G.R. No.

82170 & 82372 December 21, 1989

TEODORO YBANEZ, CRESCENCIO YBANEZ, ROMEO YBANEZ AND ELPIDIO
YBANEZ, petitioners,
vs.
COURT OF APPEALS AND IGNACIO GO, doing business under the name and
style of "Gokee Marketing Company", respondents.
Elpidio L. Ybanez for and in his own behalf.
Antonio A. Solon for petitioners.
MELENCIO-HERRERA, J.:
We uphold the assailed judgment of respondent Court of Appeals 1 ruling that, under the
factual milieu, the subsequent filing by respondent, Ignacio Go, of the case for
reconveyance of the seized property before the Regional Trial Court of Cebu (CC No.
R-22573) did not constitute a legal basis for the dismissal of the action for annulment of
the Sheriffs sale he had earlier filed before it (Civil Case No. R-21705).
The relevant facts may be capsulized as follows:
In a suit for ejectment filed on 6 February 1978 before the City Court of Cebu (Civil
Case No. R-20041) for non-payment of rentals and expiration of the lease contract,
brought by petitioners, the Ybanez brothers, as lessors, against respondent Ignacio Go,
doing business under the name and style of Globe Marketing Co., judgment was
rendered in petitioners' favor ordering respondent Go to vacate the leased premises and
to pay P156,000.00 representing unpaid rentals, attorney's fees, and costs.
A Writ of Execution was issued on 24 April 1981 and respondent Go's two (2) lots and
two (2) warehouses at the reclamation area, Cebu City, were levied upon. A Certificate
of Sale in favor of petitioners-lessors was eventually executed by the Sheriff on 31 July
1981 and thereafter registered with the Register of Deeds of the City on 4 August 1981.
On 26 April 1982, unsuccessful in an Injunction suit he had earlier availed of,
respondent Go filed a Complaint for annulment of the Sheriffs sale (Civil Case No. R21705), before the Regional Trial Court of Cebu, Branch XIII (hereinafter referred to
simply as the Annulment Suit), alleging irregularities in the conduct of the auction sale
and praying for an award of actual and moral damages.
On 17 June 1982, in the Annulment Suit, respondent Go filed a "Motion for Leave to
Deposit in Court Redemption Money," "including lawful interests and legal charges due

thereon on or before August 3,1982," which was denied on 24 September 1982. By

virtue thereof, the City Sheriff of Cebu executed the Final Certificate of Sale on 5
October 1982 (Annex "7", Petition) and placed petitioners in possession of the seized
properties.
On 12 October 1982, respondent Go tendered payment of P255,000.00 as redemption
money, to the Sheriff and asked for a deed of redemption in his favor (Annex "3",
Comment of Go in G.R. No. 82372), but was met with refusal. He then allegedly paid
petitioner, Cresencio, on 13 October 1982, the sum total of P300,350.00, in cash, as
shown by the latter's receipt (Annex "4", Ibid.), but which payment Cresencio has
denied. However, the NBI certified Cresencio's signature on the receipt as genuine
(Annex "5", Ibid.). Respondent Go hied back to the Sheriff asking for a deed of
reconveyance but the same again proved futile.
Thus it was that on 18 November 1982, respondent Go instituted another Complaint
(Civil Case No. R-22573) before the same Court, Branch III, wherein he prayed for a
judicial declaration that he had validly redeemed the properties sold at public auction
from one of the petitioners, and for an Order requiring the Sheriff to execute a deed of
reconveyance in his favor (briefly, the Reconveyance Case).
On 2 December 1982, the Cebu Court, upon Go's plea for reconsideration, granted the
Motion for Leave to Deposit (Annex "6", Ibid.) at which point in time, however,
respondent Go maintained that he could no longer make the deposit because of the
payment he had allegedly made to Cresencio.
On 2 September 1983, the two (2) cases were ordered consolidated before the Cebu
Regional Trial Court, Branch XIII (hereinafter, the Cebu Court).
Petitioners, on 6 July 1984, resorted to a "Motion to Dismiss the Annulment Case"
raising the issue of inconsistency in the causes of action in the two (2) cases. They
alleged that the filing of the Reconveyance Case constituted an abandonment of the
Annulment Suit because, in alleging in the Reconveyance Case, as respondent Go did,
that he had redeemed the property he had, in fact, recognized the regularity and validity
of the Sheriffs sale.
The Cebu Court upheld that contention and dismissed the Annulment Suit on 10
December 1984 on the main grounds of litis pendentia, abandonment of claim or
demand, and cessation of the existence of a cause of action. It opined:
A study of the allegations in the two (2) complaints can easily reveal that
the positions taken by the plaintiff Ignacio Go in the two cases are

contradictory to one another. In R-21705 he claims that the sheriff did not
comply with certain mandatory legal procedures in the auction sale and so
the sale was void while under R-22573 he alleges that he has
subsequently validly redeemed the properties subject matter of the auction
sale and by such redemption he has recognized the validity of the sheriffs
sale.
In fact as can be drawn from the allegations in the complaint in Case No.
R-22573 the redemption was absolute and unconditional. Payment of
redemption was not made under protest neither was it made subject to the
result of Case No. R-21705.
By his very act of unconditionally redeeming the property Ignacio Go
recognized and acknowledged the regularity and validity of the public
auction sale conducted by the sheriff on July 31, 1981. (Record, pp. 207208)
Upon respondent Go's appeal in CA-G.R. No. CV-06107, respondent-Appellate Court,
in its Decision of 20 January l988, set aside the Cebu Court's dismissal of the
Annulment Suit for having been improper.
From the aforesaid judgment, two (2) Petitions for Review were successively filed by
petitioners before this Court. One, on 9 February 1988, by petitioner Elpidio Ybanez
(docketed as G.R. No. 82170), assigned to the Second Division, and the other, on 12
February 1988, by his brothers, petitioners Teodoro, Crescencio and Romeo (numbered
G.R. No. 82372) originally raffled to the First Division, both Petitions directed against
respondent Go. Involving as they did the same parties and an inter-related subject
matter, the two cases were consolidated before this Second Division, which had the
lower-numbered case, upon exparte Motion of petitioners, dated 19 April 1988, and the
Resolution of the First Division on 25 May 1988. On 3 August 1988, the First Division
granted due course to the Petition in G.R. No. 82372 and required the submittal of
Memoranda. The Second Division did likewise in respect of G.R. No. 82170 on 7
December 1988. Respondent Go's Supplemental Memorandum was submitted on 26
July 1989.
On 28 August 1989 respondent Go filed before us an "Urgent Motion for Issuance of an
Order to Maintain the Status Quo and to Respect his Possession as of the Filing of the
Complaint on April 26,1982," which petitioners opposed. Being of the opinion, however,
that a decision on the merits was preferable, this Court merely Noted said Urgent
Motion in its Resolution of 4 October 1989.

As stated at the outset, we affirm respondent Court's Decision.

In alleging in the Reconveyance Case that he had validly redeemed the properties,
subject matter of the auction sale, respondent Go had not thereby "recognized and
acknowledged the validity" of that sale. In fact, in his "Motion for Leave to Allow Plaintiff
to Deposit in Court Redemption Money" filed in the Annulment Suit on 17 June 1982,
but which said Court initially denied, Go had indicated that as he was afraid of losing his
properties the deposit was intended to assure their redemption in the event that the
Annulment Suit was denied "without prejudice to the final determination of the instant
case involving as it does the issue of validity and legality of said certificate of sale and
related matters" (Motion, p.2, Rollo of G.R. No. 82372, p. 110). For him, the payment
was a means of staying the one year period of redemption, "as there was no Judge in
the sala where the case was assigned (Comment, p. 3). The circumstance that said
alleged payment of the redemption money was not unconditionally made, i.e., neither
under protest nor subject to the outcome of the Annulment Suit, cannot be construed as
an abandonment of the latter case. Go's main objective was for annulment of the public
auction sale. The Reconveyance Case, which followed in the wake of his alleged
payment, was in the nature of a cautionary remedy specially considering that the Cebu
Court had initially denied his Motion to Deposit and that the properties foreclosed are
allegedly worth P 5-M compared to the judgment in Civil Case No. R-20041 of the Cebu
City Court against respondent Go for P156,000.00.
Nor are the causes of action in the two (2) cases inconsistent with one another. As aptly
pointed out by respondent Appellate Court, there are issues in the Reconveyance Case
that are set apart from the question of the validity of the auction sale, which is the
subject of inquiry in the Annulment Suit. The latter case alleged irregularities in the
conduct of the public auction sale in that the Sheriff without a valid levy and with the use
of an expired Writ of Execution had violated rules on execution as prescribed in
Sections 11 and 15 of Rule 39 of the Rules of Court. In addition, Go prayed for actual
and moral damages for the illegal padlocking of and damage to the building as well as
loss of spare parts and machineries.
On the other hand, the issues raised in the Reconveyance Case call for a separate
determination of such questions as whether respondent Go had, in fact, delivered the
redemption money to one of the petitioners; whether or not such delivery, if there had
been one, had been made on time, and whether or not another money judgment against
respondent Go had already been satisfied. In effect, the Reconveyance Case presented
an alternative cause of action.
Indeed, given the factual situation, the two (2) cases were aptly consolidated by the
Cebu Court to avoid unnecessary costs and delay (Section 1, Rule 31, Rules of

Court). 2 But rather than having dismissed the Annulment Case it should have
proceeded to the trial thereof on the merits so that the validity of the auction sale could
have been fully and decisively determined. If untainted by irregularities then the sale
would be valid and the question of redemption, particularly the factual questions raised
in connection therewith, may then be addressed in a full-blown trial. But if the
foreclosure proceedings were fatally flawed, then the auction sale would have to be
voided in which case the matter of redemption would ordinarily lose relevance.
It is obvious then that the determination of the basic issue raised in the Annulment Suit
is crucial. Upon its resolution will hinge the question of redemption of the properties sold
at public auction. Deferment of the proceedings in the Reconveyance Case is, in fact,
called for as the Appellate Court had observed, until after the issues in the Annulment
Suit shall have been decisively resolved. Thereafter, the Trial Court may address itself
to the controversy in the Reconveyance Case and render a consolidated judgment
disposing of the related suits.
WHEREFORE, the judgment of respondent Court of Appeals is AFFIRMED in toto; Civil
Case No. R-21705 of the Regional Trial Court of Cebu, Branch XIII, is ordered
REINSTATED; and said Court hereby DIRECTED to proceed with that case and Civil
Case No. R-22573 before it in accordance with the above directives.
No costs.
SO ORDERED.
G.R. No. L-21011

August 30, 1967

ISABEL OCAMPO, plaintiff-appellant,

vs.
IGNACIO DOMALANTA and PONCIANO MARTINEZ, in his capacity as Provincial
Sheriff of Cavite,defendants-appellees.
Arturo M. Topacio, Jr. for plaintiff-appellant.
Teodoro O. Domalanta for defendant-appellee.
SANCHEZ, J.:
Sole question raised on appeal is this: Is a court order confirming a sheriff's sale upon a
judgment in a real estate foreclosure case a bar to a subsequent action by the judgment
debtor to annul the sale upon grounds which were raised in said foreclosure
proceedings?

