Facts:

• The case involves Royal Savings Bank (now GSIS Family Bank), a government-owned financial institution, seeking to reverse the orders of the Regional Trial Court (RTC) granting a motion to quash the writ of possession and writ of execution.
• In January 1974, Paciencia Salita and her nephew, Franco Valenderia, borrowed P25,000 from Royal Savings Bank. In May 1975, an additional P20,000 was loaned to them.
• To secure the payment of the loans, Salita executed a Real Estate Mortgage over her property covered by Transfer Certificate of Title (TCT) No. 103538.
• Salita and Valenderia failed to pay off their debts, leading Royal Savings Bank to institute an extra-judicial foreclosure proceeding against the Real Estate Mortgage.
• Salita filed a case for Reconveyance, Annulment of Title, and Damages against Royal Savings Bank, seeking the nullification of the foreclosure proceedings and the reconveyance of the property covered by TCT No. 299440.
• The RTC granted Salita's prayer, but the Court of Appeals (CA) reversed the decision. Since Salita did not appeal the CA ruling, it became final and executory.
• Royal Savings Bank filed an ex-parte petition for the issuance of a writ of possession, which was granted by the RTC.
• Respondents Fernando Asia, Mika Latag, Cornelia Maranan, Jimmy Ong, Conrado Macaralaya, Rolando Saba, Tomas Gallega, Lilia Fedelimo, Milagros Hagutay, and Norma Gabatic claimed to have been in open, continuous, exclusive, and notorious possession of the property for 40 years.
• They filed an urgent motion to quash the writ of possession and writ of execution, stating that they had no knowledge of the proceedings involving the property until they were served a notice to vacate.
• The RTC granted the motion to quash, and Royal Savings Bank filed a motion for reconsideration, which was denied.
• Royal Savings Bank then filed a Petition for Review with the Supreme Court.

Issue:

• (Unlock)

Ruling:

• The Supreme Court affirms the decision of the RTC to quash the writ of possess...(Unlock)

Ratio:

• The obligation of a court to issue a writ of possession in favor of the purchaser in an extrajudicial foreclosure sale ceases to be ministerial when there is a third party in possession of the property claiming a right adverse to that of the debtor/mortgagor.
• Due process must be followed, and a determination should be made ...continue reading