THIRD
DIVISION
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CHINA BANKING CORPORATION, Petitioner, - versus- SPOUSES
TOBIAS L. LOZADA and ERLINA P. LOZADA, Respondents. |
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G.R. No. 164919 Present: YNARES-SANTIAGO, Chairperson, AUSTRIA-MARTINEZ, CHICO-NAZARIO,
NACHURA,
and REYES,
JJ. Promulgated: |
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CHICO-NAZARIO, J.:
Before this Court is a Petition for
Review on Certiorari[1]
under Rule 45 of the Revised Rules of Court filed by petitioner China Banking
Corporation (CBC) seeking the reversal and setting aside of the Decision[2] dated
There is hardly any dispute as to the
antecedent facts of the instant Petition.
On P1,444,014.04, payable as follows:
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30% Downpayment (including the Residential Fee) |
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- Payable in
15 months, beginning |
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70% Balance |
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- Payable upon completion or turn-over of
the unit |
About
six months later, or on 7 December 1995, PPGI, represented by its President
Kenneth T. Yap and Treasurer Gilbert Y. Yap, and with Mortgage Clearance[8]
from the Housing and Land Use Regulatory Board (HLURB), executed two Deeds of
Real Estate Mortgage[9] in
favor of CBC to secure the credit facilities granted by CBC to PPGI in the
combined maximum amount of P37,000,000.00. The real estate mortgages covered 51 units of
the Project, including Unit No. 402.
PPGI availed itself of the said
credit facilities and incurred a total principal obligation of P29,067,708.10
to CBC. When PPGI failed to pay its
indebtedness despite repeated demands, CBC filed with the Clerk of Court and Ex
Officio Sheriff of the Makati City RTC a Petition
for Extrajudicial Foreclosure[10]
of the real estate mortgages on P30,000,000.00
for the foreclosed properties. The
Certificate of Sale[13]
of the foreclosed properties was subsequently issued in favor of CBC on
On
25 April 2000, CBC Chief Executive Officer Peter S. Dee executed an Affidavit
of Consolidation[14] stating
that 21 of the 51 foreclosed properties had been either “released by take-out
by certain buyers” or partially redeemed; the period for redemption of the
remaining foreclosed properties (which included Unit No. 402) had already
expired without having been redeemed; the titles to the remaining foreclosed
properties had already been consolidated in the name of CBC; and for said
reason, the Registry of Deeds of Makati City was
requested to issue the corresponding CCTs in the name
of CBC. Pursuant to the Affidavit of
Consolidation, the Registry of Deeds of Makati City
cancelled CCT No. 34898, covering Unit No. 402, and registered in the name of
PPGI, and issued in its place CCT No. 69096[15]
in the name of CBC on
It appears that a few months prior to
the foreclosure of the real estate mortgages, PPGI, through its Senior Manager
Salvador G. Prieto, Jr., sent a letter[16]
dated 30 March 1998 to respondent Erlina P. Lozada (Erlina) in the following
tenor:
Dear Ms. Lozada:
This refers to your purchase of Unit 402,
Cluster 1 of
We refer to Section 18 of Presidential Decree
No. 957, otherwise known as “The Subdivision and Condominium Buyer’s Protective
Decree”. Section 18 states:
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.
In view of the foregoing, we hereby direct
your goodself to remit all payments under your
Contract to Sell directly to China Banking Corporation at its Greenhills Branch located at Padilla Arcade, Greenhills, M.M. effective April 1, 1998. Attached is your Statement of Account for
your guidance.
This payment arrangement shall in no way
cause any amendment of the other terms and conditions, nor the cancellation of
the Contract to Sell you have executed with PPGI.
Very truly yours,
(Signed)
Sr. Manager
Credit and Collection Department
There is nothing on record to show
any immediate action taken by the spouses Lozada on
the afore-quoted letter. But a year
following the public auction sale of the foreclosed properties held on
Erlina next sent a letter dated
1. I have been ready, willing, and
able since
2. My liability is limited to the
amount stated thereunder plus reasonable expenses for
the transfer of title; no other liability such as for interests, penalties,
charges or any other imposition is recognized.
The VAT is a liability of the seller and I have never consented to
accept this burden.
3. On delivery of my full payment,
I have a right to demand reasonable assurance that title could be transferred
to me immediately and so to require that the muniments
of title and evidence of all tax payments by seller (necessary for
registration) be delivered to me.
In the same letter, she advised that
she was tendering payment by opening an escrow account with CBC in the amount
of P1,010,809.83, representing the 70% balance of the purchase price of Unit
No. 402 per the Contract to Sell with PPGI.
