Spouses Marcelo v. LBC Bank

Motion for New Trial or Motion for Reconsideration — Appeal · Forged Document may be a root of a valid title — Appeal from Judgment, etc

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Case DigestWeek 3–4 — The Registries of Deeds and Original Registration

Spouses Marcelo v. LBC Bank

G.R. No. 183575 · April 11, 2011 · Supreme Court — Second Division

Motion for New Trial or Motion for Reconsideration — Appeal · Forged Document may be a root of a valid title — Appeal from Judgment, etc

Gist

The relationship of the case of Spouses Rogelio Marcelo and Milagros Marcelo v. LBC Bank, G.R. No. 183575, April 11, 2011, to the assigned syllabus topic of Chapter III – Original Registration (Sections 14–38) > Sec. 32 — Review of Decree; Innocent Purchaser for Value: Remedy of Appeal is INCIDENTAL. The triggering controversy arose when Respondent LBC Bank filed a petition for the ex-parte issuance of a writ of possession over a foreclosed property covered by Transfer Certificate of Title No. T-145323, which was issued in the name of Respondent LBC Bank after the consolidation of title following extrajudicial foreclosure proceedings, which petition was opposed by Petitioner Spouses Rogelio and Milagros Marcelo on the ground that the consolidation of title was executed by an unauthorized branch manager. The Supreme Court of the Philippines denied the Petition for Review on Certiorari, affirming the Amended Decision of the Court of Appeals which upheld the Regional Trial Court's decision granting the writ of possession.

Core Doctrine

The Rule on the CA's Power to Receive Evidence: The Court of Appeals possesses the statutory authority under Section 9 of Batas Pambansa Blg. 129 to receive and consider new evidence in a special civil action for certiorari, particularly during a motion for reconsideration, to resolve factual issues concerning the authority of a corporate agent and prevent a miscarriage of justice.

Facts

On April 16, 1997 Spouses Rogelio and Milagros Marcelo borrowed ₱3 million from LBC Bank, and on May 27, 1998 a further ₱2.3 million. That same day they executed a real estate mortgage over land in Baliuag, Bulacan under TCT No. N-64135 to secure both loans.
They defaulted, and on October 15, 1998 the bank began extrajudicial foreclosure under Act No. 3135. The Notice of Sheriff's Sale issued October 21, 1998, and at the auction of November 25, 1998, after posting and publication, the bank was highest bidder and took a Certificate of Sale, which it registered.
The spouses did not redeem within the one-year period. On December 5, 2000 Ricardo B. Milan, Jr., the bank's Meycauayan Branch Manager, executed an Affidavit of Consolidation of Title, and on February 1, 2001 the Registry of Deeds cancelled TCT No. N-64135 and issued TCT No. T-145323 to the bank.
On October 12, 2004 the bank petitioned ex parte for a writ of possession in the RTC of Bulacan, Branch 11 (Case No. P-525-2004), and on December 1, 2004 the court granted it. The spouses moved for reconsideration, arguing the consolidation was invalid because Milan acted without written board authority and the petition was verified by Rosario B. Aotriz without authority; the RTC denied it on May 17, 2005.
On June 16, 2006 the CA granted their Rule 65 petition and set the RTC rulings aside. The bank moved for reconsideration, attaching an affidavit of Chief Finance Officer Ma. Tara O. Aznar that bank policy gives branch managers full authority to foreclose and consolidate, a Secretary's Certificate of June 27, 2006 from Assistant Corporate Secretary Jennifer D. Fajelagutan expressly ratifying Milan's authority, and a Secretary's Certificate of July 1, 2005 authorising Aznar to sign pleadings.
On March 26, 2008 the CA issued an Amended Decision granting reconsideration in the interest of substantial justice and reinstating the RTC rulings; reconsideration was denied June 27, 2008. The Second Division decided on April 11, 2011.

Arguments of the Parties

Petitioners. The Marcelos argued the CA erred in admitting new evidence on a Rule 65 petition, certiorari being confined to errors of jurisdiction on the record before the trial court; that the consolidation and TCT No. T-145323 were void ab initio, Milan lacking corporate authority to execute the affidavit, so the consolidation vested no ownership and could not ground a writ; and that the petition was defective in form, verified by Aotriz without any board resolution showing her authority.

Respondent. LBC Bank argued that under its corporate policies branch managers have implied and apparent authority to handle delinquent accounts, foreclose, and consolidate within their territories; that any initial want of written authority was cured by the Board's ratification through the Secretary's Certificate of June 27, 2006; and that the CA acted within Section 9 of Batas Pambansa Blg. 129, which empowers it to receive evidence to resolve factual disputes and prevent a miscarriage of justice.

Common Ground / Stipulations (if any). Both acknowledged the two loans totalling ₱5.3 million, the valid mortgage over TCT No. N-64135, the default, the foreclosure sale of November 25, 1998, and the failure to redeem.

Issue

MAIN ISSUE (Evidence-centered). Whether the CA, on a Rule 65 petition, may admit and consider new evidence — secretary's certificates and executive affidavits — on a motion for reconsideration to settle whether a corporate officer had authority to consolidate title.

SECONDARY ISSUES. Whether the consolidation and the new certificate may be collaterally attacked or stayed in a writ-of-possession proceeding for want of the branch manager's initial written authority; and whether issuing the writ of possession after redemption lapses and title consolidates is a ministerial duty.

ANCILLARY / INCIDENTAL ISSUES (if any). None separately resolved.

Ruling

On the MAIN ISSUE: YES — the CA did not err. Section 9 of Batas Pambansa Blg. 129 expressly empowers it to try cases, conduct hearings, receive evidence and do all acts necessary to resolve factual issues within its original and appellate jurisdiction, including granting and conducting further proceedings. To exclude such evidence on a motion for reconsideration in certiorari would enforce a rigid, highly technical rule defeating substantial justice, the documents having clearly and undisputedly proved the bank's ratification of Milan's act. On collateral attack: NO — any initial want of written authority was cured when the Board ratified and confirmed the branch manager's implied and apparent authority; the new certificate is evidence of ownership and cannot be collaterally attacked in a summary possessory proceeding, the proper route being a separate, direct civil action. On the writ: YES, ministerial — once the redemption year lapses without redemption, the purchaser's right to possession becomes absolute, and the court has no discretion but to issue the writ as a matter of course on a petition sufficient in form and substance; objections to the mortgage or the foreclosure do not stay that duty, without prejudice to a separate action. The dispositive portion reads verbatim: "WHEREFORE, the Court DENIES the petition and AFFIRMS the 26 March 2008 Amended Decision and 27 June 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 90166. SO ORDERED"

Ratio

Certiorari is not so narrow that it must produce absurdity. Excluding the ratifying documents would have meant annulling a valid writ only to have the bank refile the same petition with the same papers — contrary to the policy of prompt and inexpensive disposition of land cases.
An unauthorised corporate act is unenforceable, not void. Express or implied ratification validates it, and the Secretary's Certificate did so with retroactive effect.
Registration is the operative act. Consolidation cancels the mortgagor's title and issues a Torrens certificate to the purchaser, conclusive evidence of ownership — and possession is an attribute of that ownership, which is why the writ is ministerial and not open to collateral attack.
Rules of procedure are tools for justice, not obstacles to it.

