G.R. No. 105760 - Philippine National Bank vs. Court of Appeals

In 1978, spouses Crisanto de la Cruz and Pepita Montano mortgaged two parcels of land to Philippine National Bank (PNB) to secure a loan of Twenty-four Thousand Pesos (P24,000.00).
The properties, identified as Lot 614-F and Lot 614-H of the Cabiao Cadastre, were covered by Transfer Certificate of Title (TCT) No. NT-117562.

On October 12, 1984, PNB executed an extrajudicial foreclosure on the mortgage, emerging as the sole bidder at the public auction sale.
A Certificate of Sale was issued to PNB on the same day, and the sale was subsequently annotated on TCT No. NT-117562 on November 28, 1984.

On September 24, 1986, PNB filed a petition before the Regional Trial Court (RTC) of Gapan, Nueva Ecija (Branch 34) for the issuance of a Writ of Possession, asserting that the mortgagors’ failure to redeem the properties within one year after the foreclosure sale conferred upon it absolute ownership.
The RTC granted the petition and issued the writ on November 20, 1986.

Montano’s Motion for Dissolution of the Writ and Assertions of Tenant Rights

Prior to the execution of the writ, on December 9, 1986, private respondent Nildefonso Montano filed a motion to dissolve the writ, contending that:

He had been a tenant on the subject property since before 1972, a status inherited from the former owners.
The lots were the subject matter of a separate agrarian case (CAR Case No. 2387 lodged on January 18, 1983 in RTC Gapan, Branch 36) which he initiated against Crisanto de la Cruz and Pepita Montano.
Following the foreclosure sale, his counsel notified PNB about the pending agrarian suit, asserting his tenant status.

Montano further supported his claim by presenting certifications from the Cabiao-San Isidro Agrarian Reform Team and membership credentials from the Samahang Nayon, arguing that his right to occupancy was protected under P.D. 27, P.D. 36, P.D. 583, and related agrarian reform laws.

The RTC, after hearing the motion, granted Montano’s request and issued an Order dissolving the writ of possession on August 28, 1990.
PNB appealed the RTC decision, and the Court of Appeals (CA) initially rendered a decision favorable to PNB on September 13, 1991.
However, the CA subsequently reconsidered its decision, and on June 3, 1993, issued a Resolution affirming the RTC’s Order that dissolved the writ of possession.

Title consolidation is not a condition precedent to its right to a writ of possession under Art. 428 and 429 of the Civil Code, R.A. No. 3135 (as amended), and P.D. No. 385.
Near eight years had elapsed since registration of the Certificate of Sale, curing any alleged defect of prematurity.
Montano’s tenancy claim, which did not appear on the title and was already known to PNB through ocular inspection in 1978, should be barred by enforceable doctrines such as laches and estoppel.

The writ of possession should issue only after confirmation of title or during the redemption period pending proper motion and bond approval.
His status as a tenant was legitimate and enforceable, having been reflected in the agrarian suit and corroborated by agrarian reform certifications.
Even if PNB had consolidated its title, his actual possession as a tenant under agrarian laws remained valid.

Whether Philippine National Bank, as the buyer at the foreclosure sale, is entitled to a writ of possession despite the absence of a consolidated title, given that the extrajudicial foreclosure process involves the debtor’s possession and the potential intervention of third parties.

Consideration of whether the lapse of nearly eight years since the Certificate of Sale suffices to overcome the defect of title consolidation.
Examination of the ministerial duty of the court to effectuate possession in foreclosure cases under pertinent Civil Code provisions.

Whether the agrarian suit and associated adjudication, which established Montano as a legitimate tenant and possessor, adversely affect or bar PNB’s claim to take possession of the subject properties.

Analysis of the impact of Montano’s intervention in the agrarian case on the rights of PNB.
Determination of whether PNB’s knowledge of Montano’s possession (through ocular inspection and subsequent certification) translates into a waiver of any tenant claims.

Whether PNB’s right as the owner to possess and dispose of the property under Art. 428 and 429 of the Civil Code is subject to limitations imposed by agrarian reform statutes, thereby affecting its entitlement to the writ.

Consideration of the balance between an owner’s rights and the statutory protection granted to agricultural lessees.
Evaluation of whether social justice principles and tenant security under agrarian laws override PNB’s claims as the transferee of the mortgaged property.