G.R. No. L-78775 May 31, 1988
JOSE UNCHUAN, petitioner, vs. COURT OF APPEALS, HON. SENEN G. PENARANDA, REGIONAL TRIAL COURT OF MISAMIS ORIENTAL, ATTY. REXEL PACURIBOT, PROVINCIAL SHERIFF, & PHILIPPINE BANKING CORP., respondents.

FACTS

Flora Jaldon mortgaged a parcel of land to Philippine Banking Corporation (PBC) on November 3, 1976. Petitioner Jose Unchuan subsequently annotated an adverse claim on the title on December 10, 1976, asserting ownership over one-half of the property based on a prior verbal agreement with Jaldon. PBC extrajudicially foreclosed the mortgage, acquired the property at the public auction, and obtained a new title after the redemption period lapsed, with Unchuan’s adverse claim carried over. PBC later filed a petition for cancellation of the annotations and for a writ of possession. Unchuan opposed, reiterating his ownership claim and presenting a 1973 receipt from Jaldon. After hearings, the trial court granted PBC’s petition and ordered the issuance of the writ. Unchuan filed a petition for certiorari with the Court of Appeals, which was denied, prompting this appeal.

ISSUE

Whether the trial court gravely abused its discretion in issuing the writ of possession without a full trial on Unchuan’s claim and despite the pendency of his separate action for quieting of title.

RULING

No, the trial court did not gravely abuse its discretion. The issuance of a writ of possession after an extrajudicial foreclosure and the lapse of the redemption period is a ministerial duty under Section 35 of Rule 39 of the Revised Rules of Court, as applied via Act No. 3135 . The rule is that no separate action is needed to obtain possession; the purchaser merely files a petition. However, an exception exists for a third party who is actually holding the property adversely to the judgment debtor. In such a case, the third party must be given an opportunity to be heard on the nature of his possession. The trial court complied with this requirement by conducting hearings where Unchuan was able to present his opposition and evidence. The legal logic proceeds by evaluating the strength of Unchuan’s claim. His claim, based on an unregistered verbal sale and a belated adverse claim filed after the mortgage, is weak against the bank’s registered rights. Under Article 1544 of the Civil Code and the principles of the Property Registration Decree, the bank, as an innocent mortgagee for value who registered its interest first, acquired a superior right. The pendency of Unchuan’s separate quieting of title action does not bar the issuance of the writ, as proceedings for possession can proceed independently of an action on ownership. The writ of possession does not adjudicate ownership with finality; it merely restores possession to the purchaser. Thus, the trial court correctly issued the writ based on the evidence presented during the hearings, finding Unchuan’s claim insufficient to overcome the bank’s ministerial right to possession.