First, to the background facts. A contested case to foreclose a real estate and chattel
mortgage [Civil Case 45778, Court of First Instance of Manila, "Ignacio Domalanta,
plaintiff vs. Isabel O. Vda. de Chi Chioco, et al., defendants"], resulted in judgment
ordering appellant Isabel O. Vda. de Chi Chioco (now known as Isabel Ocampo) to pay
appellee Ignacio Domalanta P2,000.00, with 1% interest per month from December 5,
1958 until full payment, and P500.00 as attorneys' fees, and directing that after failure to
pay the above amounts in ninety days, the properties mortgaged be sold at public
auction, subject to a first mortgage in favor of the Philippine National Bank in reference
to appellant's land (located in Tanza, Cavite) mortgaged. 1
The judgment debt remained unpaid. The court, on Domalanta's motion, issued a writ of
execution. Pursuant thereto, on May 8, 1962, appellee sheriff sold at public auction the
mortgaged land of 32,558 square meters to the highest bidder, appellee Ignacio
Domalanta, for P3,537.00. Domalanta moved to confirm the sale. Over appellant's
objection, the court, on June 2, 1962, confirmed.
After the June 2, 1962 order had become final, appellant started the present suit (Civil
Case N-496 of the Court of First Instance of Cavite, entitled "Isabel Ocampo, plaintiff vs.
Ignacio Domalanta and Ponciano Martinez an his capacity as Provincial Sheriff of
Cavite, defendants") to annul the sheriff's sale. Grounds: Appellant mortgagor was not
properly notified of the forecloseure sale; and the price for which the property was sold
was "very much lower than the actual market value" and shocking to the conscience,
and thus invalid. Appellee Domalanta moved to dismiss the complaint below. His
reason, inter alia: res judicata. The court, on November 9, 1962, dismissed the case
"with prejudice and with costs against the plaintiff." A move to reconsider was thwarted
below in the order of November 21, 1962. Hence, this appeal.
1. Adverted to earlier is that the June 2, 1962 order of confirmation of the sheriff's sale in
the first case Case 45778 was issued over appellant's opposition. That objection
projected before the court the very same grounds relied upon in the complaint herein
the second case to wit, lack of notice by the Provincial Sheriff to appellant of the
foreclosure sale, and irregularities in the auction sale and non-conformity thereof to the
rules of court. According to the order of confirmation, the thrust of appellant's said
objection is that she "was not notified of the sheriff's sale and that the price for which the
property was sold is unconscionable." But these factual allegations, so the same in
order of June 2, 1962 stresses, "have not been established by any evidence," nor was
appellant's opposition verified. Nothing in the record suggests that after the order of
June 2, 1962 in the first case (Civil Case 45778), attempt was ever made by appellant
to cure the defects so pointedly expressed by the court in that order.

2. Law and jurisprudence have formulated the rule that confirmation of sale of real
estate in judicial foreclosure proceedings cuts off all interests of the mortgagor in the
real estate sold and vests them in the purchaser. Confirmation retroacts to the date of
the sale.2 An order of confirmation in court foreclosure proceedings is a final order, not
merely interlocutory. The right to appeal therefrom has long been recognized. 3 In fact, it
is the final order from which appeal may be taken in judicial foreclosure
proceedings.4 No appeal was taken. It follows that said order is final, binding.
3. Not that the disputed order of confirmation may be labelled null and void, as appellant
would want it to be. The presumption that the notice of sale of real estate in foreclosure
proceedings has been given, holds true here. For, indeed, a legal tenet of long standing
is that official duty presumptively has been regularly performed. 5 Appellant pleaded such
lack of notice. Her duty it was to prove it in court. She did not.1wph1.t
And if the notice that appellant here complains of is personal notice to her, she is wrong.
Because, personal notice is not required by Section 16 of Rule 39 of the 1940 Rules of
Court, now Section 18, Rule 39 of the new Rules. This legal provision was given judicial
nod as early as 1930 in La Urbana vs. Belando, 54 Phil. 930, 932 a case of
foreclosure of real estate mortgage where we pronounced that "[t]he law does not
require that such notification be given personally to the party upon whose property
execution is levied."
Nor was there an averment in the complaint now before us that if a resale should take
place, "the realty would bring a higher price" thereat, a circumstance "essential to
rescind a sale regularly made and confirmed by a competent court, on the ground of
inadequacy of price."6 The mere averment that the price is unconscionable is nothing
more than a conclusion of law. The value of such allegation is further downgraded by
the lack of proof. This is one case which epitomizes the fatal distance between
allegation and proof.
4. Properly to be pointed out here is that the dismissal order of November 9, 1962 now
on appeal, states that the legality of the foreclosure sale questioned in this action "was
an issue that could have been, and was in fact, raised and litigated in the anterior suit"
(Civil Case 45778). Except for the Provincial Sheriff who is a nominal defendant here,
the parties in the two suits below are the same: Isabel Ocampo and Ignacio Domalanta.
Subject matter is the same land. The judgment and order of confirmation of the sheriff's
sale in the first suit have both become final.
The first suit is a judicial foreclosure of mortgage; the second, annulment of the
foreclosure sale conducted in the first suit. A proceeding for judicial foreclosure of
mortgage is an action quasi in rem. It is based on a personal claim sought to be

enforced against a specific property of a person named party defendant. And, its
purpose is to have the property seized and sold by court order to the end that the
proceeds thereof be applied to the payment of plaintiff's claim. 7
To be read as controlling here are Sections 44 and 45, Rule 39 of the Rules of Court
which is now substantially embodied in Section 49, Rule 39 of the new Rules of
Court, viz:
Sec. 49. Effect of judgments.The effect of a judgment or final order rendered
by a court or judge of the Philippines, having jurisdiction to pronounce the
judgment or order, may be as follows:
(a) In case of a judgment or order against a specific thing, or in respect to the
probate of a will, or the administration of the estate of a deceased person, or in
respect to the personal, political or legal condition or status of a particular person
or his relationship to another, the judgment or order is conclusive upon the title to
the thing, the will or administration, or the condition, status or relationship of the
person; however, the probate of a will or granting of letters of administration shall
only be prima facie evidence of the death of the testator or intestate;
(b) In other cases the judgment or order is, with respect to the matter directly
adjudged or as to any other matter that could have been raised in relation
thereto, conclusive between the parties and their successors in interest by title
subsequent to the commencement of the action or special proceeding, litigating
for the same thing and under the same title and in the same capacity;
(c) In any other litigation between the same parties or their successors in interest,
that only is deemed to have been adjudged in a former judgment which appears
upon its face to have been so adjudged, or which was actually and necessarily
included therein or necessary thereto.
Paragraph (a) of the foregoing rule is commonly known to speak of judgments in rem;
paragraph (b) is said to refer to judgments in personam; and paragraph (c) is the
concept understood in law as "conclusiveness of judgment." 8
Here, the first suit was an action quasi in rem. A judgment therein "is conclusive only
between the parties."9Directly applicable is paragraph (b) above-quoted. By that
provision, the confirmation order in the foreclosure case is, "with respect to the matter
directly adjudged or as to any other matter that could have been raised in relation
thereto, conclusive between the parties" and their privies.

As we view this case from another standpoint, we reach the same result. It is true that
the cause of action in the first suit is not exactly identical to the cause of action in the
second. For, the latter merely challenges the legality of the sheriff's sale in the first
proceeding. We do say, however, that such legality of sale is an issue which could have
been, and was in fact raised and rejected in the first case. Thus, coming into play also is
paragraph (c) above-quoted. Therefore, the question raised by appellant in the present
suit should be "deemed to have been adjudged in a former judgment which appears
upon its face to have been so adjudged, or which was actually and necessarily included
therein or necessary thereto."
It is thus beyond doubt that the present action is barred by the conclusiveness of
judgment in the anterior suit. 10This case must be dismissed.
Conformably to the foregoing, the lower court's order of November 9, 1962 dismissing
this case, and the order of November 21, 1962 denying reconsideration thereof, are
hereby affirmed.
Costs against plaintiff-appellant. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Sanchez, Castro,
Angeles and Fernando,
G.R. No. L-44943 March 17, 1982
SOCORRO MONTEVIRGEN, et. al., petitioners,
vs.
COURT OF APPEALS, SPOUSES SERAFIN ABUTIN and CARMEN SENIR,
respondents.

