G.R. No. 147074 and 147075. July 15, 2005.
Spouses Rodrigo Paderes and Sonia Paderes and Spouses Isabelo Bergardo and Juana Herminia Bergardo, Petitioners, vs. The Hon. Court of Appeals and Hon. Carlota P. Valenzuela, in her capacity as the Liquidator of Banco Filipino Savings and Mortgage Bank, Respondents.

FACTS

Manila International Construction Corporation (MICC) executed a real estate mortgage over 21 parcels of land in favor of Banco Filipino on September 14, 1982, which was duly registered and annotated on the titles in December 1982. The mortgaged properties included two specific lots in Parañaque. Subsequently, in August 1983 and January 1984, MICC sold these lots and the houses thereon to the petitioner spouses Paderes and Bergardo, respectively. These sales were not registered.
Due to MICC’s loan default, Banco Filipino extrajudicially foreclosed the mortgage in 1985, emerged as the highest bidder at the auction sale, and obtained a certificate of sale. After the redemption period lapsed, the bank’s liquidator secured a writ of possession from the Regional Trial Court in 1996. Upon being served notice to vacate, the petitioners filed consolidated petitions before the Court of Appeals to assail the writ, claiming superior rights as good faith buyers and builders.

ISSUE

The core issue is whether the petitioners, as subsequent unregistered buyers from the mortgagor, can defeat the mortgagee bank’s right to a writ of possession over the foreclosed properties.

RULING

The Supreme Court denied the petition and upheld the writ of possession. The legal logic is anchored on the principles of registration and the nature of a real estate mortgage. The mortgage in favor of Banco Filipino was registered and annotated on the titles in 1982, thereby creating a real right or lien that attached to the property itself, effective against the whole world. Under Articles 1312 and 2126 of the Civil Code, this real right subsists over the property regardless of subsequent transfers, binding all possessors until the obligation is discharged.
Consequently, the petitioners’ unregistered purchases from MICC in 1983 and 1984, though allegedly in good faith, are subordinate to the bank’s prior and duly registered mortgage lien. The issuance of a writ of possession under Act No. 3135 is a ministerial duty upon the filing of an ex parte petition after the consolidation of title in the purchaser, which in this case is Banco Filipino. The petitioners’ status as alleged builders in good faith is irrelevant to the issuance of the writ, as such claims pertain to a separate cause of action for indemnity under Article 448 of the Civil Code and do not affect the mortgagee’s immediate right to possession after foreclosure. The Court of Appeals correctly dismissed the petitions.