UNION BANK OF THE PHILIPPINES, PETITIONER, VS. HON. ENCARNACION JAJA G. MOYA, IN HER CAPACITY AS PRESIDING JUDGE OF BRANCH 146 OF THE REGIONAL TRIAL COURT OF MAKATI CITY, TERESI…
ABDULWAHID, J.:
The undisputed facts, as culled from the records of the case, are as follows:
On March 20, 2007, respondent Teresita S. Terencio executed in favor of petitioner Union Bank of the Philippines a Real Estate Mortgage[3] over a parcel of land located at 3099 Gen. P. Garcia St., Bangkal, Makati, and covered by Transfer Certificate of Title No. 223388.[4] The mortgage was executed to secure the full and prompt payment of respondent Terencio’s loan obligation in the principal amount of Php5,000,000.00.[5]
Respondent Terencio defaulted on her loan obligation, thus, on September 12, 2008, petitioner filed a Petition for Extrajudicial Foreclosure of Real Estate Mortgage[6] under Act No. 3135, as amended by Act No. 4118. After due notice and publication, the subject property was sold at public auction to petitioner, being the highest bidder, and upon expiration of the one-year redemption period, petitioner consolidated its ownership over the property, resulting in the cancellation of TCT No. 223388 and the issuance of TCT No. 227650[7] in petitioner’s name.
Despite demands[8] made upon respondent Terencio to vacate and deliver the possession of the property in favor of petitioner, the former refused to do so. Thus, on March 7, 2012, petitioner filed an Ex-Parte Petition for Issuance of Writ of Possession[9] before the RTC of Makati. During an ex-parte hearing held on May 4, 2012, petitioner duly presented its witnesses and documentary evidence.[10]
On June 22, 2012, before the court a quo could decide on the foregoing petition, respondent Virgilio R. Valdez filed a Motion for Leave of Court for Allowance to Intervene (Motion for Intervention).[11] In the said motion, respondent Valdez claimed to be the former registered owner of the subject parcel of land under TCT No. 214329. Respondent Valdez alleged that he only agreed to the transfer of title in the name of respondent Terencio upon the execution of an Absolute Deed of Sale but without full payment of the purchase price due thereon, upon the latter’s plea that the title be already transferred in her name to enable her to secure a loan with the property as collateral. However, respondent Terencio’s promise to pay the full purchase price with the proceeds of the said loan did not materialize, despite repeated demands made by respondent Valdez. Instead, respondent Valdez subsequently caused the annotation of an adverse claim on TCT No. 223388 and, to respondent Valdez’s shock, petitioner subsequently foreclosed and purchased the subject property at public auction. Thus, respondent Valdez prayed that he be allowed to intervene in the case and present evidence of his ownership over the real property subject of the case. He further prayed that an order be issued: (1) declaring the extrajudicial foreclosure sale null and void; and (2) denying the issuance of a writ of possession in favor of petitioner.
On July 23, 2012, petitioner filed an Opposition to the Motion for Intervention,[12] maintaining that said motion was fatally defective for violating the three-day notice rule, since petitioner received a copy of said motion only in the late afternoon of June 29, 2012, the very day the hearing on the motion had been set. Thus, it was deprived of its right to be present during the hearing. Moreover, petitioner posited that intervention is not proper in an ex-parte proceeding such as that involving petitions for issuance of a writ of possession upon consolidation of title in a foreclosure sale. Corollarily, respondent Valdez cannot invoke the lone exception to the ministerial duty of the court to issue a writ of possession since he had not proven possession of the property in question. Finally, petitioner asserted that it was a mortgagee in good faith and for value, with no prior notice of respondent Valdez’s adverse claim.
On October 19, 2012, the RTC issued the first assailed Order, disposing the case in favor of respondent Valdez, viz:[13]
WHEREFORE, the Motion to Intervene filed by Virgilio Valdez is GRANTED. Considering that petitioner already terminated the presentation of its evidence, the presentation of evidence for intervenor, Virgilio R. Valdez is set on December 10, 2012 at 9:30a.m.
SO ORDERED.