DE CASTRO, J.:
This is a petition for review on certiorari of the decision of the Court of Appeals
promulgated on June 8, 1976 affirming in toto the Order of the Court of First Instance of
Cavite, Branch III in Civil Case No. N-1609, promulgated on September 17, 1974.
The factual background of the case is as follows:
Petitioners Montevirgen filed an action against respondent-spouses Serafin Abutin and
Carmen Senir in the Court of First Instance of Cavite, Branch III, for the annulment of a
deed of sale with pacto de retro, over a parcel of land situated in Barrio Alima, Bacoor,

Cavite, title to which was transferred to respondents upon the registration of the deed
of pacto de retro sale. On July 1, 1971, the trial court, by virtue of the agreement
reached by the parties, rendered a decision declaring the transaction an equitable
mortgage and fixing a period of ten (10) months from July 1, 1971 within which the
petitioners must pay their obligation with legal interest, otherwise execution would
follow. 1
Petitioners having failed to pay their obligation within the ten-month period, respondents
moved for execution of the decision of July 1, 1971. Petitioners opposed the motion for
execution alleging that there must be a foreclosure of mortgage upon failure to redeem
and not an outright execution sale. Said opposition was denied by the trial court and an
Order of Execution was issued on May 10, 1972. Upon implementation of said order,
the Clerk of Court issued two writs of execution, the first, directing the Provincial Sheriff
of Cavite to levy on the properties of petitioners to satisfy the sum of P57,500.00 plus
legal interest of 12% thereon commencing from February 2, 1969 and sum of
P11,104.32 plus legal interest of 12% to commence from May 15, 1969; and second,
directing the Provincial Sheriff to sell at public auction the described properties with all
the improvements existing thereon.
Petitioners moved to quash the writ of execution alleging that said writ was at variance
with the decision, firstly, because the decision merely directed the imposition of legal
interest which is 6% per annum and secondly, because it included the new construction
on the lot in question. On September 8, 1972, the lower court denied the motion to
quash writ of execution. The Provincial Sheriff accordingly executed the writs. Upon
motion filed by respondents, the sale was confirmed by the trial court in an Order dated
September 25, 1972.
On October 5, 1972, petitioners filed a Motion to Annul the Sheriff's Certificate of Sale
alleging again that the writ of execution was at variance and contrary to the decision
and at the same time calling attention to the fact that on September 21, 1972
respondents demolished the old house in the subject premises. In an order dated
October 20, 1972, the trial court granted petitioner's Motion and ordered the writ of
execution to be amended so "that the new construction may not be the object of the
occupation by the defendant and that the interest mentioned therein which is legal
interest, must be 6%."
Respondents went to the Court of Appeals on certiorari (docketed as CA-G. R. No. SP01813) alleging that the confirmation of the sale on September 25, 1972 divested the
trial court of its jurisdiction and therefor its order amending the writ of execution was
issued without jurisdiction. The Court of Appeals dismissed the petition in its Resolution
of June 11, 1972. On appeal to this Court, this Court denied the petition for lack of merit

in an Order dated November 6, 1973. Motion for reconsideration was again denied on
December 7, 1973.
On July 24, 1974, respondents filed in the Court of First Instance another motion for
execution sale on the ground that the previous auction sales conducted were declared
void either from failure to conform with the judgment, or with the requirements of the law
in the conduct of auction sales. This was opposed by petitioners on August 7, 1974 with
prayer for the cancellation of T.C.T. No. 35236 then registered in the name of
respondents, and the issuance of a new title in their names subject to equitable
mortgage right of respondents. Replying to the opposition, respondents asked for the
enforcement of the judgment of July 1, 1971 by asking for an auction sale. In resolving
the issues posed, the trial court held:
Under the circumstances this Court holds that plaintiffs cannot demand
reconveyance and there is even no need for an auction sale of this
property since this property was already titled in the name of the
defendants as early as February 24, 1969 even before this action was
instituted.
xxx xxx xxx
In the case at bar, the foreclosure sale effected by the Provincial Sheriff
was a ceremonial futility because as may be gleaned in the Decision the
only right recognized in favor of plaintiffs Socorro Montevirgen was to
repurchase the property within the 10 month period prescribed therein; if
they had done so, then the defendants would have been ordered to
reconvey the property to the plaintiffs; having failed to do so, they have
lost the equity recognized in their favor by the Decision. ...
WHEREFORE, in view of the foregoing, this Court denied defendants'
Motion for Auction Sale as well as the reliefs prayed for by plaintiffs in their
opposition on August 7, 1974 and hereby declares that the execution of
the Decision of July 1, 1971 does not require the holding of any auction
sale; that the auction sale previously held were all unnecessary; that upon
failure of plaintiffs to pay their obligation within the ten month period from
July 1, 1971, the absolute ownership over the land with the old
construction described in the Deed of Pacto de Retro Sale, and now
registered in the name of defendants under T.C.T. No. 35236 of the
Register of Deeds of the Province of Cavite has become consolidated in
the defendants, and relieved of plaintiffs equity. Plaintiff's right to remain in
possession in a concept other than owner should be threshed out in an

unlawful detainer or other appropriate possessory action including the

fixing of rentals as this suit was filed for the purpose only of determining
the nature of the Deed of Sale with Pecto de Retro. 2 (Emphasis supplied)
On appeal to the Court of Appeals, the trial court's order of September 17, 1974 was
affirmed in toto in its decision of June 8, 1976, holding as follows:
But this notwithstanding, the points sticking out like a sore thumb in
appellants thesis is, that he has not to this date paid his obligation to the
appellees within the 10 month period as required in the judgment. This in
fact gave occasion for the judgment to become executory. As said earlier,
the judgment was the result of an agreement by and between the parties
and this being so, the judgment became executory at the end of the 10
month period. When it was executed, the execution may be reasonably
considered as a foreclosure of the mortgage. The appellant did not seek to
redeem the same as he has not to this date moved in that direction.
Therefore, his right to redeem has long since expired. 3
Upon denial of these two Motions for Reconsideration dated August 9, 1976 and
October 18, 1976, petitioners filed this instant petition raising questions of law in which,
if reduced to essential the main issue would be whether or not respondent Court of
Appeals correctly affirmed the trial court's Order of September 17, 1974 interpreting, in
effect, its Decision of July 1, 1971. Pursuant to Our Resolution of March 9, 1977, this
Court issued a Temporary Restraining Order restraining private respondents from
entering into any transaction affecting or disposing of the land in question.
The appeal is impressed with merit.
1. Perusal of the Court of Appeals' decision affirming in toto the trial court's order of
September 17, 1974, shows that it has interpreted the trial court's decision of July 1,
1971 to mean that upon failure of the petitioners to pay their obligation within the period
as fixed in the judgment, petitioners also lost the right to redeem the property and as
such, the absolute ownership over the subject premises has become consolidated in the
respondents.
We do not agree with the respondent court's interpretation. It contradicts the agreement
between the parties and the declaration in the decision that the contract between the
parties was an equitable mortgage, not a pacto de retro sale. It would produce the same
effect as a pactum commissurium, a forfeiture clause that has traditionally been held as
contrary to good morals and public policy and, therefore, void. 4

Thus, in the analogous case of Guanzon vs. Argel 5 this Court speaking thru Justice JBL
Reyes, affirmed the lower court's decision denying petitioner Guanzon's prayer that the
Provincial Sheriff be ordered to execute the necessary conveyance of the property in
question in her favor and that she be placed in the possession thereof, for failure of
private respondents Dumaraogs to pay the loan of P1,500 within the period also as
specified in the judgment. As therein held:
In no way can the judgment at bar be construed to mean that should the
Dumaraogs fail to pay the money within the specified period then the
property would be conveyed by the Sheriff to Guanzon. Any interpretation
in that sense would contradict the declaration made in the same Judgment
that the contract between the parties was in fact a mortgage and not a
pacto de retro sale. The only right of a mortgagee in case of non-payment
of a debt secured by mortgage would be to foreclose the mortgage and
have the encumbered property sold to satisfy the outstanding
indebtedness. The mortgagor's default does not operate to vest in the
mortgagee the ownership of the encumbered property, for any such effect
is against public policy as enunciated by the Civil Code. 6
The declaration, therefore, in the decision of July 1, 1971 to the effect that absolute
ownership over the subject premises has become consolidated in the respondents upon
failure of the petitioners to pay their obligation within the specified period, is a nullity, for
consolidation of ownership is an improper and inappropriate remedy to enforce a
transaction declared to be one of mortgage. 7 It is the duty of respondents, as
mortgagees, to foreclose the mortgage if he wishes to secure a perfect title to the
mortgaged property if he buys it in the foreclosure sale. 8
2. Neither is the petitioners' right as a mortgagor in equity affected by the fact that the
subject property was already titled in the name of respondents as early as 1969 even
before the action was instituted. In the first place, it must be borne in mind that this
equitable doctrine that deems a conveyance intended as security for a debt to be, in
effect an equitable mortgage, operates regardless of the form of the agreement chosen
by the contracting parties as the repository of their will. Equity looks through the form
and considers the substance, and no kind of engagement can be snowed which will
enable the parties to escape from the equitable doctrine adverted to. In other words, a
conveyance of land, accompanied by registration in the name of the transferee and the
issuance of a new certificate, is no more secured from the operation of this equitable
doctrine than the most informal conveyance that could be devised. 9
In the second place, the circumstance that the land has been judicially registered under
the Torrens System does not change or affect civil rights and liabilities with respect

thereto except as expressly provided in the Land Registration Act (sec. 70); and as
between the immediate parties to any contract affecting such lands, their rights will
generally be determined by the same rules of law that are applicable to unregistered
land. 10
Finally, the circumstance that the original transaction was subsequently declared to be
an equitable mortgage must mean that the title to the subject land which had been
transferred to private respondents actually remained or is transferred back to petitioners
herein as owners-mortgagors, conformably to the well-established doctrine that the
mortgagee does not become the owner of the mortgaged property because the
ownership remains with the mortgagor (Art. 2088, New Civil Code). This is precisely the
reason why this Court issued in its Resolution of March 9, 1977 a Temporary
Restraining Order, restraining private respondents from entering into any transaction
affecting or disposing the land in question.
IN VIEW OF THE FOREGOING, the decision of respondent Court of Appeals dated
June 8, 1976 affirming in toto the trial court's order of September 17, 1974 is hereby
reversed. The Temporary Restraining Order issued pursuant to Our resolution of March
9, 1979 is hereby made permanent.
The Register of Deeds of the Province of Cavite is hereby ordered to cancel T.C.T. No.
35236 registered in the name of private respondents and to issue a new title in the
name of herein petitioners subject to the equitable mortgage rights of private
respondents.
SO ORDERED.
Makasiar, Fernandez, De Castro, Guerrero, Melencio-Herrera and Plana, JJ., concur.
Separate Opinions
TEEHANKEE, J., concurring:
I concur. The long final and executory judgment of July 1, 1971 declaring the transaction
an equitable mortgage and fixing a period of ten months within which petitionersmortgagors must pay their obligation of P57,000.00 with legal interest (of six [6%] per
cent per annum) from February 2, 1969 and the further sum of Pll,104.32 with legal
interest (of six [6%] per cent per annum) from May 15, 1969, failing which execution
would follow, has at this late date not been executed due to the errors committed by the
trial court of declaring that there was no need of such execution of judgment.