Doctrine

Doctrines / Rules / Principles Laid Down.

The Court of Appeals may, under Section 9 of Batas Pambansa Blg. 129, receive and consider new evidence in a certiorari proceeding, including on a motion for reconsideration, to resolve a factual issue about a corporate agent's authority.
An unauthorised act of a corporate officer in consolidating title is validated with retroactive effect by the board's subsequent ratification through a duly executed Secretary's Certificate.
And after redemption lapses and title consolidates, issuing the writ of possession is a ministerial duty, and the possessory right cannot be collaterally attacked or suspended by alleged defects in the consolidation.

Distinctions / Limitations / Qualifications.

The ministerial duty is absolute unless a third party holds the property adversely to the judgment debtor — inapplicable here, the mortgagors themselves being in occupation. And the CA's power to receive evidence is confined to factual issues within its jurisdiction; it does not license new causes of action or substantive issues never raised below.

Topic/Subtopic Integration (Mandatory).

INCIDENTAL: the case shows how indefeasibility operates for a registered owner whose title came through a post-registration involuntary transaction — extrajudicial foreclosure and consolidation.
Just as an original decree becomes incontrovertible after a year, a consolidated certificate confers an absolute right to possession; challenges to the bank's corporate authority belong in an independent direct action, while the possessory court's duty remains ministerial.

Separate Opinions

None. The Second Division decided unanimously through Justice Antonio T. Carpio, with Justices Austria-Martinez, Nachura, Peralta and Abad concurring.

Full Digest — Recitation Format

Facts

On April 16, 1997: Petitioner Spouses Rogelio and Milagros Marcelo obtained a loan in the amount of P3 million from Respondent LBC Bank.
On May 27, 1998: Petitioner Spouses Rogelio and Milagros Marcelo obtained a second loan from Respondent LBC Bank in the amount of P2.3 million.
On May 27, 1998: Petitioner Spouses Rogelio and Milagros Marcelo executed a real estate mortgage in favor of Respondent LBC Bank to secure the two loans, which real estate mortgage covered a parcel of land located in Baliuag, Bulacan, and was registered under Transfer Certificate of Title No. N-64135 in the name of the Spouses Marcelo.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo defaulted in the payment of the loans.
On October 15, 1998: Due to the default of Petitioner Spouses Rogelio and Milagros Marcelo, Respondent LBC Bank instituted extrajudicial foreclosure proceedings over the real estate mortgage pursuant to the provisions of Act No. 3135.
On October 21, 1998: The Office of the Clerk of Court and the Ex-Officio Sheriff of Malolos, Bulacan, issued a Notice of Sheriff's Sale.
On November 25, 1998: After the required posting and publication of the Notice of Sheriff's Sale, the mortgaged property was sold at a public auction, wherein Respondent LBC Bank emerged as the highest bidder and was subsequently issued a Certificate of Sale.
Sometime thereafter: Respondent LBC Bank registered the Certificate of Sale with the Registry of Deeds of Bulacan.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo failed to redeem the foreclosed property within the one-year statutory redemption period prescribed by law.
On December 5, 2000: Following the expiration of the redemption period, Ricardo B. Milan, Jr., the Meycauayan Branch Manager of Respondent LBC Bank, executed an Affidavit of Consolidation of Title on behalf of Respondent LBC Bank, which Affidavit of Consolidation of Title was filed with the Registry of Deeds of Bulacan.
On February 1, 2001: Pursuant to the Affidavit of Consolidation of Title, the Registry of Deeds of Bulacan cancelled Transfer Certificate of Title No. N-64135 in the name of Petitioner Spouses Rogelio and Milagros Marcelo, and issued a new Transfer Certificate of Title, TCT No. T-145323, in the name of Respondent LBC Bank.
On October 12, 2004: Respondent LBC Bank filed a petition for the ex-parte issuance of a writ of possession over the foreclosed property before the Regional Trial Court of Bulacan, Branch 11, which petition was docketed as Case No. P-525-2004.
On December 1, 2004: The Regional Trial Court of Bulacan, Branch 11, rendered a Decision granting the petition of Respondent LBC Bank and directing the issuance of a writ of possession in favor of Respondent LBC Bank.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo filed a Motion for Reconsideration before the Regional Trial Court, contending that the consolidation of title was invalid because the Affidavit of Consolidation of Title was executed by Branch Manager Milan without express written authority from the Board of Directors of Respondent LBC Bank, and that the petition for the writ of possession was insufficient in form because the petition was verified by Rosario B. Aotriz, who allegedly lacked the authority to verify the petition.
On May 17, 2005: The Regional Trial Court of Bulacan issued an Order denying the Motion for Reconsideration filed by Petitioner Spouses Rogelio and Milagros Marcelo.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo filed a Petition for Certiorari under Rule 65 of the Rules of Court before the Court of Appeals, asserting that the Regional Trial Court committed grave abuse of discretion in granting the writ of possession because there was no board resolution on record authorizing Branch Manager Milan to consolidate ownership over the subject property.
On June 16, 2006: The Court of Appeals rendered a Decision granting the Petition for Certiorari of Petitioner Spouses Rogelio and Milagros Marcelo, and annulling and setting aside the December 1, 2004 Decision and the May 17, 2005 Order of the Regional Trial Court of Bulacan.
Sometime thereafter: Respondent LBC Bank filed a Motion for Reconsideration before the Court of Appeals, attaching thereto: (1) an Affidavit of Ma. Tara O. Aznar, the Chief Finance Officer of Respondent LBC Bank, attesting that under the established bank policy, branch managers have full authority to foreclose secured accounts and consolidate title; (2) a Secretary's Certificate, dated June 27, 2006, issued by Jennifer D. Fajelagutan, the Assistant Corporate Secretary, expressly confirming, ratifying, and approving the implied and apparent authority of Branch Manager Milan to consolidate title over the subject property; and (3) a Secretary's Certificate, dated July 1, 2005, authorizing Chief Finance Officer Aznar to act as an authorized signatory in all court pleadings and affidavits.
On March 26, 2008: The Court of Appeals rendered an Amended Decision granting the Motion for Reconsideration of Respondent LBC Bank in the interest of substantial justice, annulling the June 16, 2006 Decision, and reinstating and affirming the December 1, 2004 Decision and May 17, 2005 Order of the Regional Trial Court.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo filed a Motion for Reconsideration of the Amended Decision, which Motion for Reconsideration was denied by the Court of Appeals in a Resolution dated June 27, 2008.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo elevated the case to the Supreme Court of the Philippines via a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
On April 11, 2011: The Supreme Court of the Philippines Second Division promulgated the Decision denying the Petition for Review on Certiorari.

