FIRST DIVISION
[G.R. No. 235825. April 23, 2018.]
PHILIPPINE INVESTMENT TWO [SPV-AMC], INC. [AS SUCCESSOR-IN-INTEREST OF DEVELOPMENT BANK OF THE PHILIPPINES], petitioner, vs. SPOUSES ERNESTO A. BAUTISTA, SR. AND MERVIRA M. BAUTISTA, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution datedApril 23, 2018which reads as follows:
"G.R. No. 235825 — Philippine Investment Two [SPV-AMC], Inc. [as successor-in-interest of Development Bank of the Philippines] v. Spouses Ernesto A. Bautista, Sr. and Mervira M. Bautista
Acting on petitioner's Motion for Extension of Time, the Court resolves to GRANT petitioner a period of thirty (30) days from the expiration of the reglementary period within which to file a Petition for Review on Certiorari.
After a careful review of the allegations, issues, and arguments adduced in the instant Petition for Review on Certiorari filed under Rule 45 of the Rules of Court, the Court resolves to DENY the same for failure of petitioner to show that the Court of Appeals (CA) committed any reversible error in reversing and setting aside the November 12, 2014 and April 8, 2015 Resolutions of the Regional Trial Court (RTC) of Aparri, Cagayan, Branch 8, in Adm. Case No. II-3049, and in remanding the case to the RTC for appropriate proceedings with reasonable dispatch. HTcADC
Petitioner contends that respondent spouses are not allowed to intervene in an ex parte petition for the issuance of writ of possession pursuant to Act No. 3135, as amended, and that Section 33, Rule 39 of the Rules of Court does not apply to an extrajudicial foreclosure sale such as the instant case.
The Court does not agree.
It is a settled rule that the purchaser in an extrajudicial foreclosure sale is entitled to the possession of the foreclosed property as a matter of right once the redemption period has expired and title over the said property has been consolidated in his name. 1 Thus, upon an ex parte petition and proof of title, it is the ministerial duty of the court to issue a writ of possession in favor of the purchaser. 2 As an ex parte proceeding, no intervention is allowed. 3
An exception to this rule, however, is found in Section 33, Rule 39 of the Rules of Court, which provides:
Sec. 33. Deed and possession to be given at expiration of redemption period; by whom executed or given. — If no redemption be made within one (1) year from the date of the registration of the certificate of sale, the purchaser is entitled to a conveyance and possession of the property; or, if so redeemed whenever sixty (60) days have elapsed and no other redemption has been made, and notice thereof given, and the time for redemption has expired, the last redemptioner is entitled to the conveyance and possession; but in all cases the judgment obligor shall have the entire period of one (1) year from the date of the registration of the sale to redeem the property. The deed shall be executed by the officer making the sale or by his successor in office, and in the latter case shall have the same validity as though the officer making the sale had continued in office and executed it.
Upon the expiration of the right of redemption, the purchaser or redemptioner shall be substituted to and acquire all the rights, title, interest and claim of the judgment obligor to the property as of the time of the levy. The possession of the property shall be given to the purchaser or last redemptioner by the same officer unless a third party is actually holding the property adversely to the judgment obligor. (Emphasis supplied)
Contrary to the view of petitioner, the said provision applies to extrajudicial foreclosure of real estate mortgages pursuant to Section 6 of Act No. 3135, as amended. 4 CAIHTE
Under Section 33, Rule 39 of the Rules of Court, when a third party is in possession of the foreclosed property upon a right adverse to that of the mortgagor, the issuance of an ex parte writ of possession ceases to be ministerial. Thus, the court is required to conduct a hearing to determine the nature of the third party's adverse possession i.e., whether or not he is in possession of the subject property under a claim adverse to that of the mortgagor. 5 The rationale behind this is to protect the rights of the third party as under the law he can only be ejected from the premises after he has been given an opportunity to be heard, to comply with the time-honored principle of due process. 6
In the Heirs of Peñaflor v. Heirs of Dela Cruz, 7 the Court explained that —
However, Section 33, Rule 39 of the Rules of Court — which is applied to extrajudicial foreclosure of mortgages per Section 6 of Act No. 3135 — provides that upon the expiration of the redemption period, the possession of the property shall be given to the purchaser or last redemptioner, unless a third party is actually holding the property adversely to the judgment obligor.
In China Banking Corporation v. Spouses Lozada, it was held that for the court's ministerial duty to issue a writ of possession to cease, it is not enough that the property be held by a third party, but rather the said possessor must have a claim thereto adverse to the debtor/mortgagor:
Where a parcel levied upon on execution is occupied by a party other than a judgment debtor, the procedure is for the court to order a hearing to determine the nature of said adverse possession. Similarly, in an extrajudicial foreclosure of real property, when the foreclosed property is in the possession of a third party holding the same adversely to the defaulting debtor/mortgagor, the issuance by the RTC of a writ of possession in favor of the purchaser of the said real property ceases to be ministerial and may no longer be done ex parte. For the exception to apply, however, the property need not only be possessed by a third party, but also held by the third party adversely to the debtor/mortgagor.
