G.R. No. L-68878 April 8, 1986
BANCO FILIPINO SAVINGS AND MORTGAGE BANK, petitioner, vs. INTERMEDIATE APPELLATE COURT and CELESTINA S. PAHIMUTANG, assisted by her husband, respondents.

FACTS

Spouses Gerardo and Celestina Pahimutang purchased a house and lot, financing the balance through a loan from Banco Filipino secured by a real estate mortgage. Upon the spouses’ failure to pay the monthly amortizations, the bank extrajudicially foreclosed the mortgage. The property was sold at a public auction on August 5, 1982, with Banco Filipino as the highest bidder, and the certificate of sale was registered on September 21, 1982. After the one-year redemption period expired without redemption, the Register of Deeds issued a new title in the bank’s name on October 10, 1983. Prior to this, on January 21, 1983, the bank had already filed a petition for a writ of possession under Act No. 3135. The trial court granted the petition and ordered the writ’s issuance on October 12, 1983, and again on December 7, 1983.
The spouses-mortgagors opposed the petition, alleging overpayment and lack of proper notice, and subsequently filed a separate action for annulment of the foreclosure. They also challenged the writ of possession via a certiorari petition before the Intermediate Appellate Court (IAC). The IAC granted the petition, annulling the writ. It ruled that the purchaser is not entitled to collect rents from the owner during the redemption period, implying the owner’s right to remain in possession, and that consolidation of ownership and possession only occurs after the redemption period expires. It found grave abuse of discretion in the trial court’s order for ejectment before the redemption period lapsed.

ISSUE

Whether the Intermediate Appellate Court erred in annulling the writ of possession issued to the purchaser after the expiration of the redemption period.

RULING

The Supreme Court reversed the IAC decision and upheld the writ of possession. The legal logic is anchored on the clear provisions of Act No. 3135 and established jurisprudence. The Court clarified that the facts indisputably showed the writ was issued after the redemption period had lapsed, as the certificate of sale was registered on September 21, 1982, and the writ was ordered on October 12 and December 7, 1983. The IAC’s contrary finding was a misapprehension. The law expressly entitles the purchaser to possession after the redemption period expires without redemption. Citing Section 35 of Rule 39 of the Revised Rules of Court, which governs redemption in extrajudicial foreclosures, the Court held the purchaser is entitled to conveyance and possession if no redemption is made within twelve months.
Furthermore, the Court emphasized that under Section 7 of Act No. 3135, a purchaser may even be entitled to possession during the redemption period upon filing an ex parte motion and posting a bond, with the court having no discretion to deny it. This procedural right is more compelling after the redemption period, especially when a new title has already been issued in the purchaser’s name, as in this case. The separate action for annulment filed by the spouses does not bar the issuance of the writ, as any challenge to the sale’s validity must be pursued in a subsequent proceeding and is not a valid ground to oppose the possessory writ, which is a ministerial duty of the court upon proper application. Therefore, the trial court correctly issued the writ, and the IAC committed reversible error in setting it aside.