Arguments of the Parties

Petitioner Spouses Rogelio and Milagros Marcelo.

The Inadmissibility of New Evidence on Certiorari: Petitioner Spouses Rogelio and Milagros Marcelo argue that the Court of Appeals committed a reversible error in admitting and considering the Affidavit of Chief Finance Officer Aznar and the Secretary's Certificates during the motion for reconsideration. The Spouses Marcelo contend that in a special civil action for certiorari under Rule 65, the Court of Appeals cannot admit or consider new evidence, because the sole office of the writ of certiorari is limited to the correction of errors of jurisdiction on the part of the trial court, based on the records available to the trial court at the time of the rendition of the trial court's judgment.
The Invalidity of Title Consolidation: The Spouses Marcelo assert that the consolidation of title and the subsequent issuance of Transfer Certificate of Title No. T-145323 in the name of Respondent LBC Bank were void ab initio. The Spouses Marcelo contend that Branch Manager Milan lacked the legal capacity or written corporate authority to execute the Affidavit of Consolidation of Title on behalf of Respondent LBC Bank; hence, the consolidation was an unauthorized act that cannot vest ownership in the bank or serve as a valid basis for a writ of possession.
Defect in Verification: The Spouses Marcelo maintain that the petition for the issuance of a writ of possession filed by Respondent LBC Bank was insufficient in form because the verification was executed by Rosario B. Aotriz without any board resolution on record showing the authority of Rosario B. Aotriz to sign the verification on behalf of the corporation.

Respondent LBC Bank.

Substantial Compliance and Corporate Ratification: Respondent LBC Bank argues that the consolidation of title and the petition for a writ of possession were valid and procedurally sound. The bank contends that under the established corporate policies of the bank, branch managers possess the implied and apparent authority to oversee delinquent accounts, foreclose mortgages, and execute affidavits of consolidation within the respective territorial jurisdictions of the branch managers.
The Sufficiency of Subsequent Ratification: The bank asserts that any initial lack of written authority on the part of Branch Manager Milan was completely cured and rectified when the Board of Directors of Respondent LBC Bank, through the Assistant Corporate Secretary, issued the Secretary's Certificate dated June 27, 2006, which expressly confirmed, ratified, and approved the actions of Branch Manager Milan.
The Appellate Power to Receive Evidence: The bank maintains that the Court of Appeals acted within the appellate court's statutory authority under Section 9 of Batas Pambansa Blg. 129 in admitting the affidavit and secretary's certificates, as the law explicitly empowers the appellate court to receive evidence to resolve factual disputes and prevent a manifest miscarriage of justice.

Common Ground.

Execution of Mortgages and Default: Both Petitioner Spouses Rogelio and Milagros Marcelo and Respondent LBC Bank acknowledge that the Spouses Marcelo contracted two loans totaling P5.3 million from Respondent LBC Bank, which loans were secured by a valid real estate mortgage over the parcel of land covered by Transfer Certificate of Title No. N-64135, and that the Spouses Marcelo defaulted in the payment of the loans, which default led to the extrajudicial foreclosure sale on November 25, 1998, and the failure of the Spouses Marcelo to redeem the property.

Issue

MAIN ISSUE. Whether the Court of Appeals, in a special civil action for certiorari under Rule 65 of the Rules of Court, can validly admit and consider new evidence—specifically corporate secretary's certificates and executive affidavits—during a motion for reconsideration to resolve a factual issue on the authority of a corporate officer to consolidate title over a foreclosed Torrens property.

SECONDARY ISSUES.

Whether the subsequent consolidation of title and the issuance of a new Transfer Certificate of Title in the name of the mortgagee-bank can be collaterally attacked or stayed in a proceeding for the issuance of a writ of possession based on the alleged lack of initial written authority of the branch manager.
Whether the issuance of a writ of possession in favor of a purchaser in an extrajudicial foreclosure sale under Act No. 3135 is a ministerial duty of the Regional Trial Court after the expiration of the redemption period and the consolidation of title in the name of the purchaser.

Ruling

Ruling on the MAIN ISSUE. YES. The Supreme Court of the Philippines ruled that the Court of Appeals did not err in admitting and considering the Affidavit of Chief Finance Officer Aznar and the Secretary's Certificates during the motion for reconsideration in the special civil action for certiorari. The Supreme Court held that under Section 9 of Batas Pambansa Blg. 129, the Court of Appeals is expressly granted the power to try cases, conduct hearings, receive evidence, and perform any and all acts necessary to resolve factual issues raised in cases falling within the original and appellate jurisdiction of the Court of Appeals, which includes the power to grant and conduct further proceedings. To rule that the Court of Appeals cannot admit or consider such evidence in a motion for reconsideration of a certiorari proceeding would be to enforce a rigid and highly technical rule of procedure that would defeat the ends of substantial justice, as the submitted documents clearly and undisputedly proved that Respondent LBC Bank had ratified the consolidation of title executed by Branch Manager Milan.

Ruling on SECONDARY ISSUE 1. NO. The Supreme Court of the Philippines ruled that the consolidation of title and the resulting Transfer Certificate of Title (TCT No. T-145323) issued in the name of Respondent LBC Bank cannot be invalidated or stayed in a writ of possession proceeding based on the alleged lack of initial written authority of the branch manager. The Court held that any initial defect or lack of formal written authority on the part of the branch manager in executing the Affidavit of Consolidation of Title was completely cured and resolved when the Board of Directors of Respondent LBC Bank issued the Secretary's Certificate ratifying and confirming the branch manager's implied and apparent authority. Under the Torrens system, the Register of Deeds issued the new certificate of title to Respondent LBC Bank, which title serves as evidence of ownership; hence, the title cannot be collaterally attacked or undermined in a summary proceeding for a writ of possession, as the proper remedy to challenge the validity of the foreclosure or the consolidation is a separate, direct ordinary civil action, not a motion in the possessory proceeding.

Ruling on SECONDARY ISSUE 2. YES. The Supreme Court of the Philippines affirmed that the issuance of a writ of possession in favor of a purchaser who has consolidated title after an extrajudicial foreclosure sale is a ministerial duty of the land registration court. The Court held that once the one-year redemption period has expired without any redemption being made by the mortgagor, the right of the purchaser to the possession of the foreclosed property becomes absolute, and the Regional Trial Court is left with no discretion but to issue the writ of possession as a matter of course upon the filing of a petition sufficient in form and substance. Any pending objections regarding the validity of the mortgage or the foreclosure sale do not stay the ministerial duty of the court to place the titleholder in possession of the property, without prejudice to the eventual outcome of any separate, direct civil action filed by the mortgagors.

