FRANCISCO M. ANGELES PETITIONER, VS. HON. INTERMEDIATE APPELLATE COURT AND HEIRS OF THE LATE FILOMENA VDA. DE CAYETANO, RESPONDENTS.

This is a petition for review on certiorari of the
decision of the Intermediate Appellate Court (now Court of Appeals) dated April
24, 1986 and its resolution dated June 25, 1986 in AC-G.R. SP No. 05190
entitled; “HEIRS OF THE LATE FILOMENA VDA. DE CAYETANO, petitioners,
versus HONORABLE REGIONAL TRIAL COURT OF MANILA, BRANCH IV, DEPUTY SHERIFF
ANDRES BONIFACIO AND FRANCISCO M. ANGELES, respondents.”

The antecedent facts are as follows:

The spouses Pablo Cayetano and Filomena Mendoza were the registered owners of a lot in Sampaloc, Manila,
covered by Transfer Certificate of Title No. 42347.  Pablo died on January 3, 1960.  On
April 10, 1961, Filomena and her children, private respondents herein,
namely:  Eleuterio,
Isaias, Rosal, Heracleo.  Fortunata, Candido, Pablo, Jr.,
Laura, Jose, Zenaida, Antonio and Juanito,
executed an extrajudicial settlement
and sale of his estate, whereby Eleuterio and Candido sold their shares to their mother, and the other
children (except Manuel who had predeceased his parents), transferred their
shares to her, so that Filomena and the three (3)
children of Manuel became the co-owners of the property.  Upon the registration of the deed of
extrajudicial settlement and sale, TCT No. 42347 was cancelled and TCT No.
68065 was issued to Filomena and the children of Manuel.

On November 10, 1980, Filomena sold to Juanito one-half (1/2)
of the lot on which stand apartment Nos. 807, 809 and 811 occupied respectively
by Concepcion (Manuel’s wife) and her children, Heracleo and Juanito.  On the basis of the sale, TCT No. 140500 was
issued to Juanito, Filomena
and the children of Manuel.  Not content
with the sale his mother made to him, Juanito
presented to the Register of Deeds
of Manila an Agreement of Partition of Common Property purportedly signed by
all the heirs of Pablo, including Filomena,
adjudicating to Juanito the same one-half (1/2)
portion of the property which had previously been sold by Filomena
to him.  Based on that document, the
Register of Deeds of Manila issued on December 14, 1981, TCT No. 146787 to Juanito for his one-half portion (Lot 40-A) and TCT No.
146788 to Filomena and the children of Manuel, for
the other half.

Sometime in 1981, Filomena brought an
action against Juanito
to annul the sale of Lot 40-A to him on account of his
failure to pay the consideration of the sale. 
The complaint was docketed as Civil Case No. 81-001 in Branch XIX of the Court of First Instance of Manila.  Despite his mother’s suit for annulment of
the sale, Juanito transferred his one-half (1/2)
share of the property to Bartolome Guevarra for P100,000.00
on December 22, 1981, under a deed
of sale with right to
repurchase.  Before the expiration of the
redemption period, Juanito borrowed P25,000 from petitioner
Francisco M. Angeles to redeem the property from Guevarra.  Upon paying Guevarra,
he mortgaged the property to Angeles on January 21, 1982.  The
mortgage was registered on January 22, 1982.  On March 6,
1982, Juanito obtained an additional loan of P70,000.00 from Angeles the repayment of which was secured by
the same mortgage.  It was registered on March 8,
1982.

Having learned of the
execution of the Agreement of Partition of Common
Property, the other heirs of Pablo disowned the document as a forgery because
some of the supposed signatories were outside the country when the agreement
was made.  In a letter dated April
20, 1982, they
demanded that Juanito pay the mortgage to Angeles and
reconvey the property to them.  Angeles was notified in writing of private
respondents’ demand to Juanito. 
Angeles acknowledged receipt of that notice and even assured private
respondents that he would not dispose of the property.

