G.R. No. L-55354 - Banco Filipino Savings and Mortgage Bank vs. Pardo

Banco Filipino Savings and Mortgage Bank is the petitioner, while the private respondents are spouses Celedonio and Celedonia Cacas, with Judge Bernardo Pardo (of the defunct Court of First Instance, Branch XXXIV, Caloocan City) also involved as a respondent through his court order.

On August 10, 1971, the Cacas acquired a loan from the petitioner amounting to P33,453.00, with a parcel of land (registered under Transfer Certificate of Title No. 40338) mortgaged as security for the installment payments.

Following defaults in the installment payments, leaving an unpaid balance of P28,969.50, the petitioner extrajudicially foreclosed the mortgage on July 25, 1977 pursuant to Act No. 3135.

A certificate of sale was issued on August 5, 1977, the same day the certificate was registered, with the petitioner emerging as the highest bidder at the auction sale.

On October 26, 1977, the petitioner filed a petition for the issuance of a writ of possession, invoking Section 7 of Act No. 3135.

With the occurrence of the death of Celedonio Cacas on June 27, 1978, issues regarding substitution of parties arose.

The petitioner filed a motion for substitution of party on September 18, 1979, and the respondent court ordered the substitution on January 10, 1980.

Due to the petitioner’s failure to effect the substitution as directed, the lower court dismissed the petition on March 13, 1980, stating that the dismissal was “without prejudice to petitioner availing itself of the remedies of eviction under the proper law.”

Following the denial of the motion for reconsideration, the petitioner elevated the case to the Supreme Court through a petition for a writ of certiorari.

Section 7 of Act No. 3135 provides that the purchaser at the auction sale (the petitioner/mortgagee in this case) is entitled to a writ of possession pending the lapse of the redemption period upon a simple, ex parte motion and the posting of a bond.

The jurisprudence clarifies that under this provision, the court has no discretion to deny the writ once the legal requisites are met.

Whether the petitioner, having foreclosed the mortgage and recorded the certificate of sale, is entitled to secure a writ of possession under Section 7 of Act No. 3135 through an ex parte motion and upon posting the requisite bond.
Whether the failure of the petitioner to substitute the party as ordered by the lower court justifies the dismissal of the petition for a writ of possession.
Whether the death of Celedonio Cacas, one of the mortgagors, affects the petitioner’s right to the writ of possession under the statutory scheme designed for extrajudicial foreclosure.