THIRD DIVISION
G.R. No. 203949, April 06, 2016
SPOUSES GEORGE A. GALLENT, SR. AND MERCEDES M. GALLENT, Petitioners, v. JUAN G. VELASQUEZ, Respondent.
G.R. No. 205071
JUAN G. VELASQUEZ, Petitioner, v. SPOUSES GEORGE A. GALLENT, SR. AND MERCEDES M. GALLENT, Respondents.
D E C I S I O N
REYES, J.:
Before this Court are two conflicting decisions rendered by two different divisions of the Court of Appeals (CA) on the same question of whether the Regional Trial Court (RTC) may validly issue an ex parte writ of possession to the transferee of the winning bidder at the extrajudicial foreclosure sale of mortgaged real property.
The issuance of the writ of possession is a ministerial duty of the court upon filing of the proper application and proof of title and by its nature does not require notice upon persons interested in the subject properties. By virtue of the sale of the properties involved, [Velasquez] became the new owner of the lots entitled to all rights and interests its predecessor [Allied Bank] had therein, including the right to file an application for writ of possession. The court therefore finds the petition to be sufficient in form and substance.The Spouses Gallent filed a motion for reconsideration but it was denied by the RTC in an Order20 dated April 13, 2010, reasoning as follows:
As to the motion for leave to intervene filed by [Spouses Gallent], the same will be treated by this court as their opposition to the petition and they will be considered an oppositor.
Wherefore premises considered, the motions are hereby denied for lack of merit.
x x x x
SO ORDERED.19 (Emphasis ours)
The instant motion deserves a scant consideration considering that the issues and arguments raised by the oppositors are mere rehashed which were already passed upon by this court in the order sought to be reconsidered. To reiterate, it is a ministerial duty on the part of this court to act on cases of this nature, particularly if the twelve-month period for redemption had already lapsed. Should the oppositors intend to recover title over the subject property, the same should be ventilated in a separate proceeding and proceed independently of this petition.On July 2, 2010, the Spouses Gallent filed a petition for certiorari22 before the CA, docketed as CA-G.R. SP No. 114527, raffled to the Special 4th Division, seeking to annul the RTC Orders dated February 12, 2010 and April 13, 2010. Invoking Mendoza v. Salinas,23 the Spouses Gallent argued that: (1) the RTC has no jurisdiction to issue an ex parte writ of possession to Velasquez since he did not acquire the property at a foreclosure sale, but purchased the same from the mortgagee, winning bidder and purchaser, Allied Bank, and only after it had consolidated its title thereto;24 (2) in their Agreement to Sell, Allied Bank and the Spouses Gallent entered into new contractual relations as vendees-lessees and vendor-lessor, and ceased to be mortgagors and mortgagee;25 (3) Velasquez should have filed an action for ejectment or for recovery of ownership or possession, not an ex parte petition for writ of possession;26 and (4) the RTC's duty to issue the writ has ceased to be ministerial in view of the Spouses Gallent's adverse claim upon the property based on their substantial payment of its purchase price, in addition to the fact that Velasquez and Allied Bank executed a forged deed of sale.27cralawred
Wherefore premises considered, the motion for reconsideration is hereby denied for lack of merit. Accordingly, the reception of ex parte evidence is hereby assigned to the Branch Clerk of Court to act as Commissioner and to make a report to this Court ten (10) days upon completion thereof.
x x x x
SO ORDERED.21ChanRoblesVirtualawlibrary
WHEREFORE, in view of the foregoing and considering that it is a ministerial duty of the court to issue writ of possession, the redemption period having been expired without the subject property being redeemed by the mortgagors, the petition is hereby granted. Accordingly, let a writ of possession be issued in favor of [Velasquez] and against the oppositors and all persons claiming rights under them, to place [Velasquez] in possession of the subject property and for the oppositors and all persons claiming rights under them to vacate the land covered by TCT No. 11814 of the Register of Deeds of Muntinlupa City.On September 24, 2010, the Spouses Gallent filed another petition for certiorari30 before the CA, docketed as CA-G.R. SP No. 116097 and raffled to the 10th Division, arguing that the deed of sale between Velasquez and Allied Bank was a forgery. In their certification of non-forum shopping,31 they mentioned the pendency of CA-G.R. SP No. 114527 in the CA. Surprisingly, neither of the parties nor the CA 10th Division moved for the consolidation of CA-G.R. SP No. 116097 with CA-G.R. SP No. 114527.