Not long thereafter, Erlina sent another
letter[20]
dated
Account Name : Erlina P. Lozada
Account No. : 103-630621-4
Bank :
Chinabank
Makati Head Office
Amount : P1,010,809.83
She reiterated that the amount represented the
balance of the purchase price for Unit No. 402 under the Contract to Sell, and
shall be available to the party who shall establish the lawful right to the
payment and deliver the muniments of title and other
documents necessary for the transfer of the same.
In
reply, CBC sent Erlina a letter[21]
dated P1,100,788.29;
thus, the amount she was tendering was insufficient. CBC also informed her that all taxes
including documentary stamp tax, capital gains tax, transfer tax, and all other
expenses for the transfer of title to her name shall be for her exclusive
account.
In
another letter dated 15 May 2001 to Erlina, CBC
notified her that it had already consolidated its title and ownership over Unit
No. 402 which she presently occupied, and requested her to vacate and surrender
the said property, including the appurtenant keys, to its duly authorized
representative within 15 days from receipt of the letter.
Following
the
On
WHEREFORE, it is most respectfully prayed of this Honorable
Court that the corresponding Writ of Possession be issued ex parte by the Honorable Court in favor of petitioner [CBC]
and against Erlinda [sic] Lozada
and/or all persons claiming rights under her name, over the condominium unit
covered by CCT No. 69096 (formerly CCT No. 34898), of the Registry of Deeds for
the City of Makati, with all the improvements existing
thereon.
On the other hand, on
WHEREFORE, [herein respondents spouses Lozada]
pray of this Honorable Board to order the annulment of mortgage, foreclosure,
sale, consolidation of ownership between CBC and [PPGI] insofar as they pertain
to [spouses Lozada] and to order the respondent
Register of Deeds of Makati City to cancel
Condominium Certificate of Title No. 69096.
It is likewise prayed that a Temporary Restraining Order and/or Writ of
Preliminary Injunction be issued to prevent [herein petitioner] CBC from taking
possession of the unit in question.
[Spouses Lozada] pray for such
other relief and remedies that are just and equitable under the premises.
L.R.C. Case No. M-4184 and HLURB Case No. REM-0080701-11582 proceeded
simultaneously, although it is principally the former which concerns this Court
in the present Petition.
The Makati City RTC, finding that the prayer for
issuance of a writ of possession of CBC in L.R.C. Case No. M-4184 needed to be
substantiated by evidence, initially set the hearing on 15 August 2001 at 10:00
a.m.[25] However, on motion of CBC, the Makati City RTC issued an Order[26]
dated 15 August 2001 canceling the hearing for that day and transferring the
same to 31 August 2001 at 10:00 a.m. The
same Order expressly directed that Erlina be
notified, but the records do not show that said notice was actually sent and
received by her.
The hearing on
On
Finding the petition to be duly substantiated by the
evidence presented and pursuant to the provisions of section 7 of Act 3135 as
amended by Act 4118, let a writ of possession issue in favor of the petitioner
China Banking Corporation.
In accordance
with the foregoing Order, the RTC Branch Clerk of Court issued the Writ of
Possession[28]
dated
When the
Sheriff went to Unit No. 402 on 30 October 2001, he failed to enforce the Writ
of Possession because the main door of the said property was padlocked,[30]
prompting CBC to file with the Makati City RTC an
Urgent Ex Parte Motion to Break Open[31]
the door to Unit No. 402 and place CBC in possession thereof.
While the
afore-mentioned events were unfolding in L.R.C. Case No. M-4184, the spouses Lozada were seeking recourse elsewhere.
They were
able to secure an Order[32]
dated
Four days
later, on
I. Respondent Presiding Judge deprived your [herein respondents spouses Lozada] of due process of law and their day in court, when he unjustifiably failed to order the service of notice on [spouses Lozada] of the ex-parte petition of [herein petitioner] CBC;
II. The respondent Judge, contrary to law and existing jurisprudence, issued arbitrarily, without jurisdiction and in excess of jurisdiction, the Writ of Possession to the irreparable damage and [prejudice] of [spouses Lozada];
III. The respondent Judge in grave abuse of discretion, without jurisdiction and in excess of jurisdiction, without giving [spouses Lozada] the opportunity to fully ventilate their possession over the condominium unit purchased by them, he capriciously, arbitrarily and unjustifiably issued the questioned Writ of Possession intended to eject the [spouses Lozada] from the condominium unit that they purchased;
IV. The respondent Presiding Judge committed
a grave abuse of discretion, amounting to lack or excess of jurisdiction, when
he issued the Order of
On P200,000.00.
The Court of Appeals rendered its assailed Decision[35]
on
WHEREFORE, premises considered, there being grave abuse of
discretion on the part of the court a quo in issuing the herein assailed Order,
the instant Petition is GRANTED.