Petitioner moved for reconsideration[14] of the foregoing Order, but the same was denied in the second assailed Order dated May 28, 2013, to wit:[15]
WHEREFORE, the Motion for Reconsideration filed by petitioner is denied for lack of merit. Set the presentation of intervenor’s evidence on July 31, 2013 at 2:00 p.m.
SO ORDERED.
Aggrieved, petitioner filed the instant petition, praying for the annulment and/or reversal of the above-assailed Orders of the RTC and the issuance of a temporary restraining order or writ of preliminary injunction on the following grounds:[16]
I
THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN GRANTING RESPONDENT VALDEZ’S MOTION TO INTERVENE DESPITE THE FATAL FLAW OF THE MOTION IN ITS FAILURE TO COMPLY WITH THE 3-DAY NOTICE RULE ENUNCIATED IN SECTION 4, RULE 15 OF THE RULES OF COURT;
II
THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN GRANTING RESPONDENT VALDEZ’S MOTION TO INTERVENE DESPITE OVERWHELMING PRELIMINARY EVIDENCE SHOWING THAT HE IS NOT IN POSSESSION OF THE PROPERTY;
III
THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN GRANTING RESPONDENT VALDEZ’S MOTION TO INTERVENE DESPITE HIS FAILURE TO COMPLY WITH THE REQUIREMENTS FOR A VALID INTERVENTION UNDER RULE 19 OF THE RULES OF COURT;
IV
THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN GRANTING RESPONDENT VALDEZ’S MOTION TO INTERVENE NOTWITHSTANDING THE EX PARTE NATURE OF PROCEEDINGS FOR ISSUANCE OF WRIT OF POSSESSION AND THE MINISTERIAL DUTY OF THE COURT TO ISSUE THE SAME; and
V
A TEMPORARY RESTRAINING ORDER (TRO) OR WRIT OF PRELIMINARY INJUNCTION SHOULD BE ISSUED IMMEDIATELY TO PREVENT GRAVE INJUSTICE FROM BEING PERPETRATED BY RESPONDENTS ON PETITIONER.
With respect to the first assignment of error, suffice it to state that any defect in the motion due to non-compliance with the three-day rule has been sufficiently cured by the fact that petitioner was able to file a timely opposition to said motion, which opposition was duly considered in the resolution of the motion. While it is true that Section 4, Rule 15, of the 1997 Rules of Civil Procedure requires a movant to furnish the other party with a copy of the motion in such a manner as to ensure the latter’s receipt thereof no less than three days before the date of hearing, the same is not a hard and fast rule. A liberal construction of the procedural rules is proper where the lapse in the literal observance of a rule of procedure has not prejudiced the adverse party and has not deprived the court of its authority.[17]
However, we find merit in petitioner’s position that respondent Valdez has not sufficiently proven his right to intervene in an ex-parte proceeding for the issuance of a writ of possession.
Section 1, Rule 19 of the 1997 Rules of Civil Procedure provides for the requirements of a valid intervention, as follows:
SECTION 1. Who may intervene. – A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor’s rights may be fully protected in a separate proceeding. (Emphasis supplied)
In Ongco vs. Dalisay, the Supreme Court had occasion to explain intervention and its requisites, to wit:[18]
Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a litigant therein for a certain purpose: to enable the third party to protect or preserve a right or interest that may be affected by those proceedings. This remedy, however, is not a right. The rules on intervention are set forth clearly in Rule 19 of the Rules of Court x x x
| x x x |
x x x
|
x x x
|
It can be readily seen that intervention is not a matter of right, but is left to the trial court’s sound discretion. The trial court must not only determine if the requisite legal interest is present, but also take into consideration the delay and the consequent prejudice to the original parties that the intervention will cause. Both requirements must concur, as the first requirement on legal interest is not more important than the second requirement that no delay and prejudice should result. To help ensure that delay does not result from the granting of a motion to intervene, the Rules also explicitly say that intervention may be allowed only before rendition of judgment by the trial court.
