One sided
A person filing an action must be a real party in interest or one with “a present substantial interest” which means such interest in the subject matter of the action as will entitle him under the substantive law, to recover if the evidence is sufficient, or that he has a legal title to demand. This is explained in this case of Ray.
The case arose from a loan obtained from a bank (MBTC) by a realty company (LRDC) thru its president Sammy and secured by a real estate mortgage (REM) over three parcels of land with all its buildings and improvements situated in
When LRDC failed to pay the loan on due date, MBTC extrajudicially foreclosed the REM in accordance with Act 3135 as amended where MBTC emerged as the highest bidder in the public auction conducted by the Sheriff. After the certificate of sale issued by the Sheriff was registered with the Register of Deeds on
On
Nevertheless, MBTC was able to implement the writ of possession first on
This prompted Ray to file another petition with the Court of Appeals (CA) for Annulment of Judgment on the ground of absolute lack of due process. Ray alleged that his predecessor LRDC was not notified of the proceedings on the writ of possession and that Section 7, Act 3135 allowing ex parte issuance of the writ is unconstitutional.
But the CA denied Ray’s petition on the ground that Ray was neither the registered owner nor the successor in interest of the registered owner; hence not a real party in interest. Was the CA correct?
Yes. Ray has no present substantial interest to institute the annulment of judgment and nullify the order granting the writ of possession. When the Deed of Assignment in favor of Ray was executed, Ray knew that the subject real properties were already sold at various extrajudicial foreclosure sales and bought by MBTC. In fact writs of possession were already issued in favor of the bank although they were not yet implemented. A real right or lien in favor of MBTC had already been established, subsisting over the properties until the discharge of the principal obligation whoever the possessor of the land might be. As Ray is not a party whose interest is adverse to that of LRDC, there was no bar to the issuance of a writ of possession to MBTC. It does not matter that Ray was not specifically named in the writ of possession nor notified of such proceedings.
And there was also no violation of Ray’s right to constitutional due process. The issuance of a writ of possession in favor of a purchaser in a foreclosure sale of the mortgaged property under Section 7, Act 3135 as amended, is a ministerial duty of the court. The purchaser of the foreclosed property has the right to acquire possession thereof even during the 12-month period of redemption upon an ex parte application and posting of the required bond; and with more reason after the expiration of the redemption period.
The ex parte petition for the issuance of a writ of possession is not, strictly speaking, a “judicial process” as contemplated by Article 433 of the Civil Code for the recovery of the possession of a property under a claim of ownership. It is not an ordinary suit filed in court by which one party “sues another for the enforcement of a wrong or protection of a right or the redress or prevention of a wrong”. It is a non-litigious proceeding authorized in an extrajudicial foreclosure of mortgage under Act 3135 and is brought for the benefit of one party only, and without notice to, or consent by any person adversely interested. It is a relief granted without affording the person against whom the relief is sought, an opportunity to be heard (Rayo vs. Metropolitan Bank et. al. G.R. 165142,
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