FIRST DIVISION

[G.R. No. 233127. July 10, 2023.]

INTEGRATED CREDIT AND CORPORATE SERVICES, CO.,

petitioner, vs. NOVELITA LABRADOR and PHILIPPIANS
ACADEMY OF PARAÑAQUE CITY, respondents.

DECISION

GESMUNDO, C.J : p

This is an Appeal by Certiorari 1 seeking to reverse and set aside the

February 15, 2017 Decision 2 and the August 2, 2017 Resolution 3 of the
Court of Appeals (CA) in CA-G.R. CV No. 100060. The CA denied outright the
appeal of Integrated Credit and Corporate Services, Co. (petitioner) for being
the wrong legal remedy. HTcADC

Antecedents
Respondent Novelita Labrador (Labrador) was the former owner of two
parcels of land with improvements situated in Parañaque City, and covered
by Transfer Certificates of Title (TCT) Nos. 173576 and 173577 (subject
properties). Labrador obtained a loan from Chinatrust (Phils.) Commercial
Bank Corporation (Chinatrust) in the amount of P3,440,000.00. On
September 26, 2007, in order to secure the payment of her obligations,
Labrador executed a real estate mortgage (REM) over the subject properties
in favor of Chinatrust. The REM was registered and annotated on the TCTs of
the subject properties. When Labrador defaulted in the payment of her
obligations, Chinatrust applied for extrajudicial foreclosure of the REM before
the Office of the Clerk of Court and Ex-Officio Sheriff of the Regional Trial
Court of Parañaque City, Branch 196 (RTC). The case was docketed as LRC
Case No. 12-0044. After notice and publication, pursuant to the provisions of
Act No. 3135, 4 as amended, the public auction sale of the subject properties
was scheduled on May 26, 2009. 5
During the public auction sale, petitioner was declared as the highest
and winning bidder, and a Certificate of Sale 6 dated June 18, 2009 was
issued in its favor. The certificate of sale was registered by petitioner with
the Registry of Deeds and annotated on the TCTs under Entry No. 2340
dated July 3, 2009. 7 CAIHTE

Labrador failed to exercise her right of legal redemption within one

year from July 3, 2009 and, thus, petitioner consolidated its ownership over
the subject properties by executing an Affidavit of Consolidation 8 dated July
5, 2010. Consequently, the TCTs previously issued in the name of Labrador
were cancelled by the Register of Deeds, and TCT Nos. 010-2010002226 9
and 010-2010002227 10 were issued in favor of petitioner. 11
On February 7, 2012, petitioner sent a demand letter 12 to Labrador
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 and another person, a certain Benjamin Labrador, requiring them to
surrender possession of the subject properties. Despite receipt of the
demand letter, they failed to comply and vacate the subject properties. 13
On March 21, 2012, 14 petitioner filed with the RTC an Ex Parte Petition
for Issuance of a Writ of Possession 15 against Labrador praying that a writ of
possession be issued in its favor against Labrador, her successors or assigns
or whomsoever may be in possession of the subject properties. It further
prayed that a break open order be also issued to the branch sheriff to ensure
the effective implementation of the writ of possession with reasonable force,
if necessary. 16
On March 27, 2012, the RTC issued an Order, 17 finding the petition
sufficient in form and substance. However, Atty. Teresita C. Marbibi, on
behalf of the school administrators of oppositor, co-respondent Philippians
Academy of Parañaque City (Philippians Academy), filed a Comment 18 on
the Ex Parte Petition for Issuance of a Writ of Possession before the RTC.
Philippians Academy claimed that it is an educational institution which had a
right of interest over the subject properties, being a transferee through a
Declaration of Trust Agreement 19 extended by Labrador and notarized on
September 28, 2007. aScITE

Meanwhile, the RTC scheduled a hearing for the reception of

petitioner's evidence. In lieu of conducting a direct examination, petitioner
filed a Judicial Affidavit 20 of their witness. 21
On September 26, 2012, Philippians Academy filed a Counter-Petition
22 before the RTC praying for the denial of petitioner's Ex Parte Petition for
Issuance of a Writ of Possession. Philippians Academy alleged that it is the
real owner of the subject properties and that Labrador was merely holding
the subject properties in trust for it. 23 On November 20, 2012, petitioner
filed a Motion to Dismiss Ad Cautelam 24 against Philippians Academy's
Counter-Petition.
The RTC Ruling
The RTC issued an Order 25 dated December 10, 2012 (RTC Order) ,
which denied the motion to dismiss and dismissed the Ex Parte Petition for
Issuance of a Writ of Possession filed by petitioner. The dispositive portion of
which reads:
WHEREFORE, premises considered, [petitioner] Integrated
Credit & Corporate Services Co.['s] Motion to Dismiss dated
November 20, 2012 is herewith DENIED for lack of merit, whereas, an
adversarial dispute is already existing between the parties at hand,
t h e [Ex Parte] Petition for Issuance of a Writ of Possession dated
March 7, 2012 by Integrated Credit & Corporate Services, Co.,
docketed under LRC Case No. 12-0044 is DISMISSED for lack of merit.
SO ORDERED. 26 DETACa

