CHINA BANKING CORPORATION VS ORDINARIO GR No. 121243 SANDOVAL-GUTIERREZ; SANDOVAL-GUTIERREZ; March 24, 2003 NATURE petition for review on certiorari of the Decision and Resolution of the Court of Appeals FACTS on vari variou ous s date dates, s, pet petitio itione nerr Chin China a Bank Bankin ing g Corporation granted three (3) loans in the total sum of P27,35 P27,353,0 3,000. 00.00 00 to Trans TransAme Ameri rican can Sales Sales and Expo Exposi siti tion on,, Inc. Inc. (Tra (Trans nsAm Amer eric ican an)) owne owned d and and controlled by spouses Jesus and Lorelie Garcia. The loan loans s were were secu secure red d by real real esta estate te mort mortga gage ges s constituted constituted by Jesus Garcia (with the consent of his wife) on his forty-five (45) parcels of land all of the Registry of Deeds of Quezon City. The contracts of mortgage were all registered in the same Registry.
filed a separate action; that the assailed order dated April April 10, 1991 directing directing the issuance issuance of a writ of poss posses essi sion on had had beco become me fina final; l; and and that that the the proceedings, being in rem, rem, bind herein respondents. On September September 21, 1992, 1992, the trial court issued an order denying respondents? motion for reconsid reconsiderat eration. ion.CA CA set aside the order, and a new judgment is issued by the Court granting movantsappellants appellants motion for reconsideration reconsideration to the effect of excluding from the lower courts orders dated April 10, 10, 1991 1991 and and Sept Septem embe berr 21, 21, 1992 1992,, mova movant ntssappellants appellants property covered by Transfer Certificate Certificate of Title No. 7637 as the same property should not have been covered by the writ of possession issued in the said orders of the lower court. Petitioner bank moved for a reconsideration reconsideration but it was denied by the Appellate Court in a Resolution ISSUES
For For fail failur ure e of Tran TransA sAme meri rica can n to pay pay its its loan loans, s, petitioner petitioner bank foreclosed extrajudicially extrajudicially the three real real estat estate e mortga mortgages ges.. On Augus Augustt 27, 1990, 1990, the the mortgaged mortgaged properties were sold at public auction for P38,004,205.01 P38,004,205.01 to petitioner petitioner bank, being the highest bidder. On September 3, 1990, the Certificate Certificate of Sale was registered in the Registry of Deeds of Quezon City. On October October 4, 1990, petitione petitionerr bank bank filed filed with with the Regional Trial Court (RTC) of Quezon City, Branch 90, an ex parte verified petition for issuance of a writ of possession. On April 10, 1991, the trial court issued an order granting the petition and placing petitioner bank in possession of the 45 parcels of land. On July 19, 1991, 1991, petiti petitioner oner posted the require required d surety bond which was approved by the RTC.
1. WON Respondent Respondent Court gravely gravely erred erred in setting setting aside the order dated September 21, 1992 in LRC Case No. Q-4534 which granted the petition petition ex-parte for a writ of possession of the forty-five parcels of land to include include the property property covered covered by Transfe Transferr Certificate of Title No. 7637. 2. WON Respondent Court committed a grave error when it failed to consider that the third party referred to in the case of PNB vs. Adil, Adil, 118 SCRA 110, is a third party actually holding the property adversely to the owner. 3. WON Respondent Court committed a grave error when it failed to consider that the April 10, 1991 order is already final and executory, hence, can no longer be disturbed. HELD
On Augu August st 16, 16, 1991 1991,, spou spouse ses s Osca Oscarr and and Loli Lolita ta Ordinari Ordinario, o, herein herein respond respondents ents,, filed filed a motion motion for reconsideration praying that the parcel of land with its its impr improv ovem emen entt cove covere red d by TCT TCT No. No. 7637 7637 be excluded from the above order. They alleged, among others, others, that they are indispen indispensabl sable e parties parties in the case case,, clai claimi ming ng that that in Nove Novemb mber er 1989 1989,, they they purcha purchased sed the land land cover covered ed by TCT TCT No. No. 7637 7637 on which which was constru constructe cted d their their townhou townhouse; se; that that the petition for a writ of possession does not bind them for lack of notice; that petitioner bank should have filed an action for recovery of possession, not an ex parte petition petition for a writ of possession since there are parties in actual possession of the lots involved; that they filed with the Housing and Land Use Regulatory Board (HLURB) a complaint for the delivery of title and damages against petitioner bank, Jesus Garcia and and Tran TransA sAme meri rica can; n; and and that that the the mort mortga gage ge foreclosure cannot prevail over their superior right as legitima legitimate te buyers buyers of the area area covered covered by TCT No. 7637 petitioner petitioner bank filed its opposition opposition to respondents? respondents? motion for reconsideration. reconsideration. It alleged that the trial court, acting as a land registration registration court with limited jur juris isdi dict ctio ion, n, cann cannot ot pass pass upon upon the the meri merits ts of respondents? motion; that respondents should have
1. Under Section 7 of Act No. 3135, the purchaser in a foreclos foreclosure ure sale is entitl entitled ed to possession possession of the property. 2 Thus Thus the the writ writ prayed prayed for by petit petition ioner er granting it possession has to be issued as a matter of course. course.3 This Court has consistently ruled that it is a ministerial duty of the trial court to grant such writ of possession.4 No discretion is left for the trial court. court. Any question regarding the cancellation of the writ or in respect of the validity and regularity of the the publ public ic sale sale shou should ld be dete determ rmin ined ed in a subseque subsequent nt proceed proceeding ing as outline outlined d in Section Section 8 of Act No. 3135.5 Consequently, Consequently, respondents? respondents? motion for reconsideration reconsideration of the trial court?s order dated April 10, 1991 granting the writ of possession must be denied being bereft of merit. Section 7 of Act No. 3135, as amended, provides: "Sec. 7. In any sale made under the provisions of this Act, the purchase purchaserr may petition petition the Court of First First Instance (now RTC) of the province or place where the property or any part thereof is situated, to give him posse possessi ssion on there thereof of durin during g the redem redempti ption on period, furnishing bond in an amount equivalent to the the use use of the the prop proper erty ty for for a peri period od of twel twelve ve months, to indemnify the debtor in case it be shown that that the the sale sale was was made made with withou outt viol violat atin ing g the the
