Heirs of Nicolas v. Metropolitan Bank
REITERATIONFacts
1. The Antecedents: Spouses Domingo and Josefa Nicolas were the registered owners of two parcels of land in Quezon City, which served as their conjugal residential property. Domingo Nicolas passed away on May 19, 1986. In 1988, the original copies of the Transfer Certificates of Title (TCTs) for these properties were destroyed in a fire at the Register of Deeds. Josefa Nicolas subsequently filed an application for the reconstitution of these titles, which was approved by the Land Registration Administration (LRA) in 1991, ordering the reconstitution solely in her name. 2. Procedural History: In 1998, the petitioners discovered that their mother, Josefa Nicolas, had mortgaged the subject lots to Metropolitan Bank & Trust Company (MBTC). The mortgage was foreclosed, and MBTC consolidated the titles in its name. MBTC then filed a petition for a writ of possession with the Regional Trial Court (RTC), Branch 77, Quezon City, which was granted on January 15, 1998. The petitioners filed a separate civil case (Civil Case No. Q-98-34312) for the annulment of the reconstituted titles, mortgage, and sale, which is still pending. They also filed a motion to quash the writ of possession, which was denied by the RTC. Subsequently, they filed a petition for certiorari with the Court of Appeals (CA), which dismissed their petition, holding that the RTC did not commit grave abuse of discretion in issuing the writ of possession. The CA denied their motion for reconsideration. 3. The Petition: The petitioners filed a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, seeking to reverse the CA's decision. They argue that the CA erred in dismissing their petition for certiorari and invoke the ruling in Rivero de Ortega v. Natividad, asserting that as compulsory heirs of Domingo Nicolas, they acquired ownership of portions of the lots as their legitime upon their father's death, prior to the foreclosure. They contend they are strangers to the foreclosure proceedings and should not be deprived of their legitime by the writ of possession. They also note that the estate of Domingo Nicolas has not been settled. The Supreme Court, considering the circumstances and the cited precedent, modified the CA's decision, holding that the writ of possession should only apply to Josefa Nicolas's share as may be determined in Civil Case No. Q-98-34312 or any other proper proceeding.
Issue(s)
Whether the Court of Appeals erred in dismissing the petition for certiorari. Whether the writ of possession should extend to the portions of the property pertaining to the compulsory heirs who were not parties to the foreclosure proceedings.
Ruling
The Court granted the petition, modifying the assailed Decision of the Court of Appeals. The writ of possession issued by the RTC shall apply only to such portion of the lots pertaining to Josefa Nicolas as may be determined in Civil Case No. Q-98-34312 or in any other proper proceeding which petitioners may file.
Ratio Decidendi
On the issue of whether the Court of Appeals erred in dismissing the petition for certiorari: The Court held that while the general rule is that after a sale under a foreclosure decree, the court has the power to give possession to the purchaser, and the issuance of a writ of possession is a ministerial function, this power is not absolute. On the issue of whether the writ of possession should extend to the portions of the property pertaining to the compulsory heirs who were not parties to the foreclosure proceedings: The writ of possession does not extend to parties in possession who were not parties to the foreclosure and did not acquire possession from a person bound by the decree. Such parties are considered strangers or third parties whose rights cannot be determined in a summary proceeding for a writ of possession. In this case, the petitioners, as compulsory heirs of Domingo Nicolas, acquired ownership of portions of the lots as their legitime upon their father's death, which occurred prior to the foreclosure. Therefore, they are considered strangers to the foreclosure proceedings initiated by the respondent bank. The estate of Domingo Nicolas has not been judicially or extra-judicially settled, further complicating the determination of ownership and possession. Consequently, the writ of possession, which is a matter of right after consolidation of title in the buyer's name, should apply only to the share of Josefa Nicolas, as may be determined in the pending civil case or any other proper proceeding for the settlement of the undivided estate of Domingo Nicolas. The Court invoked its ruling in Rivero de Ortega v. Natividad to support this conclusion, emphasizing that a very serious question may arise upon full proofs as to where the legal title rests, and this should not be disposed of in a summary way.
Main Doctrine
A writ of possession issued pursuant to an extra-judicial foreclosure sale shall apply only to the share of the mortgagor and shall not extend to the portions pertaining to compulsory heirs who were not parties to the foreclosure proceedings, especially when the estate of the deceased mortgagor has not been settled.