In Executive Secretary v. Northeast Freight, this Court explained intervention in this wise:
Intervention is not a matter of absolute right but may be permitted by the court when the applicant shows facts which satisfy the requirements of the statute authorizing intervention. Under our Rules of Court, what qualifies a person to intervene is his possession of a legal interest in the matter in litigation or in the success of either of the parties, or an interest against both; or when he is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or an officer thereof. As regards the legal interest as qualifying factor, this Court has ruled that such interest must be of a direct and immediate character so that the intervenor will either gain or lose by the direct legal operation of the judgment. The interest must be actual and material, a concern which is more than mere curiosity or academic or sentimental desire; it must not be indirect and contingent, indirect and remote, conjectural, consequential or collateral. However, notwithstanding the presence of a legal interest, permission to intervene is subject to the sound discretion of the court, the exercise of which is limited by considering whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties and whether or not the intervenor’s rights may be fully protected in a separate proceeding. (Emphasis supplied)
Based on the foregoing ruling, there are three factors which the court must first determine before it may grant a motion for intervention: (1) whether or not the movant has a direct legal interest in the pending action; (2) whether or not intervention will unduly delay or prejudice the adjudication of the rights of the original parties in the proceedings; and (3) whether or not the intervenor’s rights may be fully protected in a separate proceeding.
Clearly, the adjudication of petitioner’s rights in an ex-parte proceeding for the issuance of a writ of possession on the basis of a certificate of sale in an extrajudicial foreclosure sale and a newly issued TCT over the subject property will be unduly delayed or prejudiced by respondent Valdez’s intervention, since the same will entail a full-blown trial. This is in direct opposition to the very nature of an ex-parte proceeding, which requires no notice to adverse parties and hearing. Time and again, the Supreme Court has held that the purchaser in an extra-judicial foreclosure sale is entitled to the possession of the property and can demand that he be placed in possession of the same, even without payment of a bond in case the redemption period had already expired. Thus, the issuance of a writ of possession duly applied for by the purchaser should be done as a matter of course and merely constitutes a ministerial duty on the part of the court.[19]
In this respect, it has been held that an ex-parte proceeding is not a proper forum for a motion for intervention, viz:[20]
We also find merit in Metrobank’s contention that the lower court should not have allowed De Koning to intervene in the proceedings.
A judicial proceeding, order, injunction, etc., is ex parte when it is taken or granted at the instance and for the benefit of one party only, and without notice to, or contestation by, any person adversely interested.
Given that the proceeding for a writ of possession, by the terms of Section 7 of Act No. 3135, is undoubtedly ex parte in nature, the lower court clearly erred not only when it notified De Koning of Metrobank’s ex parte petition for the writ of possession, but also when it allowed De Koning to participate in the proceedings and when it took cognizance and upheld De Koning’s motion to dismiss.
As held in Ancheta v. Metropolitan Bank and Trust Company, Inc.:
In GSIS v. Court of Appeals, this Court discussed the inappropriateness of intervening in a summary proceeding under Section 7 of Act No. 3135:
The proceedings in which respondent Knecht sought to intervene is an ex-parte proceeding pursuant to Sec. 7 of Act No. 3135, as pointed out by petitioner, is a “judicial proceeding brought for the benefit of one party only, and without notice to, or consent by any person adversely interested x x x or a proceeding wherein relief is granted without an opportunity for the person against whom the relief is sought to be heard” x x x
Intervention is defined as “a proceeding in a suit or action by which a third person is permitted by the court ot make himself a party, either joining a plaintiff in claiming what is sought by the complaint, or uniting with defendant in resisting the claims of plaintiff, or demanding something adversely to both of them; the act or proceeding by which a third person becomes a party in a suit pending between others; the admission, by leave of court, of a person not an original party to pending legal proceedings, by which such person becomes a party thereto for the protection of some right of interest alleged by him to be affected by such proceedings” x x x
Action, under Rule 2, Sec. 1, is defined as an ordinary suit in a court of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prevention or redress of a wrong.