The RTC stated that petitioner sought a dismissal of the Counter-

Petition filed by Philippians Academy, but also admitted to the fact that there
existed a declaration of trust between Labrador and Philippians Academy.
The latter alleged that it is the real owner of the subject properties and that
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 Labrador was merely holding the same in trust for Philippians Academy.
Thus, the RTC pointed out jurisprudence which held that a writ of possession
does not become a ministerial duty of a court when a third party, who has
possession over property subject of an extrajudicial foreclosure, stands to be
gravely affected. The court then must undertake a hearing to determine the
nature of the adverse possession if only to determine the claim of a
mortgagor. The RTC held that as the incident between the parties had
transformed the instant petition into an adversarial concern, the RTC could
not simply issue a writ of possession due to the supervening event of the
existence of the trust agreement hovering upon the title and ownership over
the subject properties. Thus, the RTC concluded that these matters were
best ventilated in a proper action between the parties at hand. 27
Aggrieved, petitioner filed an appeal against the RTC Order before the
CA under Rule 41 of the Rules of Court. HEITAD

The CA Ruling
In its February 15, 2017 Decision, the CA dismissed the appeal and
affirmed the RTC Order. The dispositive portion of the decision reads:
WHEREFORE, the appeal is DENIED [sic].
SO ORDERED. 28

The CA dismissed outright the appeal of petitioner for being the wrong
legal remedy. It was emphasized therein that petitioner filed an appeal
under Rule 41 of the Rules of Court, assailing the RTC Order, which is
interlocutory in nature. The CA underscored that under Section 1 (c) of Rule
41 of the Rules of Court, no appeal may be taken from an interlocutory
order. It emphasized that an interlocutory order is one that does not dispose
of the case completely but leaves something to be decided upon. The CA
highlighted that an order denying a motion to dismiss is interlocutory in
nature and, hence, not appealable. Instead, the proper remedy would be to
file a petition for certiorari under Rule 65 of the Rules of Court. The CA
likewise underscored that Sec. 2, paragraph 2, Rule 50 of the Rules of Court
explicitly provides that an appeal erroneously taken to the CA shall not be
transferred to the appropriate court but shall be dismissed outright. 29
Petitioner filed a motion for reconsideration which the CA denied in its
August 2, 2017 Resolution. aDSIHc

Hence, this petition for review on certiorari under Rule 45 of the Rules
of Court which essentially raises the following issues:
(1) Whether the CA erred when it dismissed outright petitioner's
appeal for not being the proper legal remedy as the RTC's
dismissal of the original petition for issuance of a writ of
possession is a final judgment on the merits and not an
interlocutory order.
(2) Whether the CA erred when it failed to observe the
jurisprudential doctrine that when the title is consolidated in the
name of the purchaser at foreclosure sale, the writ of possession
becomes a matter of right.
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 (3) Whether the CA erred when it decided the case in a manner
contrary to law when it overlooked that Philippians Academy's
Counter-Petition failed to comply with the requirements in
opposing the issuance of a writ of possession. ATICcS

(4) Whether the CA erred when it dismissed the petitioner's appeal

despite the failure of Philippians Academy to prove that it is a
"third party which is claiming a right adverse to that of the debtor
or mortgagor" under Sec. 33, Rule 39 of the Rules of Court.
(5) Whether the CA decided contrary to law when it affirmed the
RTC's decision in dismissing the ex parte petition when petitioner
is a purchaser in good faith and for value in the public auction.
Petitioner argues that the RTC's dismissal of the Ex Parte Petition for
the Issuance of a Writ of Possession is clear, categorical, and susceptible of
no interpretation other than finality. Thus, the CA erred in concluding that an
order denying a motion to dismiss is interlocutory in nature and not
appealable as the RTC dismissed the petition on the merits. Further,
petitioner insists that the issuance of the writ is a ministerial function of the
court. Petitioner also points out that Philippians Academy failed to comply
with the requirements in opposing the issuance of a writ of possession under
Sec. 8 of Act No. 3135 and failed to sufficiently establish that it is entitled to
the exception of the ministerial function of the RTC. Petitioner alleges that
Philippians Academy was not able to prove they had any right, which was
adverse to the judgment obligor, for they were neither co-owner, tenant, nor
usufructuary. Petitioner also points out the dubious origin of the declaration
of trust for there was a defective notarization and no registration of the trust
in the TCTs or with the Registry of Deeds. Finally, petitioner stresses that it is
a purchaser in good faith and for value, thus, the CA erred in affirming the
RTC's Order. 30 ETHIDa

In its Comment, 31 Philippians Academy counters that the issues raised

by petitioner had already been decided by the RTC and the CA. It
underscores the ruling of the CA, stating that petitioner availed of the wrong
legal remedy, and the RTC Order declaring that an adversarial dispute exists
between the parties and must first be resolved by the RTC. Thus, Philippians
Academy posits that there is something to be done before the RTC, making
such order an interlocutory one, which is not appealable. 32
In its Reply, 33 petitioner reiterates its arguments in its petition adding
that its motion for reconsideration filed before the CA need not have been
verified as it merely impugned questions of law rather than disputed
allegations of fact. 34
The Court's Ruling
The petition is meritorious.
An appeal is an improper
remedy in assailing an
interlocutory order.
First, the procedural issues must be addressed. When the RTC issued
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 its Order dated December 10, 2012 denying petitioner's motion to dismiss
and dismissing its ex parte petition for the issuance of a writ of possession,
petitioner filed an appeal against the RTC Order claiming that the same was
an order of dismissal, which is a final judgment on the merits. TIADCc

The Court disagrees.

