G.R. No.

191540               January 21, 2015

SPOUSES JOSE O. GATUSLAO and ERMILA LEONILA LIMSIACO-GATUSLAO, Petitioners, 

vs.
LEO RAY V. YANSON, Respondent.

DECISION

DEL CASTILLO, J.:

Petitioners spouses Jose O. Gatuslao and Ermila Leonila Limsiaco Gatuslao (petitioners) are
assailing the December 8, 2009  Order of the Regional Trial Court (RTC) of Bacolod City, Branch 49
1

in Cad. Case No. 09-2802 which granted respondent Leo Ray  Yanson's (respondent) Ex Parte
2

Motion for the Issuance of Writ of Possession over the properties being occupied by petitioners, as
well as the February 26, 2010 RTC Order denying petitioners' motion for reconsideration thereto.
3

Factual Antecedents

Petitioner Ermila Leonila Limsiaco-Gatuslao is the daughter of the late Felicisimo Limsiaco
(Limsiaco) who died intestate on February 7, 1989. Limsiaco was the registered owner of two
parcels of land with improvements in the City of Bacolod described as Lots 10 and 11, Block. 8 of
the subdivision plan Psd-38577 and covered by Transfer Certificates of Title (TCT) Nos. T-
33429  and T-24331.
4 5

Limsiaco mortgaged the said lots along with the house standing thereon to Philippine National Bank
(PNB). Upon Limsiaco’s failure to pay, PNB extrajudicially foreclosed on the mortgageand caused
the properties’ sale at a public auction on June 24, 1991 where it emerged as the highest bidder.
When the one-year redemption period expired without Limsiaco’s estate redeeming the properties,
PNB caused the consolidation of titles in its name. Ultimately, the Registry of Deeds of Bacolod City
cancelled TCT Nos. T-33429 and T-24331 and in lieu thereof issued TCT Nos. T-308818  and T-6

308819  in PNB’s name on October 25, 2006.

7

On November 10, 2006, a Deed of Absolute Sale  was executed by PNB conveying the subject
8

properties in favor of respondent. As a consequence thereof, the Registry of Deeds of Bacolod City
issued TCT Nos. T-311125  and T-311126  in respondent’s name inlieu of PNB’s titles.
9 10

Then, as a registered owner in fee simple of the contested properties, respondent filed with the RTC
an Ex-Parte Motion for Writ of Possession  pursuant to Section 7 of Act No. 3135,  as amended by
11 12

Act No. 4118 (Act No. 3135, as amended),  docketed as Cad. Case No. 09-2802.
13

In their Opposition,  petitioners argued that the respondent is not entitled to the issuance of an ex-
14

partewrit of possession under Section 7 of Act No. 3135 since he was not the buyer of the subject
properties at the public auction sale and only purchased the same through a subsequent sale made
by PNB. Not being the purchaser at the public auction sale, respondent cannot file and be granted
an ex parte motion for a writ of possession. Petitioners also asserted that the intestate estate of
Limsiaco has already instituted an action for annulment of foreclosure of mortgage and auction sale
affecting the contested properties.  They argued that the existence of the said civil suit bars the
15

issuance of the writ of possession and that whatever rights and interests respondent may have
acquired from PNB by virtue of the sale are still subject to the outcome of the said case.

Ruling of the Regional Trial Court

The RTC granted the issuance of the writ of possession in an Order  dated December 8, 2009. It
16

cited the Court’s pronouncement in China Banking Corporation v. Lozada,  viz: 17

The Court recognizes the rights acquired by the purchaser of the foreclosed property at the public
auction sale upon the consolidation of his title when no timely redemption of the property was made,
x x x.

It is thus settled that the buyer in a foreclosure sale becomes the absolute owner of the property
purchased if it is not redeemed during the period of one year after the registration of the sale.
Assuch, he is entitled to the possession of the said property and can demand it at any time following
the consolidation of ownership in his name and the issuance to him of a new transfer certificate of
title. x x x Possession of the land then becomes an absolute right of the purchaser as confirmed
owner. Upon proper application and proof of title, the issuance of the writ of possession becomes a
ministerial duty of the court.

The purchaser, therefore, in the public auction sale of a foreclosed property is entitled to a writ of
possession x x x. 18

PNB, therefore, as the absolute owner of the properties is entitled to a writ of possession. And since
respondent purchased the properties from PNB, the former has necessarily stepped into the shoes
of the latter. Otherwise stated, respondent, by subrogation, has the right to pursue PNB’s claims
against petitioners as though they were his own.