The ten-month grace period granted in the 1971 decision has long expired, almost
eleven years afterwards. It should be understood that if upon finality of this Court's
judgment at bar (and remand of the records, if any, to the trial court) petitionersmortgagors shall not have discharged their indebtedness to respondents, the trial court
should forthwith issue a writ of execution for satisfaction of said mortgage indebtedness
(as adjudged in the 1971 decision) and no longer grant petitioners the 90-day grace
period provided in Rule 68, section 2 with the understanding that petitionersmortgagors may prevent the sale by paying their whole indebtedness with interests on
or before the date fixed by the sheriff for the sale of the properties and that if they so
fail, respondents, as stated in the Court's opinion, may "secure a perfect title to the
mortgaged property if (they) buy it in the foreclosure sale" (at page 5).
Separate Opinions
TEEHANKEE, J., concurring:
I concur. The long final and executory judgment of July 1, 1971 declaring the transaction
an equitable mortgage and fixing a period of ten months within which petitionersmortgagors must pay their obligation of P57,000.00 with legal interest (of six [6%] per
cent per annum) from February 2, 1969 and the further sum of Pll,104.32 with legal
interest (of six [6%] per cent per annum) from May 15, 1969, failing which execution
would follow, has at this late date not been executed due to the errors committed by the
trial court of declaring that there was no need of such execution of judgment.
The ten-month grace period granted in the 1971 decision has long expired, almost
eleven years afterwards. It should be understood that if upon finality of this Court's
judgment at bar (and remand of the records, if any, to the trial court) petitionersmortgagors shall not have discharged their indebtedness to respondents, the trial court
should forthwith issue a writ of execution for satisfaction of said mortgage indebtedness
(as adjudged in the 1971 decision) and no longer grant petitioners the 90-day grace
period provided in Rule 68, section 2 with the understanding that petitionersmortgagors may prevent the sale by paying their whole indebtedness with interests on
or before the date fixed by the sheriff for the sale of the properties and that if they so
fail, respondents, as stated in the Court's opinion, may "secure a perfect title to the
mortgaged property if (they) buy it in the foreclosure sale" (at page 5).

EQUITABLE PCI BANK, INC.,

Petitioner,

G.R. No. 168672

Present:

-versus-

CARPIO, J., Chairperson,

NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.

DNG REALTY AND DEVELOPMENT

Promulgated:
CORPORATION,
August 8, 2010
Respondent.
x-----------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:

Before us is a petition for review on certiorari with prayer for the issuance of a temporary
restraining order and/or writ of preliminary injunction filed by petitioner Equitable PCI Bank,
Inc., seeking to set aside the June 23, 2005 Decision[1] of the Court of Appeals (CA) in CA-G.R.
SP No. 86950.
The undisputed facts, as found by the CA, are as follows:

(Respondent) DNG Realty and Development Corporation (DNG) obtained a loan

of P20M from x x x Equitable PCI Bank (EPCIB) secured by a real estate
mortgage over the 63,380 sq. meter land of the former situated in Cabanatuan
City. Due to the Asian Economic Crisis, DNG experienced liquidity problems
disenabling DNG from paying its loan on time. For this reason, EPCIB sought the
extrajudicial foreclosure of the said mortgage by filing a petition for sale on 30
June 2003 before the Office of the Ex-Officio Sheriff. On 4 September 2003, the
mortgage property was sold at public auction, which was eventually awarded to
EPCIB as the highest bidder. That same day, the Sheriff executed a Certificate of
Sale in favor of EPCIB.
On October 21, 2003, DNG filed a petition for rehabilitation under Rule 4 of the
Interim Rules of Procedure on Corporate Rehabilitation before the Regional Trial
Court, Branch 28, docketed as Special Proceeding No. 125. Pursuant to this, a
Stay Order was issued by RTC Branch 28 on 27 October 2003. The petition for
rehabilitation was then published in a newspaper of general circulation on 19 and
26 November 2003.

On the other hand, EPCIB caused the recording of the Sheriff's Certificate of Sale
on 3 December 2003 with the Registry of Deeds of Cabanatuan City. EPCIB
executed an Affidavit of Consolidation of Ownership and had the same annotated
on the title of DNG (TCT No. 57143). Consequently, the Register of Deeds
cancelled DNG's title and issued TCT No. T-109482 in the name of EPCIB on 10
December 2003. This prompted DNG to file Civil Case No. 4631 with RTC-Br.
28 for annulment of the foreclosure proceeding before the Office of the ExOfficio Sheriff. This case was dismissed for failure to prosecute.
In order to gain possession of the foreclosed property, EPCIB on 17 March 2004
filed an Ex-Parte Petition for Issuance of Writ of Possession docketed as
Cadastral Case No. 2414-AF before RTC Br. 23 in Cabanatuan City. After
hearing, RTC-Br. 23 on 6 September 2004 issued an order directing the issuance
of a writ of possession. On 4 October 2004, RTC-Br. 23 issued the Writ of
Possession. Consequently, the Office of the Ex-Officio Sheriff issued the Notice to
Vacate dated 6 October 2004.[2]
On October 15, 2004, respondent filed with the CA a petition for certiorari, prohibition
and mandamus with prayer for the issuance of temporary restraining order/ preliminary
injunction entitled DNG Realty and Development Corporation v. Hon. LYDIA BAUTO
HIPOLITO, in her capacity as the Presiding Judge of Branch 23, Regional Trial Court, Third
Judicial Region, Cabanatuan City; the OFFICE OF THE EX-OFFICIO SHERIFF of the
Regional Trial Court, Third Judicial Region, Cabanatuan City; the OFFICE OF THE
REGISTER OF DEEDS OF CABANATUAN CITY; and EQUITABLE PCIBANK, INC. The
petition for certiorari sought to nullify (1) the affidavit of consolidation of ownership dated
December 2, 2003; (2) the cancellation of DNG's TCT No. T-57143 covering the mortgaged
property and the issuance of TCT No. T-109482 in favor of petitioner EPCIB by the Register of
Deeds of Cabanatuan City; (3) the Order dated September 6, 2004 issued by the RTC, Branch 23,
directing the issuance of the writ of possession and the writ of possession issued pursuant
thereto; and (4) the sheriff's Notice to Vacate dated October 6, 2004, while the petition for
prohibition sought to enjoin petitioner EPCIB, their agents and representatives from enforcing
and implementing the above-mentioned actions. And the petition for mandamus sought to require
petitioner EPCIB to cease and desist from taking further action both in the foreclosure
proceedings as well as in Cadastral Case No. 2414-AF, where the writ of possession was issued
until the petition for rehabilitation pending before Branch 28 of the Regional Trial Court (RTC)
of Cabanatuan City has been terminated or dismissed.
On October 22, 2004, the CA issued a temporary restraining order (TRO).[3]
After the parties filed their respective pleadings, the CA issued its assailed Decision, the
dispositive portion of which reads:

WHEREFORE, the instant petition is GRANTED. The Order of 6 September

2004 directing the issuance of a writ of possession; the Writ of Possession issued
pursuant thereto; and the Notice to Vacate are all REVERSED and SET ASIDE
for being premature and untimely issued. Lastly, the Transfer Certificate of Title
No. T-109482 under the name of Equitable PCI Bank is hereby
ordered CANCELLED for equally being issued prematurely and untimely, and in
lieu thereof the Transfer Certificate of Title No. 57143 is ordered
REINSTATED. [4]

In finding the petition meritorious, the CA stated that under A.M. No. 00-8-10-SC
adopting the Interim Rules of Procedure on Corporate Rehabilitation, all petitions for
rehabilitation by corporations, partnerships and associations under Presidential Decree (PD) 902A, as amended by Republic Act (RA) 8799, were directed to be transferred from the Securities
and Exchange Commission (SEC) to the RTCs, and allowed the RTCs to issue a stay order, i.e.,
staying enforcements of all claims, whether for money or otherwise, and whether such
enforcement is by court action or otherwise, against the debtor. And under Section 6 (c) of PD
902-A, the Commission (now the RTC) upon appointment of a management committee,
rehabilitation receiver, board or body, all actions or claims against the corporations, partnerships
or associations under management or receivership pending before any court, tribunal, board or
body shall be suspended accordingly. The CA, relying in Bank of the Philippine Islands v. Court
of Appeals (BPI v. CA)[5] found no merit to petitioner EPCIB's claim that the foreclosure sale of
the property was made prior to the issuance of the Stay Order and was, therefore, fait accompli;
and that with the consummation of the extrajudicial foreclosure sale, all the valid and legal
consequences of such could no longer be stayed. The CA ruled that after the issuance of the Stay
Order, effective from the date of its issuance, all subsequent actions pertaining to respondent
DNG's Cabanatuan property should have been held in abeyance. Petitioner EPCIB should have
refrained from executing its Affidavit of Consolidation of ownership or filing its exparte petition for issuance of a writ of possession before the RTC Branch 23; respondent Office
of the Register of Deeds of Cabanatuan City should not have cancelled respondent DNG's title
and issued a new one in petitioner EPCIB'sname; and that respondent Judge and the ExOfficio Sheriff should have abstained from issuing the writ of possession and the notice to
vacate, respectively.
The CA found no forum shopping committed by respondent DNG as Civil Case No. 4631
filed before Branch 28 sought to annul the foreclosure sale and the certificate of sale over
respondent DNG's property, while Cadastral Case No. 2414-AF instituted by petitioner EPCIB,

was an ex-parte petition to wrest possession of the same property from respondent DNG. On the
other hand, the present petition sought only to stay all proceedings on respondent DNG's
property after the Stay Order was issued. Thus, the causes of action and the reliefs sought in each
of those proceedings were not identical.
The CA also found that, despite the Stay Order issued, petitioner EPCIB's over-zealousness in
consolidating its title and taking possession of the respondent's property left the latter without
any plain, speedy and adequate remedy but to file the petition.
Dissatisfied, petitioner EPCIB filed the instant petition where it raises the errors
committed by the CA as follows:
THE COURT OF APPEALS COMMITTED GRAVE, PALPABLE, AND
REVERSIBLE ERRORS IN TAKING COGNIZANCE OF AN ORIGINAL
PETITION FOR CERTIORARI, PROHIBITION AND MANDAMUS, AND IN
ISSUING A TEMPORARY RESTRAINING ORDER, AGAINST THE
MINISTERIAL IMPLEMENTATION OF A WRIT OF POSSESSION.
THE COURT OF APPEALS COMMITTED A GRAVE, PALPABLE AND
REVERSIBLE ERROR IN HOLDING THAT THE 1994 CASE OF BPI VS. CA
IS SQUARELY IN POINT IN THE PRESENT CONTROVERSY.
THE COURT OF APPEALS GRAVELY AND SERIOUSLY ERRED IN
HOLDING THAT SINCE THE CONSOLIDATION OF TITLE, THE
APPLICATION FOR THE ISSUANCE OF A WRIT OF POSSESSION, THE
CANCELLATION OF RESPONDENT'S TITLE AND THE ISSUANCE OF A
NEW ONE UNDER EPCIBANKS'S NAME, THE ISSUANCE OF THE WRIT
OF POSSESSION, AND THE SERVICE OF A NOTICE TO VACATE HAVE
BEEN MADE AFTER THE ISSUANCE OF THE STAY ORDER, THE SAME
WERE UNTIMELY AND PREMATURE.
THE COURT OF APPEALS COMMITTED A GRAVE, PALPABLE AND
REVERSIBLE ERROR IN HOLDING THAT THE RESPONDENT HAD NO
OTHER PLAIN, SPEEDY AND ADEQUATE REMEDY.[6]

