FIRST DIVISION
PHILIPPINE
NATIONAL
BANK,
Petitioner,
G.R.
No.
135219
January 17, 2002
-versus-
THE COURT OF
APPEALS
AND ERNESTO AUSTRIA
AND LORETO Q.
QUINTANA,
Respondents.
D E C I S I O N
YNARES-SANTIAGO,
J.:
Before us is a petition
for review under Rule 45 of the Rules of Court, seeking a reversal of
the
Court of Appeals' resolution in CA-G.R. SP No. 48660 dated August 25,
1998,
which affirmed the order of the Regional Trial Court of Makati, Branch
60 in LRC Case No. M-2635.chanrobles virtuallaw libraryred
Sometime during the
late 70's, the spouses Godofredo and Wilma Monsod obtained a loan in
the
amount of P120,000.00 from petitioner Philippine National Bank (PNB).
To
secure their loan, the Monsods mortgaged to PNB a parcel of land
covered
by TCT No. S-84843, located within the Monte Villa de Monsod
Subdivision
in Parañaque, Rizal.chanrobles virtuallaw libraryred
Due to Monsods' failure
to pay their loan obligation, PNB extrajudicially foreclosed the
mortgage.
At the auction sale of the subject real property, PNB was declared the
highest bidder. On December 21, 1981, a certificate of sale was issued
in favor of PNB, and was registered on July 11, 1984.[1]
Upon expiration of the
redemption period on July 12, 1985, ownership of the property was
consolidated
in PNB. Thereafter, TCT No. S-84843 was cancelled and TCT No. 99480 was
issued in PNB's name.[2]
On June 23, 1992, PNB
filed an "Ex-Parte Petition for the Issuance of Writ of Possession"
with
Branch 60 of the Regional Trial Court of Makati City, docketed as LRC
Case
No. M-2635. Pursuant to the provisions of Act No. 3135, as amended, the
trial court conducted an ex parte hearing. PNB's representative
testified
that the foreclosed property is occupied by one Ernesto Austria.
According
to PNB, Mr. Austria was invited by the bank to a conference to discuss
the ownership of the foreclosed lot, however, he did not honor the
bank's
invitation.[3]chanrobles virtuallaw libraryred
On August 28, 1992,
the trial court granted PNB's petition and a writ of possession was
issued
on October 26, 1992.[4]
On December 11, 1992,
respondents Ernesto and Loreto Quintana Austria filed a "Motion for
Intervention
and to Recall and/or Stop the Enforcement of the Writ of Possession."
The
Austrias alleged that they are the actual occupants of the subject lot,
which they purportedly bought from the Monsods as early as 1974. They
claimed
that the foreclosed property was enclosed within a concrete fence and
formed
part of their family compound. PNB allegedly knew of this fact even
before
it granted the loan to the Monsods, because the bank's credit
investigators
were advised of the same when they inspected the property in the summer
of 1976. Consequently, the Austrias maintained that the issuance of the
possessory writ ex parte was improper, since it will deprive them of
their
property without due process.[5]
Due to the Austrias'
refusal to vacate the premises, the sheriff failed to enforce the
challenged
writ.chanrobles virtuallaw libraryred
On July 27, 1993, on
motion of PNB, the trial court issued an alias writ of possession.
