GR 53998; (May, 1989) (Digest)
G.R. No. 53998 May 31, 1989
SPOUSES ENRICO MALONZO and AVELINA MALONZO, BARBARA BROWN, and BONIFACIA MONZON, petitioners, vs. HON. HERMINIO MARIANO, Judge, CFI, Manila, Br. IV, BANCO FILIPINO SAVINGS AND MORTGAGE BANK and THE CITY SHERIFF OF MANILA, respondents.
FACTS
Universal Ventures, Inc. mortgaged a property to Banco Filipino to secure a loan. Upon default, the bank extrajudicially foreclosed the mortgage, purchased the property at the auction sale, and obtained a new certificate of title after the redemption period lapsed. The bank then filed a petition for a writ of possession in the Court of First Instance under Act 3135. The petition named the mortgagor and several persons, including petitioners Avelina Malonzo, Barbara Brown, and Bonifacia Monzon, as parties claiming rights under the mortgagor. After hearings, the court issued the writ.
Petitioners, who were occupants of the premises claiming under a verbal lease with the mortgagor, filed a special civil action for prohibition with the Supreme Court. They argued that the writ of possession could not be enforced against them because they were not made formal parties to the bank’s petition and no separate ejectment case was filed. They further contended that under then-existing tenancy laws (P.D. No. 20 and B.P. Blg. 25), a transfer of ownership was not a ground for ejectment.
ISSUE
May a writ of possession issued pursuant to Act 3135, following an extrajudicial foreclosure, be enforced against persons who are not the mortgagor but who claim possession under the mortgagor?
RULING
Yes. The Supreme Court dismissed the petition. The legal logic is anchored on the nature of a writ of possession under Act 3135. The purchaser at an extrajudicial foreclosure sale has an absolute right to possession after the lapse of the redemption period. This right is implemented through a summary proceeding, and the writ issued is generally enforceable not only against the mortgagor but also against all persons claiming under him, such as lessees, assignees, or possessors by tolerance. Their rights are derivative and subordinate to the mortgagor’s title, which was extinguished by the foreclosure sale.
The Court clarified that due process for such claimants is satisfied not by requiring a separate ejectment action, but by holding a hearing on the petition for the writ where they are given notice and an opportunity to be heard on the nature of their possession. The records showed petitioners were notified and hearings were conducted. Their reliance on tenancy laws was misplaced, as those laws did not apply to the bank’s summary right to possession under the special statutory procedure of Act 3135. The writ properly extends to all persons claiming under the mortgagor who are not actually holding the property adversely in their own right. The case was remanded for the issuance of an alias writ of possession.