The dispositive portion of the above Order reads:

WHEREFORE, premises considered, the Court hereby issues a writ of possession in favor of
movant Leo Ray V. Yanson ordering Spouses Jose and Mila Gatuslao, their heirs, assigns,
successors-in-interest, agents, representatives and/or any and all other occupants or persons
claiming any interest or title of the subject property to deliver the possession of said property to the
herein movant/ petitioner.

SO ORDERED. 19

Petitioners moved for reconsideration  which was denied in an Order  dated February 26, 2010,
20 21

thus:

WHEREFORE, the Motion for Reconsideration filed by Oppositors is hereby DENIED. Thus, the
Order dated December 8, 2009 stands.

SO ORDERED. 22

Respondent on March 19, 2010 moved to execute the possessory writ  while petitioners on April 15,
23

2010 filed with this Court the present Petition for Review on Certiorari.

On September 30, 2010, the RTC issued an Order  directing the implementation of the writ. And per
24

Sheriff’s Return of Service,  the same was fully implemented on March 14, 2011. Issues
25

1. According to petitioners, the pending action for annulment of foreclosure of mortgage and
the corresponding sale at public auction of the subject properties operates as a bar to the
issuance of a writ of possession;
 2. Claiming violation of their right to due process, petitioners likewise assert that as they
were not parties to the foreclosure and are, thus, strangers or third parties thereto, they may
not be evicted by a mere ex partewrit of possession; and

3. Lastly, petitioners argue that respondent, a mere purchaser of the contested properties by
way of a negotiated sale between him and PNB, may not avail of a writ of possession
pursuant to Section 7 of Act No. 3135, as amended, as he is not the purchaser at the public
auction sale. Petitioners further contend that respondent has no right to avail of the writ even
by way of subrogation.

Our Ruling

Preliminarily, we note that petitioners’ direct resort to this Court from the assailed Orders of the RTC
violates the rule on hierarchy of courts. Their remedy lies with the Court of Appeals. Considering
however the length of time this case has been pending and in view ofour January 26, 2011
Resolution  giving due course to the Petition, we deem it proper to adjudicatethe case on its merits.
26

The Petition is denied.

It is settled that the issuance of a Writ of

Possession may not be stayed by a
pending action for annulment of
mortgage or the foreclosure itself.

It is petitioners’ stand that the pending action for annulment of foreclosure of mortgage and of the
corresponding sale at public auction of the subject properties operates asa bar to the issuance of a
writ of possession.

The Court rules in the negative. BPI Family Savings Bank, Inc. v. Golden Power Diesel Sales
Center, Inc. reiterates the long-standing rule that:
27

[I]t is settled that a pending action for annulment of mortgage or foreclosure sale does not stay the
issuance of the writ of possession. The trial court, where the application for a writ of possession is
filed, does not need to look into the validity of the mortgage or the manner of its foreclosure. The
purchaser is entitled to a writ of possession without prejudice to the outcome of the pending
annulment case.

This is in line with the ministerial character of the possessory writ. Thus, in Bank of the Philippine
Islands v. Tarampi,  it was held:
28

To stress the ministerial character of the writ of possession, the Court has disallowed injunction to
prohibit its issuance, just as it has held that its issuance may not be stayed by a pending action for
annulment of mortgage or the foreclosure itself.

Clearly then, until the foreclosure sale of the property in question is annulled by a court of competent
jurisdiction, the issuance of a writ of possession remains the ministerial duty of the trial court. The
same is true with its implementation; otherwise, the writ will be a useless paper judgment – a result
inimical to the mandate of Act No. 3135 to vest possession in the purchaser
immediately.  (Emphases supplied)
29

Clearly, petitioners’ argument is devoid of merit.

Petitioners are not strangers or third
parties to the foreclosure sale; they were
not deprived of due process.

Section 7 of Act No. 3135, as amended, sets forth the following procedure in the availment of and
issuance of a writ of possession in cases of extrajudicial foreclosures, viz:

SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the Court
of First Instance (Regional Trial Court) of the province or place where the property or any part
thereof is situated, to give him possession thereof during the redemption period, furnishing bond in
an amount equivalent to the use of the property for a period of twelve months, to indemnify the
debtor in case it be shown that the sale was made without violating the mortgage or without
complying with the requirements ofthis Act. Such petition shall be made under oath and filed in form
of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in
special proceedings in the case of property registered under the Mortgage Law or under section one
hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a
mortgage duly registered in the office of any register of deeds in accordance with any existing law,
and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified
in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-
six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon
approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in
which the property is situated, who shall execute said order immediately.