Accordingly, the
In its Resolution[38]
dated
Comes now CBC before this Court via the present Petition for Review
on Certiorari under Rule 45 of the Revised Rules of Court with the
following assignment of errors:
I
THE HONORABLE COURT OF APPEALS
GRAVELY ERRED WHEN IT TOOK COGNIZANCE OF THE PETITION, STOPPED THE
IMPLEMENTATION OF THE WRIT OF POSSESSION AND EVENTUALLY HAD IT ANNULLED AND SET
ASIDE.
II
THE HONORABLE COURT OF APPEALS
GRAVELY ERRED IN RULING THAT THE RESPONDENTS WERE HOLDING THE SUBJECT PROPERTY
ADVERSELY TO THE JUDGMENT DEBTOR THUS THE ISSUANCE OF THE WRIT OF POSSESSION
WAS IMPROPER AND UNWARRANTED, WHICH IS IN DIRECT COLLISSION (SIC) WITH
APPLICABLE JURISPRUDENCE.
III
THE HONORABLE COURT OF APPEALS
GRAVELY ERRED WHEN IT FAILED TO APPRECIATE THE FACTUALITY THAT RESPONDENTS WERE
SUBSEQUENTLY INFORMED OF THE MORTGAGE WITH AN ADVISE OF PAYMENT OF INSTALLMENTS
TO HEREIN PETITIONERS [sic], BUT WHICH RESPONDENTS IGNORED, HENCE THEY MADE
[sic] THEMSELVES BEYOND THE MANTLE OF PROTECTION UNDER P.D. 957.[39]
Sorting through the allegations and arguments presented by the parties,
the Court ascertains that the pivotal issue for its consideration is, given the
circumstances in the present case, whether the writ of possession may be
granted and issued by the Makati City RTC ex parte or without notice to other parties.[40]
The Court answers in the affirmative.
Procedural due process
At the outset, this Court establishes that the issue herein is one
involving procedural due process.
Procedural due process "refers to the method or manner by which the
law is enforced."[41]
It consists of the two basic rights of
notice and hearing, as well as the guarantee of being heard by an impartial and
competent tribunal. True to the mandate
of the due process clause, the basic rights of notice and hearing pervade not
only in criminal and civil proceedings, but in administrative proceedings as
well. Non-observance of these rights
will invalidate the proceedings. Individuals
are entitled to be notified of any pending case affecting their interests; and
upon notice, they may claim the right to appear therein, present their side and
refute the position of the opposing parties.[42]
At the crux of the opposition of the spouses Lozada
to the ex parte issuance by the Makati City RTC of the writ of possession in favor of CBC
was that it supposedly deprived them of the opportunity to defend their title
and right to possess; or simply, that it denied them due process.
The procedure for extrajudicial foreclosure of real estate mortgage is
governed by Act No. 3135,[43]
as amended. The purchaser at the public
auction sale of an extrajudicially foreclosed real
property may seek possession thereof in accordance with Section 7 of Act No.
3135, as amended, which provides:
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 or 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 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. (Emphasis supplied.)
The
Court expounded on the application of the foregoing provision in De Gracia v. San Jose,[44]
thus:
As may be seen, the law expressly authorizes the purchaser
to petition for a writ of possession during the redemption period by filing an ex
parte motion under oath for that purpose in the
corresponding registration or cadastral proceeding in the case of property with
Torrens title; and upon the filing of such motion and the approval of the
corresponding bond, the law also in express terms directs the court to issue
the order for a writ of possession. Under the legal provisions above copied,
the order for a writ of possession issues as a matter of course upon the filing
of the proper motion and the approval of the corresponding bond. No
discretion is left to the court. And any question regarding the regularity
and validity of the sale (and the consequent cancellation of the writ) is left
to be determined in a subsequent proceeding as outlined in section 8. Such
question is not to be raised as a justification for opposing the issuance of
the writ of possession, since, under the Act, the proceeding for this is ex parte. (Emphasis
supplied.)
Strictly, Section 7 of Act No. 3135, as amended, refers to a situation
wherein the purchaser seeks possession of the foreclosed property during the
12-month period for redemption. Upon the
purchaser’s filing of the ex parte petition
and posting of the appropriate bond, the RTC[45]
shall, as a matter of course, order the issuance of the writ of possession in
the purchaser’s favor.
In IFC Service Leasing and Acceptance Corporation v. Nera,[46]
the Court reasoned that if under Section 7 of Act No. 3135, as amended, the RTC
has the power during the period of redemption to issue a writ of possession on
the ex parte application of the purchaser,
there is no reason why it should not also have the same power after the
expiration of the redemption period, especially where a new title has already
been issued in the name of the purchaser.
Hence, the procedure under Section 7 of Act No. 3135, as amended, may be
availed of by a purchaser seeking possession of the foreclosed property he
bought at the public auction sale after the redemption period has expired
without redemption having been made.
