Ibasco v. Caguioa
REITERATIONFacts
The Antecedents: Petitioners Manuel Ibasco and Edita Tampingco were lessees of a residential house, paying monthly rentals of P1,500.00. They were unaware that the lessors, the Garcias, had mortgaged the property to respondent Banco Filipino Savings and Mortgage Bank (BANK). Due to the Garcias' non-payment, the mortgage was foreclosed, and the redemption period expired. Procedural History: The lessees were served a writ of possession, ordering them to vacate within five days. They elevated the case to the Supreme Court via a petition for certiorari, alleging grave abuse of discretion by the respondent judge in issuing the writ. The Supreme Court issued a temporary restraining order. The Petition: Petitioners argued that Act 3135 was impliedly repealed by Batas Pambansa Blg. 25, that a writ of possession is only grantable in land registration cases, not in extrajudicial foreclosures, and that their petition was the only adequate remedy. They sought to annul the writ of possession.
Issue(s)
Whether a writ of possession can be granted to a mortgagee who foreclosed on a mortgaged property, despite the premises being occupied by a lessee whose lease has not been terminated. Whether Act 3135 was impliedly repealed by Batas Pambansa Blg. 25. Whether a writ of possession may only be granted in a land registration case, not in an extrajudicial foreclosure of a mortgage.
Ruling
The petition is DISMISSED. The writ of possession was correctly issued. No costs.
Ratio Decidendi
On Issue 1: The Court held that a mortgagee who has foreclosed upon the mortgaged real property and purchased it at the foreclosure sale can be granted a writ of possession over the property, even if it is in the possession of a lessee. This is permissible unless the lease had been previously registered in the Registry of Property or, despite non-registration, the mortgagee had prior knowledge of the existence and duration of the lease. Actual knowledge by the mortgagee is considered equivalent to registration for the protection of the lessee's rights. The Court emphasized that Article 1648 of the Civil Code mandates that an unregistered lease is not binding upon third persons, and this principle applies to the purchaser in a foreclosure sale. On Issue 2: The Court found no implied repeal of Act 3135 by Batas Pambansa Blg. 25. It reasoned that the two laws are not inconsistent; Act 3135 governs the procedure for extrajudicial foreclosure of mortgages, while Batas Pambansa Blg. 25 pertains to maximum rent and grounds for ejectment in certain leases. Although Batas Pambansa Blg. 25 may prevent ejectment solely due to a sale or mortgage, it does not preclude ejectment resulting from a foreclosure sale conducted under Act 3135. Furthermore, the monthly rental of P1,500.00 exceeded the P300.00 limit regulated by Batas Pambansa Blg. 25, rendering it inapplicable. On Issue 3: The Court clarified that Section 7 of Act 3135 explicitly provides for the issuance of a writ of possession to the purchaser in a foreclosure sale. The petition for possession is to be filed in the Court of First Instance of the province where the property is situated. Crucially, the law states that such a petition shall be made under oath and filed in the form of an ex-parte motion in the registration or cadastral proceedings if the property is registered. This indicates that the writ of possession in foreclosure cases is indeed linked to, and often filed within, the context of registration or cadastral proceedings, thus refuting the petitioners' claim that it is exclusively for land registration cases.
Main Doctrine
The Court affirmed that a purchaser in an extrajudicial foreclosure sale is entitled to a writ of possession, even against a lessee, unless the lease is registered or the purchaser had actual knowledge of its existence and duration. This right is derived from Act 3135, which provides the procedural framework for extrajudicial foreclosures. The Court clarified that while rent control laws may protect lessees from arbitrary ejectment, they do not supersede the mortgagee's right to possession after a valid foreclosure, especially when the lease is unregistered and unknown to the mortgagee. The protection afforded to lessees under Article 1648 of the Civil Code is contingent upon the registration of the lease or the mortgagee's actual knowledge of its terms.