G.R. No. 176019; January 12, 2011
BPI FAMILY SAVINGS BANK, INC., Petitioner, vs. GOLDEN POWER DIESEL SALES CENTER, INC. and RENATO C. TAN, Respondents.

FACTS

On October 26, 1994, CEDEC Transport, Inc. (CEDEC) mortgaged two parcels of land in Pasay City to petitioner BPI Family Savings Bank, Inc. (BPI Family) to secure a loan. Additional loans were obtained and secured by the same properties in 1995. CEDEC defaulted. BPI Family extrajudicially foreclosed the mortgage, and at the public auction on December 10, 1998, it emerged as the highest bidder. The one-year redemption period expired without redemption, and titles were consolidated in BPI Family’s name on September 13, 2000.
BPI Family filed an ex-parte petition for a writ of possession, which the Regional Trial Court (RTC) granted on June 27, 2002, and a writ was issued on July 12, 2002. However, respondents Golden Power Diesel Sales Center, Inc. and its President Renato C. Tan filed a motion to hold the writ’s implementation. They claimed possession of the properties, having acquired them from CEDEC through a Deed of Absolute Sale with Assumption of Mortgage dated September 10, 1998 (executed before the foreclosure sale). They also disclosed a pending complaint (Civil Case No. 99-0360) before another RTC branch seeking to cancel the sheriff’s certificate of sale and compel BPI Family to honor their deed of sale.
The trial court initially denied respondents’ motion but later, upon respondents filing a third-party claim, issued a resolution suspending the implementation of an alias writ of possession. The trial court reasoned that the writ should not affect third persons (the respondents) holding rights adverse to the judgment obligor (CEDEC), noting respondents’ actual possession and pending civil case. BPI Family’s motion for reconsideration was denied.
BPI Family filed a petition for mandamus and certiorari with the Court of Appeals, arguing the trial court had a ministerial duty to grant and implement the writ of possession. The Court of Appeals dismissed the petition, affirming the trial court’s orders. It ruled that the duty to issue the writ ceases to be ministerial when a third party in possession claims a right adverse to the debtor/mortgagor.

ISSUE

1. Whether respondents, as vendees of the mortgagor (CEDEC), are considered “third persons in possession of the property who are claiming a right adverse to that of the debtor/mortgagor,” such that the implementation of a writ of possession ceases to be ministerial.
2. Whether the pendency of an action (Civil Case No. 99-0360) questioning the validity of the auction sale is a valid ground to suspend the implementation of a writ of possession.

RULING

The Supreme Court GRANTED the petition, reversing the Court of Appeals.
1. On the status of respondents: Respondents are NOT third parties claiming rights adverse to the mortgagor. By virtue of the Deed of Sale with Assumption of Mortgage, respondents merely stepped into the shoes of the original mortgagor, CEDEC. They are its successors-in-interest. The deed expressly stated that respondents assumed the mortgage obligation to BPI Family. Therefore, their possession was derived from and under the mortgagor, not adverse to it. The rule that a writ of possession cannot be enforced against third parties claiming adversely refers to those who assert a right independent of, and not derived from, the mortgagor/judgment obligor.
2. On the effect of a pending annulment case: The pendency of a separate action questioning the validity of the mortgage or the foreclosure sale is NOT a legal ground to deny or suspend the issuance or implementation of a writ of possession. A writ of possession is a ministerial function incidental to the purchaser’s consolidation of title after the redemption period. The purchaser’s right to possession becomes absolute upon consolidation of title. Any pending action to annul the sale does not affect the issuance of the writ, as the latter is based on a different right. The proper remedy for a party claiming a better right is to file a separate action for reconveyance or damages, not to oppose the ministerial issuance of the writ.
The Court emphasized that the trial court’s duty to grant and implement the writ of possession in favor of the purchaser in an extrajudicial foreclosure sale, after consolidation of title, is ministerial and mandatory. The trial court and the Court of Appeals committed reversible error in suspending the writ’s implementation based on respondents’ claim and pending civil case. The Supreme Court ordered the trial court to implement the alias writ of possession in favor of BPI Family.