of the CA's decision, arguing that the CA's reliance on Barican was misplaced as Alma, the mortgagor, cannot be considered a third party holding the property adversely. PNB contends that the issuance of a writ of possession is a ministerial duty of the court once ownership has consolidated and the redemption period has expired, and that any dispute regarding a repurchase agreement should be resolved in a separate civil case. PNB emphasizes that the RTC's order granting the writ had already become final and executory, and that Alma's due process claim is without merit as ex-parte proceedings for writs of possession do not require notice to the mortgagor.
Issue(s)
Whether the Barican case is applicable to the instant case, and whether the alleged delay in the application for a writ of possession and/or the mortgagor's continued possession of the property justifies setting aside an order denying a motion to recall the writ. Whether a writ of possession issued under a resolution that has already become final and executory can still be disturbed by a motion to recall or a subsequent Court of Appeals decision.
Ruling
The Supreme Court granted the petition, reversed and set aside the decision of the Court of Appeals, and reinstated the order of the Regional Trial Court. The Court held that the issuance of a writ of possession is a ministerial duty of the court and cannot be stayed by a pending action for annulment of mortgage or foreclosure, or by claims of repurchase agreements, especially when the mortgagor failed to redeem the property and the writ has become final and executory. Alma's claims are matters to be resolved in a separate civil case.
Ratio Decidendi
On the applicability of the Barican case and the justification for setting aside the writ: The Court ruled that the Barican case was misapplied by the CA. In Barican, the possessor was a third party claiming adverse title, and the bank had knowledge of and accepted payments from this third party. In the present case, Alma is the mortgagor who failed to redeem the property; she cannot be considered a third party in adverse possession. Her claim of a repurchase agreement, even if true, does not negate PNB's right to possession as the registered purchaser after foreclosure, especially since she failed to redeem. The Court emphasized that a pending action for annulment of mortgage or foreclosure sale does not stay the issuance of a writ of possession, as the purchaser is entitled to it without prejudice to the outcome of the annulment case. Furthermore, the Court reiterated that the duty to issue a writ of possession is ministerial and cannot be stayed by a pending action for annulment of the mortgage or the foreclosure itself, with the sole exception being when a third party is actually holding the property by adverse title or right. Alma's alleged repurchase agreement and payments are matters that should be litigated in the separate civil case she filed, not through an opposition to the writ of possession. The Court also noted that Alma admitted retrieving her deposits, and there was no conclusive documentary evidence of PNB's acceptance or approval of her repurchase offer. The handwritten notes at the back of PNB's letter were insufficient to establish a perfected repurchase contract. The Court found PNB's delay in filing the petition for a writ of possession, while noted, did not extinguish its right to possession as the registered purchaser after foreclosure, especially given Alma's failure to redeem. On whether a final and executory writ of possession can be disturbed: The Court held that the RTC's order issuing the writ of possession had already become final and executory on September 15, 2011, and Alma filed her opposition more than two months thereafter. The doctrine of immutability of judgment dictates that a final judgment cannot be disturbed or modified by any court, except for specific exceptions like clerical errors, void judgments, or circumstances rendering execution unjust and inequitable. None of these exceptions were present in this case. The Court stressed that courts have a ministerial duty to enforce judgments that have attained finality. Alma's contention that her right to due process was violated because she was not notified of PNB's petition is without merit, as a writ of possession is an ex parte proceeding where relief is granted without giving the adverse party an opportunity to be heard. It is a judicial proceeding for the enforcement of the right of possession as a purchaser in a foreclosure sale, not an ordinary suit. Therefore, the RTC had already lost jurisdiction over the case when Alma filed her motion to recall, and the CA erred in entertaining her appeal.
Main Doctrine
The issuance of a writ of possession in favor of a purchaser in an extrajudicial foreclosure sale is generally a ministerial duty of the court, which may only be stayed if a third party is in actual possession of the property adversely to the judgment debtor. The mortgagor, who failed to redeem the property, cannot be considered a third party in adverse possession, and their claims regarding repurchase agreements are matters to be resolved in a separate civil case, not in a proceeding for a writ of possession.