De La Salle University Manila

Ramon V. Del Rosario College of Business

Commercial Law Department

Advocacy Paper

In Partial Fulfillment
Of the course requirements in
DOCULMG (K31)
nd
2 Term Academic Year 2015-2016

Submitted To:
Atty. Hilario S. Caraan

Submitted by:
Salamat, Joannah V.

15 April 2016
 RESEARCH BACKGROUND

Act. No. 3135, otherwise known as An Act to Regulate the Sale of Property

Under Special Powers Inserted In or Annexed to Real-Estate Mortgages,

governs the extrajudicial foreclosure sale of a real estate mortgage. Under

section 7 of the said Act, as amended by Act. No. 4118, a writ of possession may

be issued by the purchaser. A writ of possession is a writ of execution employed

to enforce a judgement to recover the possession of land. It commands the

sheriff to enter the land and give possession of it to the person entitled under the

judgement. To issue a writ of possession is ministerial upon the courts after the

foreclosure sale and during the redemption period. In a foreclosure sale, the

purchaser becomes the absolute owner of the property purchased, if not

redeemed within one year after the registration of sale. The purchaser, then, is

entitled to the possession of the property and can demand that he be placed in

possession at any time following the consolidation of ownership and the issuance

to him of a new Transfer Certificate of Title (TCT). The exceptions to the

ministerial issuance of writ of possession was laid down in the case of Nagtalon

v. UCPB, they are: 1) gross inadequacy of purchase price 2) Third party claiming

right adverse to debtor/mortgagor 3)Failure to pay the surplus proceeds of the

sale to mortgagor.
 In the problem given, W forged Xs signature in order to obtain a loan and

mortgage from Y, after which, he absconded with the loan proceeds. As a result,

Xs property was foreclosed by Y. X claims to have discovered the foreclosure

and the mortgage only after the redemption period. An investigation by the PNP

and NBI confirmed Ws falsification of Xs signature, and that X was outside of

the Philippines at the time of notarization of the real estate mortgage before a

Philippine Notary Public. The Public Prosecutor found probably cause for a

criminal case for falsification, and the case is now pending in a separate criminal

court. Nonetheless, to oust X of possession of the subject property, Y filed for a

petition of issuance of writ of possession in a separate court. X opposed the

petition. This paper will supports X opposition based on his aforecited grounds.

RESEARCH PROBLEM

Based on the problem given, should the court grant Y the issuance of writ of

possession to oust X of possession of the subject property?

 DISCUSSION OF RELATED LITERATURE

As stated in the problem, W, in order to secure from Y a mortgage and loan,

falsified Xs signature. The court should not grant Y the issuance of writ of

possession because the case falls under one of the exceptions as stated in

Nagtalon v. UCPB. In my humble opinion, the second given exception, which

states that the ministerial issuance of a writ of possession will cease if there is a

third party claiming right adverse to debtor/mortgagor. A third party, as defined in

Blacks Law Dictionary, is a person who is not a party to an agreement to a

transaction but who may have rights therein. Through his falsification of Xs

signature, it was, technically, W, who is a party to the loan and mortgage entered

into with Y. X was unaware when this transpired he was never in a contract or

in agreement with Y. X is, therefore, a stranger to the contract entered into by W

and Y.

In Villanueva v. Cherdan Lending Investors Corporation, a judicial proceeding

may determine the adverse possession by the third party. A third person

dispossessed on the strength of an ex parte possessory writ, which is tantamount

to his ejectment, would be a violation of the basic tenets of due process. He may

only be ejected once he has been given the opportunity to be heard and is
accorded due process. Citing Article 433 of the Civil Code, which states, actual

possession under claim of ownership raises disputable presumption of

ownership. The true owner must resort to judicial process for the recovery of the

property. The ex parte issuance of a writ of possession filed by Y, is not the kind

of judicial process stated in Article 433 of the Civil Code. To enforce the writ of

possession against X, who did not take part to the foreclosure proceedings,

would amount to the taking of real property without the benefit of proper judicial

intervention. In addition, a separate case for falsification filed by X is already

pending in a separate criminal court, the falsification case would properly confirm

that X remains the true owner of the subject property and that he never entered

into a contract with Y. This pending criminal case involves the rights of a third

person, X; the court should first hear the merits of the case before they could

decide on whether to grant Y the writ of possession. If the execution of the writ

proceeds, it would prejudice the rights of X in the criminal case.

The writ of possession should be unenforceable against X since the basis of

the document of the foreclosure was falsified rendering it null and void. The

PNP and NBIs confirmation that Xs signature was indeed forged, presents clear

and convincing evidence and rebuts the evidentiary weight of the notarized public

document. Y may argue that he is a mortgagee in good faith; however, Y should

have exercised due diligence to ensure that it was indeed X he was entering into

an agreement with. Even for the sake of argument, Y will state that he practiced
due diligence, is not sufficient to prove that he is a mortgagee in good faith. This

doctrine does not apply to a situation where the title of the subject property is still

in the name of the rightful owner and the mortgagor is a different person

pretending to be the owner. In this case, the mortgagee cannot be considered as

innocent mortgagee and the general owner will not lose his title. A mortgage is

void and cannot prejudice the registered owner whose signature was falsified. In

the case of Lara, et al., v. Ayroso, Justice Reyes ruled that according to the last

provisio of Section 55 of the Land Registration Law, a mortgage is null if it is

executed by an impostor without the authority of the owner of the interest

mortgaged. In addition, a registration procured by forged deed is null and void.

CONCLUSION

From the aforementioned arguments, the court should not grant Y the

issuance of writ of possession for the mere fact that the entire basis for the

petition stemmed from a falsified document; the mortgage, sale, and foreclosure,

therefore, shall be declared null and void. The case may be considered as

peculiar and may fall under the exceptions as stated in Nagtalon v. UCPB,

because X, technically, is a stranger to the mortgage and loan between W and Y.

Issuing the writ of possession would, then, violate Xs rights as the rightful owner

of the subject property.

 BIBLIOGRAPHY
CASES

China Banking Corporation v. Lozada, G.R. No. 164919, July 4, 2008, 557 SCRA
177, 196

Erea v. Querrer-Kauffman, G.R. No. 165853, June 22, 2006, 492 SCRA 298,
319, citing Cavite Development Bank v. Lim, 324 SCRA 346, 358 (2000)

Lara, et al., v. Ayroso, 95 Phil.,185; 50 Off. Gaz. (10) 4383

Nagtalon v. United Coconut Planters Bank, G.R. 172504, July 31, 2013, 702
SCRA 615

Ong v. Court of Appeals, G.R. No. 121494, June 8, 2000, 333 SCRA 189, 195

The Parents-Teachers Association (PTA) of St. Mathew Christian Academy vs.

Metropolitan Bank and Trust Co., G.R. No. 176518, 2 March 2010

Rural Bank of Cabadbaran, Inc. v. Jorgita Melicio-Yap, et al. G.R. No. 178451,
30 July 2014

Villanueva v. Cherdan Lending Investor Corporation, G.R. No. 177881, October

13, 2010, 633 SCRA 173

BOOK

Third Party, Blacks Law Dictionary (5th ed. 1979)