GR 183658; (April, 2013) (Digest)
G.R. No. 183658 ; April 10, 2013
ROYAL SAVINGS BANK, formerly Comsavings Bank, now GSIS FAMILY BANK, Petitioner, vs. FERNANDO ASIA, MIKE LATAG, CORNELIA MARANAN, JIMMY ONG, CONRADO MACARALAYA, ROLANDO SABA, TOMAS GALLEGA, LILIA FEDELIMO, MILAGROS HAGUTAY and NORMA GABATIC, Respondents.
FACTS
Sometime in January 1974, Paciencia Salita and Franco Valenderia obtained a loan from petitioner Royal Savings Bank. To secure the loan, Salita executed a Real Estate Mortgage over her property covered by TCT No. 103538. Due to non-payment, petitioner extrajudicially foreclosed the mortgage in October 1979, with petitioner as the highest bidder. The redemption period expired on April 23, 1983 without redemption, leading to the cancellation of Salita’s title and the issuance of TCT No. 299440 in petitioner’s name. Salita filed a case for Reconveyance, Annulment of Title and Damages in 1984. The RTC ruled in her favor, but the Court of Appeals reversed this decision. The CA ruling became final and executory on June 4, 2002. Petitioner subsequently filed an Ex-Parte Petition for a Writ of Possession, which the RTC granted on May 28, 2007. Respondents, claiming to have been in open, continuous, exclusive, and notorious possession of the land as owners for 40 years without knowledge of the proceedings, were served a Notice to Vacate on July 20, 2007. They filed an Urgent Motion to Quash the Writ of Possession and Writ of Execution. The RTC, through an Order dated October 4, 2007, granted the motion to quash. Petitioner’s Motion for Reconsideration was denied by the RTC on June 25, 2008. Petitioner filed a Petition for Review directly with the Supreme Court.
ISSUE
Whether the Regional Trial Court erred in granting the respondents’ Urgent Motion to Quash the Writ of Possession.
RULING
No, the Regional Trial Court did not err. The Supreme Court denied the petition and affirmed the RTC’s Orders dated October 4, 2007 and June 25, 2008.
The Court held that while petitioner, as a government financial institution (GFI), invoked the mandatory foreclosure provisions of Presidential Decree No. 385, this rule is not absolute. The purpose of P.D. No. 385 is served by allowing foreclosure proceedings to proceed without injunction, but it does not preclude the protection of third parties in possession claiming rights adverse to the judgment debtor. The obligation of a court to issue a writ of possession ceases to be ministerial when a third party in possession of the property asserts a right adverse to the debtor/mortgagor, as established in Barican v. Intermediate Appellate Court. Respondents explicitly claimed possession in the concept of owners for 40 years, adverse to mortgagor Salita. Therefore, the RTC correctly applied the doctrine that a hearing must be conducted to determine the nature of such adverse possession before issuing a writ of possession, in compliance with due process and Section 33, Rule 39 of the Rules of Civil Procedure. The Court also found no violation of the hierarchy of courts, as the pairing judge who quashed the writ was acting in the capacity of the same RTC branch that issued it. The proper recourse for resolving the conflicting claims of possession and ownership is through an appropriate judicial action, such as an ejectment suit or a reivindicatory action.