FIRST DIVISION
G.R. No. 200991, March 18, 2021
SPOUSES WILFREDO AND DOMINICA ROSARIO, Petitioners, v. GOVERNMENT SERVICE INSURANCE SYSTEM, Respondent.
D E C I S I O N
ZALAMEDA, J.:
A home is not just property; it is a sanctuary, a realized dream. If for justifiable causes it must be seized, courts must ensure that the same is in accordance with law and upon observance of the requisites of due process.
The right to possess a foreclosed property after the redemption period is subject to the rights of third-party possessors |
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; ....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.
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 supplied).
SECTION 1. The tenure of the tenant-tillers in private agricultural lands devoted to crops other than rice and/or com, including but not limited to those primarily planted to abaca, banana, coconut, coffee, mango, durian and other permanent trees, shall be secured and no tenant-tiller shall be removed, ejected, ousted or excluded from his farmholding unless for causes provided by law and directed by a final decision or order of the court. (Emphasis ours)PD No. 1038 was enacted to fortify the security of tenure of tenant-tillers who were being unlawfully ousted in their lands,29 and reinforce earlier laws providing for security of tenure for agricultural tenants. Security of tenure is a legal concession to agricultural lessees, which they value as life itself, as deprivation of their landholdings is tantamount to deprivation of their only means of livelihood. The exercise of the right of ownership, then, yields to the exercise of the rights of an agricultural tenant.30
Condominium and subdivision buyers are parties protected by law against compromising mortgages that would deprive them of their hard-earned property |
WHEREAS, it is the policy of the State to afford its inhabitants the requirements of decent human settlement and to provide them with ample opportunities for improving their quality of life;In the context of financing subdivision and condominium development projects, PD No. 957 recognizes the disparity between the resources of banks and financial institutions as against individual property buyers. In past cases, this Court has characterized PD No. 957 as an instrument of social justice meant to protect small lot and condominium unit buyers as against gigantic financial institutions who developers normally deal with.31 As eloquently stated by this Court in Philippine National Bank v. Office of the President:32chanrobleslawlibrary
WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems, and other similar basic requirements, thus endangering the health and safety of home and lot buyers;
WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles to the buyers or titles free from liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the same subdivision lots to different innocent purchasers for value; xxx
Protection must be afforded small homeowners who toil and save if only to purchase on installment a tiny home lot they can call their own. The consuming dream of every Filipino is to be able to buy a lot, no matter how small, so that he may somehow build a house. It has, however, been seen of late that these honest, hard-living individuals are taken advantage of, with the delivery of titles delayed, the subdivision facilities, including the most essential such as water installations not completed, or worse yet, as in the instant case, after almost completing the payments for the property and after constructing a house, the buyer is suddenly confronted by the stark reality, contrived or otherwise, in which another person would now appear to be owner.Verily, while these large financial institutions have access to information and resources allowing them to protect themselves from loans with developers, individual property buyers are normally powerless to discover and prevent encumbrances involving the property being sold to them. Thus, this Court has held that the lofty aspirations of P.D. No. 957 should be read in every provision of the statute, in every contract that undermines its objects, in every transaction which threatens its fruition.33xxx xxx xxx
"We cannot over emphasize the fact that the BANK cannot barefacedly argue that simply because the title or titles offered as security were clean of any encumbrance or lien, that it was thereby relieved of taking any other step to verify the over-reaching implications should the subdivision be auctioned on foreclosure. The BANK could not have closed its eyes that it was dealing over a subdivision where there were already houses constructed. Did it not enter the mind of the responsible officers of the BANK that there may even be subdivision residents who have almost completed their installment payments?"
Nevertheless, despite the apparent validity of the mortgage between the petitioner and PEPI, the former is still bound to respect the transactions between respondents PEPI and Dee. The petitioner was well aware that the properties mortgaged by PEPI were also the subject of existing contracts to sell with other buyers. While it may be that the petitioner is protected by Act No. 3135, as amended, it cannot claim any superior right as against the installment buyers. This is because the contract between the respondents is protected by P.D. No. 957, a social justice measure enacted primarily to protect innocent lot buyers. Thus, in Luzon Development Bank v. Enriquez, the Court reiterated the rule that a bank dealing with a property that is already subject of a contract to sell and is protected by the provisions of P.D. No. 957, is bound by the contract to sell. (Emphasis ours)In the past, the Court has likewise upheld the rights of individual buyers to possess their properties if it is established that the mortgagee-bank had knowledge of their conveyance to third-party buyers.