Again,
the writ was not implemented.[6]
On September 17, 1993,
the sheriff sought to enforce the first alias writ of possession for
the
second time. The Austrias filed a "Second Motion for Intervention"
seeking
to restrain the enforcement of the writ of possession issued on October
26, 1992.[7]
PNB then filed an "Urgent Ex-Parte Motion for Issuance of Break Open
Order"[8]
and, subsequently, an Opposition to the Austrias' Second Motion for
Intervention.[9]
On January 31, 1994,
the trial court denied the Austrias' second motion and granted PNB's
"Motion
for Issuance of Break Open Order." The trial court ruled that the
Austrias
can no longer be permitted to intervene in the case during said stage
of
the proceedings and that the remedy of the Austrias was to file an
ordinary
civil action to assert their claim of ownership over the property.[10]
In the meantime, the
first alias writ of possession lapsed. PNB thus filed an "Ex-Parte
Motion
for Issuance of Second Alias Writ of Possession,"[11]
and on November 29, 1994, a second alias writ was issued.[12]chanrobles virtuallaw libraryred
Unfazed, the Austrias
filed an Omnibus Motion on January 25, 1995, seeking a recall of the
second
alias writ and a reconsideration of the trial court's order denying
their
motion to intervene.[13]
Meanwhile, the second alias writ had likewise expired.cralaw:red
PNB filed a "Manifestation
and Motion for Issuance of Third Alias Writ of Possession," which the
trial
court granted anew in an order dated October 10, 1995.[14]
However, on December
12, 1995, the Austrias again filed a motion to set aside the trial
court's
order dated October 10, 1995 and to recall the third alias writ.[15]
Consequent to the filing
of this fourth motion, the sheriff again failed to implement the third
alias writ, which also lapsed. Thus, on February 15, 1996, PNB filed
another
"Motion for Issuance of a Fourth Alias Writ,"[16]
which was granted on March 26, 1996.cralaw:red
The trial court, after
hearing the Austrias' fourth motion, issued an order on October 4,
1996,
denying the same, on the ground that the issuance of a possessory writ
for a property sold at public auction pursuant to an extra-judicial
foreclosure
proceeding was a ministerial duty on its part. The Austrias failed to
establish
any legal ground for recalling the writs, even as they claimed a
superior
right to the subject property.[17]
On February 19, 1997,
the fourth alias writ was issued by the trial court. The writ was
partially
implemented with the posting of PNB security guards within the premises
of the foreclosed lot.[18]
On April 17, 1997, the
Austrias, for the fifth time, filed a motion to stop the enforcement of
the fourth alias writ and to set aside all prior writs issued by the
trial
court.[19]
In the meantime, the
Austrias filed before the Regional Trial Court of Parañaque, an
action for cancellation of PNB's title to the property, docketed as
Civil
Case No. 97-0184.[20]chanrobles virtuallaw libraryred
On October 28, 1997,
the trial court denied the Austrias' fifth motion but ruled that: "any
writ of possession that may be issued in this case, is declared
unenforceable
against the MOVANTS ERNESTO AUSTRIA and the HEIRS OF LORETO AUSTRIA,
until
the Court declares otherwise."[21]
PNB filed a motion for
reconsideration, which was denied on May 20, 1998.[22]
A petition for certiorari under Rule 65 of the Rules of Court was filed
by PNB before the Court of Appeals. However, the Court of Appeals
dismissed
the petition, stating:
There is no prima facie
showing of grave abuse of discretion on the part of respondent Judge in
issuing his assailed Order which the Court finds to be in accord with
law,
the pertinent rules and jurisprudence cited therein.cralaw:red
Hence, PNB filed the
instant petition, contending that:chanrobles virtuallaw libraryred
I
THE COURT OF APPEALS
COMMITTED A SERIOUS ERROR BY SIMPLY ADOPTING THE FINDINGS OF THE TRIAL
COURT THAT WRIT OF POSSESSION CANNOT BE ENFORCED AGAINST RESPONDENT
AUSTRIA.
SAID FINDINGS ARE UNPROVEN AND UNSUPPORTED BY EVIDENCE.
II
THE COURT OF APPEALS
COMMITTED SERIOUS MISAPPREHENSION OF FACTS IN:
A) SUPPORTING THE
JURISPRUDENCE
CITED BY THE TRIAL COURT IN THE OCTOBER 28, 1997 ORDER. THE RULINGS DO
NOT JUSTIFY THE NON-ENFORCEMENT OF THE WRIT OF POSSESSION AGAINST
RESPONDENTS.
RESPONDENTS WERE GIVEN THE OPPORTUNITY TO BE HEARD BUT NO EVIDENCE WAS
PRESENTED TO SUPPORT THEIR CLAIM;
B) NOT GIVING DUE
CONSIDERATION
TO THE FACT THAT PNB HAS THE LEGAL RIGHT TO POSSESS THE PROPERTY AS ITS
REGISTERED OWNER;
C) LOSING SIGHT OF
THE
FACT THAT THE TRIAL COURT BELATEDLY ISSUED THE OCTOBER 28, 1997 ORDER
DIRECTING
THAT THE WRIT OF POSSESSION CANNOT BE ENFORCED AGAINST THE RESPONDENTS.