The distinction between a final or interlocutory order is well-settled. In
Spouses Limso v. Philippine National Bank 35 (Spouses Limso), the Court
distinguishes between final and interlocutory orders, thus:
The word interlocutory refers to something intervening
between the commencement and the end of the suit which decides
some point or matter but is not a final decision of the whole
controversy. This Court had the occasion to distinguish a final order
or resolution from an interlocutory one in the case of Investments,
Inc. v. Court of Appeals, thus:
x x x A "final" judgment or order is one that finally
disposes of a case, leaving nothing more to be done by
the Court in respect thereto, e.g., an adjudication on the
merits which, on the basis of the evidence presented on
the trial, declares categorically what the rights and
obligations of the parties are and which party is in the
right; or a judgment or order that dismisses an action on
the ground, for instance, of res judicata or prescription.
Once rendered, the task of the Court is ended, as far as
deciding the controversy or determining the rights and
liabilities of the litigants is concerned. Nothing more
remains to be done by the Court except to await the
parties' next move (which among others, may consist of
the filing of a motion for new trial or reconsideration, or
the taking of an appeal) and ultimately, of course, to
cause the execution of the judgment once it becomes
"final" or, to use the established and more distinctive
term, "final and executory."cSEDTC

[xxx xxx xxx]

Conversely, an order that does not finally dispose of
the case, and does not end the Court's task of
adjudicating the parties' contentions and determining
their rights and liabilities as regards each other, but
obviously indicates that other things remain to be done
by the Court, is "interlocutory," e.g., an order denying
motion to dismiss under Rule 16 of the Rules, or granting
of motion on extension of time to file a pleading, or
authorizing amendment thereof, or granting or denying
applications for postponement, or production or
inspection of documents or things, etc. Unlike a "final"
judgment or order, which is appealable, as above pointed
out, an "interlocutory" order may not be questioned on
appeal except only as part of an appeal that may
eventually be taken from the final judgment rendered in
the case. 36 (Citation omitted)

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 Thus, the main difference between an interlocutory order and a final
order is that a final order disposes of a case, an interlocutory order, on the
other hand, does not dispose of a case and does not end the court's task of
adjudicating the parties' contentions. 37 The test to determine whether an
order or a judgment is interlocutory or final is: Does the order or judgment
leave something to be done in the trial court regarding the merits of the
case? If it does, the order or judgment is interlocutory; otherwise, it is final.
38 In the present case, pertinent parts of the RTC Order states:

Jurisprudence dictates that when a third party holds on a

property subject of an [extrajudicial] foreclosure, the issuance of a
writ of possession does not anymore become a ministerial duty and a
court should undertake a hearing to determine the nature of the
adverse possession if only to determine a claim and a duty of a
mortgagor. And, in determining adversarial claims over a property
where a third party's superior right from that of a purchaser, the
former cannot be ejected by a mere writ of possession as it is held
adverse to the judgment obligor/mortgagor, rather a proper action
instead be instituted to determine such adversarial claim as may
favor a party affected therein.
AIDSTE

Indeed, in line with the jurisprudencial pronouncement

by the Court where an adversarial proceeding should be
undertaken for the subject property in determining the better
right of the parties of the parties of adverse possession over
disputed property, this Court finds no reason for the dismissal
of the counter petition borne by the simple admission by a
petitioner over a trust arrangement invoked therein.
Anent, as the incident between the parties has already
transformed the instant petition into an adversarial concern
between the parties, this Court finds no plausible reason to
entertain a simple writ of possession as the same has already
been affected by the supervening circumstances hovering
upon title and ownership over a property which can be best
ventilated in a proper action between the parties at hand. This
Court finds no reason to maintain a simple petition for issuance of a
writ of possession at this time, to lead to the dismissal thereof. 39
(Emphases supplied) SDAaTC

A perusal of the RTC Order reveals that it is indeed an interlocutory

order. The RTC Order does not dispose of the case on the merits, seeing as
the trial court clearly requires the need to determine the better right of the
parties in an adversarial proceeding, and that the trial court found no reason
to dismiss the Counter-Petition of Philippians Academy. To reiterate, an
order is "interlocutory when it does not dispose of the case completely but
leaves something to still be decided by the trial court." 40 In this case, the
order dismissing the writ of possession merely determines that petitioner is
not entitled to the writ of possession ex parte. It is not a judgment on the
merits, contrary to petitioner's claim. There is still a need for further
proceedings to determine the respective rights of the parties involved.
Indubitably, the RTC Order dated December 10, 2012 is merely an
interlocutory order.
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 Anent thereto, Sec. 1, Rule 41 of the Rules of Court, provides:
Section 1. Subject of appeal. — An appeal may be taken
from a judgment or final order that completely disposes of the case,
or of a particular matter therein when declared by these Rules to be
appealable.
No appeal may be taken from:
xxx xxx xxx
(c) An interlocutory order;
xxx xxx xxx
In all the above instances where the judgment or final
order is not appealable, the aggrieved party may file an
appropriate special civil action under Rule 65. (Emphases
supplied) AaCTcI

