G.R. No. 157125. September 19, 2008.
Iluminada “Lumen” R. Policarpio, Petitioner, versus Active Bank (formerly Maunlad Savings and Loan Bank), Respondent.

FACTS

The spouses Septem and Grelita Ricaza, registered owners of a parcel of land, mortgaged the property to respondent Active Bank on October 2, 1996. Due to the spouses’ failure to settle their obligation, the bank foreclosed the mortgage. After the spouses failed to redeem the property, the bank consolidated its ownership. The bank then filed a Petition for Issuance of a Writ of Possession with the Regional Trial Court (RTC). Petitioner Iluminada Policarpio opposed the petition, claiming she purchased the property from Septem Ricaza under a Deed of Sale dated April 22, 1998. A hearing was set for her opposition, but neither she nor her counsel appeared. The RTC ordered the issuance of the writ, finding the Deed of Sale void as only Septem signed it without proof of authority from his wife Grelita to sell the conjugal property. After being served with the writ and a notice to vacate, petitioner’s belongings were removed by the sheriff, though she retained partial possession. Petitioner filed a petition for certiorari and prohibition with the Court of Appeals, arguing she was a third-party possessor under Section 33, Rule 39 of the Rules of Court, which should preclude the issuance of the writ. The Court of Appeals denied her petition, ruling the sale was questionable, unregistered, and that laches applied as she did not prosecute her claim. Her motion for reconsideration was denied.

ISSUE

Whether petitioner is a third party in possession of the property contemplated under Section 33, Rule 39 of the Rules of Court such as to preclude the trial court from issuing a Writ of Possession in favor of respondent.

RULING

No. The Supreme Court denied the petition and affirmed the Court of Appeals. The Court held that while the issuance of a writ of possession is generally ministerial for a purchaser in an extrajudicial foreclosure sale, this ceases when a third party in possession claims a right adverse to the debtor/mortgagor. In such a case, a hearing should be conducted. Here, a hearing was set, but petitioner failed to appear. The trial court properly evaluated the only evidence she submitted: the Deed of Sale and a certified true copy of the title. The sale’s validity was questionable because only the husband signed the deed for a conjugal property without the wife’s consent or authority. Furthermore, the deed was not registered, a fatal defect. Petitioner’s reliance on a partial copy of the title (lacking the dorsal page where the mortgage was annotated) was misplaced, as a person dealing with registered property is charged with notice only of annotated burdens. As a lawyer, she should have been more circumspect. The Court distinguished the case from Philippine National Bank v. Court of Appeals, where the third-party possessor was in possession prior to the mortgage and the bank was aware of it. Here, the mortgage preceded the sale, and there was no allegation the bank was aware of petitioner’s possession. Thus, petitioner was not a third-party possessor with a right adverse to the mortgagor that would bar the writ’s issuance.