Section 6.2 That during the lifetime of this mortgage, the BORROWERMORTGAGOR shall not alienate, sell, dispose of, mortgage, or in any manner, encumber the mortgaged properties, or any portion thereof without the prior written consent of the LENDER-MORTGAGEE. However, the BORROWER-MORTGAGOR may continue to sell the 366 housing units, the 102 condominium units and its right on the 240 condominium units subject to the condition that the net proceeds from the sales should be exclusively used in recoupment of the loan. Should the BORROWER-MORTGAGOR violate this provision, it agrees and obligates itself to pay the LENDER-MORTGAGEE liquidated damages in an amount equivalent to 10% of the total loss, which amount shall automatically be added to the principal of the loan covered by the Mortgage, without the need of executing another contract and the LENDER-MORTGAGEE may declare the entire amount due and demandable.40 (Emphasis ours)Under the circumstances, respondent knew the possibility and assumed the risk that some of the condominium units would eventually be sold to individual buyers. Hence, it cannot now claim that it was unaware of the individual buyers' rights, nor should it be allowed to bypass the same, through a summary application for a writ of possession without according them the opportunity to be heard. The RTC thus correctly allowed petitioners and the other condominium unit buyers to intervene, and be excluded from the issuance of the writ of possession. Respondent's supposed superior right over occupied condominium units should instead be determined in a full-blown proceeding where all the parties' claims are ventilated and scrutinized by the courts.
The ruling in Chinabank v. Lozada should be modified |
Endnotes:
1Rollo, pp. 10-21.
2Id., at 25-37; penned by Associate Justice Stephen C. Cruz, with Associate Justices Isaias P. Dicdican and Edwin D. Sorongon, concurring.
3Id., at 40-42.
4Id., at 90-92.
5Id., at 74-84.
6 Section 18. Mortgages. No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the Authority. Such approval shall not be granted unless it is shown that the proceeds of the mortgage loan shall be used for the development of the condominium or subdivision project and effective measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan. The buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereto;
7Id. at 15.
8Id. at 15-19.
9Id. at 19-20.
10Spouses Fortaleza v. Spouses Lapitan, G.R. No. 178288, 15 August 2012, 692 Phil. 596 (2012) [Per J. Del Castillo].
11Spouses Gallent v. Velasquez, G.R. No. 203949 & 205071, 06 April 2016, 784 Phil. 44 (2016) [Per J. Reyes].
12Bank of the Philippine Islands v. Spouses Co, G.R. Nos. 171172 & 200061, 09 November 2015, 772 Phil. 291 (2015) [Per J. Jardeleza].
13 G.R. No. 47714, 14 March 1941, 71 Phil. 340 [Per J. Laurel].
14 G.R. No. 75009, 29 September 1989, 258 Phil. 746 [Per J. Medialdea].
15 G.R. No. 137548, 03 September 2007, 558 Phil. 649 [Per J. Sandoval-Gutierrez].
16 G.R. No. 168061, 12 October2009, 618 Phil. 320 [Per J. Carpio].
17 G.R. No. 213736, 17 June 2020, [Per J. Carandang]; See also Villanueva v. Cherdan Lending Investors Corp., G.R. No. 177881, 13 October 2010, 647 Phil. 494 [Per J. Nachura]; Capital Credit Dimension, Inc. v. Chua, G.R. No. 157213, 28 April 2004, 472 Phil. 250 [Per J. Reyes].
18 G.R. Nos. 175728 & 178914, 08 May 2009, 605 Phil. 660 [Per J. Tinga].
19 G.R. No. 156542, 26 June 2007, 552 Phil. 602, [Per J. Austria-Martinez]; See also Royal Savings Bank v. Asia, G.R. No. 183658, 10 April 2013, 708 Phil. 485 [Per J. Sereno].
20See also Sio Tiat King v. Lim, G.R. No. 185407, 22 June 2015, 761 Phil. 173 [Per J. Reyes].
21Sio Tiat King v. Lim, G.R. No. 185407, 22 June 2015, 761 Phil. 173 [Per J. Reyes].
22Unchuan v. Court of Appeals, G.R. No. 78775, 31 May 1988, 244 Phil. 733 [Per J. Cortes].
23Omaña v. Gatulayao, G.R. No. 47969, 22 July 1941, 73 Phil. 66 [Per J. Moran].