Based on the foregoing, it is clear that no appeal may be taken from an

interlocutory order issued by the RTC. The remedy against an interlocutory
order is a special civil action for certiorari under Rule 65 of the Rules of
Court, but only when there is grave abuse of discretion. 41 A petition for
certiorari is an extraordinary remedy availed of when a tribunal, board, or
officer exercising judicial or quasi-judicial functions has acted without or in
excess of its or his or her jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law. 42
Likewise, the Court has previously declared that an appeal and a petition for
certiorari are two different remedies, which are not interchangeable. 43
Remedies of appeal and certiorari are mutually exclusive, not alternative or
successive. 44
Nevertheless, jurisprudence shows that there are exceptions wherein a
wrong remedy availed of a party may be set aside, such as when the
interests of justice and fairness demand it. In the recent case of Alfiler v.
Spouses Cayabyab, 45 the Court allowed the filing of a petition for certiorari
even though the remedy of appeal was available. The Court ratiocinated that
even though therein petitioner filed the wrong remedy, the procedural error
may be set aside in the interest of substantial justice. Similarly, in Bases
Conversion and Development Authority v. Callangan, Jr. , 46 the Court held
that there is no separate appeal available to assail a partial summary
judgment because of its interlocutory nature. In that case, petitioner therein
filed a Rule 45 petition and availed of the wrong remedy when it should have
filed a petition for certiorari under Rule 65. Again, the Court excused the
procedural defect and relaxed the rules of procedure in the interest of
substantial justice, finding that there was grave abuse of discretion which
attended the issuance of the partial summary judgment. acEHCD

In this case, the Court finds that the procedural error committed by
petitioner may be set aside for reasons of substantial justice. As will be
discussed infra, the inferences made by the RTC in its Order are manifestly
mistaken, and its conclusions are findings grounded on speculation,
surmises, and/or conjectures. Due to these reasons, the Court finds
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 compelling reasons to justify the relaxation of the rules. To deny the case
based on the stringent application of the rules would hinder rather than
serve the demands of substantial justice for procedural rules were precisely
conceived to aid the attainment of justice. 47 As aptly stated in Subic Bay
Metropolitan Authority v. Commission on Audit: 48
Time and again, this Court has emphasized that procedural
rules should be treated with utmost respect and due regard, since
they are designed to facilitate the adjudication of cases to remedy the
worsening problem of delay in the resolution of rival claims and in the
administration of justice. From time to time, however, the Court has
recognized exceptions to the Rules, but only for the most compelling
reasons where stubborn obedience to the Rules would defeat rather
than serve the ends of justice. 49
Thus, setting aside these procedural defects, the Court finds the
petition meritorious in its substantive aspect.
Issuance of a writ of
possession; ministerial
function; exceptions
A writ of possession is a writ of execution used to enforce a judgment
to recover the possession of land. It orders the sheriff to enter the land and
give its possession to the person entitled under the judgment. 50 In this case,
petitioner based its prayer for the issuance of the writ of possession on an
extrajudicial foreclosure proceeding under Act No. 3135, 51 as amended by
Act No. 4118. 52 In extrajudicial foreclosures, a writ of possession may be
issued either (1) within the redemption period or (2) after the lapse of the
redemption period. 53 EcTCAD

The first instance for the issuance of the writ of possession in an

extrajudicial foreclosure is based on Sec. 7 54 of Act No. 3135, as amended,
which states that in any sale made under the provisions of Act No. 3135, the
purchaser may petition the court to give him or her possession of the
property during the redemption period by furnishing a bond. Such petition
shall be made under oath and filed in the form of an ex parte motion.
Meanwhile, the second instance for the issuance of a writ of possession
in an extrajudicial foreclosure of real estate mortgage is based on the
purchaser's right of ownership. 55 In such case, the purchaser's right
over the property becomes consolidated due to the mortgagor's failure to
redeem his or her property within the one-year period after the registration
of sale as mandated in Sec. 6 56 of the same Act, as amended.
I n Philippine National Bank v. Sanao Marketing Corporation, 57 the
Court held that a writ of possession may be issued after consolidation of
ownership of the property in the name of the purchaser. This is
because the right to the possession thereof, along with all other rights of
ownership, follows the thing sold to the new owner. 58 As such, the
purchaser is entitled to the possession of the property and can demand it at
any time following the consolidation of ownership in his or her name and the
issuance of a new TCT as a matter of course. 59
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 In the present case, it must be emphasized that petitioner was able to
consolidate its title to the subject properties after Labrador failed to redeem
the latter after the one-year period. The TCTs previously issued in the name
of Labrador were cancelled by the Register of Deeds, and TCT Nos. 010-
2010002226 and 010-2010002227 were issued in favor of petitioner.
Therefore, petitioner is entitled to the issuance of a writ of possession based
on its right of ownership. SDHTEC