Although the above provision clearly pertains to a writ of possession availed of and issued within the
redemption period of the foreclosure sale, the same procedure also applies to a situation where a
purchaser is seeking possession of the foreclosed property bought at the public auction sale afterthe
redemption period has expired without redemption having been made.  The only difference is that in
30

the latter case, no bond is required therefor, as held in China Banking Corporation v. Lozada,  thus:
31

It is thus settled that the buyer in a foreclosure sale becomes the absolute owner of the property
purchased if it is not redeemed during the period of one year after the registration of the sale.
Assuch, he is entitled to the possession of the said property and can demand it at any time following
the consolidation of ownership in his name and the issuance to him of a new transfer certificate of
title. The buyer can in fact demand possession of the land even during the redemption period except
that he has to post a bond inaccordance with Section 7 of Act No. 3135, as amended. No such bond
is required after the redemption period if the property is not redeemed. x x x  (Emphasis supplied)
32

Upon the expiration of the period to redeem and no redemption was made, the purchaser, as
confirmed owner, has the absolute right to possess the land and the issuance of the writ of
possession becomes a ministerial duty of the court upon proper application and proof of title. 33

Nevertheless, where the extrajudicially foreclosed real property is in the possession of a third party
who is holding the same adversely to the judgment debtor or mortgagor, the RTC’s duty to issue a
writ of possession in favor of the purchaser of said real property ceases to be ministerial and, as
such, may no longer proceed ex parte.  In such a case, the trial court must order a hearing to
34

determine the nature of the adverse possession.  For this exception to apply, however, it is not
35

enough that the property is in the possession of a third party, the property must also be held by the
third party adversely to the judgment debtor or mortgagor,  such as a co-owner, agricultural tenant
36

or usufructuary.37

In this case, petitioners do not fall under any of the above examples of such a third party holding the
subject properties adversely to the mortgagor; nor is their claim to their right of possession
analogous to the foregoing situations. Admittedly, they are the mortgagor Limsiaco’s heirs. It was
precisely because of Limsiaco’s death that petitioners obtained the right to possess the subject
properties and, as such, are considered transferees or successors-in-interest of the right of
possession of the latter. As Limsiaco’s successors-in-interest, petitioners merely stepped into his
shoes and are, thus, compelled not only to acknowledge but, more importantly, to respect the
mortgage he had earlier executed in favor of respondent.  They cannot effectively assert that their
38

right of possession is adverse to that of Limsiaco as they do not have an independent right of
possession other than what they acquired from him.  Not being third parties who have a right
39

contrary to that of the mortgagor, the trial court was thus justified in issuing the writ and in ordering
its implementation.

Petitioners’ claim that their right to due process was violated by the mere ex-parte issuance of the
writ of possession must likewise fail. As explained, petitioners were not occupying the properties
adversely to the mortgagor, hence, a writ of possession may be issued ex parte.And precisely
because of this ex parte nature of the proceedings no notice is needed to be served  upon them. It
40

has been stressed time and again that "the ex parte nature of the proceeding does not deny due
process to the petitioners because the issuance of the writ of possession does not prevent a
separate case for annulment of mortgage and foreclosure sale."  Consequently, the RTC may grant
41

the petition even without petitioners’ participation. Nevertheless, even if the proceedings in this case
was supposed to be ex parte, the records of the casewould show that petitioners’ side on this
controversy was actuallyheard as evidenced by the numerous pleadings  filed by them in the lower
42

court. In fact, in its July 27, 2009 Order,  the RTC expressly directed respondent, "in observance of
43

equity and fair play x x x to furnish [petitioners] with a copy of his motion/petition and toshow x x x
proof of compliance thereof x x x."  Then and now, the Court holds that a party cannot invoke denial
44

of due process when he was given an opportunity to present his side. 45

Respondent is entitled to the issuance of

writ of possession.

Petitioners insist that respondent is not entitled to the issuance of the writ of possession under
Section 7 of Act No. 3135 as he is only a buyer of the subject properties in a contract of sale
subsequently executed in his favor by the actual purchaser, PNB. To them, it is only the actual
purchaser of a property at the public auction sale who can ask the court and be granted a writ of
possession.

