G.R. No. L-31789, June 29, 1972
ANTONIO R. BANZON and ROSA BALMACEDA, petitioners, vs. HON. FERNANDO CRUZ, Spouses PEDRO CARDENAS and LEONILA BALUYOT and ASSOCIATED INSURANCE & SURETY COMPANY, INC., respondents.

FACTS

Petitioners Antonio Banzon and Rosa Balmaceda owned two lots in Caloocan City. Banzon, as an indemnitor for a surety company (Associated Insurance), was held jointly and severally liable with the principal debtor in a 1957 Manila CFI judgment. To satisfy this judgment, the two lots were levied upon and sold at public auction to Associated as the highest bidder. After the redemption period lapsed, Associated obtained title. Petitioners later filed a suit for reconveyance, alleging the judgment was void for lack of summons and the execution sale was fraudulent because the price was grossly inadequate and the lots were conjugal property.
While the reconveyance suit was pending, Associated, which was under liquidation, sold one lot to respondents spouses Pedro Cardenas and Leonila Baluyot. The Insurance Commissioner, as liquidator, sought a writ of possession and demolition from the Caloocan CFI against petitioners. Petitioners then filed this original action with the Supreme Court to enjoin the enforcement of that writ, arguing it should be suspended pending the outcome of their reconveyance case.

ISSUE

Whether a writ of possession and demolition obtained by a purchaser at an execution sale can be enforced against the judgment debtor who remains in possession and has filed a separate action for reconveyance of the property based on claims of fraud and nullity of the sale.

RULING

No. The Supreme Court granted the writ of injunction, suspending the enforcement of the writ of possession and demolition. The legal logic is that when a judgment debtor in possession of property sold at an execution sale files a substantive action for reconveyance, asserting ownership and challenging the validity of the sale on grounds such as fraud, the issuance and enforcement of a writ of possession is not ministerial and automatic. In such a scenario, where the very title of the purchaser is directly assailed in a pending judicial proceeding, allowing the writ to be enforced would preempt the reconveyance case and could cause irreparable injury. The court emphasized that the duty to issue a writ of possession becomes discretionary, not ministerial, when a third party (or the judgment debtor in a reconveyance suit claiming continuous ownership) asserts a right adverse to that of the purchaser at the execution sale. The proper course is to maintain the status quo until the reconveyance suit, which challenges the root of the purchaser’s title, is definitively resolved.