The Court elucidated in Tolentino v. Laurel , 60 that the individual's title

over the subject property is proof of his or her ownership thereof, thus:
It is a fundamental principle in land registration that the certificate of
title serves as evidence of an indefeasible and incontrovertible title to
the property in favor of the person whose name appears therein. It is
conclusive evidence with respect to the ownership of the land
described therein. It is also settled that the titleholder is entitled to all
the attributes of ownership of the property, including possession.
Thus, the Court held that the age-old rule is that the person
who has a Torrens title over a land is entitled to possession
thereof. 61 (Emphasis supplied)
Accordingly, when there has been an extrajudicial foreclosure of a
mortgage, the title has been consolidated to the purchaser, and the
certificate of title has been issued, the court's duty on such matter is that,
upon proper application and proof of title by the petitioner, the issuance of
the writ of possession to the purchaser in an extrajudicial foreclosure
becomes a ministerial function of the court, which cannot be enjoined or
restrained. 62 Even any question concerning the regularity or validity of the
mortgage or its foreclosure cannot be raised as a justification for opposing
the issuance of the writ. 63 Hence, the general rule is that the lower court,
acting on an application for its issuance, should issue the writ as a matter of
course and without any delay. 64 HSAcaE

Nevertheless, there are narrow exceptions wherein the issuance of the

writ of possession shall not be a ministerial duty on the part of the trial court
even though the purchaser is the registered owner thereof. 65 In Nagtalon v.
United Coconut Planters Bank, 66 the Court enumerated the following
jurisprudential exceptions, to wit: (a) gross inadequacy of the purchase price;
(b) a third party claiming a right adverse to the mortgagor/debtor;
and (c) the failure to pay the surplus proceeds of the sale to the mortgagor.
The second exception is further explained in Spouses Rosario v. Government
Service Insurance System: 67
As an exception, the ministerial duty of the court to issue an [ex
parte] writ of possession ceases when there are third-parties who are
actually holding the mortgaged property adversely to the judgment
debtor. Sec. 33 of Rule 39, made applicable to extrajudicial
foreclosure of real estate mortgages by Sec. 6, Act No. 3135,
provides:
SEC. 33. Deed and possession to be given at
expiration of redemption period; by whom executed or
given. — If no redemption be made within one (1) year
from the date of the registration of the certificate of sale,
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 the purchaser is entitled to a conveyance and possession
of the property[.]
Upon the expiration of the right of redemption, the
purchaser or redemptioner shall be substituted to and
acquire all the rights, title, interest and claim of the
judgment obligor to the property as of the time of the
levy. The possession of the property shall be given to the
purchaser or last redemptioner by the same officer
unless a third party is actually holding the property
adversely to the judgment obligor. AScHCD

Jurisprudence teaches that when there are third-party

possessors of the property, the RTC should instead conduct a hearing
to determine the nature of the adverse possession. However, for this
exception to apply, it is not enough that the property is in the
possession of a third party, it must also be held by the third party
adversely to the judgment debtor or mortgagor. 68 (Emphasis
supplied)
In this case, Philippians Academy claims that the issuance of the writ of
possession is not a mere ministerial duty of the trial court because the
second exception applies — that there is a third party claiming a right
adverse to the mortgagor/debtor.
To be clear, for the second exception of the trial court's ministerial
issuance of an ex parte writ of possession to apply, a third party should hold
possession of the property adversely to the judgment obligor. 69 In Madriaga,
Jr. v. China Banking Corp. , 70 the Court discussed the meaning of a "third
party who is actually holding the property adversely to the judgment
obligor," thus:
The exception provided under Section 33 of Rule 39 of the
Revised Rules of Court contemplates a situation in which a third party
holds the property by adverse title or right, such as that of a co-
owner, tenant or usufructuary. The co-owner, agricultural tenant,
and usufructuary possess the property in their own right, and
they are not merely the successor or transferee of the right of
possession of another co-owner or the owner of the property.
71 (Emphasis supplied) HESIcT

Indeed, to be considered in adverse possession, the third party

possessor must have done so in his own right and not as a mere successor
or transferee of the debtor or mortgagor. 72 Only in such instance shall the
trial court's duty to issue a writ of possession in favor of the purchaser, who
has consolidated ownership, not be considered as ministerial.
A beneficiary of a trust
possessing mortgaged property
is not holding the same
adversely to the judgment
debtor who is the trustee.
In the present case, the Court holds that Philippians Academy cannot
be considered a third party in possession of the subject properties for the
reason that it does not possess the subject properties adversely to the
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 judgment debtor.
It is to be noted that Philippians Academy claimed a right of interest
over the subject properties alleging that it is the real owner thereof by virtue
of a trust agreement executed between the academy and Labrador. 73
A trust is the legal relationship between one person who has equitable
ownership of a property and another who owns the legal title to the property.
74 It is a fiduciary relationship that requires the trustee to deal with the

property for the benefit of the beneficiary. 75 "The trustor is the one who
establishes the trust; the beneficiary, the person for whose benefit the trust
was created; and the trustee, the one in whom, by conferment of a legal
title, confidence has been reposed as regards the property of the
beneficiary." 76 Express trusts are created by direct and positive acts of the
parties, by some writing, deed or will, or by words either expressly or
impliedly evincing an intention to create a trust. 77AcICHD