Dispositive portion (verbatim). The final dispositive portion of the Supreme Court of the Philippines in G.R. No. 183575, dated April 11, 2011, is quoted verbatim as follows:

WHEREFORE , the Court DENIES the petition and AFFIRMS the 26 March 2008 Amended Decision and 27 June 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 90166.

SO ORDERED

Ratio

The Power of the Court of Appeals to Receive Evidence under Batas Pambansa Blg. 129: Under Section 9 of Batas Pambansa Blg. 129 (the Judiciary Reorganization Act of 1980), the Court of Appeals is granted the power to try cases, conduct hearings, receive evidence, and perform any and all acts necessary to resolve factual issues raised in cases falling within the original and appellate jurisdiction of the Court of Appeals. This broad grant of authority applies to special civil actions for certiorari under Rule 65. When a party raises a factual issue on the lack of authority of a corporate representative in a certiorari petition, the Court of Appeals is fully authorized to receive and consider evidence—such as board resolutions, secretary's certificates, and affidavits—during a motion for reconsideration to resolve the factual dispute, as this prevents unnecessary delays and serves the interest of substantial justice.
Corporate Ratification Cures Unauthorized Acts of Agents: Under the Corporation Code and the Civil Code, any act performed by a corporate officer or agent without prior express written authority from the board of directors is an unauthorized act. However, the unauthorized act is not void ab initio but is merely unenforceable, and the act can be subsequently validated and cured by the express or implied ratification of the corporation. In this case, even if Branch Manager Milan lacked a specific board resolution on December 5, 2000, when the manager executed the Affidavit of Consolidation of Title, the subsequent issuance of the Secretary's Certificate by the Assistant Corporate Secretary expressly ratifying and confirming the manager's authority completely validated the consolidation of title with retroactive effect.
The Indefeasibility of Torrens Titles and the Ministerial Writ of Possession: Under the Torrens system, the registration of a land transaction in the Registry of Deeds is the operative act that conveys or affects registered land. Once the redemption period in an extrajudicial foreclosure under Act No. 3135 expires and the title is consolidated, the Register of Deeds cancels the old title of the mortgagors and issues a new Transfer Certificate of Title in the name of the purchaser. This new title is a Torrens certificate of title, which serves as conclusive evidence of the bank's indefeasible and incontrovertible ownership. The right of the registered owner to possess the property is an attribute of ownership; thus, the issuance of a writ of possession in favor of the registered owner is a purely ministerial duty of the Regional Trial Court, which cannot be stayed or collaterally attacked by allegations of procedural defects in the consolidation process.
Substantial Justice Prevails Over Technicalities of Certiorari: The Supreme Court of the Philippines emphasized that rules of procedure are mere tools designed to facilitate the attainment of justice, rather than frustrate the administration of justice. While a certiorari proceeding under Rule 65 is generally limited to questions of grave abuse of discretion amounting to lack or excess of jurisdiction based on the record before the trial court, the Court of Appeals did not commit any error in admitting LBC Bank's ratifying documents during the motion for reconsideration. Enforcing a rigid rule to exclude such documents would have resulted in the absurd situation of annulling a valid writ of possession only to force the bank to refile the entire petition with the same ratifying documents, which would violate the public policy of prompt and inexpensive disposition of land cases.

Doctrine

Doctrines / Rules / Principles Laid Down.

The Rule on the CA's Power to Receive Evidence: The Court of Appeals possesses the statutory authority under Section 9 of Batas Pambansa Blg. 129 to receive and consider new evidence in a special civil action for certiorari, particularly during a motion for reconsideration, to resolve factual issues concerning the authority of a corporate agent and prevent a miscarriage of justice.
The Corporate Ratification Rule: An unauthorized act of a corporate officer or branch manager in executing land registration or title consolidation documents is fully validated and cured with retroactive effect by the subsequent express ratification of the corporation's board of directors, as evidenced by a duly executed Secretary's Certificate.
The Ministerial Writ of Possession Rule: Following the expiration of the statutory redemption period and the consolidation of title in the name of the purchaser in an extrajudicial foreclosure sale, the land registration court has a ministerial duty to issue a writ of possession in favor of the titleholder, and this possessory right cannot be collaterally attacked or suspended by alleged defects in the consolidation process.

Distinctions / Limitations / Qualifications.

The Summary Nature of Writ of Possession Proceedings: The ministerial duty of the court to issue a writ of possession is absolute, unless a third party is actually holding the property adversely to the judgment debtor. In this case, since the property was occupied by the mortgagor spouses, no adverse third-party possession existed to stay the execution of the writ.
The Procedural Limit of Certiorari: While the Court of Appeals has the power to receive evidence under Section 9 of Batas Pambansa Blg. 129, this power is restricted to the resolution of factual issues raised in cases falling within the original and appellate jurisdiction of the Court of Appeals, and does not allow the parties to raise entirely new causes of action or substantive issues that were never brought to the attention of the trial court.

Topic/Subtopic Integration (Mandatory).

Classification of Relationship: INCIDENTAL.
Integration: The case of Spouses Marcelo v. LBC Bank is incidentally related to Section 32 of Presidential Decree No. 1529 (Review of Decree) because the case illustrates how the Torrens system safeguards the rights of a registered owner who acquired title through post-registration involuntary transactions, such as extrajudicial foreclosure and consolidation of title. The decision establishes that once a new Transfer Certificate of Title is issued by the Register of Deeds in the name of the purchaser following the expiration of the redemption period, the title cannot be collaterally attacked or delayed in a summary proceeding for a writ of possession. The case connects to the broader theme of Section 32 by demonstrating that just as an original decree of registration becomes incontrovertible and indefeasible after one year, a consolidated Transfer Certificate of Title issued after extrajudicial foreclosure grants the titleholder an absolute and incontrovertible right to possession. Any challenge to the procedural or corporate authority of the bank's representatives in consolidating the title must be raised in an independent, direct ordinary civil action, and the court in the possessory proceeding maintains a ministerial duty to enforce the Torrens titleholder's right to possession, thereby preserving the stability and integrity of the Torrens system of land registration. Also assigned under. The Course Outline assigns this case under more than one heading. Each additional angle is answered here, on the page every one of those rows links to.

spouses-marcelo-v-lbc-bank-digest.md — classification INCIDENTAL.

No separate topic integration in this variant.