Petitioner contends that upon failure to redeem the foreclosed property, consolidation of title
becomes a matter of right on the part of the auction buyer, and the issuance of a certificate of title
in favor of the purchaser becomes ministerial upon the Register of Deeds; that the issuance and
implementation of a writ of possession are both ministerial in character, thus, a writ of certiorari,
prohibition and mandamus which respondent DNG filed with the CA and which were all directed
to address the abuse of discretion allegedly committed by the cadastral court and the sheriff will

not lie; and that the CA erred in finding grave abuse of discretion or excess of jurisdiction upon
the cadastral court which issued the writ of possession and the sheriff who implemented the
same, as they acted in compliance with the express provision of Act 3135 as amended.
Petitioner claims that the CA's reliance in BPI v. CA in ruling that all subsequent actions
pertaining to respondent DNG's Cabanatuan property, i.e., consolidation of ownership,
cancellation of respondent's title and the issuance of a new title in petitioner's name and the
issuance of a writ of possession by Branch 23 of the RTC in Cadastral Case No. 2414-F, and the
notice to vacate, which were all made after the issuance of the Stay Order by the rehabilitation
court, should have been held in abeyance is erroneous. Petitioner EPCIB cites the case of Rizal
Commercial Banking Corporation v. Intermediate Appellate Court (RCBC v. IAC) [7] as the
applicable jurisprudence in this case. Petitioner argues that since the extrajudicial foreclosure
sale of respondent DNG's property was conducted on September 4, 2003, or prior to the filing of
the petition for rehabilitation on October 21, 2003 and the issuance of the Stay Order on October
27, 2003, the enforcement of a creditor claim via an extrajudicial foreclosure sale conducted on
September 4, 2003 could no longer be stayed for having been fully consummated prior to the
issuance of the Stay Order.
Petitioner argues that the CA erred in its finding that there was no other plain, speedy and
adequate remedy available to respondent but to file the petition for certiorari, prohibition and
mandamus with the CA, since Section 8 of Act 3135 provides for the proper remedy against an
order granting the issuance of a writ of possession.
In its Comment, respondent echoed the findings made by the CA. Petitioner filed its
Reply.
The issues for resolution are (1) whether respondent DNG's petition for certiorari,
prohibition and mandamus filed in the CA was a proper remedy; (2) whether the CA correctly
held that all subsequent actions pertaining to respondent DNG's Cabanatuan property should
have been held in abeyance after the Stay Order was issued by the rehabilitation court.
We answer both issues in the negative.
Anent the first issue, respondent DNG filed before the CA a petition for certiorari, prohibition
and mandamus with prayer for the issuance of a TRO and a writ of preliminary injunction
seeking to annul the RTC Order dated September 6, 2004 issued in Cadastral Case No. 2414AF, i.e., in re ex-parte petition filed by petitioner EPCIB for the issuance of a writ of possession,
which ordered the issuance of the writ of possession in petitioner EPCIB's favor as the new
registered owner of the property covered by TCT No. T-109482. We find that the CA erred in
acting on the petition. Act 3135, as amended by Act 4118, which regulates the methods of
effecting an extrajudicial foreclosure of mortgage explicitly authorizes the issuance of such writ
of possession.[8] Section 7 of Act 3135 as amended provides:

Section 7. Possession during redemption period. - In any sale made under the provisions
of this Act, the purchaser may petition the [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 of this Act. Such petition shall be made under
oath and filed in the 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 court shall, upon
the filing of such petition, collect the fees specified in paragraph eleven of section
one hundred and fourteen of 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.
Section 7 of Act 3135, as amended, refers to a situation wherein the purchaser seeks possession
of the foreclosed property during the redemption period. Upon the purchaser's filing of the ex
parte petition and posting of the appropriate bond, the RTC shall, as a matter of course, order the
issuance of the writ of possession in the purchaser's favor.[9] But equally well settled is the rule
that a writ of possession will issue 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.[10] Thus, if under Section 7 of Act 3135 as amended, the RTC has the power during the
period of redemption to issue a writ of possession on the ex parte application of the purchaser,
there is no reason why it should not also have the same power after the expiration of the
redemption period, especially where a new title had already been issued in the name of the
purchaser.[11] Thus, after the consolidation of title in the buyers name for failure of the mortgagor
to redeem, the writ of possession becomes a matter of right and the issuance of such writ of
possession to a purchaser in an extrajudicial foreclosure is merely a ministerialfunction.[12] The
basis of this right to possession is the purchasers ownership of the property.[13]
Respondent's petition for certiorari, prohibition and mandamus filed with the CA was not the
proper remedy. A special civil action forcertiorari and prohibition could be availed of only if a
tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in
excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and if there is no appeal or other plain, speedy, and adequate remedy in the ordinary
course of law.[14]

In this case, respondent DNG failed to redeem the foreclosed property within the reglementary
period; thus, petitioner EPCIB consolidated its ownership over the property in its favor and
annotated the same in respondent's title. Thus, respondent DNG's title was cancelled and a new
title was issued in petitioner EPCIB's name. The RTC's issuance of a writ of possession in favor
of petitioner EPCIB as the new registered owner of the subject property was in compliance with
the express provisions of Act 3135 as amended. It cannot, therefore, be charged with grave abuse
of discretion as there is no showing that, in the exercise of its judgment, it acted in a capricious,
whimsical, arbitrary or despotic manner tantamount to lack of jurisdiction.[15]
In Santiago v. Merchants Rural Bank of Talavera, Inc.,[16] we said that:
Case law has it that after the consolidation of title in the name of the
respondent as the buyer of the property, upon failure of the mortgagor to redeem
the property, the writ of possession becomes a matter of right. Its issuance to the
purchaser is merely a ministerial function. As such, the court neither exercises its
discretion nor judgment. Indeed, in an avuncular case, we held that:
The right of the petitioner to the possession of the property is clearly
unassailable. It is founded on its right of ownership. As the purchaser of the
properties in the foreclosure sale, and to which the respective titles thereto have
already been issued, petitioners right over the property has become absolute,
vesting upon him the right of possession over an enjoyment of the property which
the Court must aid in effecting its delivery. After such delivery, the purchaser
becomes the absolute owner of the property. As We said in Tan Soo Huat vs.
Ongwico, the deed of conveyance entitled the purchaser to have and to hold the
purchased property. This means, that the purchaser is entitled to go immediately
upon the real property, and that it is the Sheriffs inescapable duty to place him in
such possession.[17]

Thus, in Philippine National Bank v. Sanao Marketing Corporation,[18] we ruled that:

x x x The judge issuing the order following these express provisions of [Act 3135]
cannot be charged with having acted without jurisdiction or with grave abuse of
discretion. If only to stress the writs ministerial character, we have, in previous
cases, disallowed injunction to prohibit its issuance, just as we have held that the
issuance of the same may not be stayed by a pending action for annulment of
mortgage or the foreclosure itself.[19]

Moreover, a writ of certiorari, prohibition and mandamus will only be issued if there is
neither appeal nor any plain, speedy or adequate relief in the ordinary course of law. However,

Section 8 of Act 3135 provides the plain, speedy, and adequate remedy in opposing the issuance
of a writ of possession.[20] The provision reads:
Section 8. Setting aside of sale and writ of possession. The debtor may,
in the proceedings in which possession was requested, but not later than thirty
days after the purchaser was given possession, petition that the sale be set aside
and the writ of possession cancelled, specifying the damages suffered by him,
because the mortgage was not violated or the sale was not made in accordance
with the provisions hereof, and the court shall take cognizance of this petition in
accordance with the summary procedure provided for in section one hundred and
twelve of Act Numbered Four hundred and ninety-six; and if it finds the
complaint of the debtor justified, it shall dispose in his favor of all or part of the
bond furnished by the person who obtained possession. Either of the parties may
appeal from the order of the judge in accordance with section fourteen of Act
Numbered Four hundred and ninety-six; but the order of possession shall continue
in effect during the pendency of the appeal.

