Spouses Malonzo v. Mariano
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns the enforcement of a writ of possession following an extrajudicial foreclosure sale. Universal Ventures, Inc. mortgaged two parcels of land with an apartment and commercial building thereon to Banco Filipino Savings and Mortgage Bank for a loan of P400,000.00. Upon default, Banco Filipino foreclosed the mortgage extrajudicially, purchased the property at the sale, and obtained a new title in its name. 2. Procedural History: After obtaining title, Banco Filipino filed an ex parte petition for a writ of possession with the Court of First Instance of Manila, as authorized by Act 3135. The petition named Universal Ventures, Inc. and persons claiming rights under it, including petitioners Avelina Malonzo, Barbara Brown, and Bonifacia Monzon, as respondents. The court, presided over by Judge Herminio Mariano, issued the writ of possession. Subsequently, the Sheriff of Manila attempted to enforce this writ. Three of the individuals sought to be evicted, along with Avelina Malonzo, then filed a civil case seeking to restrain the enforcement and recover damages, alleging they were lessees and protected by rent control laws. This was followed by the present special civil action for prohibition filed directly with the Supreme Court. 3. The Petition: The petitioners, in this special civil action for prohibition, seek to prevent the enforcement of the writ of possession against them. They argue that as they were not parties to the original mortgage and were not properly made parties to the petition for the writ of possession, and given their status as lessees protected by rent control decrees, they cannot be ejected via such a writ. They contend that an ejectment case should have been filed against them. The Supreme Court, however, is asked to determine if a writ of possession issued under Act 3135 can be enforced against persons other than the mortgagor who are in occupancy of the foreclosed property.
Issue(s)
Whether a writ of possession issued under Act 3135, as amended, may be enforced against persons other than the mortgagor who are in occupancy of the foreclosed property, and whether such enforcement violates due process. Whether petitioners, as alleged lessees under a verbal lease contract with the mortgagor, are entitled to protection against the enforcement of the writ of possession, considering their knowledge of the mortgage and the derivative nature of their rights.
Ruling
The petition is dismissed for lack of merit. The case is remanded to the Court a quo with instructions to forthwith issue in favor of respondent bank an alias writ of possession enforceable against the petitioners or their successors in interest, and all other persons claiming under, or not otherwise actually holding the property adversely to, the mortgagor, Universal Ventures, Inc.
Ratio Decidendi
On the enforceability of the writ of possession against persons other than the mortgagor: Section 7 of Act 3135, as amended, grants the purchaser at an extrajudicial foreclosure sale an absolute right to possession after the redemption period has expired, enforceable through an ex parte writ of possession. This writ may be enforced against persons other than the mortgagor in occupancy, unless they are holding the property adversely to the mortgagor, as supported by Section 35, Rule 39 of the Rules of Court. The purchaser need not file a separate suit for possession. Enforcement against third parties is permissible if they are not holding adversely and have been accorded due process. On the petitioners' status as lessees and their right to protection: The petitioners, claiming to be lessees under a verbal lease contract with the mortgagor, derive their rights from the mortgagor and are not holding the property adversely. Their right to possession ceased with the mortgagor's loss of rights. The registration of the mortgage charged them with constructive knowledge of the mortgage. They were accorded due process, notified of the petition for a writ of possession, and given an opportunity to be heard. Their assertion of a verbal lease did not establish adverse possession. Therefore, the writ of possession was properly enforceable against them, as their possessory rights were subsequent to and derived from the mortgagor's title.
Main Doctrine
A writ of possession issued under Act 3135, as amended, to give possession of property sold at an extrajudicial foreclosure sale to the purchaser thereof, may be enforced against persons other than the mortgagor who are in occupancy of the property, provided they are not holding the property adversely to the mortgagor and were accorded due process by being notified and given an opportunity to be heard on the petition for the writ.