On May 24,
1982, Angeles
foreclosed his mortgage on the property. 
It was sold at public auction on June 28, 1982 to Angeles himself, being the highest
bidder.

On July 9,
1982, Jose, Heracleo and Isaias each filed a
charge of falsification of public document against Juanito and his wife Antoinette Sadorna,
Angeles, and notary public Quirino Carpio.  The
investigating fiscal recommended the filing of an information
against Juanito and Atty. Quirino
Carpio, but dismissed the charge against Angeles and Antoinette Sadorna.  The information was docketed as Criminal Case
No. 82-12849 in the Court of First Instance of Manila.

On August
13, 1982, Filomena died.

On June 22 and 27, 1983,
notices of the pendency of Civil Case No. 81-001 were
recorded on Juanito’s title.  For failure of Juanito
to redeem the property from Angeles, the sheriff delivered to the latter a final deed of sale which, upon registration, resulted in the issuance
of TCT No. 155284 to Angeles on July 1, 1983 by the Register of Deeds of Manila.

On July 13,
1984, private
respondents, except Juanito, filed an action to annul the sale of the property by their mother to their
brother as well as the Agreement of Partition of Common Property.  It was docketed as Civil Case No. 84-25611 in the Regional Trial Court of
Manila, Branch 53.

On July 6, 1984,
Angeles filed in LRC Record No. 11546 a petition for the issuance of a writ of
possession of the property covered by his TCT No. 155284.  On August
23, 1984, the trial court issued an order granting the petition,
the dispositive portion of which reads (p. 52, Rollo):

“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 property described
in Transfer Certificate of Title No. 155284 and to eject therefrom
the Spouses Juanito Cayetano
and Antoinette Cayetano, their agents and other
persons in possession of the premises.

“SO ORDERED.”

The private respondents asked for the
setting aside of that order which was, however, denied.  On December
26, 1984, a writ of possession was issued to Angeles.

In Civil Case No. 84-25611, private respondents asked for a writ
of preliminary injunction or restraining order against the writ of possession,
but the judge refused to oblige.

On January 16, 1985,
on the same day when the private respondents filed their petition for certiorari
in the respondent Court of Appeals, the Manila Sheriff and Angeles enforced the
writ of possession and ejected Heracleo, Concepcion and Juanito
from the property in question.  Although
a restraining order was issued by the respondent court on January 21, 1985,
it was too late to stop the eviction of private respondents from the premises.

The petition for certiorari
prayed that the order dated August 23,
1984 be set aside as the trial court committed a grave abuse of
discretion amounting to lack of jurisdiction in issuing a writ of possession against the heirs of Filomena Mendoza who were not
parties to the mortgage transaction.

On April 24, 1986,
the respondent court granted the petition, the dispositive
portion of which reads (p. 40, Rollo):

“WHEREFORE, the petition for certiorari is
granted.  The respondent court’s order
dated August 23, 1984 is
amended in the sense that the
Sheriff should limit the implementation of the writ of possession only against
the mortgagors spouses Juanito
Cayetano and Antoinette Cayetano,
their agents, and other persons claiming title under them.  The other heirs of Filomena Mendoza Vda. de Cayetano, specifically the plaintiffs in Civil Case No.
84-25611 of the Regional Trial Court of Manila should be excluded from the
implementation of the writ of possession and the public respondents are ordered
to restore them in the possession of the premises which possession should be
respected pending the final adjudication of their claims thereto in Civil Case
No. 84­-25611.”

Angeles filed a motion for reconsideration which was, however,
denied in the resolution dated June
25, 1986.  Hence, this
present petition for review on certiorari.

This petition basically questions only the main finding of
respondent court that the writ of possession issued by the trial court cannot
be implemented against the private respondents, particularly the plaintiffs in Civil Case No. 84-25611.