Separate Opinions

NOT APPLICABLE / NOT IN RECORD. (The decision of the Supreme Court of the Philippines Second Division was rendered unanimously, with Associate Justice Antonio T. Carpio as the ponente, and with Associate Justices Maria Alicia Austria-Martinez, Antonio Eduardo B. Nachura, Diosdado M. Peralta, and Roberto A. Abad concurring, and with no separate concurring or dissenting opinions filed).

Cited Laws & Provisions

Every statute, rule, and issuance the decision turns on — the text as written, and the work it does in this case.

Special Law

Section 7, Act No. 3135, as amended by Act No. 4118

Writ of possession pending redemption

Act No. 3135 (6 March 1924), as amended by Act No. 4118 (7 December 1933), Section 2

No verbatim text here, and the reason is a version trap plus a defective source.

LawPhil's Act No. 3135 page carries only the original 1924 text, whose Section 7 is the effectivity clause — "This Act shall take effect on its approval." The writ-of-possession Section 7 that every foreclosure case cites was inserted later, by Section 2 of Act No. 4118 (1933), which also renumbered the old Section 7 as Section 10. Quoting "Section 7 of Act 3135" from the 1924 page therefore gives entirely the wrong provision.

The amending act's own page carries the inserted text, but LawPhil's copy of it is garbled — it reads "furnishing in amount equivalent" where words are plainly missing, and runs "duly registered in of deeds in accordance with any ex case the clerk of the court shall, petition, collect the fees," which is not a sentence. Since the wording cannot be confirmed, none is quoted.

What the section provides is not in doubt. In any sale made under the Act, the purchaser may petition the court of the place where the property is situated to be given possession during the redemption period, on a bond equivalent to the use of the property for twelve months, to indemnify the debtor should the sale prove irregular. The petition is made under oath, filed as an ex parte motion in the registration or cadastral proceeding, and on approval of the bond the court shall order that a writ of possession issue.

Two points the case law builds on. The proceeding is ex parte and summary, so the issuance is treated as ministerial — the court does not try ownership or the regularity of the foreclosure in it. And after consolidation of title, the bond requirement falls away entirely: the purchaser is then the registered owner and takes possession as an incident of ownership. Section 8 gives the debtor his own remedy — a petition to set the sale aside, filed within thirty days after possession is given.

For the exact words, use the enrolled text of Act No. 4118, not this repo.

Why it is cited here

The provision the writ issued under, and the reason the Marcelos' objection could not be heard in it.

A purchaser at an extrajudicial foreclosure sale may petition for possession by ex parte motion, on a bond, during the redemption period; on approval the court shall order that a writ of possession issue.

Two features do all the work. The proceeding is ex parte — the debtor is not a party and has no right to be heard in it — and issuance is ministerial, so the court does not try ownership, the regularity of the foreclosure, or the authority of whoever signed the consolidation.

After consolidation of title, as here, the bond requirement falls away entirely. LBC Bank was by then the registered owner under TCT No. T-145323, and possession followed as an incident of ownership.

The Marcelos argued the consolidation was executed by an unauthorized branch manager. That may or may not be true — but it is a question about the validity of the transfer, which belongs in a separate action, not in a summary proceeding where the court is forbidden to look past the certificate.

Special Law

Section 47, P.D. No. 1529

Registered land not subject to prescriptions

Presidential Decree No. 1529 (Property Registration Decree, 1978)

No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession.

Why it is cited here

Why the certificate settles the question in this proceeding.

"No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession."

The section states the wider principle the writ proceeding depends on: the registered owner's right is conclusive until the certificate is set aside in a proper action. The court issuing the writ takes the register as it finds it.

That is what makes the duty ministerial rather than merely quick. There is nothing to weigh — the certificate names the owner, and possession follows.

It also explains why the Marcelos' remedy is not lost, only relocated. Section 8 of Act 3135 gives the debtor a petition to set the sale aside within thirty days after possession; beyond that, a direct action to annul the consolidation. What he may not do is resist the writ, because that would be a collateral attack on the title.

Special Law

Section 32, P.D. No. 1529

Review of decree of registration; Innocent purchaser for value

Presidential Decree No. 1529 (Property Registration Decree, 1978)

The decree of registration shall not be reopened or revised by reason of absence, minority, or other disability of any person adversely affected thereby, nor by any proceeding in any court for reversing judgments, subject, however, to the right of any person, including the government and the branches thereof, deprived of land or of any estate or interest therein by such adjudication or confirmation of title obtained by actual fraud, to file in the proper Court of First Instance a petition for reopening and review of the decree of registration not later than one year from and after the date of the entry of such decree of registration, but in no case shall such petition be entertained by the court where an innocent purchaser for value has acquired the land or an interest therein, whose rights may be prejudiced. Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in this Decree, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for value.

Upon the expiration of said period of one year, the decree of registration and the certificate of title issued shall become incontrovertible. Any person aggrieved by such decree of registration in any case may pursue his remedy by action for damages against the applicant or any other persons responsible for the fraud.

Why it is cited here

The section the case is filed under, and the reason its relation is incidental.

A decree may be reviewed for actual fraud within one year after entry, and never against an innocent purchaser for value; the innocent-purchaser protection is what the subtopic is about.

The connection is thematic rather than doctrinal. Section 32 and the writ proceeding both rest on the same premise — that a registered title is taken at face value and attacked only directly, within defined limits — and both allocate the loser a remedy against a person rather than against the register.

But no decree of registration was reviewed here. LBC Bank's title came from extrajudicial foreclosure and consolidation, not from an original registration proceeding, so Section 32's machinery was never engaged.

Worth keeping the routes distinct, since the certificates look identical: judicial decree → Section 32; administrative patent → Section 91 with Section 101 standing; foreclosure sale → Act 3135, Sections 7 and 8.

Source: Spouses Marcelo v. LBC Bank, G.R. No. 183575, April 11, 2011

Cited laws & provisions

Section 7, Act No. 3135, as amended by Act No. 4118

Special Law

Writ of possession pending redemption

Act No. 3135 (6 March 1924), as amended by Act No. 4118 (7 December 1933), Section 2

No verbatim text here, and the reason is a version trap plus a defective source.

For the exact words, use the enrolled text of Act No. 4118, not this repo.

Why it is cited here

The provision the writ issued under, and the reason the Marcelos' objection could not be heard in it.

Full entry below ↓

Section 47, P.D. No. 1529

Special Law

Registered land not subject to prescriptions

Presidential Decree No. 1529 (Property Registration Decree, 1978)

No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession.

Why it is cited here

Why the certificate settles the question in this proceeding.

"No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession."

That is what makes the duty ministerial rather than merely quick. There is nothing to weigh — the certificate names the owner, and possession follows.

