G.R. No.

177881 October 13, 2010

EMMANUEL C. VILLANUEVA,  vs.

CHERDAN LENDING INVESTORS CORPORATION

FACTS: Spouses Peñaredondo obtained from respondent Cherdan Lending

Investors Corporation a loan secured by a real estate mortgage over a parcel of
land. Despite demand, spouses Peñaredondo failed to pay the obligation. Hence,
respondent extrajudicially foreclosed the mortgage. Cherdan won the bid. Upon
the expiration of the redemption period, the title to the property was
consolidated and a new title was issued in respondent’s name.

Writ of possession was issued for Cherdan, Emmanuel C. Villanueva moved

for the reconsideration of the order and the setting aside of the writ of
possession on the ground that he is the owner and is in actual possession of
the subject property.

RTC granted Villanueva’s motion and ordered that the same be allowed
possession of the property pending finality of decision of the matter. And writ of
possession previously issued in favor of Cherdan was recalled.

Cherdan instituted a special civil action for certiorari before the CA. CA granted
the petition.

The CA held that the pendency of the case for annulment of the foreclosure
 proceedings was not a bar to the issuance of the writ of possession. The
CA refused to apply Section 33, Rule 39 of the Rules of Court, which
authorizes the giving of possession of the property to the purchaser or last
redemptioner unless a third party is actually holding the property adverse
to the judgment obligor, ratiocinating that the provision applies only to
execution sales and not to extrajudicial foreclosures of real estate
mortgage under Act 3135.

Issue: W/N a case for annulment of foreclosure is a bar to issuance of

writ of possession.

Held: YES. It is settled that the buyer in a foreclosure sale becomes the
absolute owner of the property purchased if it is not redeemed within one
year after the registration of the sale. As such, he is entitled to the possession
of the property and can demand that he be placed in possession at any time
following the consolidation of ownership in his name and the issuance to him
of a new TCT.23 Time and again, we have held that it is ministerial upon the
court to issue a writ of possession after the foreclosure sale and during the
period of redemption. Upon the filing of an ex parte motion and the approval
of the corresponding bond, the court issues the order for a writ of possession.
The writ of possession issues as a matter of course even without the filing
and approval of a bond after consolidation of ownership and the issuance of a
new TCT in the name of the purchaser.24
This rule, however, is not without exception. Under Section 33, Rule 39 of the
Rules of Court, which is made to apply suppletorily to the extrajudicial
foreclosure of real estate mortgages by Section 6, Act 3135, as amended, the
possession of the mortgaged property may be awarded to a purchaser in the
extrajudicial foreclosure unless a third party is actually holding the property
adversely to the judgment debtor.

Important: The purchaser’s right of possession is recognized only as against

the judgment debtor and his successor-in-interest but not against persons
whose right of possession is adverse to the latter.
G.R. No. 199747, April 03, 2013
TEODORO DARCEN, ET. AL. V V.R. GONZALES CREDIT ENTERPRISE

FACTS:
Spouses Mamerto and Flora Darcen begot 7 children (herein petitioners).
Mamerto died leaving 3 parcels of land. Manuel (one of the children) caused
the execution of an Extra-Judicial Settlement of Estate with Waiver  by
forging the signatures of the petitioners and their mother Flora. In the said
instrument, the petitioners and their siblings were said to have waived their
shares in their father’s estate in favor of their mother, thus making Flora the
sole owner of the three lots. Manuel loaned from respondent using the parcels
of land as mortgage.

Fired destroyed the office of register of deeds including the titles to the parcels
of land.

Respondent demanded payment enforcing the mortgage contract. Petitioner

opposed alleging forgery. Respondent extrajudicially forclosed while petitioners
filed civil case for annulment of mortgage and foreclosure.

Foreclosure sale pushed through and respondent won as highest bidder.

Redemption period elapsed and respondent filed for consolidation of title over
the properties and writ of possession. Petitioner filed motion to dismiss on
ground of forum shopping because respondent failed to disclose the pending
civil case.

RTC ruled in favor of respondent. CA affirmed, that the issuance of the writ of
possession is merely a ministerial function of the court a quo, the possession
being incidental to the transfer of title to the new owner.

Issue: W/N petitioners are entitled to possession of the lands pursuant to

Sec. 33 Rule 39 of Rules of Court.

Held: No. The established rule is that the purchaser in an extrajudicial

foreclosure sale becomes the absolute owner of the property if no redemption is
made within one (1) year from the registration of the certificate of sale by those
who are entitled to redeem. 27 Possession being a recognized essential attribute
of ownership,28 after consolidation of title the purchaser may demand
possession as a matter of right.29 Under Section 7 of Act No. 3135, as amended
by Act No. 4118, the issuance of the writ is merely a ministerial function of the
RTC, which the new owner may obtain through an ex parte motion.

Nonetheless, the ministerial duty of the court to issue an ex parte writ of

possession ceases once it appears that there is a third party in possession
of the property, who is a stranger to the mortgage and who claims a right
adverse to that of the debtor/ mortgagor pursuant to Sec. 33 Rule 39 ROC.

However, We find no proof that the petitioners are adverse third-party

claimants entitled to be retained in possession.
It will be noted that 12 years had passed since petitioners brought the
action to annul the mortgage. Even granting that the petitioners should be
allowed to retain possession, the petition has been rendered moot and
academic by the issuance and satisfaction of the writ of possession issued
in favor of respondent.
given the lessee formal notice within three (3) months in advance of the
lessor’s intention to repossess the property: Provided, finally, that the owner/
lessor is prohibited from leasing the residential unit or allowing its use by a
third party for at least one year.

Here, it is undisputed that respondents do not own any other lot or real
property except the herein subject lot. They have urgent need of the
same to build their own house to be used as their residence. Also,
petitioners had already been asked to leave the premises as early as
1982, but sternly refused, hence, its former owners refused to accept
their rental payments. When the same property was donated to
respondents, petitioners were allowed to continue occupying the subject
lot since respondents did not as yet have the money to build a house of
their own.1avvphi1  But now that respondents have sufficient money to
build their own house, petitioners still rebuff respondents’ demand to
vacate the premises and to remove or demolish their house. Clearly,
since respondents have complied with the requirements of the law, their
right to possess the subject property for their own use as family
residence cannot be denied.