24Gatchalian v. Arlegui, G.R. No. L-35615, L-41360, 17 February 1977, 166 Phil. 236 [Per J. Aquino].
25See Carvajal v. Court of Appeals, G.R. No. L-44426, 25 February 1982 [Per J. Teehankee].
26Moralidad v. Spouses Pernes, G.R. No. 152809, 03 August 2006, 529 Phil. 523 [Per J. Garcia].
27 Art. 603. Usufruct is extinguished:chanroblesvirtualawlibrary(1) By the death of the usufructuary, unless a contrary intention clearly appears;28See Clapano v. Gapultos, G.R. No. L-51574-77, 30 September 1984, 217 Phil. 409 [Per J. MelencioHerrera].
(2) By the expiration of the period for which it was constituted, or by the fulfillment of any resolutory condition provided in the title creating the usufruct;
(3) By merger of the usufruct and ownership in the same person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person constituting the usufruct;
(7) By prescription.
29 The whereas clause of PD No. 1038 provides:chanroblesvirtualawlibraryWHEREAS, I have received disturbing reports that owners of private agricultural lands, landholders, agricultural lessors, legal possessors, civil law lessees, usufructuaries, or those acting for and in their behalf planted to crops other than rice and/or com, including but not limited to those primarily planted to abaca, banana, coconut, coffee, citrus, durian and other similar permanent trees, are harassing or ejecting or removing or ousting or excluding the tenant-tillers from their farmholdings in spite of the fact that existing laws, particularly Republic Acts Nos. 1199, as amended, and 3844, as amended, protect the security of tenure of these tenant-tillers;30Heirs of Soriano v. Court of Appeals, G.R. No. 128177, 15 August 2001, 415 Phil. 299 [Per J. YnaresSantiago].
31Philippine National Bank v. Office of the President, G.R. No. 104528, 18 January 1996, 322 Phil. 6 [Per J. Panganiban]; Far East Bank & Trust Co. v. Marquez, G.R. No. 147964, 20 January 2004, 465 Phil. 276 [Per J. Panganiban].
32 Citing Breta and Hamor vs. Lao, et al., CA G.R. No. 58728-R, 11 November 1981 [Per J. Melo]; G.R. No. 104528, 18 January 1996, 322 Phil. 6 [Per J. Panganiban].
33Luzon Development Bank v. Enriquez, G.R. Nos. 168646 & 168666, 12 January 2011, 654 Phil. 315-339 [Per J. Del Castillo].
34 G.R. No. 182128, 19 February 2014, 727 Phil. 473 [Per J. Reyes].
35 G.R. No. 79906, 20 June 1988, 245 Phil. 316 [Per J. Gutierrez].
36 G.R. No. 135219, 17 January 2002, 424 Phil. 757 [Per J. Ynares-Santiago].
37See Philippine National Bank v. Court of Appeals, G.R. No. 135219, 17 January 2002, 424 Phil. 757 [Per J. Ynares-Santiago].
38Luzon Development Bank v. Enriquez, G.R. Nos. 168646 & 168666, 12 January 2011, 654 Phil. 315 [Per J. Del Castillo].
39See Luzon Development Bank v. Enriquez, G.R. Nos. 168646 & 168666, 12 January 2011, 654 Phil. 315 [Per J. Del Castillo].
40Rollo, p. 77.
41 G.R. No. 164919, 04 July 4, 2008, 579 Phil. 454 [Per J. Chico-Nazario].
42 G.R. No. 200667, 11 March 2013, 706 Phil. 106 [Per J. Perlas-Bernabe]; See also BPI Family Savings Bank v. Golden Power Diesel Sales Center, Inc., G.R. No. 176019, 12 January 2011, 654 Phil. 382 [Per J. Carpio].
43 G.R. No. 184045, 22 January 2014, 725 Phil. 237 [Per J. Perlas-Bernabe]; See also Cahilig v. Terencio, G.R. No. 164470, 28 November 2011, 677 Phil. 277 [Per J. Leonardo de Castro]; Madriaga, Jr. v. China Banking Corp., G.R. No. 192377, 25 July 2012, 691 Phil. 770 [Per J. Reyes].
44See Spouses Gatuslao v. Yanson, G.R. No. 191540, 21 January 2015, 751 Phil. 188 (2015) [Per J. Del Castillo]; Heirs of Peñaflor v. Heirs of Dela Cruz, G.R. No. 197797, 09 August 2017, 816 Phil. 324 [Per J. Perlas-Bernabe].