SO ORDERED.29ChanRoblesVirtualawlibrary
Based on these tenets, the issuance of a writ of possession, therefore, is clearly a ministerial duty of the land registration court. Such ministerial duty, however, ceases to be so with particular regard to petitioners who are actual possessors of the property under a claim of ownership. Actual possession under claim of ownership raises a disputable presumption of ownership. This conclusion is supported by Article 433 of the Civil Code, which provides:Velasquez filed a motion for reconsideration, but it was denied;42 hence, he filed a Petition for Review on Certiorari43 before this Court docketed as G.R. No. 205071.
chanRoblesvirtualLawlibraryActual possession under claim of ownership raises a disputable presumption of ownership. The true owner must resort to judicial process for the recovery of the property.Under said provision, one who claims to be the owner of a property possessed by another must bring the appropriate judicial action for its physical recovery. The term "judicial process" could mean no less than an ejectment suit or reinvindicatory action, in which the ownership claims of the contending parties may be properly heard and adjudicated.41 (Citation omitted and emphasis ours)
A torrens title recognizes the owner whose name appears in the certificate as entitled to all the rights of ownership under the civil law. The Civil Code of the Philippines defines ownership in Articles 427, 428 and 429. This concept is based on Roman Law which the Spaniards introduced to the Philippines through the Civil Code of 1889. Ownership, under Roman Law, may be exercised over things or rights. It primarily includes the right of the owner to enjoy and dispose of the thing owned. And the right to enjoy and dispose of the thing includes the right to receive from the thing what it produces, [jus utendi; jus fruendi] the right to consume the thing by its use, [jus abutendi] the right to alienate, encumber, transform or even destroy the thing owned, [jus disponendi] and the right to exclude from the possession of the thing owned by any other person to whom the owner has not transmitted such thing [jus vindicandi].47ChanRoblesVirtualawlibraryPossession being an essential right of the owner with which he is able to exercise the other attendant rights of ownership,48 after consolidation of title the purchaser in a foreclosure sale may demand possession as a matter of right.49 This is why Section 7 of Act No. 3135, as amended by Act No. 4118, imposes upon the RTC a ministerial duty to issue a writ of possession to the new owner upon a mere ex parte motion.50 Section 7 reads:
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 194 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 court shall, upon the filing of such petition, collect the fees specified in paragraph 11 of Section 114 of Act No. 496, as amended by Act No. 2866, 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.In Spouses Arquiza v. CA,51 it is reiterated that simply on the basis of the purchaser's ownership of the foreclosed property there is no need for an ordinary action to gain possession thereof:
Indeed, it is well-settled that an ordinary action to acquire possession in favor of the purchaser at an extrajudicial foreclosure of real property is not necessary. There is no law in this jurisdiction whereby the purchaser at a sheriff's sale of real property is obliged to bring a separate and independent suit for possession after the one-year period for redemption has expired and after he has obtained the sheriff's final certificate of sale. The basis of this right to possession is the purchaser's ownership of the property. The mere filing of an ex parte motion for the issuance of the writ of possession would suffice, and no bond is required.52 (Citations omitted)As also explained in Asia United Bank v. Goodland Company, Inc.,53 the ex parte application for writ of possession is a non-litigious summary proceeding without need to post a bond, except when possession is being sought even during the redemption period:
It is a time-honored legal precept that after the consolidation of titles in the buyer's name, for failure of the mortgagor to redeem, entitlement to a writ of possession becomes a matter of right. As the confirmed owner, the purchaser's right to possession becomes absolute. There is even no need for him to post a bond, and it is the ministerial duty of the courts to issue the same upon proper application and proof of title. To accentuate the writ's ministerial character, the Court has consistently disallowed injunction to prohibit its issuance despite a pending action for annulment of mortgage or the foreclosure itself.Moreover, not even a pending action to annul the mortgage or the foreclosure sale will by itself stay the issuance of the writ of possession, as held in BPI Family Savings Bank, Inc. v. Golden Power Diesel Sales Center, Inc., et al.:55
The nature of an ex parte petition for issuance of the possessory writ under Act No. 3135 has been described as a non-litigious proceeding and summary in nature. As an ex parte proceeding, it is brought for the benefit of one party only, and without notice to or consent by any person adversely interested.54 (Citations omitted)
Furthermore, it is settled that a pending action for annulment of mortgage or foreclosure sale does not stay the issuance of the writ of possession. The trial court, where the application for a writ of possession is filed, does not need to look into the validity of the mortgage or the manner of its foreclosure. The purchaser is entitled to a writ of possession without prejudice to the outcome of the pending annulment case.56 (Citations omitted)When the thing purchased at a foreclosure sale is in turn sold or transferred, the right to the possession thereof, along with all other rights of ownership, follows the thing sold to its new owner.