THE TRIAL COURT HAD EARLIER ISSUED FOUR (4) POSSESSORY WRITS ALL OF
WHICH
WERE DIRECTED AGAINST RESPONDENTS AUSTRIA & QUINTANA.[23]
The basic issue to be
resolved in this case is whether or not an ex-parte writ of possession
issued pursuant to Act No. 3135, as amended, can be enforced against a
third person who is in actual possession of the foreclosed property and
who is not in privity with the debtor/ mortgagor.[24]chanrobles virtuallaw libraryred
Petitioner PNB maintains
that the trial court's order was based on the unproven allegation that
respondents had purchased the property from the Monsods before the
latter
mortgaged it to PNB. According to petitioner PNB, respondents did not
adduce
any proof to support their claim of ownership, even as they were
repeatedly
given the opportunity to do so during the hearings on the numerous
motions
filed by respondents themselves.cralaw:red
Petitioner PNB also
submits that since it is the registered owner of the property, it is
entitled
to a writ of possession as a matter of right. The bank insists that it
could rely on the title of the registered land which does not have any
annotation of respondents' supposed rights.cralaw:red
Petitioner PNB likewise
avers that the trial court could not now belatedly refuse to enforce
the
writ of possession against respondents. The trial court had already
issued
a total of four possessory writs directing the ouster of all occupants
of the lot, including respondents herein.cralaw:red
On the other hand, respondents
assert that the trial court correctly held that the writ of possession
can only be implemented against the debtor/mortgagor and his
successors-in-interest.
Since respondents acquired their rights as owners of the property by
virtue
of a sale made to them by the Monsods prior to the bank's mortgage
lien,
respondents can not be dispossessed therefrom without due notice and
hearing,
through the simple expedient of an ex-parte possessory writ.cralaw:red
We agree with respondents.
Under applicable laws and jurisprudence, they can not be ejected from
the
property by means of an ex-parte writ of possession.cralaw:red
The operative provision
under Act No. 3135, as amended,[25]
is Section 6, which states:chanrobles virtuallaw libraryred
Sec. 6. Redemption.
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
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 section 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. (Italics ours)
Despite the evolutionary
development of our procedural laws throughout the years, the pertinent
rule in the Code of Civil Procedure[26]
remains practically unchanged. Particularly, Rule 39, Section 33,
second
paragraph, which relates to the right of possession of a purchaser of
property
in an extrajudicial foreclosure sale:
Sec. 33. 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 at the time of 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. (Italics ours)chanrobles virtuallaw libraryred
Thus, in Barican v.
Intermediate Appellate Court,[27]
we held that the obligation of a court to issue an ex-parte writ of
possession
in favor of the purchaser in an extrajudicial foreclosure sale ceases
to
be ministerial once it appears that there is a third party in
possession
of the property who is claiming a right adverse to that of the
debtor/mortgagor.
The same principle was inversely applied in a more recent case,[28]
where we ruled that a writ of possession may be issued in an
extrajudicial
foreclosure of real estate mortgage, only if the debtor is in
possession
and no third party had intervened. Although the factual nuances of this
case may slightly differ from the aforecited cases, the availing
circumstances
are undeniably similar - a party in possession of the foreclosed
property
is asserting a right adverse to the debtor/mortgagor and is a stranger
to the foreclosure proceedings in which the ex-parte writ of possession
was applied for.cralaw:red
It should be stressed
that the foregoing doctrinal pronouncements are not without support in
substantive law. Notably, the Civil Code protects the actual possessor
of a property, to wit:
Art. 433. Actual 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.cralaw:red
Under the aforequoted
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.chanrobles virtuallaw libraryred
An ex-parte petition
for issuance of a possessory writ under Section 7 of Act No. 3135 is
not,
strictly speaking, a "judicial process" as contemplated above. Even if
the same may be considered a judicial proceeding for the enforcement of
one's right of possession as purchaser in a foreclosure sale, it is not
an ordinary suit filed in court, by which one party "sues another for
the
enforcement or protection of a right, or the prevention or redress of a
wrong."[29]
It should be emphasized
that an ex-parte petition for issuance of a writ of possession is a
non-litigious
proceeding authorized in an extrajudicial foreclosure of mortgage
pursuant
to Act 3135, as amended. Unlike a judicial foreclosure of real estate
mortgage
under Rule 68 of the Rules of Court, any property brought within the
ambit
of the act is foreclosed by the filing of a petition, not with any
court
of justice, but with the office of the sheriff of the province where
the
sale is to be made.[30]
As such, a third person
in possession of an extrajudicially foreclosed realty, who claims a
right
superior to that of the original mortgagor, will have no opportunity to
be heard on his claim in a proceeding of this nature. It stands to
reason,
therefore, that such third person may not be dispossessed on the
strength
of a mere ex-parte possessory writ, since to do so would be tantamount
to his summary ejectment, in violation of the basic tenets of due
process.cralaw:red
Besides, as earlier
stressed, Article 433 of the Civil Code, cited above, requires nothing
less than an action for ejectment to be brought even by the true owner.
