SUPREME COURT - THIRD DIVISION
[ G.R. No. 256021 & G.R. No. 268716, April 02, 2025 ]
RURAL BANK OF SAN MATEO ISABELA, INC. VS. MYRVIN A. RAMALES, ET AL. / ALVAREZ-RAMALES SCHOOL FOUNDATION, INC. VS. RURAL BANK OF SAN MATEO, (ISABELA) INC.
Case Summary: Jurisdiction, Pleadings & Intervention
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- These consolidated cases highlight a strict application of procedural rules. In the first case, the Supreme Court ruled that an RTC did not commit grave abuse of discretion when it ordered the amendment of a complaint to cure a jurisdictional defect (failure to state the property's assessed value) instead of dismissing it. In the second case, the Court held that the issuance of a writ of possession to a foreclosure buyer is a ministerial duty, and a third party (a school foundation) that derived its right from the debtor-mortgagor (via donation) cannot be considered an adverse possessor entitled to intervene or stop the execution.
- The Parties: The Spouses Ramales are incorporators of Alvarez-Ramales School Foundation, Inc. (ARSFI). The Rural Bank of San Mateo Isabela, Inc. (RBSMI) is a banking institution.
- The Transactions: The Spouses Ramales donated two parcels of land to their school, ARSFI. Later, they mortgaged one of these donated properties (and others) to RBSMI to secure a loan.
- Foreclosure and Legal Actions: The spouses defaulted, and RBSMI foreclosed on the properties. This led to two separate legal battles: (1) The spouses filed a case to annul the foreclosure; (2) RBSMI filed a petition for a writ of possession, which the school, ARSFI, tried to stop by intervening.
- G.R. No. 256021 (Annulment Case): The spouses' petition to annul the foreclosure did not state the property's assessed value. RBSMI moved to dismiss for lack of jurisdiction. The RTC denied the dismissal and ordered the spouses to amend their petition. The CA dismissed RBSMI's subsequent *certiorari* petition, ruling it was the wrong remedy.
- G.R. No. 268716 (Possession Case): The RTC granted RBSMI's petition for a writ of possession. It denied ARSFI's motions to intervene and quash the writ, finding ARSFI was not an adverse third party. The CA affirmed this decision.
- Was a Rule 65 petition for *certiorari* the proper remedy to question the RTC's denial of a motion to dismiss?
- Can a third party, whose claim to a property is derived from the debtor-mortgagor, intervene to stop the issuance of a writ of possession to the foreclosure sale purchaser?
The Supreme Court DENIED both petitions and AFFIRMED the respective CA decisions.
- On the Annulment Case (G.R. No. 256021): The Court held that while RBSMI correctly used a Rule 65 petition to question the RTC's interlocutory order, the RTC did not commit grave abuse of discretion. Ordering the amendment of the petition to state the assessed value—a jurisdictional fact that could be gleaned from the attachments—was proper to allow the case to be decided on its merits.
- On the Possession Case (G.R. No. 268716): The Court affirmed that the issuance of the writ of possession was ministerial. ARSFI was not a third party holding the property with a right *adverse* to the debtors (Spouses Ramales). Since ARSFI's claim was based on a donation from the spouses, it was merely their successor-in-interest and could not stop the writ. ARSFI failed to establish the legal interest required for intervention.
- Amendment of Pleadings (Rule 10, Sec. 1): Courts may allow pleadings to be amended to correct inadequate allegations (like failure to state assessed value) so that the actual merits of the controversy can be determined.
- Writ of Possession: The issuance of a writ of possession in favor of a purchaser in an extrajudicial foreclosure sale is a ministerial duty of the court.
- Adverse Possession by a Third Party: To stop a writ of possession, a third party must hold the property with a title or right *adverse* to the debtor-mortgagor. A successor-in-interest, like a donee, is not considered an adverse possessor.
- Intervention & *Terceria*: To intervene or file a third-party claim (*terceria*), the claimant must unmistakably establish their ownership or right of possession over the levied property.