Clearly, a party may file a petition to set aside the foreclosure sale and to cancel the writ
of possession in the same proceedings where the writ of possession was requested.
[21]
The aggrieved party may thereafter appeal from any disposition by the court on the matter.[22]
In this case, respondent DNG had the right to file a petition to set aside the sale and writ
of possession issued by the RTC and to file an appeal in case of an adverse ruling. However,
respondent DNG did not file such petition and, instead, filed the petition for certiorari,
prohibition and mandamus with the CA. Hence, they were barred from filing such petition from
the RTC Order and the writ of possession issued by it. [23] Respondent's recourse to the CA via
Rule 65 was inappropriate even though the Sheriff had demanded that they vacate the property.
[24]
Section 8 of Act No. 3135 mandates that even if an appeal is interposed from an order
granting a petition for a writ of possession, such order shall continue to be in effect during the
pendency of an appeal.[25]
As to the second issue of whether the CA correctly held that after the issuance of the Stay
Order by the rehabilitation court, all subsequent actions in this case pertaining to respondent's
Cabanatuan property should have been held in abeyance is devoid of merit.
Respondent DNG's petition for rehabilitation filed in Branch 28 of the RTC of Cabanatuan City
on October 21, 2003 was made pursuant to the 2000 Interim Rules of Procedure on Corporate
Rehabilitation, which was the applicable law on rehabilitation petitions filed by corporations,

partnerships or associations, including rehabilitation cases transferred from the SEC to the RTCs
pursuant to RA 8799 or theSecurities Regulation Code.[26]
Section 6 of the Interim Rules of Procedure on Corporate Rehabilitation[27] provides:
SEC. 6. Stay Order. If the court finds the petition to be sufficient in form and
substance, it shall, not later than five (5) days from the filing of the petition, issue
an Order (a) appointing a Rehabilitation Receiver and fixing his bond; (b) staying
enforcement of all claims, whether for money or otherwise and whether such
enforcement is by court action or otherwise, against the debtor, its guarantors and
sureties not solidarily liable with the debtor; (c) prohibiting the debtor from
selling, encumbering, transferring, or disposing in any manner any of its
properties except in the ordinary course of business; (d) prohibiting the debtor
from making any payment of its liabilities outstanding as of the date of filing of
the petition; (e) prohibiting the debtors suppliers of goods or services from
withholding supply of goods and services in the ordinary course of business for as
long as the debtor makes payments for the services and goods supplied after the
issuance of the stay order; (f) directing the payment in full of all administrative
expenses incurred after the issuance of the stay order; (g) fixing the initial hearing
on the petition not earlier than forty five (45) days but not later than sixty (60)
days from the filing thereof; (h) directing the petitioner to publish the Order in a
newspaper of general circulation in the Philippines once a week for two (2)
consecutive weeks; (i) directing all creditors and all interested parties (including
the Securities and Exchange Commission) to file and serve on the debtor a
verified comment on or opposition to the petition, with supporting affidavits and
documents, not later than ten (10) days before the date of the initial hearing and
putting them on notice that their failure to do so will bar them from participating
in the proceedings; and (j) directing the creditors and interested parties to secure
from the court copies of the petition and its annexes within such time as to enable
themselves to file their comment on or opposition to the petition and to prepare
for the initial hearing of the petition.

The suspension of the enforcement of all claims against the corporation is subject to the rule that
it shall commence only from the time the Rehabilitation Receiver is appointed.[28]

The CA annulled the RTC Order dated September 6, 2004 directing the issuance of a writ of
possession, as well as the writ of possession issued pursuant thereto on October 4, 2004, and the
notice to vacate issued by the Sheriff for being premature and untimely and ordered the
cancellation of TCT No. T-109482 in the name of petitioner EPCIB as they were all done after

the Stay Order was issued on October 27, 2003 by the rehabilitation court. In so ruling, the CA
relied on BPI v. CA.[29]
In BPI v. CA, BPI filed with the RTC a complaint for foreclosure of real estate mortgage against
Ruby Industrial Corporation (RUBY).After RUBY filed its Answer with Counterclaim, it
submitted a motion for suspension of proceedings, since the SEC had earlier issued an Order
placing RUBY under a rehabilitation plan, pursuant to Section 6 par. (c) of PD 902-A which also
declared that with the creation of the Management Committee, all actions or claims against
RUBY pending before any court, tribunal, branch or body were suspended. Thus, the RTC
suspended the proceedings. BPI moved for the reopening of the proceedings; however, the RTC
denied it, citing the case ofAlemar's Sibal and Sons, Inc v. Elbinias where we held that
suspension of payments applied to all creditors, whether secured or unsecured, in order to place
them on equal footing. As BPI's motion for reconsideration was denied, it went to the CA in a
petition for certiorari and mandamus alleging grave abuse of discretion on the RTC in refusing
to reopen the case, which was dismissed by the CA. BPI filed its appeal with Us wherein the
issue presented was whether BPI, a secured creditor of RUBY, may still judicially enforce its
claim against RUBY which had already been placed by the SEC under Rehabilitation. We denied
the petition and found that BPIs action for foreclosure of real estate mortgage had been filed
against RUBY and was pending with the RTC when RUBY was placed by the SEC under
rehabilitation through the creation of a management committee. Thus, with the SEC order, which
directed that all actions or claims against RUBY pending before any court, tribunal, branch or
body be deemed suspended, the RTC's jurisdiction over the foreclosure case was also considered
suspended; and that SEC had acquired jurisdiction with the appointment of a rehabilitation
receiver for the distressed corporation and had directed all proceedings or claims against Ruby
suspended. We then ruled that:
x x x whenever a distressed corporation asks [the] SEC for rehabilitation and
suspension of payments, preferred creditors may no longer assert such preference,
but x x x stand on equal footing with other creditors. Foreclosure shall be
disallowed so as not to prejudice other creditors, or cause discrimination among
them. If foreclosure is undertaken despite the fact that a petition for rehabilitation
has been filed, the certificate of sale shall not be delivered pending rehabilitation.
If this has already been done, no transfer certificate of title shall likewise be
effected within the period of rehabilitation. The rationale behind PD 902-A, as
amended, is to effect a feasible and viable rehabilitation. This cannot be achieved
if one creditor is preferred over the others.[30]
BPI case is not in all fours with the instant case. Notably, in BPI, the action for judicial
foreclosure of the real estate mortgage was still pending with the RTC when the stay order was
issued; thus, there was no judgment on the foreclosure for payment and the sale of the mortgaged

property at a public auction. In contrast to this case, herein respondent's mortgaged property had
already been extrajudicially foreclosed and sold to petitioner as the highest bidder and a
Certificate of Sale was issued on September 4, 2003, which was prior to the issuance of the Stay
Order on October 27, 2003.
We find merit in petitioner EPCIB's argument on the applicability of RCBC v. IAC,
[31]
an en banc case decided in 1999, to the instant case. There, we ruled that RCBC can rightfully
move for the extrajudicial foreclosure of the mortgage on the BF Home properties on October
16, 1984, because a management committee was not appointed by the SEC until March 18,
1985. Such ruling was a reversal of our earlier decision in the same case where we found that the
prohibition against foreclosure attaches as soon as a petition for rehabilitation was filed.
In RCBC v. IAC, BF Homes filed a petition for rehabilitation and for suspension of payments
with the SEC on September 28, 1984. On October 26, 1984, RCBC requested the Provincial
Sheriff to extrajudicially foreclose its real estate mortgage on some of BF Homes' properties;
thus, notices were sent to the parties. BF Homes filed a motion with the SEC for the issuance of
a TRO to enjoin RCBC and the sheriff from proceeding with the auction sale, which the SEC
granted by issuing a TRO for twenty days. The sale was rescheduled to January 29, 1985. On
January 25, 1985, the SEC ordered the issuance of a writ of preliminary injunction conditioned
upon BF Homes' filing of a bond which the latter failed to do not until January 29, the day of the
auction sale. As the sheriff was not aware of the filing of the bond, he proceeded with the auction
on January 29, wherein RCBC emerged as the highest bidder.
On February 5, 1985, BF Homes filed with the SEC a consolidated motion to annul the auction
sale and to cite RCBC and the sheriff for contempt. The sheriff then withheld the delivery of a
certificate of sale to the RCBC due to the SEC proceedings. On March 13, 1985, RCBC filed
with the RTC of Rizal, Branch 140, an action for mandamus against the Provincial Sheriff of
Rizal and his deputy to compel them to execute in its favor a certificate of sale of the auctioned
properties. The sheriffs filed their answer saying that they proceeded with the sale since no writ
of preliminary injunction was issued as of the auction sale, but they informed the SEC that they
would suspend the issuance of the certificate of sale.
On March 18, 1985, the SEC appointed a management committee for BF Homes.
On May 8, 1985, the RTC, Branch 140, rendered a judgment on the pleading in the mandamus
case filed by RCBC which ordered the sheriff to execute and deliver to RCBC the certificate of
sale of January 29, 1984. BF Homes filed with the IAC an original complaint for annulment
of the RTC judgment. The IAC set aside the RTC decision by dismissing the mandamus case and

ordered the suspension of the issuance to RCBC of new land titles [32] until the SEC had resolved
the petition for rehabilitation.
RCBC filed an appeal with us. During the pendency of the appeal, RCBC filed a manifestation
informing us that the SEC issued an Order on October 16, 1986 denying the motion to annul the
auction sale and to cite RCBC and the sheriff for contempt. Thus, by virtue of the said SEC
Order, the Register of Deeds of Pasay effected transfer of titles over the auctioned properties to
RCBC and the issuance of new titles in its name. Thereafter, RCBC presented with us a motion
for the dismissal of its petition, since the issuance of new titles in its name rendered the petition
moot and academic. In our original decision dated September 14, 1992, we denied petitioners
motion to dismiss, finding basis for nullifying and setting aside the TCTs in the name of RCBC.
We dismissed the RCBC petition and upheld the IAC decision dismissing the mandamus case
filed by RCBC. We ordered the nullification of the new titles already issued in RCBC's name and
reinstated the old titles in the name of BF Homes. In setting aside RCBCs acquisition of title and
nullifying the TCTs issued to it, we held that prohibition against foreclosure attaches as soon as a
petition for rehabilitation was filed.
However, as we have said earlier, upon RCBC's motion for reconsideration, we reversed
our previous decision and granted reconsideration for the cogent reason that suspension of
actions for claims commenced only from the time a management committee or receiver was
appointed by the SEC. We said that RCBC, therefore, could have rightfully, as it did, move for
the extrajudicial foreclosure of its mortgage on October 26, 1984, because a management
committee was not appointed by the SEC until March 18, 1985.

In RCBC, we upheld the extrajudicial foreclosure sale of the mortgage properties of BF Homes
wherein RCBC emerged as the highest bidder as it was done before the appointment of the
management committee. Noteworthy to mention was the fact that the issuance of the certificate
of sale in RCBC's favor, the consolidation of title, and the issuance of the new titles in RCBC's
name had also been upheld notwithstanding that the same were all done after the management
committee had already been appointed and there was already a suspension of claims. Thus,
applying RCBC v. IAC in this case, since the foreclosure of respondent DNG's mortgage and the
issuance of the certificate of sale in petitioner EPCIB's favor were done prior to the appointment
of a Rehabilitation Receiver and the Stay Order, all the actions taken with respect to the
foreclosed mortgage property which were subsequent to the issuance of the Stay Order were not
affected by the Stay Order. Thus, after the redemption period expired without respondent
redeeming the foreclosed property, petitioner becomes the absolute owner of the property and it

was within its right to ask for the consolidation of title and the issuance of new title in its name
as a consequence of ownership; thus, it is entitled to the possession and enjoyment of the
property.
WHEREFORE, the petition is GRANTED. The Decision dated June 23, 2005 of the
Court of Appeals in CA-G.R. SP No. 86950 is hereby REVERSED and SET ASIDE.
SO ORDERED.

