Songco v. Lim Hu
REITERATIONFacts
1. The Antecedents: Respondent Lim Hu and his wife were the registered owners of a property mortgaged to the Government Service Insurance System (GSIS). Due to non-payment of amortizations, GSIS extrajudicially foreclosed the mortgage, with GSIS emerging as the highest bidder. The certificate of sale was registered, and GSIS filed a petition for a writ of possession. While a writ of possession was issued, Lim Hu filed a complaint against GSIS for annulment of the foreclosure. Lim Hu executed an 'Undertaking' agreeing to pay rentals, vacate the premises when required, and hold GSIS harmless, in exchange for holding the writ of possession in abeyance pending determination of rental value. 2. Procedural History: After the redemption period expired, GSIS consolidated its title. GSIS then sold the property to petitioner Mariano Songco. Due to Lim Hu's violations of the 'Undertaking,' GSIS obtained another writ of possession, which was served on Lim Hu. When Lim Hu failed to vacate, the sheriff took possession and delivered it to GSIS, which then turned it over to Songco. Subsequently, Lim Hu filed a complaint for forcible entry against Songco. The City Court dismissed Lim Hu's complaint, but the Court of First Instance (CFI) reversed this, ordering Songco to vacate and pay damages and attorney's fees. 3. The Petition: Petitioner Mariano Songco challenged the CFI's decision, arguing it was contrary to evidence, rules of evidence, and jurisprudence. The Supreme Court entertained the petition despite petitioner's resort to an improper forum (petition for review instead of ordinary appeal to the Court of Appeals) to attain substantial justice. The core of the petition was that the CFI erred in reversing the City Court's dismissal of the forcible entry case, as the dispossession of Lim Hu was legally authorized by a writ of possession issued by the CFI of Rizal, based on Lim Hu's violation of his own 'Undertaking'.
Issue(s)
Whether the Court of First Instance erred in reversing the City Court's dismissal of the forcible entry case filed by respondent Lim Hu against petitioner Mariano Songco. Whether the dispossession of respondent Lim Hu from the premises was legally authorized despite the pendency of a case questioning the validity of the foreclosure proceedings.
Ruling
The Supreme Court reversed the decision of the Court of First Instance of Rizal, Quezon City, Branch XXXI in Civil Case No. 23700. No costs were awarded.
Ratio Decidendi
On Issue 1: The Supreme Court reversed the decision of the Court of First Instance, finding that the CFI erred in ordering the defendant (petitioner Songco) to vacate the premises and restore possession to the plaintiff (respondent Lim Hu). The CFI's conclusion that the dispossession was bereft of legal authority was deemed unwarranted because it ignored two significant considerations. Firstly, the dispossession was effected pursuant to a writ of possession issued by the CFI of Rizal on March 31, 1976, which was duly served upon respondent Lim on April 1, 1976. Secondly, the issuance of this writ was based upon respondent Lim's violation of the terms and conditions of his own 'Undertaking,' specifically his repeated failure to pay the stipulated rent for his continued stay in the premises. The Court emphasized that Lim Hu had agreed to vacate when required by GSIS and that the writ of possession, held in abeyance, would be executed upon his failure to pay rentals or agree to the final determination of rental value. On Issue 2: The Supreme Court held that the fact that the action for annulment of the foreclosure proceedings was still pending at the time respondent Lim was dispossessed of the premises was of no consequence. Citing Marcelo Steel Corp. v. Court of Appeals, the Court explained that Sections 7 and 8 of Act No. 3135, as amended, clearly authorize the purchaser to petition for a writ of possession during the redemption period through an ex parte motion. Upon filing the motion and approval of the bond, the court is directed to issue the writ of possession. The law grants no discretion to the court in this regard, and any question regarding the regularity and validity of the sale is to be determined in a subsequent proceeding as outlined in Section 8. Therefore, the pendency of the annulment case did not preclude the issuance and execution of the writ of possession, as the right of possession was clearly vested in GSIS, petitioner's predecessor-in-interest, by virtue of the court's validly issued writ and Lim's own 'Undertaking'.
Main Doctrine
The Court reiterated that under Act No. 3135, a purchaser in an extrajudicial foreclosure sale is entitled to a writ of possession as a matter of course upon filing an ex parte motion and posting the required bond. The issuance of such a writ is a ministerial duty of the court, and any challenge to the validity of the foreclosure sale must be raised in a separate proceeding, not as a ground to oppose the writ of possession. The debtor's execution of an 'Undertaking' further solidifies the purchaser's right to possession, especially when the debtor violates the terms of the undertaking.