Full entry below ↓

Section 32, P.D. No. 1529

Special Law

Review of decree of registration; Innocent purchaser for value

Presidential Decree No. 1529 (Property Registration Decree, 1978)

Why it is cited here

The section the case is filed under, and the reason its relation is incidental.

A decree may be reviewed for actual fraud within one year after entry, and never against an innocent purchaser for value; the innocent-purchaser protection is what the subtopic is about.

Full entry below ↓

Facts

On April 16, 1997 Spouses Rogelio and Milagros Marcelo borrowed ₱3 million from LBC Bank, and on May 27, 1998 a further ₱2.3 million. That same day they executed a real estate mortgage over land in Baliuag, Bulacan under TCT No. N-64135 to secure both loans.
They defaulted, and on October 15, 1998 the bank began extrajudicial foreclosure under Act No. 3135. The Notice of Sheriff's Sale issued October 21, 1998, and at the auction of November 25, 1998, after posting and publication, the bank was highest bidder and took a Certificate of Sale, which it registered.
The spouses did not redeem within the one-year period. On December 5, 2000 Ricardo B. Milan, Jr., the bank's Meycauayan Branch Manager, executed an Affidavit of Consolidation of Title, and on February 1, 2001 the Registry of Deeds cancelled TCT No. N-64135 and issued TCT No. T-145323 to the bank.
On October 12, 2004 the bank petitioned ex parte for a writ of possession in the RTC of Bulacan, Branch 11 (Case No. P-525-2004), and on December 1, 2004 the court granted it. The spouses moved for reconsideration, arguing the consolidation was invalid because Milan acted without written board authority and the petition was verified by Rosario B. Aotriz without authority; the RTC denied it on May 17, 2005.
On June 16, 2006 the CA granted their Rule 65 petition and set the RTC rulings aside. The bank moved for reconsideration, attaching an affidavit of Chief Finance Officer Ma. Tara O. Aznar that bank policy gives branch managers full authority to foreclose and consolidate, a Secretary's Certificate of June 27, 2006 from Assistant Corporate Secretary Jennifer D. Fajelagutan expressly ratifying Milan's authority, and a Secretary's Certificate of July 1, 2005 authorising Aznar to sign pleadings.
On March 26, 2008 the CA issued an Amended Decision granting reconsideration in the interest of substantial justice and reinstating the RTC rulings; reconsideration was denied June 27, 2008. The Second Division decided on April 11, 2011.

Arguments of the Parties

Issue

ANCILLARY / INCIDENTAL ISSUES (if any). None separately resolved.

Ruling

Ratio

Certiorari is not so narrow that it must produce absurdity. Excluding the ratifying documents would have meant annulling a valid writ only to have the bank refile the same petition with the same papers — contrary to the policy of prompt and inexpensive disposition of land cases.
An unauthorised corporate act is unenforceable, not void. Express or implied ratification validates it, and the Secretary's Certificate did so with retroactive effect.
Registration is the operative act. Consolidation cancels the mortgagor's title and issues a Torrens certificate to the purchaser, conclusive evidence of ownership — and possession is an attribute of that ownership, which is why the writ is ministerial and not open to collateral attack.
Rules of procedure are tools for justice, not obstacles to it.

Doctrine

Doctrines / Rules / Principles Laid Down.

The Court of Appeals may, under Section 9 of Batas Pambansa Blg. 129, receive and consider new evidence in a certiorari proceeding, including on a motion for reconsideration, to resolve a factual issue about a corporate agent's authority.
An unauthorised act of a corporate officer in consolidating title is validated with retroactive effect by the board's subsequent ratification through a duly executed Secretary's Certificate.
And after redemption lapses and title consolidates, issuing the writ of possession is a ministerial duty, and the possessory right cannot be collaterally attacked or suspended by alleged defects in the consolidation.

Distinctions / Limitations / Qualifications.

The ministerial duty is absolute unless a third party holds the property adversely to the judgment debtor — inapplicable here, the mortgagors themselves being in occupation. And the CA's power to receive evidence is confined to factual issues within its jurisdiction; it does not license new causes of action or substantive issues never raised below.

Topic/Subtopic Integration (Mandatory).

INCIDENTAL: the case shows how indefeasibility operates for a registered owner whose title came through a post-registration involuntary transaction — extrajudicial foreclosure and consolidation.
Just as an original decree becomes incontrovertible after a year, a consolidated certificate confers an absolute right to possession; challenges to the bank's corporate authority belong in an independent direct action, while the possessory court's duty remains ministerial.

Separate Opinions

None. The Second Division decided unanimously through Justice Antonio T. Carpio, with Justices Austria-Martinez, Nachura, Peralta and Abad concurring.

