FE H. OKABE, Petitioner,
ERNESTO A. SATURNINO, Respondent.
G.R. No. 196040 August 26, 2014
The subject of the controversy is an 81 square meter property located in Makati City, which was initially covered by TCT No. 175741 under the name of the wife of respondent Ernesto A. Saturnino. Sometime in 1994, the couple obtained a loan with the Philippine National Bank (PNB), which was secured by the subject property. Because of the couple’s failure to settle their loan obligation with the bank, PNB extrajudicially foreclosed the mortgage.
On August 24, 1999, the Certificate of Sale was inscribed on TCT No. 175741. Considering that the property was not redeemed by respondent during the redemption period, consolidation of ownership was inscribed on October 13, 2006 and a new TCT was issued in favor of PNB. Without taking possession of the subject property, PNB sold the land to petitioner Fe H. Okabe on June 17, 2008. TCT No. 225265 was later issued in petitioner’s name on August 13, 2008.
On November 27, 2008, petitioner filed with the Regional Trial Court (RTC) of Makati City an Ex-Parte Petition for Issuance of Writ of Possession over the subject property.
The RTC ruled, among other things, that the right of the petitioner to be placed in absolute possession of the subject property was a consequence of her right of ownership and that petitioner cannot be deprived of said possession being now the registered owner of the property. Meanwhile, on November 23, 2009, the RTC rendered a Decision in favor of petitioner, which granted her ex-parte petition and ordered that the corresponding writ of possession over the subject property be issued in her favor.
The CA reversed RTC’s decision and opined, among other things, that although it may be true that by virtue of the contract of sale, petitioner obtained the same rights of a purchaser-owner and which rights she derived from erstwhile mortgagee turned owner PNB, this does not mean that the right to file an ex-parte motion for a writ of possession under Act 3135 had also been transferred to the petitioner. Such a special right is granted only to purchasers in a sale made under the provisions of Act 3135.
Whether or not an ex-parte petition for the issuance of a writ of possession was the proper remedy of the petitioner in obtaining possession of the subject property.
NO. Section 7 of Act No. 3135,28 as amended by Act No. 4118,29 states:
Section 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 the form of an ex parte motion x x x 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.
Under the provision cited above, the purchaser or the mortgagee who is also the purchaser in the foreclosure sale may apply for a writ of possession during the redemption period, upon an ex-parte motion and after furnishing a bond.
GC Dalton Industries, Inc. v. Equitable PCI Bank: the Court held that the issuance of a writ of possession to a purchaser in an extrajudicial foreclosure is summary and ministerial in nature as such proceeding is merely an incident in the transfer of title.
China Banking Corporation v. Ordinario: the Court held that under Section 7 of Act No. 3135, the purchaser in a foreclosure sale is entitled to possession of the property.
Spouses Nicasio Marquez and Anita Marquez v. Spouses Carlito Alindog and Carmen Alindog: although the Court allowed the purchaser in a foreclosure sale to demand possession of the land during the redemption period, it still required the posting of a bond under Section 7 of Act No. 3135.
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.
When bond required
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.
Here, petitioner does not fall under the circumstances of the aforequoted case and the provisions of Section 7 of Act No. 3135, as amended, since she bought the property long after the expiration of the redemption period. Thus, it is PNB, if it was the purchaser in the foreclosure sale, or the purchaser during the foreclosure sale, who can file the ex-parte petition for the issuance of writ of possession during the redemption period, but it will only issue upon compliance with the provisions of Section 7 of Act No. 3135.
Remedy of purchaser subsequent to the foreclosure sale purchaser
Section 33, Rule 39 of the Rules of Court provides: SEC. 33. Deed and possession to be given at expiration of redemption period; by whom executed or given. – If no redemption be made within one (1) year from the date of 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 registration of the sale to redeem the property. The deed shall be executed by the officer making the sale or 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.
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.
When issuance of writ of possession is ex-parte and non-adversarial
From the foregoing, 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 debtor to the property, and its possession shall be given to the purchaser or last redemptioner unless a third party is actually holding the property adversely to the judgment debtor. In which case, the issuance of the writ of possession ceases to be ex-parte and non-adversarial.
When issuance of writ of possession requires hearing
Thus, where the property levied upon on execution is occupied by a party other than a judgment debtor, the procedure is for the court to conduct a hearing to determine the nature of said possession, i.e., whether or not he is in possession of the subject property under a claim adverse to that of the judgment debtor.
Summary of rules
It is but logical that Section 33, Rule 39 of the Rules of Court be applied to cases involving extrajudicially foreclosed properties that were bought by a purchaser and later sold to third-party-purchasers after the lapse of the redemption period. 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.