VIOLA CAHILIG and ANTONIO

G. SIEL, JR.,

G.R. No. 164470

Petitioners,
Present:
- versus CORONA, C.J.,
HON.
EUSTAQUIO
G.
TERENCIO,
Regional
Trial
Court of Kalibo, Aklan, Branch
8; THE PROVINCIAL SHERIFF,
Kalibo,
Aklan;
and
MERCANTILE
CREDIT
RESOURCES CORPORATION,

Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.

Respondents.

Promulgated:

November 28, 2011

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

LEONARDO-DE CASTRO, J.:

In this petition for review on certiorari with a prayer for the issuance of a writ
of preliminary mandatory injunction under Rule 45 of the 1997 Rules of Civil
Procedure, the Court is urged to annul and set aside the Decision [1] dated July
23, 2003 as well as the Resolution [2]dated July 9, 2004 both issued by the
Court of Appeals in CA-G.R. SP No. 76475, entitled, Viola Cahilig and Antonio
G. Siel, Jr. v. Hon. Eustaquio G. Terencio, Mercantile Credit Resources
Corporation and the Provincial Sheriff, Kalibo, Aklan. The July 23, 2003
Decision dismissed for lack of merit the petition for certiorari filed by
petitioners assailing the issuance of an alias writ of possession via an
Order[3] dated December 20, 2002 by the Regional Trial Court (RTC) of Kalibo,
Aklan, Branch 8 in SP. Proc. No. 6923, entitled In The Matter For Ex-Parte
Issuance Of Writ Of Possession Covering Lot 402-Part, Being A Portion Of Lot
402, NR-06-000001 (And Its Improvements Thereon) Malay Cadastre,
Covered By ARP/TD No. 93-003-1674 (PIN-038-12-003-13-014), Pursuant To
Section 7 Of Act No. 3135. The July 9, 2004 Resolution, on the other hand,
denied petitioners motion for reconsideration.

The facts of this case, as outlined in the Decision dated July 23, 2003 of
the Court of Appeals, follow:

It appears that on April 14, 1997 and September 17, 1997,

Soterania G. Siel executed deeds of real estate mortgage
covering a portion of Lot 402, consisting of 2,882 square meters,
located at Barangay Balabag, Malay, Aklan, in favor of
Moneytrend Lending Corporation, as security for two promissory
notes.

On March 31, 1999, Moneytrend Lending Corporation assigned

the promissory notes and deeds of real estate mortgage to
private respondent Mercantile Credit Resources Corporation.

In view of the non-payment of the loans, private respondent

caused the extrajudicial foreclosure of the mortgages. It then
acquired the mortgaged property as the highest bidder. A
certificate of sale was subsequently issued in favor of private
respondent. Soterania Siel failed to redeem the property within
the prescribed period and a final deed of sale was issued by the
Sheriff on March 19, 2001 in favor of private respondent.
On May 2, 2001, private respondent filed with the Regional Trial
Court, Branch 8, Kalibo, Aklan an ex-parte motion for the
issuance of a writ of possession over the subject property. In an
Order dated June 29, 2001, respondent Judge granted the motion
and directed the Sheriff to place private respondent in
possession of the subject property, ruling thus:
Jhett Tolentino, Corporate Secretary of the petitioner,
testified that from the time the mortgage was
constituted and thereafter assigned to the petitioner,
it was the mortgagor who remained in possession of
the mortgaged property. Lately, when he inspected
the property after it was foreclosed, it was Viola
Cahilig, the daughter of Soterania G. Siel, the
previous owner, who was in possession of the same.
In the light of the foregoing, petitioner would want
now that a writ of possession be issued in its favor
citing the provisions of Sec. 7 of R.A. 3135.

After a careful assessment of the evidence, the Court

is convinced that the petitioner has substantiated all
its allegations in the petition that entitles the
petitioner to the issuance of the writ.

In IFC v. Nerta (19 SCRA 181) it was held that in

Extrajudicial Foreclosure of Real Estate Mortgage, the
possession of the property sold may be given to the
purchaser by the sheriff after the period of
redemption had expired unless a third person is
actually holding the property adverse to the
mortgagor. An ordinary action for the recovery of
possession is not necessary.
From the evidence, it was shown that the property
sought to be possessed by the petitioner by virtue of
this petition is not in the possession of any third
person. The present possessor is the immediate
successor-in-interest of the mortgagor.
A motion for reconsideration was filed by petitioner Viola Cahilig,
for herself and in behalf of the heirs of Soterania Siel, alleging
that private respondent is guilty of forum shopping in view of the
pendency of the appeal in Civil Case No. 6247 involving the same
parties and subject matter. The motion for reconsideration was
denied in an Order dated October 18, 2001.
The writ of possession was implemented by Sheriff Victor B.
Beluso on January 21, 2002 by serving a notice to vacate on
petitioner Viola Cahilig, who manifested that she could turn over
only her 1/6 share over the property as the other shares do not
belong to her. On March 11, 2002, the Sheriff received a third
party claimants affidavit executed by petitioner Antonio Siel, Jr.,
who claimed that he and his siblings bought the property from
their mother, Soterania Siel, on March 2, 1993, attaching thereto
copies of the deeds of sale in their favor.
On November 25, 2002, private respondent filed a motion for the
issuance of an alias writ of possession. Said motion was opposed
by petitioners Viola Cahilig and Antonio G. Siel, Jr. alleging that
they and their siblings have been the owners of the property
since 1993, that is, before the mortgage was constituted. In an
Order dated December 20, 2002, respondent Judge granted the
motion for the issuance of an alias writ of possession and
directed the Sheriff to implement the same, with police
assistance if necessary.

Petitioners motion for reconsideration, motion for inhibition and

motion to quash the alias writ of possession were denied in an
Order dated March 21, 2003, although private respondent was
ordered to post an indemnity bond in the amount of P100,000.00
to answer for whatever damages petitioners may suffer in the
event that they would be able to vindicate their claim in the civil
cases they filed against private respondent. An indemnity
supersedeas bond was then filed by private respondent and
approved by respondent Judge.[4]
On March 28, 2003, petitioners instituted a special civil action
for certiorari alleging grave abuse of discretion on the part of respondent
Judge Eustaqio G. Terencio for not quashing the alias writ of possession in
view of their third-party claim and irregularities in the mortgage transactions
as the loans were allegedly not obtained by Soterania Siel but by petitioner
Viola Cahilig and Shirley Candolita.Petitioners prayed for the issuance of a
restraining order to enjoin the implementation of the alias writ of possession.
[5]

This was followed by the filing of a Supplemental Petition for Certiorari with
Preliminary Injunction with Leave of Court [6] on April 11, 2003 and a Second
Supplemental Petition for Certiorari with Prayer for Preliminary Mandatory
Injunction with Leave of Court and Motion for Contempt of Court [7] on April
22, 2003. The latter pleading alleged that respondent Provincial Sheriff,
accompanied by private respondents counsel and escorted by police officers,
forcibly ejected petitioner Viola Cahilig from the subject property, injured the
latter, and destroyed the structures located therein.
In its July 23, 2003 Decision, the Court of Appeals pointed out that the
principal issue to be resolved in the case being appealed by the petitioners is
whether or not petitioners are third parties holding the subject property
adversely to the judgment debtor which was the late Soterania Siel. The
Court of Appeals ruled in the negative and dismissed the petition
for certiorari for lack of merit.
A motion for reconsideration was filed by petitioners but this was
denied by the Court of Appeals in its July 9, 2004 Resolution.
Hence, petitioners take this appeal wherein they put forth the following
issues for consideration:
I

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT

NULLIFYING THE ALIAS WRIT OF POSSESSION ISSUED BY THE
TRIAL COURT CONSIDERING THAT PETITIONERS, BEFORE THEIR
FORCIBLE EVICTION, HAVE ACTUALLY POSSESSED THE SUBJECT
PROPERTY AS THIRD [PARTIES] ADVERSE TO THE MORTGAGOR,
SOTERANIA SIEL, AS EVIDENCED BY THE THIRD PARTY CLAIM AND
THE NOTARIZED DEEDS OF SALE.
II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT THE DEEDS OF SALE EXECUTED BY THE
PETITIONERS MOTHER, SOTERANIA SIEL, IN THEIR FAVOR AND
THEIR SIBLINGS ARE FICTITIOUS AND WERE ONLY PREPARED TO
THWART THE IMPLEMENTATION OF THE WRIT OF POSSESSION,
MERELY RELYING ALONE ON THE ALLEGED ADMISSION OF
PETITIONERS IN THEIR SUPPLEMENTAL PETITION FOR CERTIORARI
THAT THEY HAVE INHERITED THE SUBJECT PROPERTY FROM
THEIR DECEASED MOTHER, BUT OVERLOOKING THE CONSISTENT
AND INSISTENT CLAIM OF PETITIONERS THAT THE ONE-SIXTH
(1/6) PORTIONS OF THE PROPERTY WERE SOLD TO PETITIONERS
AND THE SIBLINGS FOR A VALUABLE CONSIDERATION, AND
CONSIDERING THAT SAID DOCUMENTS, BEING NOTARIZED, ARE
ENTITLED TO THE PRESUMPTION OF REGULARITY AND ENTITLED
TO BE GIVEN WEIGHT AND PROBATIVE VALUE.
III
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE
MISAPPREHENSION OF FACTS AND GROSSLY MISSAPRECIATED
THE EVIDENCE IN GRANTING THE ISSUANCE OF AN ALIAS WRIT
OF POSSESSION DESPITE FATAL DEFECTS OF THE EXTRAJUDICIAL
FORECLOSURE PROCEEDINGS AND IN CONSIDERING AS OF NO
MOMENT THE PENDENCY OF THE APPEALED CASES BEFORE THE
COURT OF APPEALS FOR ANNULMENT AND/OR DECLARATION OF
THE NULLITY OF THE DEEDS OF REAL ESTATE MORTGAGE AND
FORECLOSURE PROCEEDINGS, INCLUDING THE CRIMINAL CASE
FOR ESTAFA, AND THAT THE ISSUANCE OF THE WRIT OF
POSSESSION TO A PURCHASER IN AN EXTRAJUDICIAL
FORECLOSURE SALE IS MERELY A MINISTERIAL FUNCTION OF THE

COURT AND MAY NOT BE STAYED BY A PENDING ACTION FOR

ANNULMENT OF MORTGAGE OR THE FORECLOSURE ITSELF.