Full Digest — Recitation Format

Facts

On April 16, 1997: Petitioner Spouses Rogelio and Milagros Marcelo obtained a loan in the amount of P3 million from Respondent LBC Bank.
On May 27, 1998: Petitioner Spouses Rogelio and Milagros Marcelo obtained a second loan from Respondent LBC Bank in the amount of P2.3 million.
On May 27, 1998: Petitioner Spouses Rogelio and Milagros Marcelo executed a real estate mortgage in favor of Respondent LBC Bank to secure the two loans, which real estate mortgage covered a parcel of land located in Baliuag, Bulacan, and was registered under Transfer Certificate of Title No. N-64135 in the name of the Spouses Marcelo.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo defaulted in the payment of the loans.
On October 15, 1998: Due to the default of Petitioner Spouses Rogelio and Milagros Marcelo, Respondent LBC Bank instituted extrajudicial foreclosure proceedings over the real estate mortgage pursuant to the provisions of Act No. 3135.
On October 21, 1998: The Office of the Clerk of Court and the Ex-Officio Sheriff of Malolos, Bulacan, issued a Notice of Sheriff's Sale.
On November 25, 1998: After the required posting and publication of the Notice of Sheriff's Sale, the mortgaged property was sold at a public auction, wherein Respondent LBC Bank emerged as the highest bidder and was subsequently issued a Certificate of Sale.
Sometime thereafter: Respondent LBC Bank registered the Certificate of Sale with the Registry of Deeds of Bulacan.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo failed to redeem the foreclosed property within the one-year statutory redemption period prescribed by law.
On December 5, 2000: Following the expiration of the redemption period, Ricardo B. Milan, Jr., the Meycauayan Branch Manager of Respondent LBC Bank, executed an Affidavit of Consolidation of Title on behalf of Respondent LBC Bank, which Affidavit of Consolidation of Title was filed with the Registry of Deeds of Bulacan.
On February 1, 2001: Pursuant to the Affidavit of Consolidation of Title, the Registry of Deeds of Bulacan cancelled Transfer Certificate of Title No. N-64135 in the name of Petitioner Spouses Rogelio and Milagros Marcelo, and issued a new Transfer Certificate of Title, TCT No. T-145323, in the name of Respondent LBC Bank.
On October 12, 2004: Respondent LBC Bank filed a petition for the ex-parte issuance of a writ of possession over the foreclosed property before the Regional Trial Court of Bulacan, Branch 11, which petition was docketed as Case No. P-525-2004.
On December 1, 2004: The Regional Trial Court of Bulacan, Branch 11, rendered a Decision granting the petition of Respondent LBC Bank and directing the issuance of a writ of possession in favor of Respondent LBC Bank.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo filed a Motion for Reconsideration before the Regional Trial Court, contending that the consolidation of title was invalid because the Affidavit of Consolidation of Title was executed by Branch Manager Milan without express written authority from the Board of Directors of Respondent LBC Bank, and that the petition for the writ of possession was insufficient in form because the petition was verified by Rosario B. Aotriz, who allegedly lacked the authority to verify the petition.
On May 17, 2005: The Regional Trial Court of Bulacan issued an Order denying the Motion for Reconsideration filed by Petitioner Spouses Rogelio and Milagros Marcelo.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo filed a Petition for Certiorari under Rule 65 of the Rules of Court before the Court of Appeals, asserting that the Regional Trial Court committed grave abuse of discretion in granting the writ of possession because there was no board resolution on record authorizing Branch Manager Milan to consolidate ownership over the subject property.
On June 16, 2006: The Court of Appeals rendered a Decision granting the Petition for Certiorari of Petitioner Spouses Rogelio and Milagros Marcelo, and annulling and setting aside the December 1, 2004 Decision and the May 17, 2005 Order of the Regional Trial Court of Bulacan.
Sometime thereafter: Respondent LBC Bank filed a Motion for Reconsideration before the Court of Appeals, attaching thereto: (1) an Affidavit of Ma. Tara O. Aznar, the Chief Finance Officer of Respondent LBC Bank, attesting that under the established bank policy, branch managers have full authority to foreclose secured accounts and consolidate title; (2) a Secretary's Certificate, dated June 27, 2006, issued by Jennifer D. Fajelagutan, the Assistant Corporate Secretary, expressly confirming, ratifying, and approving the implied and apparent authority of Branch Manager Milan to consolidate title over the subject property; and (3) a Secretary's Certificate, dated July 1, 2005, authorizing Chief Finance Officer Aznar to act as an authorized signatory in all court pleadings and affidavits.
On March 26, 2008: The Court of Appeals rendered an Amended Decision granting the Motion for Reconsideration of Respondent LBC Bank in the interest of substantial justice, annulling the June 16, 2006 Decision, and reinstating and affirming the December 1, 2004 Decision and May 17, 2005 Order of the Regional Trial Court.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo filed a Motion for Reconsideration of the Amended Decision, which Motion for Reconsideration was denied by the Court of Appeals in a Resolution dated June 27, 2008.
Sometime thereafter: Petitioner Spouses Rogelio and Milagros Marcelo elevated the case to the Supreme Court of the Philippines via a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
On April 11, 2011: The Supreme Court of the Philippines Second Division promulgated the Decision denying the Petition for Review on Certiorari.

Arguments of the Parties

Petitioner Spouses Rogelio and Milagros Marcelo.

The Inadmissibility of New Evidence on Certiorari: Petitioner Spouses Rogelio and Milagros Marcelo argue that the Court of Appeals committed a reversible error in admitting and considering the Affidavit of Chief Finance Officer Aznar and the Secretary's Certificates during the motion for reconsideration. The Spouses Marcelo contend that in a special civil action for certiorari under Rule 65, the Court of Appeals cannot admit or consider new evidence, because the sole office of the writ of certiorari is limited to the correction of errors of jurisdiction on the part of the trial court, based on the records available to the trial court at the time of the rendition of the trial court's judgment.
The Invalidity of Title Consolidation: The Spouses Marcelo assert that the consolidation of title and the subsequent issuance of Transfer Certificate of Title No. T-145323 in the name of Respondent LBC Bank were void ab initio. The Spouses Marcelo contend that Branch Manager Milan lacked the legal capacity or written corporate authority to execute the Affidavit of Consolidation of Title on behalf of Respondent LBC Bank; hence, the consolidation was an unauthorized act that cannot vest ownership in the bank or serve as a valid basis for a writ of possession.
Defect in Verification: The Spouses Marcelo maintain that the petition for the issuance of a writ of possession filed by Respondent LBC Bank was insufficient in form because the verification was executed by Rosario B. Aotriz without any board resolution on record showing the authority of Rosario B. Aotriz to sign the verification on behalf of the corporation.

Respondent LBC Bank.

Substantial Compliance and Corporate Ratification: Respondent LBC Bank argues that the consolidation of title and the petition for a writ of possession were valid and procedurally sound. The bank contends that under the established corporate policies of the bank, branch managers possess the implied and apparent authority to oversee delinquent accounts, foreclose mortgages, and execute affidavits of consolidation within the respective territorial jurisdictions of the branch managers.
The Sufficiency of Subsequent Ratification: The bank asserts that any initial lack of written authority on the part of Branch Manager Milan was completely cured and rectified when the Board of Directors of Respondent LBC Bank, through the Assistant Corporate Secretary, issued the Secretary's Certificate dated June 27, 2006, which expressly confirmed, ratified, and approved the actions of Branch Manager Milan.
The Appellate Power to Receive Evidence: The bank maintains that the Court of Appeals acted within the appellate court's statutory authority under Section 9 of Batas Pambansa Blg. 129 in admitting the affidavit and secretary's certificates, as the law explicitly empowers the appellate court to receive evidence to resolve factual disputes and prevent a manifest miscarriage of justice.

Common Ground.

Execution of Mortgages and Default: Both Petitioner Spouses Rogelio and Milagros Marcelo and Respondent LBC Bank acknowledge that the Spouses Marcelo contracted two loans totaling P5.3 million from Respondent LBC Bank, which loans were secured by a valid real estate mortgage over the parcel of land covered by Transfer Certificate of Title No. N-64135, and that the Spouses Marcelo defaulted in the payment of the loans, which default led to the extrajudicial foreclosure sale on November 25, 1998, and the failure of the Spouses Marcelo to redeem the property.

Issue

SECONDARY ISSUES.

Whether the subsequent consolidation of title and the issuance of a new Transfer Certificate of Title in the name of the mortgagee-bank can be collaterally attacked or stayed in a proceeding for the issuance of a writ of possession based on the alleged lack of initial written authority of the branch manager.
Whether the issuance of a writ of possession in favor of a purchaser in an extrajudicial foreclosure sale under Act No. 3135 is a ministerial duty of the Regional Trial Court after the expiration of the redemption period and the consolidation of title in the name of the purchaser.