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, the purchaser is entitled to a conveyance and possession of the property; or, if so redeemed whenever sixty (60) days have elapsed and no other redemption has been made, and notice thereof given, and the time for redemption has expired, the last redemptioner is entitled to the conveyance and possession; but in all cases the judgment obligor shall have the entire period of one (1) year from the date of the registration of the sale to redeem the property. The deed shall be executed by the officer making the sale or by his successor in office, and in the latter case shall have the same validity as though the officer making the sale had continued in office and executed it.Pursuant to Section 6 of Act No. 3135, the application of Section 33, Rule 39 of the Rules of Court has been extended to extrajudicial foreclosure sales, thus:
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. (Emphasis ours)
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 464 to 466, inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent with the provisions of this Act.In China Banking Corporation v. Spouses Lozada,58 it was held that for the court's ministerial duty to issue a writ of possession to cease, it is not enough that the property be held by a third party, but rather the said possessor must have a claim thereto adverse to the debtor/mortgagor:
Where a parcel levied upon on execution is occupied by a party other than a judgment debtor, the procedure is for the court to order a hearing to determine the nature of said adverse possession. Similarly, in an extrajudicial foreclosure of real property, when the foreclosed property is in the possession of a third party holding the same adversely to the defaulting debtor/mortgagor, the issuance by the RTC of a writ of possession in favor of the purchaser of the said real property ceases to be ministerial and may no longer be done ex parte. For the exception to apply, however, the property need not only be possessed by a third party, but also held by the third party adversely to the debtor/mortgagor.59 (Citation omitted)Specifically, the Court held that to be considered in adverse possession, the third party possessor must have done so in his own right and not merely as a successor or transferee of the debtor or mortgagor:
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. x x x.60 (Citations omitted)Thus, in BPI Family,61 the Court held that it was an error to issue an ex parte writ of possession to the purchaser in an extrajudicial foreclosure, or to refuse to abate one already granted, where a third party has raised in an opposition to the writ or in a motion to quash the same, his actual possession thereof upon a claim of ownership or a right adverse to that of the debtor or mortgagor. The procedure, according to Unchuan v. CA,62 is for the trial court to order a hearing to determine the nature of the adverse possession, conformably with the time-honored principle of due process.63
The remedy of a writ of possession, a remedy that is available to the mortgagee-purchaser to acquire possession of the foreclosed property from the mortgagor, is made available to a subsequent purchaser, but only after hearing and after determining that the subject property is still in the possession of the mortgagor. Unlike if the purchaser is the mortgagee or a third party during the redemption period, a writ of possession may issue ex parte or without hearing. In other words, if the purchaser is a third party who acquired the property after the redemption period, a hearing must be conducted to determine whether possession over the subject property is still with the mortgagor or is already in the possession of a third party holding the same adversely to the defaulting debtor or mortgagor. If the property is in the possession of the mortgagor, a writ of possession could thus be issued. Otherwise, the remedy of a writ of possession is no longer available to such purchaser, but he can wrest possession over the property through an ordinary action of ejectment.65ChanRoblesVirtualawlibraryIn regard to their deed of assignment in favor of Velasquez, the Spouses Gallent may be considered as adverse possessors in their own right, the said agreement being in essence an equitable mortgage.
Endnotes:
1Rollo (G.R. No. 203949), pp. 79-83.
