G.R. No. 200667; March 11, 2013
RURAL BANK OF STA. BARBARA (ILOILO), INC., Petitioner, vs. GERRY CENTENO, Respondent.

FACTS

Spouses Gregorio and Rosario Centeno mortgaged three cadastral lots to petitioner Rural Bank of Sta. Barbara to secure a loan. Upon default, the bank extrajudicially foreclosed the mortgage, purchased the lots as the highest bidder at the auction sale in 1969, and registered the Certificate of Sale in 1971. The spouses failed to redeem the properties within the statutory period. Despite this, they remained in possession. In 1988, their son, respondent Gerry Centeno, purchased the same lots from his parents, paid the corresponding taxes, and obtained tax declarations in his name while continuing possession.
Petitioner consolidated its title and secured a Final Deed of Sale in 1997. In 1998, it filed a petition for a writ of possession before the Regional Trial Court (RTC). Respondent opposed, asserting his purchase and adverse possession for over fifteen years, challenging the validity of the foreclosure due to alleged forged signatures, and claiming petitioner’s rights had prescribed.

ISSUE

Whether or not petitioner is entitled to a writ of possession over the subject lots.

RULING

Yes, the Supreme Court granted the petition and reinstated the RTC decision ordering the issuance of the writ. The legal logic is anchored on the ministerial duty of the court to issue a writ of possession after the consolidation of title in favor of the purchaser in an extrajudicial foreclosure sale. Upon the mortgagor’s failure to redeem, the purchaser’s right to possession ripens into an absolute right of a confirmed owner. The issuance of the writ becomes a ministerial function under Section 33, Rule 39 of the Rules of Court.
The critical exception is when the property is in the possession of “a third party who is actually holding the property adversely to the judgment obligor.” This phrase refers to a party holding the property by an adverse title or right independent of the mortgagor’s, such as a co-owner, tenant, or usufructuary. The Court ruled that respondent is not such a third party. He is a mere successor-in-interest of the original mortgagors, his parents, from whom he purchased the lots long after the bank’s rights had accrued. Therefore, he does not hold the property under a right adverse to his parents (the judgment obligors) but precisely through them. His defenses, including claims of nullity of the foreclosure and prescription, were deemed irrelevant to the summary proceeding for a writ of possession, which is not the venue for ventilating such claims. The RTC’s ministerial duty to issue the writ was thus upheld.