The Court recognizes the rights acquired by the purchaser of the
foreclosed property at the public auction sale upon the consolidation of his
title when no timely redemption of the property was made, to wit:
It is settled that upon receipt of the definitive deed in
an execution sale, legal title over the property sold is perfected (33 C. J.
S. 554). And this court has also [said] and that the land bought by him and
described in the deed deemed (sic) within the period allowed for that purpose,
its ownership becomes consolidated in the purchaser, and the latter, "as
absolute owner . . . is entitled to its possession and to receive the rents and
fruits thereof." (Powell v. Philippine National Bank, 54 Phil., 54,
63.) x x x.[47]
It is thus settled that the buyer in a foreclosure sale becomes the
absolute owner of the property purchased if it is not redeemed during the
period of one year after the registration of the sale. As such, he is entitled to the possession of
the said property and can demand it at any time following the consolidation of
ownership in his name and the issuance to him of a new transfer certificate of
title. The buyer can in fact demand
possession of the land even during the redemption period except that he has to
post a bond in accordance with Section 7 of Act No. 3135, as amended. No such bond is required after the redemption
period if the property is not redeemed. Possession of the land then becomes an
absolute right of the purchaser as confirmed owner. Upon proper application and proof of title,
the issuance of the writ of possession becomes a ministerial duty of the court.[48]
The purchaser, therefore, in the public auction sale of a foreclosed
property is entitled to a writ of possession; and upon an ex parte petition of the purchaser, it is ministerial upon
the RTC to issue such writ of possession in favor of the purchaser. However, while this is the general rule, as
in all general rules, there is an exception.
The exception and its basis were summarized by the Court in Roxas v. Buan,[49]
thus:
In the extrajudicial foreclosure of real estate mortgages,
possession of the property may be awarded to the purchaser at the foreclosure
sale during the pendency of the period of redemption
under the terms provided in Sec. 6 of Act 3135, as amended (An Act to Regulate
the Sale of Property Under Special Powers Inserted In or Annexed to Real Estate
Mortgages), or after the lapse of the redemption period, without need of a
separate and independent action [IFC Service Leasing and Acceptance Corp. v.
Nera, G.R. No. L-21720,
This rule is, however, not without exception. Under Sec.
35, Rule 39 of the Revised Rules of Court, which was made applicable to the extrajudicial
foreclosure of real estate mortgages by Sec. 6 Act No. 3135, the possession of
the mortgaged property may be awarded to a purchaser in extrajudicial
foreclosures "unless a third party is actually holding the property
adversely to the judgment debtor." (Clapano
v. Gapultos, G.R. Nos. 51574-77, September 30,
1984, 132 SCRA 429, 434; Philippine National Bank v. Adil,
G.R. No. 52823, November 2, 1982, 118 SCRA 110; IFC Service Leasing and
Acceptance Corp. v. Nera, supra.) As explained by
the Court in IFC Service Leasing and Acceptance Corp. v. Nera,
supra:
x x x
The applicable provision of Act No. 3135 is Section 6 which provides that, in
cases in which an extrajudicial sale is made, "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 in so far as
these are not inconsistent with the provisions of this Act." Sections
464-466 of the Code of Civil Procedure were superseded by Sections 25-27 and Section
31 of Rule 39 of the Rules of Court which in turn were replaced by Sections
29-31 and Section 35 of Rule 39 of the Revised Rules of Court. Section 35 of
the Revised Rules of Court expressly states that "If no redemption be made
within twelve (12) months after the sale, the purchaser, or his assignee, is
entitled to a conveyance and possession of the property x x
x." The possession of the property shall be
given to the purchaser or last redemptioner by the
officer unless a party is actually holding the property adversely to the
judgment debtor, [
After further revision of the Rules of Court, Section 35 of Rule 39
referred to above is now Section 33 of Rule 39, which reads:
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; x x x.
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.)
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.[50]
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.
General rule v. exception
While CBC invokes the general rule in the Petition at bar, the spouses Lozada assert the exception.
The spouses Lozada aver that they are holding Unit
No. 402 adversely to the debtor/mortgagor PPGI, and that their possession is
sufficient obstacle to the ex parte issuance
of a writ of possession in favor of CBC.
CBC, however, counters that the spouses Lozada
are mere successors-in-interest of PPGI who only stepped into the latter’s
shoes and may not claim the defense of possession by third persons.
It is thus incumbent upon this Court to scrutinize the nature of the
spouses Lozada’s possession of Unit No. 402.
