BPI Family Savings Bank, Inc. v. Golden Power Diesel Sales Center, Inc.
REITERATIONFacts
The Antecedents: CEDEC Transport, Inc. (CEDEC) mortgaged two parcels of land to BPI Family Savings Bank, Inc. (BPI Family) to secure several loans. CEDEC defaulted on its obligations, leading BPI Family to initiate an extrajudicial foreclosure of the real estate mortgage. Following the public auction, BPI Family emerged as the highest bidder and acquired the properties. After the redemption period expired without CEDEC redeeming the properties, BPI Family consolidated ownership and obtained new titles in its name. Despite becoming the owner, CEDEC refused to vacate the properties, prompting BPI Family to file a petition for a writ of possession. Procedural History: BPI Family filed an ex parte petition for a writ of possession, which the Regional Trial Court (RTC) granted. Subsequently, Golden Power Diesel Sales Center, Inc. and Renato C. Tan (respondents) filed a motion to hold the implementation of the writ, claiming they acquired the properties from CEDEC via a Deed of Absolute Sale with Assumption of Mortgage and asserting rights adverse to CEDEC. The RTC initially denied this motion but later suspended the implementation of the alias writ of possession, citing the respondents' adverse possession and an ongoing civil case filed by respondents for the cancellation of the sheriff's certificate of sale. BPI Family's motion for reconsideration was denied. Aggrieved, BPI Family filed a petition for mandamus and certiorari with the Court of Appeals (CA), arguing the RTC gravely abused its discretion. The CA denied BPI Family's petition, affirming the RTC's suspension of the writ. The Petition: BPI Family filed a petition for review with the Supreme Court, arguing that the Court of Appeals erred in upholding the RTC's suspension of the writ of possession. BPI Family contended that the respondents, as vendees of the properties, merely stepped into the shoes of the mortgagor CEDEC and thus were not third persons claiming rights adverse to the debtor. Furthermore, BPI Family argued that the pendency of a case questioning the legality of the mortgage or auction sale cannot be a ground for the non-implementation of a writ of possession, as the issuance of such a writ is a ministerial duty of the court once ownership has been consolidated.
Issue(s)
Whether respondents, as vendees of the properties from the mortgagor CEDEC, are considered third persons in possession claiming a right adverse to CEDEC. Whether the pendency of a case questioning the legality of a mortgage or auction sale can be a ground for the non-issuance and/or non-implementation of a writ of possession.
Ruling
The Supreme Court granted the petition, setting aside the CA's decision and the RTC's resolutions suspending the writ of possession. The Court ordered the sheriff to proceed with the implementation of the writ of possession without prejudice to the outcome of the pending civil case.
Ratio Decidendi
On the issue of whether respondents are third persons claiming adverse rights: The Court ruled that respondents are not third parties claiming adverse rights to CEDEC. The respondents acquired possession of the properties through a Deed of Absolute Sale with Assumption of Mortgage from CEDEC. This transaction clearly indicates that respondents stepped into the shoes of CEDEC, becoming its transferees. Their right to possession is derived from CEDEC, making them successors-in-interest. The Court reiterated the ruling in Roxas v. Buan, emphasizing that transferees hold title and possess the property as the transferor's transferee, and any right they have is necessarily derived from the transferor. Therefore, their occupancy cannot be considered adverse to CEDEC. The exception to the ministerial duty of issuing a writ of possession applies only when a third party holds the property by an independent adverse title or right, such as a co-owner, tenant, or usufructuary, which is not the case here. On the issue of whether the pendency of a case questioning the mortgage or sale can suspend the writ of possession: The Court held that a pending action for annulment of a mortgage or foreclosure sale does not stay the issuance of a writ of possession. The trial court, in an application for a writ of possession, is not required to delve into the validity of the mortgage or the foreclosure proceedings. The purchaser is entitled to a writ of possession as a matter of right, and its issuance is a ministerial duty of the court, which should proceed without prejudice to the outcome of any pending annulment case. The trial court erred in suspending the implementation of the alias writ of possession based on the pendency of Civil Case No. 99-0360.
Main Doctrine
The issuance of a writ of possession in extrajudicial foreclosure sales ceases to be ministerial when a third party is in actual possession of the property claiming a right adverse to the judgment obligor; however, transferees who acquire possession from the judgment obligor, even if through a Deed of Absolute Sale with Assumption of Mortgage, are considered successors-in-interest and do not possess the property adversely to the judgment obligor, thus not preventing the ministerial issuance of the writ.