mortgage or without complying with the requirements requirements of this Act. Such petition shall be made under under oath oath and filed filed in the form form of an ex parte parte motion in the registration registration or cadastral cadastral proceedings if the property is registered, or in special proceedings in the the case case of prop proper erty ty regi regist ster ered ed unde underr the the Mortgage Law xxx, and in each case the clerk of the court shall, upon the filing of such petition, collect the the fees fees specif specified ied xxx, xxx, and and the the court court shall shall upon upon approval of the bond, order that a writ of possession issue, issue, addresse addressed d to the sheriff sheriff of the province province in which which the property property is situate situated, d, who shall execute execute said order immediately." (underscoring supplied). 2. & 3 The above provision is not without exception. Under Section 33, Rule 39 of the 1997 Rules of Civil Proce Procedur dure, e, as amend amended ed,, the the posses possessio sion n of the fore forecl clos osed ed prope ropert rty y may may be awar awarde ded d to the the purchaser or highest bidder "unless a third party is actua actuall lly y holdi holding ng the the prope propert rty y advers adversel ely y to the judgm judgment ent debto debtor. r.""7 Assuming arguendo that respond respondent ent spouses spouses are adverse third third parties parties,, as they they so aver averre red, d, Sect Sectio ion n 16 of the the same same Rule Rule reser reserves ves to them them the remedie remedies s of (1) terceria to determine whether the sheriff has rightly or wrongly take taken n hold hold of the the proper property ty not belongi belonging ng to the judgment debtor or obligor and (2) an independent "sep "separ arat ate e acti action on"" to vind vindic icat ate e thei theirr clai claim m of ownershi ownership p and/or and/or possessi possession on over the foreclos foreclosed ed property. 8 Section 16 of Rule 39 provides: Sec. 16. Proc Procee eedi ding ngs s wher where e prop proper erty ty clai claime med d by thir third d person. person . ? If property property levied levied on is claim claimed ed by any any person other than the judgment obligor or his agent, and such perso person n make makes s an affida affidavit vit of his titl title e thereto or right to the possession thereof, stating the grounds of such right or title, and serves the same upon the officer making the levy, and copy thereof upon the judgment obligee, the officer shall not be bound to keep the property, unless such judgment oblige obligee, e, on dema demand nd of the officer, officer, files files a bond bond approved by the court to indemnify the third-party claim claimant ant in a sum sum not not less less than than the value value of the property levied on. on. In case of disagreement as to such value, value, the same shall be determin determined ed by the court court issui issuing ng the writ writ of execu executi tion on.. No claim claim for damages for the taking or keeping of the property may be enforced against the bond unless the action therefo thereforr is filed filed within within one hundred hundred twenty twenty (120) days from the date of the filing of the bond. "The officer shall not be liable for damages for the taking or keep keepin ing g of the the prop proper erty ty,, to any any thir third d part party y clai claima mant nt if such such bond bond is file filed. d. Nothing Nothing herein herein contained shall prevent such claimant or any third person from vindicating his claim to the property in a separat separate e action, action, or prevent prevent the judgment judgment obligee obligee from claiming damages in the same or a separate action action against against a third-p third-party arty claimant claimant who filed a frivolous or plainly spurious claim . xxx." Under Under the above Rule, a third-pa third-party rty claimant claimant or a stranger stranger to the foreclos foreclosure ure suit, suit, like like responden respondents ts herein, can opt to file a remedy known as terceria against against the sheriff sheriff or officer officer effecting effecting the writ by serving on him an affidavit of his title and a copy thereof upon the judgment creditor. By the terceria, terceria , the officer shall not be bound to keep the property and could be answerable for damages. A third-party clai claima mant nt may may also also reso resort rt to an inde indepe pend nde ent
"separate "separate action," the object of which is the recovery of ownership or possession of the property seized by the sheriff, as well as damages arising from wrongful wrongful seizure seizure and detenti detention on of the property property despite despite the third third-pa -part rty y claim claim.. If a "separ "separat ate e actio action" n" is the recourse, the third-party claimant must institute in a forum forum of compete competent nt jurisdict jurisdiction ion an action, action, distinct distinct and separate from the action in which the judgment is being enforced, even before or without need of filing a claim in the court that issued the writ. Both remed remedie ies s are cumul cumulat ative ive and may be availe availed d of indepe independe ndent ntly ly of or separ separat atel ely y from from the othe other. r. Availment of the terceria is not a condition sine qua non to the institution of a "separate action." Thus, respondents? resort to a motion for reconsideration is obviously a procedural misstep. DISPOSITION GRANTED . The appea The The insta instant nt petit petitio ion n is GRANTED. appeale led d Decisi Decision on and Resol Resoluti ution on of the Court Court of Appeal Appeals s dated March 20, 1995 and September 6, 1995 in CAASIDE. G.R. CV No. 40953 are REVERSED and SET ASIDE. The orders of the RTC, Branch 90, Quezon City, in LRC Case No. Q-4534 (90) directing directing the issuance of a writ writ of possession possession in favor favor of petitioner petitioner bank are AFFIRMED. AFFIRMED.