The spouses Lozada acquired possession of Unit
No. 402 pursuant to the Contract to Sell executed in their favor by PPGI. According to the Contract to Sell, PPGI shall
deliver Unit No. 402 to the spouses Lozada upon the
completion thereof, and the spouses Lozada, in turn,
shall already be bound at that point to pay the 70% balance of the purchase
price for the said property. The records
do not establish the date when the spouses Lozada
actually entered into possession of Unit No. 402. However, it is undisputed that they were
already in possession thereof at the time CBC filed its Ex Parte Petition for the Issuance of a Writ of Possession
with the Makati City RTC on July 2001.
Given the foregoing, it is apparent that the spouses Lozada’s
possession of Unit No. 402 cannot be considered adverse to that of PPGI. Their right to possess the said property was
derived from PPGI under the terms of the Contract to Sell executed by the
latter in their favor. It was because
PPGI contractually agreed to deliver Unit No. 402 to them even prior to the
transfer of ownership and title over the same that they came into its
possession. They cannot assert that said
right of possession is adverse or contrary to that of PPGI when they have no
independent right of possession other than what they acquired from PPGI. The spouses Lozada
can be more appropriately considered the transferee of or successor to the
right of possession of PPGI over Unit No. 402.
Again relevant herein is the Court’s ruling in Roxas
v. Buan,[51]
which involved factual circumstances akin to the instant Petition. Valentin executed a
Deed of Real Estate Mortgage over a house and lot in favor of Buan to secure a loan granted by the latter to the
former. When Valentin
failed to pay his loan when it matured, Buan caused
the extrajudicial foreclosure of the real estate mortgage and was the winning
bidder at the auction sale of the foreclosed property. Upon the expiration of the period for
redemption without Valentin redeeming the foreclosed
property, a Final Bill of Sale was issued by the Sheriff in Buan’s
favor. Buan
then filed a petition for the issuance of a writ of possession, which, being
uncontested, was granted by the trial court.
However, the Sheriff was unable to execute the writ of possession
because the foreclosed property was occupied by Roxas
and the spouses De Guia. Roxas allegedly
bought the foreclosed property from Valentin and
leased the same to the spouses De Guia. Roxas and the
spouses De Guia argued that the writ of possession
was ineffective as against them, being third parties. They also insisted that Buan
should file an independent action to recover the property, otherwise, their
right to due process of law would be violated since they were not given their
day in court to prove their adverse claim.
In the said case, the character of Roxas’
possession was directly put in issue.
The Court determined that Roxas was the
successor-in-interest of the mortgagor Valentin, and
not a third party holding the property adversely to the latter. The Court ratiocinated as follows:
Contending that petitioner Roxas
is a party actually holding the property adversely to the debtor, Arcadio Valentin, petitioners
argue that under the provisions of Act No. 3135 they cannot be ordered to
vacate the property. Hence, the question of whether, under the circumstances,
petitioner Roxas indeed is a party actually holding
the property adversely to Valentin.
It will be recalled that Roxas'
possession of the property was premised on its alleged sale to him by Valentin for the amount of P100,000.00. Assuming
this to be true, it is readily apparent that Roxas
holds title to and possesses the property as Valentin's
transferee. Any right he has to the property is necessarily derived from that
of Valentin. As transferee, he steps into the
latter's shoes. Thus, in the instant case, considering that the property had
already been sold at public auction pursuant to an extrajudicial foreclosure,
the only interest that may be transferred by Valentin
to Roxas is the right to redeem it within the period
prescribed by law. Roxas is therefore the successor-in-interest
of Valentin, to whom the latter had conveyed his
interest in the property for the purpose of redemption [Rule 39, Sec. 29 (a) of
the Revised Rules of Court; Magno v. Viola,
61 Phil. 80 (1934); Rosete v. Prov. Sheriff of Zambales, 95
Phil. 560 (1954).] Consequently, Roxas' occupancy of
the property cannot be considered adverse to Valentin.
x x x x
It does not matter that petitioner Roxas
was not specifically named in the writ of possession, as he merely stepped into
the shoes of Valentin, being the latter's
successor-in-interest. On the other hand, petitioner de Guia
was occupying the house as Roxas' alleged tenant [Rollo, p. 24]. Moreover, respondent court's decision
granting private respondent Buan's petition for the
issuance of a writ of possession ordered the Provincial Sheriff of Zambales or any of his deputies to remove Valentin "or any person claiming interest under
him" from the property [Rollo, p. 16].
Undeniably, petitioners fell under this category.[52]
In contrast, China Banking Corporation v. Spouses Ordinario,[53]
cited by the spouses Lozada, finds no application to the
present Petition.
In
said case, CBC granted loans to the company TransAmerican
which executed real estate mortgages to secure the same. When TransAmerican
failed to pay its loans, CBC foreclosed the real estate mortgages. At the public auction sale, CBC was the
highest bidder for the foreclosed properties.