Specifically, the Court held that to be considered in adverse possession, the third party possessor must have done so in his own right and not merely as a successor or transferee of the debtor or mortgagor:
The exception provided under Section 33 of Rule 39 of the Revised Rules of Court contemplates a situation in which a third party holds the property by adverse title or right, such as that of a co-owner, tenant or usufructuary. The co-owner, agricultural tenant, and usufructuary possess the property in their own right, and they are not merely the successor or transferee of the right of possession of another co-owner or the owner of the property. x x x.
Thus, in BPI Family, the Court ruled that it was an error to issue an ex parte writ of possession to the purchaser in an extrajudicial foreclosure, or to refuse to abate one already granted, where a third party has raised in an opposition to the writ or in a motion to quash the same, his actual possession thereof upon a claim of ownership or a right adverse to that of the debtor or mortgagor. The procedure, according toUnchuan v. CA, is for the trial court to order a hearing to determine the nature of the adverse possession, conformably with the time-honored principle of due process.
xxx xxx xxx
As above-discussed, where a third party has raised in an opposition to the writ of possession or in a motion to quash the same his actual possession thereof upon a claim of ownership or a right adverse to that of the debtor or mortgagor — as in this case — the procedure is for the trial court to order a hearing to determine the nature of the adverse possession, conformably with the time-honored principle of due process. Notably, when this opposition is made, the proceeding for the issuance of a writ of possession loses its nature of being an ex parte, and instead, turns adversarial, so as to give:
On the one hand, the third party claimant the opportunity to present evidence of his title showing his independent right over the subject property adverse to the judgment obligor/mortgagor; and
On the other hand, the mortgagee the opportunity to rebut said evidence in order to sustain the issuance of the writ and gain possession of the subject property pursuant to his consolidated title.
Jurisprudence describes that "[a]n ex parte proceeding merely means that it is taken or granted at the instance and for the benefit of one party, and without notice to or contestation by any party adversely affected." Clearly, this is not the case when an opposition is made by a third party claimant against the issuance of a writ of possession, from which the court is compelled to now order a hearing to determine the nature of the former's adverse possession. (Emphasis supplied)
In this case, respondent spouses, as owners of the subject property, filed a case for Annulment of Mortgage, Special Powers of Attorney (SPAs), Public Auction Sale, Certificate of Sale, and Damages against the mortgagee, Development Bank of the Philippines (DBP), and the mortgagor, Fatima Rescar (Rescar), claiming that Rescar used a forged SPA to mortgage their property. Considering that they were able to prove their claim and, accordingly, cause the annulment of the mortgage and the extrajudicial foreclosure of the subject property, and considering further that the decision in the annulment case has attained finality, the CA correctly considered respondent spouses as third parties actually holding the subject property adversely to the mortgagor. As such, the RTC should have allowed respondent spouses to participate in the instant case even after it issued its April 7, 2014 Resolution granting the Ex Parte Petition for the issuance of a Writ of Possession. The RTC should have brushed aside technicalities and treated the motion to intervene as opposition to afford respondent spouses the opportunity to present evidence considering that they are third parties actually holding the subject property adversely to the mortgagor. As aptly pointed out by the CA, procedural rules are mere tools to expedite the resolution of cases; thus, their strict and rigid application may be suspended in the interest of substantial justice. 8 DETACa
In view of the foregoing, the Court finds no error on the part of the CA in remanding the case to the RTC for appropriate proceedings.
ACCORDINGLY, the March 8, 2017 Decision and November 23, 2017 Resolution of the Court of Appeals in CA-G.R. CV No. 104830 are hereby AFFIRMED.
SO ORDERED." Sereno, C.J., on leave; De Castro, J., designated as Acting Chairperson of the First Division per Special Order No. 2540 dated February 28, 2018; Tijam, J., no part; Peralta, J., designated additional member per Raffle dated March 26, 2018. HEITAD
Very truly yours,
(SGD.) LIBRADA C. BUENADeputy Division Clerk of Court
Footnotes
1.China Banking Corp. v. Spouses Lozada, 579 Phil. 454, 472-473 (2008).
2.Id. at 473.
3.Metropolitan Bank & Trust Co. v. Santos, 623 Phil. 134 (2009).
4.Hernandez v. Ocampo, G.R. No. 181268, August 15, 2016, 800 SCRA 227, 238-239.
5.Id.
6.Id.
7. G.R. No. 197797, August 9, 2017.
8.Neptune Metal Scrap Recycling, Inc. v. Manila Electric Company, G.R. No. 204222, July 04, 2016, 795 SCRA 418, 428.