2 Id. at 85-86.
3 Id. at 88-90.
4 Id. at 158-159.
5 Id. at 92-96.
6 Id. at 98
7 Id. at 159.
8 Id. at 19.
9 Id. at 100-101.
10 Id. at 103.
11 Id. at 105-107.
12 Id. at 106.
13 Id. at 147-149.
14 Id. at 113-115.
15 Id. at 117.
16 Id. at 120-125.
17Rollo (G.R. No. 205071), pp. 159-170.
18Rollo (G.R. No. 203949), p. 153.
19 Id.
20 Id. at 155.
21 Id.
22Rollo (G.R. No. 205071), pp. 82-124.
23 543 Phil. 380 (2007).
24Rollo, (G.R. No. 205071), pp. 97-101.cralawred
25 Id. at 101-103.
26 Id. at 103-107.cralawred
27 Id. at 107-110.
28Rollo (G.R. No. 203949), pp. 72-73.
29 Id. at 73.
30 Id. at 303-360.
31 Id. at 358-359.
32 Id. at 23-24.
33 Penned by Associate Justice Jose C. Reyes, Jr., with Associate Justices Priscilla J. Baltazar-Padilla and Agnes Reyes-Carpio concurring; id. at 58-68.
34 Id. at 70.
35 Id. at 12-55.
36 Penned by Associate Justice Amelita G. Tolentino, with Associate Justices Ramon R. Garcia and Socorro B. Inting concurring; rollo (G.R. No. 205071), pp. 66-79.
37 Supra note 23.
38 AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL-ESTATE MORTGAGES. Approved on March 6, 1924.
39 Supra note 23, at 386.cralawred
40Rollo (G.R. No. 205071), pp. 75-77.
41Mendoza v. Salinas, supra note 23, at 387.
42Rollo (G.R. No. 205071), pp. 80-81.
43 Id. at 26-65.
44 An ex parte petition is taken or granted at the instance and for the benefit of only one party, without notice to, or contestation by any person adversely interested. [BLACK'S Law DICTIONARY, 5th Edition (1979), p. 517.]
45 ACT No. 3135, Section 6.
46Laureano v. Bormaheco, Inc., 404 Phil. 80, 86 (2001).
47 Separate Opinion of Associate Justice Reynato S. Puno in Cruz v. Secretary of Environment and Natural Resources, 400 Phil. 904, 994-995 (2000).
48See NEW CIVIL CODE, Book II, Title II, Articles 428-430.
49Samson v. Rivera, G.R. No. 154355, May 20, 2004, 428 SCRA 759, 768-769.
50Metropolitan Bank & Trust Company v. Hon. Judge AbadSantos, et al., 623 Phil. 134, 146 (2009).
51 498 Phil. 793 (2005).
52 Id. at 804.
53 650 Phil. 174 (2010).
54 Id. at 185-186.
55 654 Phil. 382 (2011).
56 Id. at 394.
57 404 Phil. 80 (2001).
58 579 Phil. 454 (2008).
59 Id. at 474-475.
60 Id. at 478-480.
61 Supra note 55.
62 244 Phil. 733 (1988).
63 Id. at 738.
64 G.R. No. 196040, August 26, 2014, 733 SCRA 652.
65 Id. at 666.
66Rollo (G.R. No. 203949), p. 24.
67 Art. 1602 of the New Civil Code provides:
Art. 1602. The contract shall be presumed to be an equitable mortgage, in any of the following cases:
(1) When the price of a sale with right to repurchase is unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed; (4) When the purchaser retains for himself a part of the purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold; and (6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation.
In any of the foregoing cases, any money, fruits, or other benefit to be received by the vendee as rent or otherwise shall be considered as interest which shall be subject to the usury laws. (Emphasis ours)
68Go v. Bacaron, 509 Phil. 323, 331 (2005).
69Legaspi v. Spouses Ong, 498 Phil. 167, 186 (2005).
70Zamora v. CA, 328 Phil. 1106, 1115 (1996).
71See Casio and De Rama v. Palileo, 121 Phil. 959 (1965).
72 617 Phil. 328 (2009).
73 Id. at 338.
74 G.R. No. 157213, April 28, 2004, 428 SCRA 259.