G.R. No. 191540, January 21, 2015
SPOUSES JOSE O. GATUSLAO and ERMILA LEONILA LIMSIACO-GATUSLAO, Petitioners, vs. LEO RAY V. YANSON, Respondent.

FACTS

Petitioner Ermila Leonila Limsiaco-Gatuslao is the daughter of the late Felicisimo Limsiaco, the registered owner of two parcels of land in Bacolod City. Limsiaco mortgaged the properties to the Philippine National Bank (PNB). Upon his failure to pay, PNB extrajudicially foreclosed the mortgage and purchased the properties at a public auction on June 24, 1991. After the one-year redemption period expired without redemption, PNB consolidated its title, and new titles were issued in its name on October 25, 2006. On November 10, 2006, PNB sold the properties to respondent Leo Ray V. Yanson via a Deed of Absolute Sale, and new titles were issued in his name. As the registered owner, respondent filed an Ex-Parte Motion for a Writ of Possession with the Regional Trial Court (RTC) pursuant to Section 7 of Act No. 3135, as amended. Petitioners opposed, arguing that: (1) respondent, not being the purchaser at the public auction but a subsequent buyer, could not avail of an ex parte writ of possession; (2) a pending action for annulment of the foreclosure and auction sale (filed by Limsiaco’s estate) barred the issuance of the writ; and (3) as parties not privy to the foreclosure, they were strangers/third parties who could not be evicted via an ex parte writ, violating their due process. The RTC granted the writ, ruling that PNB, as absolute owner after consolidation, was entitled to possession, and respondent, as purchaser from PNB, stepped into its shoes by subrogation. The RTC denied petitioners’ motion for reconsideration.

ISSUE

1. Whether a pending action for annulment of foreclosure and auction sale bars the issuance of a writ of possession.
2. Whether petitioners, as occupants claiming under the mortgagor, are strangers/third parties to the foreclosure sale such that their eviction via an ex parte writ violates due process.
3. Whether a subsequent purchaser (like respondent) from the foreclosure sale buyer (PNB) is entitled to a writ of possession under Section 7 of Act No. 3135, as amended.

RULING

The Supreme Court denied the petition and upheld the issuance of the writ of possession.
1. No, a pending action for annulment of mortgage or foreclosure sale does not stay the issuance of a writ of possession. The issuance is a ministerial duty of the court upon application by the purchaser after consolidation of title, without prejudice to the outcome of the annulment case. The ministerial character of the writ disallows injunction against its issuance.
2. No, petitioners are not strangers or third parties to the foreclosure sale. They are parties who claim under the mortgagor, Felicisimo Limsiaco. The rule that an ex parte writ cannot be issued against strangers/third parties refers to persons who are neither the mortgagor nor his successors-in-interest. Petitioners, as successors-in-interest of the mortgagor, are bound by the foreclosure and are subject to the writ. Their due process rights were not violated as they were given the opportunity to oppose the motion.
3. Yes, a subsequent purchaser from the foreclosure sale buyer is entitled to a writ of possession. Upon expiration of the redemption period without redemption, the foreclosure sale buyer (PNB) became the absolute owner and was entitled to possession. When PNB sold the property to respondent, the latter acquired all of PNB’s rights, including the right to possess the property. The right to a writ of possession is a concomitant of the right of ownership acquired at the foreclosure sale, and this right can be transferred to a subsequent purchaser. The procedure under Section 7 of Act No. 3135 applies, and no bond is required after the redemption period. Respondent, by subrogation, stepped into the shoes of PNB and could avail of the writ.