During the period of redemption, CBC filed with the Quezon
City RTC an ex parte petition for the issuance
of a writ of possession, which was granted by the trial court upon the posting
of a surety bond by CBC. The spouses Ordinario filed a motion for reconsideration with the Quezon City RTC claiming to have bought one of the
foreclosed properties on which they built their townhouse; and praying for the
exclusion of said property from the writ of possession, since they did not
receive notice of CBC’s petition.
In its Decision, the Court did not
directly resolve the nature of the possession of the foreclosed property by the
spouses Ordinario.
The Court merely presented therein the remedies available to the spouses
Ordinario, assuming arguendo
that they were adverse third parties, namely: (1) a terceria
to determine whether the Sheriff had rightly or wrongly taken hold of the
property not belonging to the judgment debtor or obligor; and (2) an
independent “separate action” to vindicate their claim of ownership and/or
possession over the foreclosed property.
Since the spouses Ordinario did not avail
themselves of either remedy and, instead, filed a motion for reconsideration
before the Quezon City RTC, which granted CBC’s ex parte petition
for issuance of a writ of possession, the Court affirmed the trial court’s
denial of their motion for reconsideration.
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.[54] The co-owner,[55]
agricultural tenant,[56]
and usufructuary[57]
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. The spouses Lozada cannot claim that their right of possession over Unit
No. 402 is analogous to any of these.
It is true that in the case presently before this Court, PPGI executed in
favor of the spouses Lozada the Contract to Sell
covering Unit No. 402 before it constituted in favor of CBC the real estate mortgages
on 51 Project units including Unit No. 402.
Nonetheless, it must be emphasized that what PPGI executed in favor of
the spouses Lozada was a Contract to Sell,[58]
a mere promise to sell,[59]
which, at the moment of its execution, did not yet transfer possession, much less,
title to Unit No. 402 from PPGI to the spouses Lozada. When PPGI constituted the real estate
mortgage on Unit No. 402 in favor of CBC six months later, possession of and
title to the property still resided in PPGI.
And when PPGI subsequently ceded possession of Unit No. 402, upon its
completion, to the spouses Lozada, such right was
already burdened by the terms and conditions of the mortgage constituted
thereon. By merely stepping into the
shoes of PPGI, the spouses Lozada’s right of
possession to Unit No. 402 cannot be less or more than PPGI’s.
For the same reasons, Presidential Decree No. 957[60]
cannot totally prevent the owner or developer from mortgaging the subdivision
lot or condominium unit when the title thereto still resides in the owner or
developer awaiting the full payment of the purchase price by the installment
buyer. However, to protect the
installment buyer of the subdivision lot or condominium unit under a Contract
to Sell, Presidential Decree No. 957 imposed the following conditions on the
right of the owner or developer to mortgage a subdivision lot or condominium
unit:
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.
The
spouses Lozada persistently allege herein that PPGI
did not comply with the foregoing requirements; thus, the mortgage it
constituted on Unit No. 402 was null and void.
This Court, though, will not rule on the matter, for it is not
significant to the case at hand. It bears to stress that the issue herein is
purely procedural, on whether the Makati City RTC can
issue the writ of possession in favor of CBC ex parte,
the resolution of which hinges on the nature of the spouses Lozada’s
possession of Unit No. 402, whether it is adverse to or as successor of
PPGI. The Court already made a
determination that the spouses Lozada possessed Unit
No. 402 as the successors or transferees of PPGI. The annulment of the real estate mortgage
will have no bearing on this Court’s determination, for it will not change the
nature of the spouses Lozada’s possession as to make
it adverse to that of PPGI. Still, the
spouses Lozada only acquired the right of possession
of PPGI over Unit No. 402; hence, their possession can never be adverse or
contrary to that of PPGI. Moreover, the
issue of whether the real estate mortgages constituted by PPGI in favor of CBC
are valid or void is squarely raised by the spouses Lozada
before the HLURB in HLURB Case No. REM-0080701-11582.
The
spouses Lozada, having succeeded PPGI in the
possession of Unit No. 402, cannot be considered a third party holding the said
property adversely to PPGI, the defaulting debtor/mortgagor. Resultantly, the general rule, and not the
exception, applies to the instant Petition.
It was the mandatory and ministerial duty of the Makati
City RTC to grant the ex parte petition of CBC
and order the issuance of a writ of possession in the latter’s favor over Unit
No. 402. It was likewise mandatory and
ministerial for the Clerk of Court to comply with the Makati
City RTC order by issuing the writ of possession, and for the Sheriff to
implement the writ by first issuing a notice to vacate to the occupants of Unit
No. 402. As this Court ruled in St.
Dominic Corp. v. The Intermediate Appellate Court[61]
:
The right of the respondent to the possession of the
property is clearly unassailable. It is founded on the
right of ownership. As the purchaser of the properties in the foreclosure sale,
and to which the respective titles thereto have already been issued, the
petitioner's rights over the property has become absolute, vesting upon it the
right of possession of the property which the court must aid in affecting its delivery.