Ruling

Dispositive portion (verbatim). The final dispositive portion of the Supreme Court of the Philippines in G.R. No. 183575, dated April 11, 2011, is quoted verbatim as follows:

WHEREFORE , the Court DENIES the petition and AFFIRMS the 26 March 2008 Amended Decision and 27 June 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 90166.

SO ORDERED

Ratio

The Power of the Court of Appeals to Receive Evidence under Batas Pambansa Blg. 129: Under Section 9 of Batas Pambansa Blg. 129 (the Judiciary Reorganization Act of 1980), the Court of Appeals is granted the power to try cases, conduct hearings, receive evidence, and perform any and all acts necessary to resolve factual issues raised in cases falling within the original and appellate jurisdiction of the Court of Appeals. This broad grant of authority applies to special civil actions for certiorari under Rule 65. When a party raises a factual issue on the lack of authority of a corporate representative in a certiorari petition, the Court of Appeals is fully authorized to receive and consider evidence—such as board resolutions, secretary's certificates, and affidavits—during a motion for reconsideration to resolve the factual dispute, as this prevents unnecessary delays and serves the interest of substantial justice.
Corporate Ratification Cures Unauthorized Acts of Agents: Under the Corporation Code and the Civil Code, any act performed by a corporate officer or agent without prior express written authority from the board of directors is an unauthorized act. However, the unauthorized act is not void ab initio but is merely unenforceable, and the act can be subsequently validated and cured by the express or implied ratification of the corporation. In this case, even if Branch Manager Milan lacked a specific board resolution on December 5, 2000, when the manager executed the Affidavit of Consolidation of Title, the subsequent issuance of the Secretary's Certificate by the Assistant Corporate Secretary expressly ratifying and confirming the manager's authority completely validated the consolidation of title with retroactive effect.
The Indefeasibility of Torrens Titles and the Ministerial Writ of Possession: Under the Torrens system, the registration of a land transaction in the Registry of Deeds is the operative act that conveys or affects registered land. Once the redemption period in an extrajudicial foreclosure under Act No. 3135 expires and the title is consolidated, the Register of Deeds cancels the old title of the mortgagors and issues a new Transfer Certificate of Title in the name of the purchaser. This new title is a Torrens certificate of title, which serves as conclusive evidence of the bank's indefeasible and incontrovertible ownership. The right of the registered owner to possess the property is an attribute of ownership; thus, the issuance of a writ of possession in favor of the registered owner is a purely ministerial duty of the Regional Trial Court, which cannot be stayed or collaterally attacked by allegations of procedural defects in the consolidation process.
Substantial Justice Prevails Over Technicalities of Certiorari: The Supreme Court of the Philippines emphasized that rules of procedure are mere tools designed to facilitate the attainment of justice, rather than frustrate the administration of justice. While a certiorari proceeding under Rule 65 is generally limited to questions of grave abuse of discretion amounting to lack or excess of jurisdiction based on the record before the trial court, the Court of Appeals did not commit any error in admitting LBC Bank's ratifying documents during the motion for reconsideration. Enforcing a rigid rule to exclude such documents would have resulted in the absurd situation of annulling a valid writ of possession only to force the bank to refile the entire petition with the same ratifying documents, which would violate the public policy of prompt and inexpensive disposition of land cases.

Doctrine

Doctrines / Rules / Principles Laid Down.

The Rule on the CA's Power to Receive Evidence: The Court of Appeals possesses the statutory authority under Section 9 of Batas Pambansa Blg. 129 to receive and consider new evidence in a special civil action for certiorari, particularly during a motion for reconsideration, to resolve factual issues concerning the authority of a corporate agent and prevent a miscarriage of justice.
The Corporate Ratification Rule: An unauthorized act of a corporate officer or branch manager in executing land registration or title consolidation documents is fully validated and cured with retroactive effect by the subsequent express ratification of the corporation's board of directors, as evidenced by a duly executed Secretary's Certificate.
The Ministerial Writ of Possession Rule: Following the expiration of the statutory redemption period and the consolidation of title in the name of the purchaser in an extrajudicial foreclosure sale, the land registration court has a ministerial duty to issue a writ of possession in favor of the titleholder, and this possessory right cannot be collaterally attacked or suspended by alleged defects in the consolidation process.

Distinctions / Limitations / Qualifications.

The Summary Nature of Writ of Possession Proceedings: The ministerial duty of the court to issue a writ of possession is absolute, unless a third party is actually holding the property adversely to the judgment debtor. In this case, since the property was occupied by the mortgagor spouses, no adverse third-party possession existed to stay the execution of the writ.
The Procedural Limit of Certiorari: While the Court of Appeals has the power to receive evidence under Section 9 of Batas Pambansa Blg. 129, this power is restricted to the resolution of factual issues raised in cases falling within the original and appellate jurisdiction of the Court of Appeals, and does not allow the parties to raise entirely new causes of action or substantive issues that were never brought to the attention of the trial court.

Topic/Subtopic Integration (Mandatory).

Classification of Relationship: INCIDENTAL.
Integration: The case of Spouses Marcelo v. LBC Bank is incidentally related to Section 32 of Presidential Decree No. 1529 (Review of Decree) because the case illustrates how the Torrens system safeguards the rights of a registered owner who acquired title through post-registration involuntary transactions, such as extrajudicial foreclosure and consolidation of title. The decision establishes that once a new Transfer Certificate of Title is issued by the Register of Deeds in the name of the purchaser following the expiration of the redemption period, the title cannot be collaterally attacked or delayed in a summary proceeding for a writ of possession. The case connects to the broader theme of Section 32 by demonstrating that just as an original decree of registration becomes incontrovertible and indefeasible after one year, a consolidated Transfer Certificate of Title issued after extrajudicial foreclosure grants the titleholder an absolute and incontrovertible right to possession. Any challenge to the procedural or corporate authority of the bank's representatives in consolidating the title must be raised in an independent, direct ordinary civil action, and the court in the possessory proceeding maintains a ministerial duty to enforce the Torrens titleholder's right to possession, thereby preserving the stability and integrity of the Torrens system of land registration. Also assigned under. The Course Outline assigns this case under more than one heading. Each additional angle is answered here, on the page every one of those rows links to.

spouses-marcelo-v-lbc-bank-digest.md — classification INCIDENTAL.

No separate topic integration in this variant.

Separate Opinions

NOT APPLICABLE / NOT IN RECORD. (The decision of the Supreme Court of the Philippines Second Division was rendered unanimously, with Associate Justice Antonio T. Carpio as the ponente, and with Associate Justices Maria Alicia Austria-Martinez, Antonio Eduardo B. Nachura, Diosdado M. Peralta, and Roberto A. Abad concurring, and with no separate concurring or dissenting opinions filed).