45See St. Raphael Montessori School, Inc. v. Bank of the Philippine Islands, G.R. No. 184076, 21 October 2015, 772 Phil. 79 [Per J. Peralta].
46 G.R. No. 196950, 18 June 2014, 736 Phil. 582 [Per J. Brion].
47See AQA Global Construction, Inc. v. Planters Development Bank, G.R. Nos. 211649 & 211742, 12 August 2015, 766 Phil. 519 [Per J. Perlas-Bernabe].
48 G.R. No. 188069, 17 June 2015, 760 Phil. 766 [Per J. Peralta].
CAGUIOA, J.:
SECTION 18. Mortgages. - No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the Authority. Such approval shall not be granted unless it is shown that the proceeds of the mortgage loan shall be used for the development of the condominium or subdivision project and effective measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan. The buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereto[.]To be sure, the above provision addresses the inherent concern that petitioners here, as buyers in a contract to sell with New San Jose Builders, Inc. (NSJBI), should have been informed of the mortgage involving Unit 205. More specifically, Section 18 of P.D. 957 addresses what would otherwise have been an unfair situation on the part of the buyers, when it provides that buyers must be notified before the release of the loan, and that said buyers must be given the option to pay directly to the mortgagee the installments for the loan which is secured by the property in their possession. Section 18 provides for this requirement of notice and option to pay directly to the mortgagee, in order to enable buyers such as herein petitioners to obtain title over the lot and avoid a situation wherein the mortgagee consolidates ownership over properties in the possession of third-person buyers/possessors.
SECTION 34. Jurisdiction of Regional Adjudicators. - The Regional Adjudicators shall exercise original and exclusive jurisdiction to hear and decide cases involving the following:In addition, HLURB Resolution No. 980 Series of 2019 on its Revised Rules of Procedure (Revised Rules) correspondingly provides under Section 2(g) thereof that said Revised Rules cover the clearance for mortgage as provided in Section 18 of P.D. 957:chanroblesvirtualawlibrary
34.1 x x x.
x x x x
(g) Actions to annul mortgages executed in violation of Section 18 of [P.D.] 957 filed by a subdivision lot or condominium unit buyer against the project owner and/or developer and the mortgagee;
x x x x.
Section 2. Coverage. - This Rules shall be applicable to the following disputes or controversies:Under the foregoing Revised Rules, third-person buyers/possessors may file a verified complaint6 for annulment of a mortgage which did not comply with Section 18 of P.D. 957 with the Regional Field Office which has jurisdiction over the area where the project is located,7 in order to enforce their right or otherwise prevent or redress a wrong.8
x x x x
(g) Suits filed in opposition to an application for certificate of registration and license to sell, development permit for condominium projects, clearance to mortgage, and, when issued by the Regional Field Office of HLURB in appropriate cases, locational clearances, zoning certifications or permits, including suits for the revocation or cancellation thereof[.]
x x x x. (Emphasis supplied)
SECTION 3. In all transactions or contracts involving the sale or financing of real estate on installment payments, including residential condominium apartments but excluding industrial lots, commercial buildings and sales to tenants under Republic Act Numbered Thirty-eight hundred forty-four as amended by Republic Act Numbered Sixty-three hundred eighty-nine, where the buyer h as paid at least two years of installments, the buyer is entitled to the following rights in case he defaults in the payment of succeeding installments:chanroblesvirtualawlibraryThe protected substantive right of installment buyers of condominium units and subdivision lots is further illustrated in the case of Orbe v. Filinvest Land, Inc.,10 where the Court expounded on the intent of the Maceda Law, viz.:chanroblesvirtualawlibrary(a) To pay, without additional interest, the unpaid installments due within the total grace period earned by him, which is hereby fixed at the rate of one month grace period for every one year of installment payments made: Provided, That this right shall be exercised by the buyer only once in every five years of the life of the contract and its extensions, if any.Down payments, deposits or options on the contract shall be included in the computation of the total number of installment payments made.
(b) If the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty per cent of the total payments made and, after five years of installments, an additional five per cent every year but not to exceed ninety per cent of the total payments made: Provided, That the actual cancellation of the contract shall take place after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act and upon full payment of the cash surrender value to the buyer.