In support of his petition, Angeles
alleges that he was an innocent mortgagee and purchaser for value and in good faith since he was not
aware of any flaw whatsoever in the title of Juanito,
it being clear of any liens and encumbrances at the time of the execution of
the real estate mortgage contracts. 
Angeles submits next that notices of lis
pendens were recorded on Juanito’s
title almost two (2) years after
the registration of the real estate mortgage contracts on January 22 and March
8, 1982.  Thus, on the basis
of Bank of the Philippine Islands, et al. v. Noblejas,
etc., et al., 105 Phil. 418, any subsequent lien or encumbrance at the back of
the certificate of title cannot, in any way, prejudice the mortgage previously
registered and the lot subject thereto passes to the purchaser at the public
auction sale, free from liens or encumbrances. 
In the same manner, the letter dated April 20, 1982, which is much later
in point of time to the registration of the real estate mortgage contracts, has
no more material significance other than a mere scrap of paper.  Angeles, who is first in time, is preferred
in right.  Angeles avers also that the
writ of possession under Act 3135, as amended,
is a right given a purchaser in an extra-judicial foreclosure.  Finally,
Angeles contends that the period within which the orders of the trial
judge may be impugned by appeal has already elapsed.  It is settled that the remedy of certiorari
cannot be a substitute for appeal.

We agree with the respondent court that there is no merit in the allegation that Angeles
was an innocent mortgagee and purchaser for value and in good faith (pp. 39-40,
Rollo):

“x x x he
(Angeles) was notified in writing of the petitioners’ demand dated April 20,
1982 to Juanito Cayetano to
discharge the mortgage debt and reconvey the property
to them on the ground that the Partition Agreement was a forgery.  The private respondent acknowledged receipt
of that notice and even assured the petitioners that he would not dispose of
the property.  The fact that Cayetano’s certificate of title was clean when he mortgaged
it to Angeles will not protect the mortgagee from the unregistered claims or
rights of the other heirs of Filomena Mendoza since,
at the time of the foreclosure sale the mortgagee had actual knowledge of such
adverse claims or rights of the other heirs of Filomena
Mendoza who were in actual possession of the land.

‘One who purchases real estate with knowledge of a defect or lack
of title in his vendor cannot claim that he has acquired title thereto in good
faith, as against the true owner of the land or of an interest therein; and the same rule must be applied to one
who has knowledge of facts which should have put him upon such inquiry and
investigation as might be
necessary to acquaint him with the defects in the title of his vendor.

‘A purchaser cannot close his eyes to facts which should put a
reasonable man upon his guard and then claim
that he acted in good faith under the belief that there was no defect in the
title of the vendor.’ “

(Leung Yee vs. F.L. Strong Machinery Co. and Williamson, 37 Phil.
644, 645)

As correctly remarked by
the private respondents, the demand letter placed Angeles on his toes that Juanito was not the sole owner of the property.  The maxim
that the spring cannot rise higher than its source applies squarely to
Angeles.  However, We
do not subscribe to the observation made by the respondent court that (p. 39, Rollo):

“x x x.  Although
the notices of lis pendens were not carried
over to his title, it was proven that before he foreclosed the mortgage, notices of the pendency
of Civil Case No. 81001 for annulment of Juanito’s
purchase of the lot, had been recorded on June 22 and 27, 1983 on Juanito’s title x x x.”

since it runs
counter to the facts on record.  The
foreclosure was made earlier, or on May
24, 1982 whereas the notices of lis pendens were recorded on Juanito’s
title later, or on June 22 and 27, 1983. 
At any rate, the determination of whether or not Angeles was an innocent
mortgagee and purchaser for value and in good faith is of little significance,
because of the following more important considerations that We shall now
elucidate.

