G.R. No. L-62619 August 19, 1986
MANUEL IBASCO and EDITA TAMPINGCO, petitioners, vs. HON. EDUARDO P. CAGUIOA, in his capacity as Presiding Judge of the Court of First Instance of Bulacan Branch VIII, Valenzuela, Metro Manila, BANCO FILIPINO SAVINGS AND MORTGAGE BANK, and RICARDO CRUZ, as ex-Officio Sheriff, respondents.

FACTS

Petitioners Manuel Ibasco and Edita Tampingco were lessees of a residential house in Valenzuela, Metro Manila, leased from spouses Anastacio and Asuncion Garcia at a monthly rental of P1,500. They were religiously paying rent and were unaware that the Garcias had mortgaged the property to respondent Banco Filipino Savings and Mortgage Bank. Due to the mortgagors’ non-payment, the bank extrajudicially foreclosed the mortgage, purchased the property at the foreclosure sale, and the redemption period expired.
The bank subsequently obtained a writ of possession from the Court of First Instance. Petitioners, as lessees in possession, were served with the writ ordering them to vacate. They filed this petition for certiorari, arguing the lower court abused its discretion in issuing the writ. They contended that Act No. 3135 (governing extrajudicial foreclosure) was impliedly repealed by Batas Pambansa Blg. 25 (the House Rental Law) and that a writ of possession is obtainable only in land registration cases.

ISSUE

Whether a mortgagee-purchaser at an extrajudicial foreclosure sale can be granted a writ of possession over the property despite the presence of a lessee whose lease has not been terminated.

RULING

Yes. The Supreme Court dismissed the petition, upholding the issuance of the writ of possession. The legal logic is anchored on the explicit provisions of Act No. 3135 and the Civil Code. Act No. 3135 expressly authorizes the issuance of a writ of possession to the purchaser at a foreclosure sale during or after the redemption period. This right is ministerial and non-discretionary upon the court once the foreclosure is proper and the redemption period has lapsed.
The petitioners’ arguments were unmeritorious. First, there is no implied repeal of Act No. 3135 by Batas Pambansa Blg. 25. The laws are not inconsistent; Act 3135 governs foreclosure procedures, while BP 25 regulates rentals and grounds for ejectment. BP 25’s provision that a sale or mortgage alone is not ground for ejectment does not conflict with the right of a foreclosure purchaser to obtain possession under Act 3135. Furthermore, BP 25 was inapplicable as it covered units with rentals not exceeding P300, whereas the petitioners’ rent was P1,500.
Second, the writ was properly issued. Section 7 of Act No. 3135 mandates that for registered land, the petition for possession shall be filed in the form of an ex-parte motion in the registration or cadastral proceedings, which was complied with in this case.
Finally, the petitioners’ leasehold rights were not binding on the mortgagee-bank as a third party. Under Article 1648 of the Civil Code, an unrecorded lease is not binding upon third persons unless the third person had actual knowledge of its existence and duration. Petitioners failed to allege or prove that their lease was registered in the Registry of Property or that the bank had prior actual knowledge of it. Consequently, the bank’s right to possession as the foreclosure purchaser prevails over the unregistered leasehold rights of the petitioners.