From the aforesaid definitions, it is clear that intervention contemplates a suit, and is therefore exercisable during a trial and, as pointed out by petitioner is one which envisions the introduction of evidence by the parties, leading to the rendition of the decision in the case. Very clearly, this concept is not that contemplated by Sec. 7 of Act No. 3135, whereby, under settled jurisprudence, the Judge has to order the immediate issuance of a writ of possession 1)upon the filing of the proper motion and 2) the approval of the corresponding bond. The rationale for the mandate is to allow the purchaser to have possession of the foreclosed property without delay, such possession being founded on his right of ownership. A trial which entails delay is obviously out of the question. (Emphasis supplied.)
Even assuming an ex-parte proceeding for the issuance of a writ of possession is a proper forum for a motion for intervention, we find that respondent Valdez failed to establish and prove the existence of a legal right or interest in the case. To reiterate, the obligation to issue a writ of possession in favor of the purchaser in an extrajudicial foreclosure sale is ministerial, unless a third party is actually holding the property by adverse title or right.[21] In this case, respondent Valdez, in his Motion for Intervention, failed to sufficiently establish with prima facie evidence his possession of the subject property. On the contrary, he admitted that the same had been the subject of an Absolute Deed of Sale, with respondent Terencio as the buyer, and that a new transfer certificate of title had already been issued in the name of the latter. Moreover, respondent Valdez’s assertion that he is presently in adverse possession of the subject property is belied by the evidence on record, which shows that respondent Terencio’s address on record is the subject property and that it was always respondent Terencio or her representatives, and never respondent Valdez, who received all the demand letters sent by petitioner to said address. Even the RTC, in its second assailed Order, which denied petitioner’s Motion for Reconsideration, acknowledged that it has not been shown whether respondent Valdez is, in fact, in possession of the subject property.[22] However, contrary to the RTC’s conclusion, said possession should have been first established in the Motion for Intervention itself, and not subsequently during trial, after the granting of said motion, since possession and adverse title are the very factors which will establish respondent’s legal interest in the case, one of the requisites of intervention.
Finally, Section 1, Rule 19 of the 1997 Rules of Civil Procedure requires the court to determine whether the intervenor’s claims alleged rights may be fully protected in a separate proceeding, instead of in the action where intervention is sought. In the instant case, which involves an ex-parte proceeding, the jurisdiction of the court is limited only to the issuance of the writ of possession. It has no jurisdiction to determine who between the parties is the rightful owner and lawful possessor of the property. Thus, the proper remedy for the purpose of nullifying the foreclosure proceeding and, consequently, petitioner’s newly-issued title to the subject property, would have been through an accion reivindicatoria, and not a motion for intervention in an ex-parte proceeding.
Considering the foregoing disquisition, we find that the public respondent RTC committed grave abuse of discretion in granting respondent Valdez’s motion for intervention and allowing the latter to present evidence as to his ownership and right of possession over the subject property.
WHEREFORE, the instant petition is GRANTED. The Orders dated October 19, 2012 and May 28, 2013 issued by respondent RTC are REVERSED and SET ASIDE, and the Motion for Leave of Court for Allowance to Intervene dated June 22, 2012 is DENIED.
SO ORDERED.
C E R T I F I C A T I O N
Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above-entitled decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.
Cruz, R.A., and [*]Inting, S. B., JJ., concur.
[*] Vice J. R.F. Barza, who is on Baguio Summer Session, per Office Order No. 238-14-ABR dated May 23, 2014.
[1] Rollo, pp. 27-28.
[2] Id. at 29-30.
[3] Id. at 34-37.
[4] Id. at 31-33.
[5] Id. at 50-53.
[6] Id. at 39-42.
[7] Id. at 59-60.
[8] Id. at 61.
[9] Id. at 62-68.
[10] Id. at 72-73.
[11] Id. at 90-96.
[12] Id. at 117-123.
[13] Id. at 28.
[14] Id. at 124-127.
[15] Id. at 30.
[16] Id. at 8-9.
[17] Cabrera vs. Ng, G.R. No. 201601, March 12, 2014.
[18] 677 SCRA 232, 238-240 (2012).
[19] See Sps. Marquez vs. Sps. Alindog, G.R. No. 184045, January 22, 2014.
[20] Metropolitan Bank & Trust Company vs. Santos, 608 SCRA 222, 235-236 (2009) (citations omitted).
[21] See Note 19.
[22] See Note 1, p. 30.