After such delivery, the purchaser becomes the absolute owner of the property.
As we said in Tan Soo Huat
v. Ongwico (63 Phil., 746), the deed of
conveyance entitled the purchaser to have and to hold the purchased property.
This means, that the purchaser is entitled to go immediately upon the real
property, and that it is the sheriff's inescapable duty to place him in such
possession. (Philippine National Bank v. Adil, 118 SCRA 110).
Writ of certiorari
In consideration of the foregoing discussion, it is evident that the Court
of Appeals erred in finding that the Makati City RTC
committed grave abuse of discretion amounting to lack or excess of jurisdiction
when it ordered ex parte the issuance of a
writ of possession in favor of CBC.
The grounds for the issuance of a writ of certiorari are described
below:
Certiorari lies where a court has acted without or in excess of
jurisdiction or with grave abuse of discretion. "Without
jurisdiction" means that the court acted with absolute want of jurisdiction.
There is "excess of jurisdiction" where the court has jurisdiction
but has transcended the same or acted without any statutory authority. (Leung
Ben vs. O'Brien, 38 Phil., 182;
Since there is sufficient legal basis for the Makati City RTC to issue its Order dated 31 August 2001
granting the ex parte petition of CBC and
ordering the issuance in the latter’s favor of a writ of possession over Unit
No. 402, it could not be said that the trial court acted in grave abuse of
discretion warranting the issuance of a writ of certiorari to annul its
said Order. Accordingly, no grave abuse
of discretion can also be attributed to the RTC Branch Clerk of Court and
Sheriff who issued, respectively, the Writ of Possession dated 3 September 2001
and the Notices to Vacate dated 17 October 2001 and 22 October 2001, since they
were only acting in accordance with and in execution of a valid order of the Makati City RTC.
HLURB Case No. REM-0080701-11582
The
spouses Lozada already filed a complaint with the
HLURB, docketed as HLURB Case No. REM-0080701-11582, praying for the annulment
of real estate mortgage, foreclosure, public auction sale, and consolidation of
title, and the cancellation of CCT, chiefly grounded on the argument that the
real estate mortgage on Unit No. 402 constituted by PPGI in favor of CBC did
not comply with Section 18 of Presidential Decree No. 957. The spouses Lozada
instituted said case before the HLURB invoking the jurisdiction of the Board
over the following cases, enumerated under Presidential Decree No. 1344[63]:
Sec. 1. In
the exercise of its functions to regulate the real estate trade and business
and in addition to its powers provided for in Presidential Decree No. 957, the
National Housing Authority [now the HLURB] shall have exclusive jurisdiction to
hear and decide cases of the following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other
claims filed by subdivision lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman; and
C. Cases involving specific performance of
contractual and statutory obligations filed by buyers of subdivision lot or
condominium unit against the owner, developer, dealer, broker or salesman.
It is but proper for this Court to refrain from making any pronouncements
that may predetermine the issues raised in HLURB Case No.
REM-0080701-11582. Under the doctrine of
primary administrative jurisdiction, in which jurisdiction is vested in an
administrative body, no resort to the courts may be made before such
administrative body shall have acted upon the matter.[64]
Also based on the doctrine of primary jurisdiction, this Court pronounces
that the findings of the Court of Appeals in its assailed Decision as regards
the non-compliance by PPGI with the requirements for a valid mortgage, as
provided in Section 18 of Presidential Decree No. 957 and Union Bank of the
Philippines v. Housing and Land Use Regulatory Board,[65]
were rendered prematurely and in excess of its jurisdiction, considering that
the said issue was the one primarily raised before the HLURB in HLURB Case No.
REM-0080701-11582; and as the Court previously discussed, it is not even
significant for the resolution of the Petition at bar. Therefore, the HLURB, in resolving HLURB Case
No. REM-0080701-11582, must not be bound by the said findings of the Court of
Appeals, allowing it to freely proceed in making its own determination thereof
based on the arguments and evidence presented before it by the parties.
Another point that needs to be addressed is the fact that the HLURB issued
in HLURB Case No. REM-0080701-11582 a Status
Quo Order[66]
dated
WHEREFORE, premises
considered, the instant Petition for Review is GRANTED. The Decision dated
SO ORDERED.
|
|
MINITA V. CHICO-NAZARIO
Associate Justice |
WE
CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
Associate Justice
Associate Justice
RUBEN T. REYES
Associate Justice
ATTESTATION
I
attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution, and the Division Chairperson’s
Attestation, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Rollo, pp. 25-52.