Philippians Academy presented a Declaration of Trust between itself

and Labrador, thus, claiming that there is an express trust therein.
Meanwhile, petitioner raises the dubious provenance of the deed when it
found the latter to have a defective notarization. Nevertheless, no particular
words are required for the creation of an express trust, it being sufficient
that a trust is clearly intended. 78 In any case, even if such a trust was
established, there are several considerations which this Court takes notice
of. In an express trust, the trustee has fiduciary obligations and active duties
of management. 79
Here, it must be emphasized that Labrador obtained a loan from
Chinatrust and executed a REM, on September 26, 2007 to secure the
payment of the obligation. Meanwhile, the Declaration of Trust that
Philippians Academy relies on as proof of its true ownership of the subject
properties was notarized on September 28, 2007, or merely two days after
the REM was executed. The REM was likewise registered and annotated on
the TCTs of the subject properties. Notably, the Declaration of Trust was not.
Thus, the Declaration of Trust only binds the parties to the deed and does
not affect third parties. 80
More importantly, Philippians Academy's Counter-Petition filed in
opposition to petitioner's Ex Parte Issuance of a Writ of Possession admits
that the loan obtained by Labrador from Chinatrust was partly used in
acquiring the subject properties. 81 Thus, by its own admission, Philippians
Academy benefited from the actions of Labrador, as trustee, in obtaining the
loan from the bank to buy the subject properties. The same Counter-Petition
did not allege that Labrador, as trustee, had obtained the loan from
Chinatrust without Philippians Academy's knowledge or approval. Further,
Philippians Academy never objected to Labrador's act of entering into a REM
over the subject properties to secure the same loan. Neither were there any
allegations that Labrador acted fraudulently in her fiduciary obligations in
managing the trust. caITAC

Evidently, even assuming that there was indeed a trust agreement

between Philippians Academy and Labrador, the former is bound by the acts
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 of the latter in obtaining a REM over the subject properties. Verily,
Philippians Academy, when objecting to the issuance of the writ of
possession in favor of petitioner, cannot be considered as a "third party."
Rather, Philippians Academy, as beneficiary in the trust agreement, is
evidently a successor or assignee of Labrador, and is bound by the acts of
the latter, absent any allegation of fraud. Philippians Academy is not a co-
owner, agricultural tenant, or usufructuary, which may possess the property
in its own right, and cannot prevent the issuance of the writ of possession in
favor of petitioner, the registered owner of the subject properties.
There were no allegations of
fraud on the part of Labrador
in obtaining the REM.
Notably, jurisprudence shows that the Court had previously recalled the
issuance of the writ of possession because fraud perpetuated the
transactions between a mortgagor and purchaser in an extrajudicial
foreclosure of mortgage. In Sy v. China Banking Corp., 82 the Court recalled a
writ of possession based on the finding that the occupants of the property
were fraudulently deprived of their share thereon through simulated and
forged conveyances. Similarly, in Development Bank of the Phils. v. Prime
Neighborhood Association, 83 the Court also recalled a writ of possession
based on the plea of third parties who were allegedly transferees of the true
owner of the foreclosed property. In said case, it was claimed that the
judgment mortgagor's supposed right to the property was hinged on a
spurious title. TAIaHE

Accordingly, for Philippians Academy's interest on the subject

properties to be adverse to Labrador, there should be, at the very least, an
allegation of a breach of fiduciary duties or fraud. However, it must be
emphasized that Philippians Academy neither repudiated the trust nor the
actions of Labrador with allegations of fraud or want of authority over
establishing the REM. These matters cannot be presumed by the courts, and
must be alleged and proven. 84 The Court has also held that the exercise of
trustees of their acts of administration should not be disturbed by the courts
unless there is clear proof of fraud or bad faith, or unless the transaction in
question is manifestly prejudicial to the interest of the beneficiaries. 85
Here, there was absolutely no allegation of fraud on the part of
Labrador in obtaining the REM. Instead, Philippians Academy admitted that
part of the proceeds of the loan obtained from Chinatrust was used in paying
for acquiring the subject properties, which clearly indicates that Philippians
Academy benefited from the action of Labrador in obtaining the loan from
Chinatrust. Such acceptance of the benefit demonstrates its assent in
obtaining the loan acquisition from Chinatrust and the resulting
establishment of the REM which allowed Philippians Academy to purchase
the subject properties in the first place. Thus, the actions of Labrador, which
benefited and were accepted by Philippians Academy, should bind the latter.
Consequently, Philippians Academy cannot be considered a third party
possessor because their interest in the mortgaged property is not
independent or adverse to the judgment debtor. 86 ICHDca