Republic Act No. 6552, the Realty Installment Buyer Act or more popularly referred to as the Maceda Law, named after its author, the late Sen. Ernesto Maceda, was adopted with the purpose of "protect[ing] buyers of real estate on installment payments against onerous and oppressive conditions." It "delineat[es] the rights and remedies of [x x x] buyers and protect[s] them from one-sided and pernicious contract stipulations":chanroblesvirtualawlibraryFour years after the Maceda Law came P.D. 957 which, for its part, likewise directed every intendment towards the protection of innocent lot buyers from scheming developers or onerous arrangements. The case of Metropolitan Bank and Trust Company v. SLGT Holdings, Inc.,12 enlightens in this respect:chanroblesvirtualawlibraryIts declared public policy is to protect buyers of real estate on installment basis against onerous and oppressive conditions. The law seeks to address the acute housing shortage problem in our country that has prompted thousands of middle and lower class buyers of houses, lots and condominium units to enter into all sorts of contracts with private housing developers involving installment schemes. Lot buyers, mostly low income earners eager to acquire a lot upon which to build their homes, readily affix their signatures on these contracts, without an opportunity to question the onerous provisions therein as the contract is offered to them on a "take it or leave it" basis. Most of these contracts of adhesion, drawn exclusively by the developers, entrap innocent buyers by requiring cash deposits for reservation agreements which oftentimes include, in fine print, onerous default clauses where all the installment payments made will be forfeited upon failure to pay any installment due even if the buyers had made payments for several years. Real estate developers thus enjoy an unnecessary advantage over lot buyers who[m] they often exploit with iniquitous results. They get to forfeit all the installment payments of defaulting buyers and resell the same lot to another buyer with the same exigent conditions. To help especially the low income lot buyers, the legislature enacted R.A. No. 6552 delineating the rights and remedies of lot buyers and protect[ing] them from one-sided and pernicious contract stipulations.Having been adopted with the explicit objective of protecting buyers against what it recognizes to be disadvantageous and onerous conditions, the Maceda Law's provisions must be liberally construed in favor of buyers. Within the bounds of reason, fairness, and justice, doubts in its interpretation must be resolved in a manner that will afford buyers the fullest extent of its benefits.11chanRoblesvirtualLawlibrary
As it were, [P.D.] 957 aims to protect innocent subdivision lot and condominium unit buyers against fraudulent real estate practices. Its preambulatory clauses say so and the Court need not belabor the matter presently. Section 18, supra, of the decree directly addresses the problem of fraud and other manipulative practices perpetrated against buyers when the lot or unit they have contracted to acquire, and which they religiously paid for, is mortgaged without their knowledge, let alone their consent. The avowed purpose of [P.D.] 957 compels, as the OP correctly stated, the reading of Section 18 as prohibitory and acts committed contrary to it are void. Any less stringent construal would only accord unscrupulous developers and their financiers unbridled discretion to follow or not to follow [P.D.] 957 and thus defeat the very lofty purpose of that decree. It thus stands to reason that a mortgage contract executed in breach of Section 18 of the decree is null and void.13chanRoblesvirtualLawlibraryIn the same vein, the Court in Philippine National Bank v. Office of the President14 expounded on the rationale behind P.D. 957, as a tool to protect condominium unit and/or subdivision lot buyers against developers and mortgaging banks, to wit:chanroblesvirtualawlibrary
x x x [T]he unmistakable intent of the law [is] to protect innocent lot buyers from scheming subdivision developers. As between these small lot buyers and the gigantic financial institutions which the developers deal with, it is obvious that the law - as an instrument of social justice - must favor the weak. Indeed, the petitioner bank had at its disposal vast resources with which it could adequately protect its loan activities, and therefore is presumed to have conducted the usual "due diligence" checking and ascertaining x x x the actual status, condition, utilization and occupancy of the property offered as collateral. x x x On the other hand, private respondents obviously were powerless to discover the attempt of the land developer to hypothecate the property being sold to them. It was precisely in order to deal with this kind of situation that P.D. 957 was enacted, its very essence and intendment being to provide a protective mantle over helpless citizens who may fall prey to the razzmatazz of what P.D. 957 termed "unscrupulous subdivision and condominium sellers."15chanRoblesvirtualLawlibraryProceeding from the foregoing, if in the Maceda Law, a buyer who defaults after a threshold of installment payments (i.e., at least two years) is given the right to pay the unpaid balance free of additional interests within a grace period equivalent to one month for every year of installment to be exercised every five years, as well as the right to be refunded the cash surrender value of the payments on the property equivalent to 50% of the total payments made in case of cancellation of the contract by a notarial act, then much more latitude should be rightly afforded a buyer on installment such as petitioners in this case, who have not been shown to have defaulted, but instead have been proven to have had possession of Unit 205 since 1998, and had been religiously paying installments for their purchase thereof.