After all, the actual possessor of a property enjoys a legal
presumption
of just title in his favor,[31]
which must be overcome by the party claiming otherwise.cralaw:red
In the case at bar,
petitioner PNB admitted that as early as 1990, it was aware that the
subject
lot was occupied by the Austrias. Yet, instead of bringing an action in
court for the ejectment of respondents, it chose to simply file an
ex-parte
petition for a writ of possession pursuant to its alleged right as
purchaser
in the extra-judicial foreclosure sale. We cannot sanction this
procedural
shortcut. To enforce the writ against an unwitting third party
possessor,
who took no part in the foreclosure proceedings, would be tantamount to
the taking of real property without the benefit of proper judicial
intervention.chanrobles virtuallaw libraryred
Consequently, it was
not a ministerial duty of the trial court under Act No. 3135 to issue a
writ of possession for the ouster of respondents from the lot subject
of
this instant case. The trial court was without authority to grant the
ex-parte
writ, since petitioner PNB's right of possession under said Act could
be
rightfully recognized only against the Monsods and the latter's
successors-in-interest,
but not against respondents who assert a right adverse to the Monsods.
Hence, the trial court cannot be precluded from correcting itself by
refusing
to enforce the writs it had previously issued. Its lack of authority to
direct issuance of the writs against respondents assured that its
earlier
orders would never attain finality in the first place.cralaw:red
In the same vein, respondents
are not obliged to prove their ownership of the foreclosed lot in the
ex-parte
proceedings conducted below. The trial court has no jurisdiction to
determine
who between the parties is entitled to ownership and possession of the
foreclosed lot.chanrobles virtuallaw libraryred
Likewise, registration
of the lot in petitioner PNB's name does not automatically entitle the
latter to possession thereof. As discussed earlier, petitioner PNB must
resort to the appropriate judicial process for recovery of the property
and cannot simply invoke its title in an ex-parte proceeding to justify
the ouster of respondents.cralaw:red
WHEREFORE, the instant
petition is DENIED and the resolution of the Court of Appeals in CA
G.R.
SP No. 48660 is AFFIRMED.cralaw:red
SO ORDERED.cralaw:red
Davide, Jr., C.J.,
(Chairman),
Puno, Kapunan, and Pardo, JJ.,
concur.cralaw:red
____________________________
Endnotes:
[1]
Rollo, pp. 12-13.
[2]
Ibid., at 34.chanrobles virtuallaw libraryred
[3]
RTC Records, pp. 26-27.
[4]
Ibid., at 76.
[5]
Id., at 59-63.chanrobles virtuallaw libraryred
[6]
Id., at 100 & 103.
[7]
Id., at 104-108.
[8]
Id., at 119.
[9]
Id., at 129.
[10]
Id., at 158-160.
[11]
Id., at 171.chanrobles virtuallaw libraryred
[12]
Id., at 180-183.
[13]
Id., at 185-187.
[14]
Id., at 224.
[15]
Id., at 232.
[16]
Id., at 244.
[17]
Id., at 310-312.
[18]
Id., at 319, 322, 324 & 338.
[19]
Id., at 327.
[20]
Id., at 369-370.
[21]
Id., at 417.chanrobles virtuallaw libraryred
[22]
Id., at 455.
[23]
Ibid., at 20.
[24]
Id., at 130.chanrobles virtuallaw libraryred
[25]
An Act to Regulate the Sale of Property Under Special Powers Inserted
in
or Annexed to Real Estate Mortgages, as amended by Act No. 4118.
[26]
See IFC Service Leasing and Acceptance Corporation v. Nera, 19 SCRA
181,
184 (1967), where the Court explained that 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.
[27]
162 SCRA 358, 363 (1988), citing IFC Service Leasing and Acceptance
Corporation
v. Nera, supra; Tan Soo Huat v. Ongwico, 63 Phil. 746 (1936).
[28]
Philippine National Bank v. Court of Appeals, 275 SCRA 70, 77 (1997),
citing
Gatchalian v. Arlegui, 75 SCRA 234 (1977).
[29]
Section 3 (a), Rule 1, 1997 Rules of Civil Procedure.chanrobles virtuallaw libraryred
[30]
See Supena v. De la Rosa, 267 SCRA 1, 10 (1997), citing Section 4, Act
No. 3135, as amended.
[31]
Civil Code of the Philippines, Article 541. A possessor in the concept
of owner has in his favor the legal presumption that he possesses with
a just title and he cannot be obliged to show or prove it. |