Okabe v. Saturnino
CLARIFICATIONFacts
The Antecedents: The controversy involves an eighty-one (81) square meter property in Barangay San Antonio, Makati City, initially under the name of respondent Ernesto A. Saturnino's wife. Sometime in 1994, the couple obtained a loan from the Philippine National Bank (PNB), secured by the subject property. Due to their failure to settle the loan obligation, PNB extrajudicially foreclosed the mortgage. On August 24, 1999, the Certificate of Sale was inscribed on Transfer Certificate of Title (TCT) No. 175741. As Saturnino failed to redeem the property within the redemption period, PNB consolidated ownership on October 13, 2006, and a new TCT was issued in its favor. Without taking physical possession, PNB sold the property to petitioner Fe H. Okabe on June 17, 2008, and TCT No. 225265 was issued in Okabe's name on August 13, 2008. Procedural History: On November 27, 2008, Okabe filed an Ex-Parte Petition for Issuance of Writ of Possession with the Regional Trial Court (RTC) of Makati City. Saturnino opposed, moving to dismiss, arguing estoppel and strict construction of Section 7 of Act No. 3135, as amended. The RTC, on April 30, 2009, denied Saturnino's opposition, citing Ramos v. Mañalac and Lopez that the issuance of a writ of possession is ministerial. The RTC subsequently denied Saturnino's motion for reconsideration on July 29, 2009, affirming Okabe's right to possession as the registered owner. Dismayed, Saturnino filed a Petition for Certiorari with the Court of Appeals (CA) on August 17, 2009, questioning the RTC orders. Meanwhile, on November 23, 2009, the RTC granted Okabe's ex-parte petition and ordered the issuance of a writ of possession. Saturnino's motion to set aside this decision was denied on April 27, 2010. On July 8, 2010, the RTC granted Okabe's motion for execution, and a writ of possession was issued. On July 14, 2010, the Sheriff attempted to serve the notice to vacate, finding the property abandoned, and posted the notice. On July 20, 2010, the Sheriff turned over possession to Okabe. On July 19, 2010, the CA issued a Temporary Restraining Order (TRO) enjoining the RTC, but the RTC Presiding Judge informed the CA on July 21, 2010, that the writ had already been implemented. On September 24, 2010, the CA granted Saturnino's petition, vacated the RTC orders, and permanently enjoined Okabe from proceeding via an ex-parte motion for a writ of possession, reasoning that the special right under Act No. 3135 is only for purchasers in a sale under its provisions, not subsequent buyers. The CA denied Okabe's motion for reconsideration on March 9, 2011. The Petition: Unfazed by the CA's decision, Okabe filed the present Petition for Review on Certiorari under Rule 45 of the Rules of Court before the Supreme Court. Okabe argued that Saturnino was well aware of the transfer of ownership and that his possession of the property had become illegal. She contended that as the registered owner, her possession should not be disturbed and that the issue regarding the procedure pertaining to her possession of the property had become moot and academic since she had already been in possession of the property since July 20, 2010. Okabe prayed for the Supreme Court to rectify the situation and reverse the CA's ruling, asserting that the termination of the ex-parte motion proceedings and the award of possession to her by the lower court rendered Saturnino's arguments before the CA moot and academic.
Issue(s)
Whether or not an ex-parte petition for the issuance of a writ of possession was the proper remedy for the petitioner, a subsequent purchaser, in obtaining possession of the subject property after the redemption period had lapsed.
Ruling
The Supreme Court GRANTED the instant petition, thereby REVERSING AND SETTING ASIDE the Decision dated September 24, 2010, and Resolution dated March 9, 2011, of the Court of Appeals in CA-G.R. SP No. 110029.
Ratio Decidendi
On Issue 1: The Supreme Court held that while the issuance of a writ of possession to a purchaser in an extrajudicial foreclosure sale is generally summary and ministerial, this applies primarily to the mortgagee-purchaser or the purchaser during the redemption period. Section 7 of Act No. 3135, as amended, grants the purchaser the right to petition the court for possession during the redemption period, upon an ex-parte motion and after furnishing a bond. After the redemption period, if the property is not redeemed, the purchaser's right to possession becomes absolute, and the issuance of the writ of possession remains a ministerial duty of the court, without the need for a bond. However, the Court clarified that this ministerial nature changes when the purchaser is a subsequent buyer, like Okabe, who acquired the property long after the expiration of the redemption period from the original purchaser (PNB). In such a scenario, the subsequent purchaser cannot avail of an ex-parte writ of possession. The Court reasoned that Section 33, Rule 39 of the Rules of Court, which is made applicable to extrajudicial foreclosures by virtue of Section 6 of Act No. 3135, provides that possession shall be given to the purchaser or last redemptioner "unless a third party is actually holding the property adversely to the judgment obligor." This implies that if a third party is in adverse possession, the issuance of the writ of possession ceases to be ex-parte and non-adversarial. Therefore, for a subsequent purchaser, a hearing must be conducted to determine whether possession is still with the mortgagor or already with a third party holding adversely. If the property is in the possession of the mortgagor, a writ of possession may be issued after such a hearing. Otherwise, if a third party holds adversely, the remedy is an ordinary action for ejectment. The Court ultimately reversed the CA, implicitly allowing the writ of possession to stand, given that the property was found abandoned and possession was already turned over to Okabe, and to immediately require a separate ejectment suit would unduly prolong proceedings.
Main Doctrine
The primary legal doctrine established and clarified by this case concerns the proper remedy for a subsequent purchaser of an extrajudicially foreclosed property to obtain possession. While the original purchaser in a foreclosure sale (or the mortgagee who becomes the purchaser) may apply for an ex-parte writ of possession during or after the redemption period (without bond after redemption), a subsequent purchaser who acquires the property after the redemption period cannot avail of an ex-parte writ of possession. Instead, if the property is still in the possession of the mortgagor, the subsequent purchaser may file a petition for a writ of possession, but it must be heard, not ex-parte, to determine if the mortgagor or a third party is holding the property adversely. If a third party holds the property adversely, the proper remedy is an ordinary action for ejectment. This clarifies the scope and limitations of the summary remedy of a writ of possession under Act No. 3135 and Rule 39 of the Rules of Court, distinguishing between the original purchaser and subsequent transferees.