This argument is not tenable. Respondent, as a transferee or successor-ininterest of PNB by virtue

of the contract of sale between them, is considered to have stepped into the shoes of PNB. As such,
he is necessarily entitled to avail of the provisions of Section 7 of Act No. 3135, as amended, as if he
isPNB. This is apparent in the Deed of Absolute Sale  between the two, viz:
46

1. The Vendor hereby sells, transfer[s] and convey[s] unto[, and] in favor of the Vendee, and
the latter’s assigns and successors-in-interest, all of the former’s rights and title to, interests
and participation in the Propertyon an "AS IS, WHERE IS" basis.It is thus understood that
the Vendee has inspected the Property and has ascertained its condition.

xxxx

3. The Vendor is selling only whatever rights and title to, interests and participation it has
acquired over the Property, and the Vendee hereby acknowledges full knowledge of the
natureand extent of the Vendor’s rights and title to, [and] interests and participation in the
Property.
 4. x x x The Vendee further agrees to undertake, at its/his/her expense, the ejectment of any
occupant of the Property.  (Emphases in the original)
47

Verily, one of the rights that PNB acquired as purchaser of the subject properties at the public
auction sale, which it could validly convey by way of its subsequent sale of the same to respondent,
is the availment of a writ of possession. This can be deduced from the above-quoted stipulation that
"[t]he [v]endee further agrees to undertake, at xxx his expense, the ejectment of any occupant of the
[p]roperty." Accordingly, respondent filed the contentious ex partemotion for a writ of possession to
eject petitioners therefrom and take possession of the subject properties. Further, respondent may
rightfully take possession of the subject properties through a writ of possession, even if he was not
the actual buyer thereof at the public auction sale, in consonance with our ruling in Ermitaño v.
Paglas.  In the said case, therein respondent was petitioner’s lessee ina residential property owned
48

by the latter. During the lifetime of the lease, respondent learned that petitioner mortgaged the
subject property in favor of Charlie Yap (Yap) who eventually foreclosed the same. Yap was the
purchaser thereof in an extrajudicial foreclosure sale. Respondent ultimately bought the property
from Yap. However, it was stipulated in the deedof sale that the property was still subject to
petitioner’s right of redemption. Subsequently and despite written demands to pay the amounts
corresponding to her monthly rental of the subject property, respondent did not anymore pay rents.
Meanwhile, petitioner’s period to redeem the foreclosed property expired on February 23, 2001.
Several months after, petitioner filed a case for unlawful detainer against respondent. When the case
reached this Court, it ruled that therein respondent’s basis for denying petitioner’s claim for rent was
insufficient as the latter, during the period for which payment of rent was being demanded, was still
the owner of the foreclosed property. This is because at that time, the period of redemption has not
yet expired. Thus, petitioner was still entitled to the physical possession thereof subject, however, to
the purchaser’s right to petition the court to give him possession and to file a bond pursuant to the
provisions of Section 7 ofAct No. 3135, as amended. However, after the expiration of the redemption
period without redemption having been made by petitioner, respondent became the owner thereof
and consolidation of title becomes a right. Being already then the owner, respondent became
entitled to possession. Consequently, petitioner's ejectment suit was held to have been rendered
moot by the expiration of the period of redemption without petitioner redeeming the properties. This
is considering that petitioner already lost his possessory right over the property after the expiration of
the said period.

Although the main issue in Ermitano was whether respondent was correct in refusing to pay rent to
petitioner on the basis of her having bought the latter's foreclosed property from whom it was
mortgaged, the case is enlightening as it acknowledged respondent's right, as a subsequent buyer of
the properties from the actual purchaser of the same in the public auction sale, to possess the
property after the expiration of the period to redeem sans any redemption. Verily, Ermitano
demonstrates the applicability of the provisions of Section 7 of Act No. 313 5 to such a subsequent
purchaser like respondent in the present case.

All told, the Court affirms the RTC's issuance of the Writ of Possession in favor of
respondent.  WHEREFORE, the Petition is hereby DENIED. The December 8, 2009 and February
1âwphi1

26, 2010 Orders of the Regional Trial Court of Bacolod City, Branch 49 in Cad. Case No. 09-2802
are AFFIRMED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice