SPOUSES ENRICO MALONZO AND AVELINA MALONZO, BARBARA BROWN, AND BONIFACIA MONZON, PETITIONERS, VS. HON. HERMINIO MARIANO, JUDGE, CFI, MANILA, BR. IV, BANCO FILIPINO SAVINGS AND M…

The principal issue raised in the special civil action of
prohibition at bar is whether or not a writ of possession issued by a Court of
First Instance (Regional Trial Court) in accordance with Act 3135, to give
possession of property sold at an extra-judicial foreclosure sale to the
purchaser thereof, may be enforced against persons other than the mortgagor.

The property in question consists of two (2) parcels of land and
the apartment and commercial building thereon standing, located at R.
Magsaysay Boulevard,
Sta. Mesa, Manila.  A mortgage was constituted over this property
by its owner then, Universal Ventures, Inc., in favor of Banco
Filipino Mortgage & Savings Bank, as security for the payment of a loan of
P350,000.00.1 The mortgage deed authorized the
extra-judicial foreclosure of the property in the event of default in the
repayment of the loan.  It was later
amended to extend to and cover an additional and total consolidated loan of
P400,000.00.2 Universal Ventures, Inc. failed to
repay the loan. Consequently, Banco Filipino caused
the extra-judicial foreclosure of the property by the City Sheriff of
Manila.  The foreclosure sale took place
in due course; the mortgaged property was struck off to the bank, as highest
bidder; and the bank registered the sheriff’s certificate of sale with the
Register of Deeds of Manila and on July 27, 1976 obtained a certificate of
title in its name, numbered 122496, in lieu of that of the mortgagor, which was
accordingly cancelled.1

On the same day that title was issued to it, Banco
Filipino filed a petition for a writ of possession with the Court of First
Instance of Manila.2
The petition recited the foregoing facts and the additional circumstances that
(1) the mortgagor, Universal Ventures, Inc., had failed to redeem the property
within the one-year period allowed by law, and (2) the mortgagor was still in
possession of the property, as well as certain other persons claiming rights
under said mortgagor although said rights had not been recorded in the Register
of Deeds, and prayed –

”
… that after due notice and hearing, ** (the) Court forthwith issue in
accordance with Section 7 of Act No. 3135, as amended by Act No. 4118, a writ
of possession of the property in favor of the petitioner and against the
respondent and all persons claiming under it, to vacate the premises** covered
by and embraced in (the mortgagor’s title,) Transfer Certificate of Title No.
67992 of the Register of Deeds of Manila.”

Among the persons named in the petition
as “claiming (rights) under” Universal Ventures, Inc. were
petitioners Avelina Malonzo,
Barbara Brown, and Bonifacia Monzon.3
The petition contained a “Notification” addressed to the Clerk of
Court to set the hearing thereon on July
30, 1976 at 9:00 o’clock
in the morning; and copies were served on the Universal Ventures, Inc. and the
persons alleged to be claiming rights under it.4

After hearings were had on the petition, Judge Herminio Mariano issued the order now assailed, under date
of September 20, 1979, the dispositive portion
whereof reads as follows:5

WHEREFORE, let the corresponding Writ of Possession be issued
directing the Sheriff of Manila or his duly authorized representative to place
the herein petitioner in actual possession of the foreclosed properties
described in Transfer Certificate of Title No. 67992 and to eject therefrom the herein respondent, its officers, agents and
other persons claiming under said respondent.

The writ of possession issued on March 4, 1980 and on the strength thereof, the Sheriff of
Manila attempted to evict the persons in occupancy of the property.6

Three of the persons sought to be evicted, Enrico
Malonzo, husband of Avelina
Malonzo, Barbara Brown, and Bonifacia
Monzon, filed suit against Banco
Filipino and the City Sheriff in the same Court of First Instance of Manila
seeking to perpetually restrain the enforcement of the writ of possession
against them, and to recover damages resulting from the defendants’ attempts to
enforce it.1
The action was docketed as Civil Case No. 132075.  In their complaint, they alleged that they
were occupying their respective premises in the foreclosed property “by
virtue of a verbal lease contract with Universal Ventures, Inc.,” that “there
being no ejectment case filed against them neither
were they made a party to the Petition for Writ of Possession of defendant
BANCO FILIPINO **,” they were entitled to remain in possession and
could not be ousted under the writ of possession; moreover, “under
Presidential Decree No. 20 and Batas Pambansa Blg. 25, transfer of ownership whether by virtue of sale or
mortgage will not be a ground for ejectment.”

Fourteen (14) days later, these same persons — Enrico Malonzo, Barbara Brown and
Bonifacia Monzon — and Enrico’s wife, Avelina Malonzo, instituted a second action, this time, a special
civil action for prohibition, commenced in this Court by petition dated June 6, 1980.  Named respondents were the same defendants in
Civil Case No. 132075 — Banco Filipino and the City
Sheriff of Manila — as well as Judge Mariano, who had issued the writ of
possession.  The petition recited
substantially the same facts as those set out in the complaint in Civil Case
No. 132075, and submitted the same thesis, that they could not be evicted from
the premises “there being no ejectment case
filed against them neither were they made a party to the petition for writ of
possession filed by respondent Bank,” and “under Presidential
Decree No. 20 and further reiterated in Batas Pambansa
Bilang 25, transfer of ownership whether by
virtue of sale or mortgage will not be a ground for ejectment
**.”

Section 7 of Act 3135, as amended by Act 4118, grants to the
purchaser at an extra-judicial foreclosure sale, an absolute right to
possession of the property sold during the one-year period of redemption and a
fortiori, after the lapse of said period without any redemption
being made.2
Possession may be obtained under a writ which may be applied for ex parte.  Section 7
reads as follows:

SEC. 7. 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.

There being no dispute about the fact
that no redemption had been made within one (1) year from registration of the
extra-judicial foreclosure sale, there can be no question about the absolute
right of Banco Filipino, as purchaser, to a writ of
possession1,
or stated otherwise, the ministerial duty of the Court to issue the writ,2
upon mere motion, without need of instituting a separate action for the
purpose.3
The question is whether or not that writ of possession — which is the final
process to carry out or consummate the extra-judicial foreclosure of the
mortgage — may be enforced by the sheriff against persons other than the
mortgagor who are in occupancy of the foreclosed property.  To this question this Court has already had
occasion to give an affirmative answer, grounded particularly on the provisions
of Section 35, Rule 39 of the Rules of Court which are inter alia suppletory to Act 3135.4

“Under section 6 of Act No. 3135 and Sections 29 to 31 and
section 35 of Rule 39 of the Revised Rules of Court, in case of an
extra-judicial foreclosure of a 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 adversely to the mortgagor. 
An ordinary action for the recovery of possession is not necessary.  There is no law in this jurisdiction whereby
the purchaser at a sheriff’s sale of real property is obliged to bring a
separate and independent suit for possession after the one-year period for
redemption has expired and after he has obtained the sheriff’s final
certificate of sale.  (Tan Soo Huat vs. Ongwico,
63 Phil. 746, 749).  The same rule was
followed in a judicial foreclosure of mortgage and in an execution sale (Rivera
vs. Court of First Instance of Nueva Ecija, 61 Phil. 201 and Republic vs. Nable, L-4979, April 30, 1952).  If the court can issue a writ of possession
during the period of redemption there is no reason why it should not also have
the same power after the expiration of that period.1

The petitioners cannot be deemed third parties “actually
holding the property adversely” to the mortgagor.  They derive their rights to the possession of
the property exclusively from the mortgagor, in virtue of verbal agreements of
lease.  They were lessees at the time
that the property occupied by them was mortgaged by their lessor
to respondent Banco Filipino.  And of that mortgage they were charged with
constructive knowledge upon its registration in the Registry of Property, if
they did not indeed, actually know of it. 
The right pertaining to them in this situation was that of being
notified of the application for a writ of possession and of being accorded an
opportunity at a hearing to oppose the same, as by showing that they were
“actually holding the property adversely” to the mortgagor.  That right was duly accorded to them.  They were served with copies of the motion or
petition for issuance of the writ of possession and had ample opportunity to
oppose the same, to persuade the Court that the writ should not issue or be
executed against them.  The proceedings
showed that, by their own assertions, they were not holding the property
adversely to the mortgagor, but were exercising rights under, derived from,
said mortgagor, who was their lessor.  Upon the cessation of their lessor’s rights over the property, their own also ceased.  The writ of possession was therefore properly
enforceable against them.

The situation is not significantly different from that
contemplated by Section 49 (b) of Rule 39, declaring a final and executory judgment or order conclusive and hence enforceable
not only against the parties but also “their successors in interest by
title subsequent to the commencement of the action or special proceeding.”
Pursuant to this provision, a judgment in personam
directing a party to deliver possession of property to another is binding
not only against the former but also against his successors in interest by
title subsequent to the commencement of the action, i.e., those whose possessory rights are derived from him,2
e.g., lessees, possessors by tolerance, assignees.  As regards the latter, it is not required
that a separate action be instituted against them to litigate the issue of
possession; due process is satisfied by holding a hearing, with notice to them,
on the nature of their possession, and thereafter denying or acceding to the
enforcement of a writ of possession against them as the findings at said
hearing shall warrant.3

WHEREFORE,
the petition is DISMISSED for lack of merit, and the case is remanded to the
Court a quo with instructions to forthwith issue in favor of respondent
bank an alias writ of possession enforceable against the petitioners or
their successors in interest, and all other persons claiming under, or not
otherwise actually holding the property adversely to, the mortgagor, Universal
Ventures, Inc.  Costs
against petitioners.

SO ORDERED.

Cruz, Gancayco, Griño-Aquino,
and Medialdea,
JJ., concur.

1
Rollo, p. 24

2
Id., p. 25

1
Id., pp. 25, 35

2
Docketed as LRC Rec. No. 7680, and assigned to Branch IV, CFI, Manila
(Rollo, p. 31)

3
Rollo, p. 26

4
Id., p. 29

5
Italics supplied

6
Rollo, p. 31

1
Id., pp. 30-34

2 IFC Service Leasing & Acceptance Corp. v.
Nera, 19 SCRA 181, cited in GSIS v. CA, 145
SCRA 341; Banco Filipino Savings and Mortgage Bank v.
I.A.C., et al., 142 SCRA 44

1 SEE GSIS v. CA, supra, 145 SCRA 341,
De Gracia v. San Jose,
94 Phil. 623

2 Barican v. I.A.C.,
G.R. No. 77906, June 30, 1988, citing Banco Filipino
Savings & Mortgage Bank v. I.A.C., supra, 142 SCRA 44; PNB v.
Adil, 118 SCRA 110; De los
Angeles v. C.A., 60 SCRA 116; IFC Service Leasing and Acceptance Corp. v.
Nera, supra, 19 SCRA 181; De Gracia v. San Jose, 94 Phil. 623; Ramos v. Mañalac, 89 Phil. 270

3 GSIS v. CA, supra, citing Marcelo
Steel Corp. v. CA, in turn citing De Gracia v.
San Jose, supra, IFC Service Leasing & Acceptance Corp. v.
Nera, supra, 19 SCRA 181

4 Indeed, Act 3135, as amended, incorporates the
provisions of Act 190 (the Code of Civil Procedure [now the Rules of Court, of
course]) governing redemption of real property sold by the sheriff at execution
sales.  As far as relevant, said Section
35, Rule 39, declares that after the redemption period has expired, “possession
of the property shall be given to the purchaser ** by the same officer
(sheriff) unless a third party is actually holding the property adversely to
the ** (mortgagor).”

1 IFC Service Leasing & Acceptance Corp. v.
Nera, supra, 19 SCRA 181; emphasis supplied

2 Ariem v. delos Angeles, 49 SCRA 343; Gatchalian
v. Arlegui, 75 SCRA 334; Guevarra
Realty, Inc. v. CA, G.R. No. 57469, April 15, 1988

3 Perater v Rosete, 129 SCRA 508; Omaña, et
al. v. Gatulayao, et al, 73 Phil. 66; Santiago
v. Sheriff of Manila, 77 Phil 740, Gozon v.
de la Rosa, et al., 77 Phil. 919