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 Petitioner is entitled to an ex
parte writ of possession.
To reiterate, when the exception of the third party claiming a right
adverse to the mortgagor/debtor arises, jurisprudence teaches that the trial
court must conduct a hearing to determine the nature of the adverse
possession. 87 This is so the trial court may determine whether the actual
possessor may be privy to any of the parties to the action, or the bona fide
possession may be disputed, or where such possession has been taken in
connivance with the defeated litigant with a view to frustrating the
judgment. Only then shall the trial court deny or accede to the enforcement
of a writ of possession as the finding shall warrant. 88
In this case, the RTC took the allegations of Philippians Academy's
Counter-Petition at face value without determining whether the latter was
privy to any of the parties to the action or whether the purported trust was
undertaken in connivance with Labrador in view of frustrating the issuance
of the writ of possession in favor of petitioner. It was clear that the RTC
overlooked and did not question the fact that the loan proceeds obtained by
Labrador from Chinatrust were used to pay the subject properties for the
benefit of Philippians Academy. Instead, the RTC erroneously ratiocinated
that petitioner had not disputed the existence of the Declaration of Trust,
hence, the matters would be better threshed out in a proper action between
the parties. Contrary to such pronouncement, petitioner, since the
beginning, had vehemently objected to the trust, claiming the dubious
provenance of the deed and alleging falsification of the deed in order to give
a semblance of legitimacy to the alleged fictitious claim of ownership. 89 cDHAES

Again, it is to be borne in mind that petitioner had already completed

the consolidation of its ownership over the properties after the lapse of the
one-year period for the judgment debtor to redeem the property, and had
already been issued new TCTs under its name. 90 Petitioner was entitled to
an ex parte writ of possession as a matter of course. In such case, it is the
responsibility of the trial court to be vigilant in protecting the rights of the
purchaser given that the general rule is that it is the ministerial duty of the
court to issue a writ of possession in due course. This holds true when
several questions arise on whether the supposed third party possessor's
possession is adverse to the judgment debtor. Thus, it was improper for the
RTC to deny the issuance of the writ of possession based on the mere
allegations of Philippians Academy that it was a third party, independent of
Labrador, when it was not.
Based on the foregoing, the Court holds that petitioner is entitled to
the issuance of the writ of possession ex parte. To rule otherwise would be
to open doors to scrupulous parties that may attempt to create trusts over
mortgaged properties to prevent their land from being taken by innocent
purchasers for value by simply saying that the trustee had no power to
mortgage the properties. 91
As it is established that petitioner is entitled to an ex parte writ of
possession, the Court deems it unnecessary to resolve the other issues
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 raised in the petition as the rest of the issues are factual matters beyond the
ambit of this Court. TCAScE

WHEREFORE, the petition is GRANTED. The February 15, 2017

Decision and the August 2, 2017 Resolution of the Court of Appeals in CA-
G.R. CV No. 100060 are REVERSED and SET ASIDE. The Regional Trial
Court of Parañaque City, Branch 196 and its Sheriff are ORDERED to ISSUE
and PROCEED with the implementation of the Ex Parte Writ of Possession in
favor of petitioner Integrated Credit and Corporate Services, Co.
SO ORDERED. ASEcHI

Hernando, Zalameda, Rosario and Marquez, JJ., concur.

Footnotes

1. Rollo , pp. 10-37.

2. Id. at 39-45; penned by Associate Justice Myra V. Garcia-Fernandez and

concurred in by Associate Justices Rosmari D. Carandang and Mario V. Lopez
(now a Member of the Court).

3. Id. at 46-48.

4. Entitled "An Act to Regulate the Sale of Property Under Special Powers Inserted
in or Annexed to Real Estate Mortgages." Approved on March 6, 1924.

5. Rollo , p. 40.

6. Id. at 55.
7. Id. at 40-41.

8. Id. at 57-58.

9. Id. at 59-61.
10. Id. at 62-64.

11. Id. at 41.

12. Id. at 88-89.

13. Id. at 41.

14. Id. at 211. In the Order of the RTC dated December 10, 2012, the date of filing
of the ex parte petition was November 21, 2012. This is evidently a
typographical error.

15. Id. at 66-72.

16. Id. at 41-42.

17. Id. at 91.

18. Id. at 99-109.

19. Id. at 188-190.

20. Id. at 115-126.

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 21. Id. at 42.

22. Records, pp. 182-197.

23. Id. at 183-184.

24. Rollo , pp. 197-210.

25. Id. at 211-213; docketed as LRC Case No. 12-044.

26. Id. at 213.

27. Id. at 211-213.

28. Id. at 44.

29. Id.

30. Id. at 19-31.

31. Id. at 297-303.

32. Id. at 301.

33. Id. at 338-353.

34. Id. at 350.

35. 779 Phil. 287 (2016).

36. Id. at 356-357, citing United Overseas Bank v. Judge Ros, 556 Phil. 178, 188-
189 (2007).

37. Spouses Limso v. Philippine National Bank , id.

38. Cereza v. Suarez , G.R. No. 242722, October 10, 2022.

39. Rollo , p. 213.

40. Rizal Commercial Banking Corp. v. F. Franco Transport, Inc., 843 Phil. 556, 570
(2018).
41. See United Overseas Bank v. Judge Ros, supra note 36, at 188.

42. Uy v. 3tops de Philippines Estate Corp. , G.R. No. 248140, January 16, 2023.
43. Berces v. Civil Service Commission, G.R. No. 222557, September 29, 2021.