In China Banking Corporation v. Spouses Lozada, 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:chanroblesvirtualawlibraryGiven the foregoing, since herein petitioners' possession of Unit 205 in this case affords them under the Maceda Law and P.D. 957 with substantive rights which are clearly assertible against the developer/seller and other parties, including mortgagees of the developer/seller, in order that they may be preserved in their possession of the same, such a nuanced statutory configuration effectively sets them apart from the operatively constrained "transferee" of the debtor or mortgagor, in that as opposed to mere transferees who obtain no better right to the property than that which the mortgagor had, petitioners here are granted specific protective substantive rights in order that they may not be expediently ousted from the property they possess by the mere fact that they purchased and are paying for the same in installments.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.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.17chanRoblesvirtualLawlibrary
Thus, in keeping with the avowed purpose of [P.D.] 957, the rule should now be that the issuance of a writ of possession ceases to be ministerial if a condominium or subdivision lot buyer intervenes to protect [his/her] rights against a mortgagee bank or financial institution. The court must order a hearing to determine the nature and source of the buyer's supposed right to the foreclosed property. Should the judge be satisfied that the oppositors to the issuance of the writ are bona fide condominium or subdivision buyers, the writ should thus be issued excluding the aforesaid buyers from its implementation. It should, however, be clarified that exclusion of such buyers is without prejudice to the outcome of cases concerning the validity of mortgage between the developer and the mortgagee financial institution or bank under Section 18 of [P.D.] 957.Finally, it is submitted that a disposition otherwise would result in a remedial gap that effectively circumvents the singular objective of both the Maceda Law and P.D. 957. For in the final analysis, carving out this route would genuinely afford the most just and equitable remedy for petitioners in this case, who otherwise and despite resort to an action before the HLURB, must still fear an impending eviction by reason of a writ of possession which was issued as an ultimate consequence of a defaulted loan they had no hand in taking out or satisfying.
Endnotes:
1Ponencia, pp. 4-7.
2 AN ACT TO PROVIDE PROTECTION TO BUYERS OF REAL ESTATE ON INSTALLMENT PAYMENTS, August 26, 1972.
3 REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS, PROVIDING PENALTIES FOR VIOLATIONS THEREOF, July 12, 1976.
4 Entitled, "THE IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 11201, OTHERWISE KNOWN AS THE DEPARTMENT OF HUMAN SETTLEMENTS AND URBAN DEVELOPMENT ACT" issued by the Housing and Urban Development Coordinating Council and the Housing and Land Use Regulatory Board on July 19, 2019.
5 AN ACT CREATING THE DEPARTMENT OF HUMAN SETTLEMENTS AND URBAN DEVELOPMENT, DEFINING ITS MANDATE, POWERS AND FUNCTIONS AND APPROPRIATING FUNDS THEREFOR, February 14, 2019.
6 In accordance with Rule 5 of the Revised Rules.
7 Sec. 7 of Revised Rules provides:
Section 7. Venue. - All complaints or actions shall be filed in the Regional Field Office which has jurisdiction over the area where the project involved is located or, in cases of homeowners suits, in the Regional Field Office where the homeowners association is registered.
8 Id. Sec. 5 provides:
Section 5. Actions and Proceedings. - An action or proceedings means any suit filed with HLURB by which one party sues another for the enforcement or protection of a right or for the prevention or redress of a wrong.
9 G.R. No. 155113, January 9, 2013, 688 SCRA 200.
10 G.R. No. 208185, September 6, 2017, 893 SCRA 72.
11 Id. at 89-90 citing Active Realty & Development Corporation v. Daroya, 431 Phil. 753 (2002). Emphasis supplied.
12 G.R. Nos. 175181-82 and G.R. Nos. 175354 & 175387-88, September 14, 2007, 533 SCRA 516.
13 Id. at 526. Emphasis supplied.
14 G.R. No. 104528, January 18, 1996, 252 SCRA 9.
15 Id. at 10-11. Emphasis supplied.
16 G.R. No. 203949, April 6, 2016, 788 SCRA 518.
17 Id. at 535-536 citing China Banking Corporation v. Spouses Lozada, 579 Phil. 454 (2008).
18Fajardo, Jr. v. Freedom To Build, Inc., G.R. No. 134692, December 8, 2000, 347 SCRA 474, 478.cralawredlibrary