[2] Penned by Associate Justice Rosmari D. Carandang with Associate Justices Eugenio S. Labitoria and Mercedes Gozo-Dadole, concurring. Rollo, pp. 53-61.
[3] Rollo, pp. 62-64.
[4] Penned by Judge
[5] Rollo, p. 99.
[6] Records, pp. 90-91.
[7] Rollo, pp. 270-273.
[8]
[9] Records, pp. 8-27.
[10]
[11]
[12]
[13]
[14]
[15]
[16] Rollo, p. 131.
[17]
[18] The Notice of Adverse Claim of the
spouses Lozada was
subsequently annotated on CCT No. 69096 when it was issued in the name of CBC
on
[19] Rollo, pp. 282-283.
[20]
[21]
[22]
[23] Records, pp. 1-7.
[24] Rollo, pp. 291-298.
[25] Order dated
[26]
[27] Rollo, p. 98.
[28]
[29] Records, pp. 90-91.
[30]
[31]
[32] Penned by Housing and Land Use Arbiter Atty. Rowena C. Balasolla; rollo, p. 340.
[33] CA rollo, pp. 1-14.
[34] Penned by Associate Justice Hilarion L. Aquino with Associate
Justices Edgardo P. Cruz and Alicia L. Santos,
concurring. CA rollo, pp. 89-92.
[35] Rollo, pp. 53-61.
[36] G.R. No. 95364,
[37] Rollo, p. 60.
[38]
[39]
[40] Where there is no provision made
for notice, by publication or otherwise, of the application, or in this case,
the petition, then the proceedings, for all intents and purposes, are ex parte. (See Ramirez v. Gmur,
42 Phil. 855 [1918].)
[41] Hon. Corona v. United Harbor
Pilots Association of the
[42] Secretary of Justice v. Hon. Lantion, 379 Phil. 165, 203 (2000).
[43] An Act to Regulate the
[44] 94 Phil. 623, 625-626 (1954).
[45] In place of the Court of First Instance.
[46] 125 Phil. 595 (1967).
[47] Belleza v. Zandaga, 98 Phil. 702, 703 (1956).
[48] F. David Enterprises v. Insular
Bank of
[49] G.R. No. L-53798,
[50] Saavedra v. Siari Valley Estates, Inc., 106 Phil. 432, 436 (1959).
[51] Supra note 49.
[52]
[53] 447 Phil. 557 (2003).
[54] St.
Dominic Corp. v. The Intermediate Appellate Court, G.R. No. L-70623,
[55] In co-ownership, each co-owner owns the whole, and over it he exercises rights of dominion, but at the same time he is the owner of a share which is really abstract because until the division is effected, such share is not concretely determined. While there is co-ownership, a co-owner's possession of his share is co-possession which is linked to the possession of the other co-owners. (Gatchalian v. Judge Arlegui, 166 Phil. 236, 248 [1977].)
[56] Agricultural tenants are protected
by Presidential Decree No. 1038, which provides that no tenant-tiller of
private agricultural lands devoted to crops other than rice and/or corn,
including but not limited to abaca, banana, coconut, coffee, mongo, durian and
other permanent crops 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.
[57] Relevant provisions of the Civil Code on usufructuary are reproduced below:
Art. 562. Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides.
Art. 581. The owner of property the usufruct of which is held by another, may alienate it, but he cannot alter its form or substance, or do anything thereon which may be prejudicial to the usufructuary.
Art. 603. Usufruct is extinguished:
(1) By the death of the usufructuary, unless a contrary intention clearly appears;
(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.
Art. 612. Upon the termination of the usufruct, the thing in usufruct shall be delivered to the owner, without prejudice to the right of retention pertaining to the usufructuary or his heirs for taxes and extraordinary expenses which should be reimbursed. After the delivery has been made, the security or mortgage shall be cancelled.
[58] A contract to sell is one wherein ownership shall be transferred only after the full payment of the installments of the purchase price or the fulfillment of the condition and the execution of a definite or absolute deed of sale. (Joseph & Sons Enterprises, Inc. v. Court of Appeals, 227 Phil. 625 [1986].)
[59] Visayan
SawMill Company, Inc. v. Court of Appeals, G.R.
No. 83851,
[60] Regulating the
[61] Supra note 54 at 290.
[62] Alafriz v. Nable, 72 Phil. 278, 280 (1941).
[63] Empowering the National Housing Authority to Issue Writ of Execution in the Enforcement of Its Decision under Presidential Decree No. 957.
[64] Cristobal v. Court of Appeals, 353 Phil. 318, 330 (1998).
[65] Supra note 36 at 564.
[66] Rollo, p. 340.
[67] Penson
v. Spouses Maranan, G.R. No. 148630,
[68] Penned by Judge Salvador S. Abad-Santos; rollo, p. 98.
[69]
[70] Records, pp. 90-91.