Penaflor v. Dela Cruz
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns the ownership and possession of a property located at No. 11, Ifugao St., Brgy. Barretto, Olongapo City. Nicolasa dela Cruz, the original owner, mortgaged this property to Jose R. Penaflor to secure a loan. Upon failure to pay, the property was extrajudicially foreclosed, with Penaflor emerging as the highest bidder. Despite the consolidation of title in Penaflor's name, Nicolasa remained in possession and refused to deliver the property. 2. Procedural History: Penaflor filed an ex parte petition for a writ of possession, which the Regional Trial Court (RTC) granted. However, Nicolasa's son, Artemio dela Cruz, filed a complaint for annulment of judgment, which was dismissed. Artemio later filed an ejectment case against his sister Carmelita, claiming ownership based on a 1989 waiver of possessory rights from Nicolasa and other documents. The ejectment case was affirmed by the Supreme Court. Meanwhile, the RTC re-issued the writ of possession in Penaflor's favor. Artemio's heirs (respondents) moved to quash the writ, claiming they were third parties in adverse possession. The RTC denied their motion, leading them to file a petition for certiorari with the Court of Appeals (CA). 3. The Petition: The CA annulled the RTC's writ of possession, finding that Artemio's heirs were third parties in adverse possession, citing evidence from the ejectment case and the 1989 waiver. The petitioners (heirs of Penaflor) seek review of the CA's decision, arguing that the CA erred in setting aside the writ of possession. They contend that Artemio's claim was not sufficiently adverse to Nicolasa and that the evidence considered by the CA was inadmissible in this proceeding or insufficient to establish an independent right adverse to the mortgagee. The core issue is whether the respondents, as heirs of Artemio, are third parties in adverse possession such that the writ of possession should not have been issued.
Issue(s)
Whether the Court of Appeals (CA) erred in setting aside the Writ of Possession and Notice to Vacate issued by the Regional Trial Court (RTC) in favor of the petitioners. Whether the respondents, as heirs of Artemio dela Cruz, are third parties holding the property adversely to the judgment obligor (Nicolasa) such that the issuance of the writ of possession should not be ministerial.
Ruling
The petition is meritorious. The Decision and Resolution of the Court of Appeals are REVERSED and SET ASIDE. The Writ of Possession and Notice to Vacate issued by the RTC are REINSTATED in favor of the petitioners.
Ratio Decidendi
On the issue of whether the CA erred in setting aside the Writ of Possession: The Court held that the CA erred. It is well-settled that the purchaser in an extrajudicial foreclosure sale becomes the absolute owner upon consolidation of title and is entitled to possession as a matter of right. The issuance of a writ of possession is a ministerial duty of the court upon a mere ex parte motion. This right to possession is an incident of ownership. The purchaser's right to possession becomes absolute after consolidation of title, and there is no need to file a separate suit for possession. The Court has consistently disallowed injunctions to prohibit the issuance of a writ of possession, even with a pending action for annulment of mortgage or foreclosure. On the issue of whether respondents are adverse third-party possessors: The Court ruled that respondents are not third parties holding the property adversely to the judgment obligor in a manner that would prevent the ministerial issuance of the writ of possession. While Section 33, Rule 39 of the Rules of Court provides an exception when a third party is actually holding the property adversely to the judgment obligor, this exception requires the possessor to have a claim thereto adverse to the debtor/mortgagor, meaning they must possess the property in their own right and not merely as a successor or transferee of the debtor or mortgagor. The May 3, 1989 Waiver, relied upon by the CA, is not an effective mode of transferring ownership under the Civil Code, as it lacks the essential elements of a sale, barter, donation, or assignment. Furthermore, the evidence presented by Artemio in the ejectment case (Miscellaneous Sales Application, Deeds of Real Estate Mortgage to a third party, tax declarations) were inadmissible in the present case for the writ of possession because they were never submitted to the RTC in Other Case No. 38-0-93, thus violating petitioners' right to due process. These documents were also insufficient to prove an independent right of ownership adverse to Nicolasa. Moreover, Artemio's claims were riddled with inconsistencies, and the filing of the ejectment suit seven years after the mortgage further cast doubt on his alleged possession at the time of the mortgage.
Main Doctrine
The issuance of a writ of possession after extrajudicial foreclosure is ministerial, but this duty ceases if a third party is actually holding the property adversely to the judgment obligor. However, for the exception to apply, the third party must demonstrate an independent right of ownership or a right adverse to the mortgagor, which must be proven in a hearing, not merely by presenting evidence from a different case against a different party.