IV

THE DECISION OF THE HONORABLE COURT OF APPEALS

DISREGARDED AND/OR FAILED TO RESOLVE THE VITAL ISSUES
RAISED BY PETITIONERS IN THEIR SECOND SUPPLEMENTAL
PETITION AND THE MOTION FOR CONTEMPT CONCERNING THE
FORCIBLE EJECTMENT OF PETITIONER VIOLA CAHILIG FROM THE
SUBJECT PROPERTY, INJURING HER AND DESTROYING THE
STRUCTURES BELONGING TO HER AND OTHER OCCUPANTS
ERECTED ON THE SUBJECT PROPERTY.[8]
[9]

On the other hand, private respondent,

presented the following issues for resolution:

in

its

Memorandum,

a.

Whether or not the Petition had complied with the mandatory requirement
of execution of non-forum shopping certification by petitioners.

b.

Whether or not petitioner Viola Cahilig is a third-party claimant to the

subject property adverse to the judgment debtor Soterania Siel.

c.

Whether or not petitioner Viola Cahilig is bound by the Alias Writ of

Possession, as she was bound by the original Writ of Possession.

d.

Whether or not the case at bar challenging the issuance and the
implementation of the Alias Writ of Possession can continue to survive after
the issues on the validity of the mortgage and of the foreclosure proceedings
of the subject property had already been decided and rendered res judicata in
favor of respondent Mercantile Credit Resources Corporation and of its
predecessor-in-interest.[10]

The petition is without merit.

In fine, the focal issue of this case is whether or not the issuance of the
writ of possession over the property subject of the foreclosure of the real
estate mortgage is proper.
We
previously
held
Investors Corporation[11] that:

in Villanueva

v.

Cherdan

Lending

A writ of possession is an order of the court commanding

the sheriff to place a person in possession of a real or personal
property. It may be issued in an extrajudicial foreclosure of a real
estate mortgage under Section 7 of Act 3135, as amended by Act
4118, either 1) within the one-year redemption period, upon the
filing of a bond, or 2) after the lapse of the redemption period,
without need of a bond or of a separate and independent action.
[12]

The aforementioned provision of law, Section 7 of Act 3135 as

amended, in turn, states:
In any sale made under the provisions of this Act, the
purchaser may petition the Court of First Instance 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 of this 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.
Moreover, in Asia United Bank v. Goodland Company, Inc.,[13] we
pointed out that:
It is a time-honored legal precept that after the
consolidation of titles in the buyers name, for failure of the
mortgagor to redeem, entitlement to a writ of possession
becomes a matter of right. As the confirmed owner, the
purchasers right to possession becomes absolute. There is even
no need for him to post a bond, and it is the ministerial duty of
the courts to issue the same upon proper application and proof of
title. To accentuate the writs ministerial character, the Court has
consistently
disallowed
injunction
to
prohibit
its
issuance despite a pending action for annulment of
mortgage or the foreclosure itself.[14] (Emphasis supplied.)
In the case at bar, there is no dispute that private respondent caused
the extrajudicial foreclosure of the real estate mortgage pursuant to Section
7 of Act 3135, as amended by Act 4118, over the property at issue after
Soterania Siel defaulted on her loan payments when they became due under
the promissory notes she had executed. It is likewise undisputed that private
respondent purchased the same property at the extrajudicial foreclosure sale
and, as a result thereof, a certificate of sale was issued in its favor. Following
Soterania Siels failure to redeem the property within the prescribed period, a
final deed of sale was issued by the Sheriff in the name of private
respondent.
Given this factual premise, private respondent acted well within its
legal rights when it petitioned the trial court ex parte for the issuance of a
writ of possession which the trial court eventually granted. We note, too, that
the trial court issued the alias writ of possession only after giving due
consideration to petitioners motion for reconsideration and, subsequently, to
their supposed third-party claim wherein petitioners allege that they and
their other siblings had already bought the subject property from their
mother, the now deceased Soterania Siel, prior to the constitution of the
mortgage and that they were in actual possession of the land in dispute.
It is on the strength of this third-party claim that petitioners doggedly
oppose the trial courts issuance of the said writ of possession arguing that

under Section 33, Rule 39 of the Rules of Court, which is made to apply
suppletorily to the extrajudicial foreclosure of real estate mortgages under
Section 6 of Act 3135, as amended by Act 4118, [15] 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, to wit:
Sec. 33. Deed and possession to be given at expiration of
redemption period; by whom executed or given. - If no
redemption be made within one (1) year from the date of the
registration of the certificate of sale, the purchaser is entitled to
a conveyance and possession of the property; or, if so redeemed
whenever sixty (60) days have elapsed and no other redemption
has been made, and notice thereof given, and the time for
redemption has expired, the last redemptioner is entitled to the
conveyance and possession; but in all cases the judgment
obligor shall have the entire period of one (1) year from the date
of the registration of the sale to redeem the property. The deed
shall be executed by the officer making the sale or by his
successor in office, and in the latter case shall have the same
validity as though the officer making the sale had continued in
office and executed it.
Upon the expiration of the right of redemption, the
purchaser or redemptioner shall be substituted to and acquire all
the rights, title, interest and claim of the judgment obligor to the
property as of the time of the levy. The possession of the
property shall be given to the purchaser or last redemptioner by
the same officer unless a third party is actually holding the
property adversely to the judgment obligor. (Emphasis
supplied.)
In a number of cases, we have held that the obligation of the court to
issue an ex parte writ of possession in favor of the purchaser in an
extrajudicial foreclosure sale ceases to be ministerial once it appears that
there is a third party in possession of the property who is claiming a right
adverse to that of the debtor/mortgagor.[16]
However, unlike in those cases, the third-party claim in the instant
case was not presented at the onset of litigation. In fact, it was not the
original theory propounded by petitioners when they filed a motion for
reconsideration of the Order[17] dated June 29, 2001 issued by the trial court

which first granted the writ of possession in private respondents favor. More
importantly, the judicial admissions made by petitioners in their motion were
wholly incompatible with their belated claim that they are actually vendees
of Soterania Siels property.

Judicial admissions are discussed in Section 4, Rule 129 of the Rules of

Court which states that:
Sec. 4. Judicial Admissions. - An admission, verbal or
written, made by a party in the course of the proceedings in the
same case, does not require proof. The admission may be
contradicted only by showing that it was made through palpable
mistake or that no such admission was made
In Maagad v. Maagad,[18] we explained:
It is well-settled that a judicial admission conclusively binds
the party making it. He cannot thereafter take a position
contradictory to, or inconsistent with his pleadings. Acts or facts
admitted do not require proof and cannot be contradicted unless
it is shown that the admission was made through palpable
mistake or that no such admission was made.[19]
In the case at bar, petitioners admitted in their Urgent Motion for
Reconsideration[20] dated July 23, 2001 that they opposed the issuance of the
writ of possession over the subject property because of the pendency of Civil
Case No. 6247 filed before the RTC of Kalibo, Aklan, Branch 6. In the said civil
case, petitioners, along with their other siblings, sought the annulment of the
real estate mortgage and the foreclosure proceedings affecting the subject
property in their capacity as heirs of the now deceased Soterania Siel and
not as vendees to an alleged sale of the land in dispute. It must be stressed
that petitioners raised for the first time their theory that they are third
parties (vendees) holding the property adversely to the mortgagor only in
their Opposition to the Motion for Issuance of Alias Writ of Possession, after
the trial court had already issued the first order granting a writ of possession
to private respondent and after the above-mentioned Urgent Motion for
Reconsideration (of the original order issuing a writ of possession) had been
denied.
In light of this written admission in their pleading, petitioners cannot be
allowed to subsequently claim in the same proceedings that they oppose the
issuance of the writ of possession because they already owned the subject

property prior to the constitution of the mortgage without first showing that
the contradictory admission was made through palpable mistake or that no
such admission was made.This petitioners failed to do and, worse, they offer
no explanation as to why they failed to adduce evidence of the purported
sale of the property in their favor at the earliest opportunity. As a
consequence thereof, they must be bound by their original admission that
they are merely successors in interest of the mortgagor, rather than adverse
claimants.

Moreover, it is not disputed that the subject property is unregistered

land and is covered by a tax declaration in the name of Soterania Siel when
the same was mortgaged by her in 1997 in favor of private respondents
predecessor-in-interest, Moneytrend Lending Corporation. As correctly
pointed out by the Court of Appeals, Section 113 of Presidential Decree No.
1529 or the Property Registration Decree is applicable and the same provides
that (n)o deed, conveyance, mortgage, lease, or other voluntary instrument
affecting land not registered under the Torrens system shall be valid, except
as between the parties thereto, unless such instrument shall have been
recorded in the manner herein prescribed in the office of the Register of
Deeds for the province or city where the land lies. x x x.
In the present case, petitioners failed to adduce evidence showing that
the deeds of sale in their favor were recorded in the office of the Register of
Deeds or that they were annotated on the tax declaration of Soterania Siel in
order to affect the subject property insofar as third persons are concerned,
specially private respondent and its predecessor-in-interest. Petitioners
likewise failed to prove that private respondent and its predecessor-ininterest had actual or constructive knowledge of the alleged sale of the
subject property in their favor prior to the filing of the third-party
claim. Lastly, petitioners did not dispute the testimony of private
respondents Corporate Secretary, Jhett Tolentino, who stated that it was
Soterania Siel who was in possession of the subject property when the
mortgage was constituted, which was later assigned to private respondent,
and that it was only after the subject property was foreclosed that the same
was possessed by petitioner Viola Cahilig. Thus, in light of the foregoing, the
alleged sale of the land in dispute, even if true, does not bind private
respondent.
All in all, we find that the Court of Appeals committed no reversible
error when it affirmed the trial courts issuance of a writ of possession in the
present case, despite the pendency of civil proceedings to annul the
mortgage and the foreclosure sale and in light of petitioners own failure to

prove (a) their status as third parties to the mortgage, and (b) notice to the
mortgagee of the supposed sale of the subject property in their favor. As
discussed above, these actions on the part of the lower courts were in
keeping with prevailing jurisprudence.

WHEREFORE, premises considered, the petition is DENIED.

The assailed Decision dated July 23, 2003 as well as the Resolution dated July
9, 2004 of the Court of Appeals in CA-G.R. SP No. 76475 are AFFIRMED.

SO ORDERED.