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 extrajudicial foreclosure of a real state mortgage, the possession
of the property sold may be given
to the purchaser by the sheriff after the period of redemption had expired (IFC
Service Leasing and Acceptance Corporation v. Nera,
G.R. No. L-21720, January 30, 1967, 19 SCRA 181; Clapano v. Gapultos, G.R. No. 51574-77, September 30, 1984, 132 SCRA 429).  The
same rule was followed in a judicial foreclosure of mortgage and in an
execution sale (Rivera v. Court of First Instance of Nueva
Ecija, 61 Phil. 201). 
We also held that it is ministerial upon the court to issue a writ of
possession in favor of the purchaser in a foreclosure sale of a mortgaged
property (De los
Angeles, etc., et al. v. Court of Appeals, et al.,
G.R. No. L-34317, September 30, 1974, 60 SCRA 116). 
However, the aforestated provision provides
for an exception, that is, “unless a third party is actually holding the
property adversely to the judgment debtor.” In the case at bar, the writ
of possession ordered the ejectment not only of
“x x x the spouses Juanito M. Cayetano and
Antoinette Cayetano, their agents” but included
also “x x x other
persons in possession of the premises” which, in this case, were the
private respondents.

In the case of Rivero de Ortega v. Natividad, etc., et al., 71 Phil. 340, We
held:

“x x x
where a party in possession was not a party
to the foreclosure, and did not
acquire his possession from a person who was bound by the decree,
but who is a mere stranger and
who entered into possession before the suit was begun, the court has no power
to deprive him of possession by enforcing the
decree.  (See 2 Wiltsie on Mortgage Foreclosure, 1061-1062; 3 Jones on
Mortgages, 301; and the cases cited therein). 
Thus, it was held that only parties to the suit, persons who came in
under them pendente lite,
and trespassers or intruders without title, can be evicted by a writ of
possession.  (Thompson v. Campbell, 57 Ala.
183, 188; Cooper v. Cloud, 194 Ala.,
449, 452).  The reason for this
limitation is that the writ does not issue in case of doubt, nor will a
question of legal title be tried or decided in proceedings looking to the
exercise of the power of the court
to put a purchaser in possession.  A very
serious question may arise upon full proofs as to where the legal title to the
property rests, and should not be disposed of in a summary way.  The petitioner, it is held, should be
required to establish his title in a proceeding directed to that end.”

It is clear from the foregoing that the
writ of possession may not be enforced against the private respondents inasmuch
as 1) they possess the property adversely, as evidenced by the cases they filed
(Civil Case No. 84-25611) for annulment of the sale their mother made to Juanito and the partition agreement, and (Criminal Case No.
82-12849) for falsification of the partition agreement; 2) they were not
parties to the mortgages executed by Juanito in favor
of Angeles nor to the foreclosure proceedings; 3) they have been in possession
even prior to the foreclosure sale; and 4) they did not derive the right to
possess the land from Juanito but from Pablo, the
original owner of the lot.

The case of Bank of
the Philippine Islands, et al. v. Noblejas, etc., et
al., supra, cited by Angeles is not in point because the issue there was
whether or not the notice of adverse
claim may be cancelled and removed from the new certificates of title, which is
obviously not the issue here.

As correctly held by the respondent court, in issuing the writ of possession also
against the private respondents, the
trial judge clearly acted without or in excess of his jurisdiction.

The allegation that the period within which the orders of the
trial judge may be impugned by appeal has already elapsed was not substantiated
by facts to show that the period has indeed elapsed.  Brushing aside this allegation, certiorari is the proper remedy when appeal is
inadequate and will not promptly relieve private respondents from the injurious
effects of the judgment (see Romero, et al. v. Court of Appeals, et al., G.R.
No. L-29659, July 30, 1971, 40 SCRA 172).  Appeal could not have
been an adequate remedy in view of the speedy implementation of the writ of
possession against the private respondents who were ejected from the premises.

ACCORDINGLY, the petition for review on certiorari is hereby DENIED.  The decision of the respondent Intermediate
Appellate Court is AFFIRMED.

SO ORDERED.

Narvasa, Cruz, and Gancayco, JJ., concur.

Grino-Aquino, J., no part. I was the ponente in CA.