44. Id.

45. G.R. No. 217111, March 13, 2023.

46. G.R. No. 241168, August 22, 2022.

47. Latogan v. People , G.R. No. 238298, January 22, 2020, 929 SCRA 605, 614.
48. 845 Phil. 982 (2019).

49. Id. at 997.

50. Spouses Reyes v. Spouses Chung , 818 Phil. 225, 235 (2017).
51. Entitled "An Act to Regulate the Sale of Property Under Special Powers Inserted
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 in or Annexed to Real Estate Mortgages." Approved on March 6, 1924.
52. Amendments to Act No. 3135. Approved on December 7, 1933.

53. 680 Home Appliances, Inc. v. Court of Appeals, 744 Phil. 481, 491 (2014).

54. Sec. 7. In any sale made under the provisions of this Act, the purchaser may
petition the Court of First Instance of the province or place where the
property or any part thereof is situated, to give him possession thereof
during the redemption period, furnishing bond in an amount equivalent to
the use of the property for a period of twelve months, to indemnify the
debtor in case it be shown that the sale was made without violating the
mortgage or without complying with the requirements of this Act. Such
petition shall be made under oath and filed in form of an ex parte motion in
the registration or cadastral proceedings if the property is registered, or in
special proceedings in the case of property registered under the Mortgage
Law or under section one hundred and ninety-four of the Administrative
Code, or of any other real property encumbered with a mortgage duly
registered in the office of any register of deeds in accordance with any
existing law, and in each case the clerk of the court shall, upon the filing of
such petition, collect the fees specified in paragraph eleven of section one
hundred and fourteen of Act Numbered Four hundred and ninety-six, as
amended by Act Numbered Twenty-eight hundred and sixty-six, and the
court shall, upon approval of the bond, order that a writ of possession issue,
addressed to the sheriff of the province in which the property is situated, who
shall execute said order immediately.

55. Spouses Teves v. Integrated Credit & Corporate Services, Co., 829 Phil. 290,
302 (2018); Bascara v. Sheriff Javier, 760 Phil. 766, 775 (2015), citing China
Banking Corporation v. Spouses Lozada, 579 Phil. 454, 472-473 (2008).
56. Sec. 6. In all cases in which an extrajudicial sale is made under the special
power hereinbefore referred to, the debtor, his successors in interest or any
judicial creditor or judgment creditor of said debtor, or any person having a
lien on the property subsequent to the mortgage or deed of trust under
which the property is sold, may redeem the same at any time within the term
of one year from and after the date of the sale; and such redemption shall be
governed by the provisions of sections four hundred and sixty-four to four
hundred and sixty-six, inclusive, of the Code of Civil Procedure, [insofar] as
these are not inconsistent with the provisions of this Act.
57. 503 Phil. 260, 271 (2005).

58. Uy v. 3tops De Philippines Estate Corp., supra note 42.

59. Bank of the Philippine Islands v. Spouses Co, 772 Phil. 291, 302 (2015).
60. 682 Phil. 527 (2012).

61. Id. at 540-541.

62. Uy v. 3tops De Philippines Estate Corp., supra note 42.

63. Spouses Torrecampo v. Wealth Development Bank Corp. , G.R. No. 221845,
March 21, 2022.
64. Philippine National Bank v. Fontanoza, G.R. No. 213673, March 2, 2022.
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 65. Id.

66. 715 Phil. 595, 606-607 (2013).

67. G.R. No. 200991, March 18, 2021.

68. Id.

69. Philippine National Bank v. Fontanoza, supra.

70. 691 Phil. 770 (2012).

71. Id. at 781, citing BPI Family Savings Bank, Inc. v. Golden Power Diesel Sales
Center, Inc., 654 Phil. 382, 393 (2011).
72. Philippine National Bank v. Fontanoza, supra.

73. Rollo , pp. 211-212.

74. Spouses Oco v. Limbaring, 516 Phil. 691, 702 (2006).

75. Secuya v. Vda. de Selma, 383 Phil. 126, 136 (2000).

76. Spouses Oco v. Limbaring, supra at 702.

77. Spouses Gomez v. Duyan , 493 Phil. 819, 826 (2005).

78. CIVIL CODE, Article 1444.

79. Philippine National Bank v. Court of Appeals, 291 Phil. 356, 367 (1993).
80. Secuya v. Vda. de Selma, supra at 137.

81. Rollo , p. 153.

82. G.R. No. 213736, June 17, 2020, 938 SCRA 314.

83. 605 Phil. 660 (2009).

84. Republic v. Sandiganbayan, 663 Phil. 212, 326 (2011).

85. Perez v. Araneta, 116 Phil. 779, 786 (1962).

86. Spouses Rosario v. Government Service Insurance System, supra note 67.
87. Sy v. China Banking Corp. , supra at 324, citing Okabe v. Saturnino, 742 Phil. 1,
14 (2014).

88. Spouses Rosario v. Government Service Insurance System, supra.

89. Rollo , p. 212.

90. Id. at 211.

91. See Roman Catholic Archbishop of Caceres v. Secretary of Agrarian Reform,

565 Phil. 598, 609 (2007).

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