Facts:

The case revolves around the dispute between spouses Salvador Batolinio and Amor P. Batolinio (the petitioners) and the Sheriff of the Las Piñas City Regional Trial Court and the Philippine Savings Bank (the respondents). The events began when Nicefora MiAoza secured a loan of P5.7 million from the Philippine Savings Bank on October 26, 2007, backed by a real estate mortgage over a property registered under her name. MiAoza defaulted on the loan, prompting the bank to foreclose on the mortgage and acquire the property at a public auction, with a certificate of sale issued on June 23, 2008.

On July 29, 2010, the Regional Trial Court (RTC) of Las Piñas City issued a writ of possession in favor of the Philippine Savings Bank after the foreclosure proceedings were finalized. The petitioners, however, claimed ownership of the subject property under a previous title. They had initially mortgaged the property to Union Bank in 2003 before allegedly selling the property to MiAoza in 2007

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Facts:

Ex Parte Petition and Extrajudicial Foreclosure

• On October 26, 2007, Nicefora MiAoza obtained a loan of P5.7 million from Philippine Savings Bank (PSB).
• To secure the loan, MiAoza executed a real estate mortgage (REM) over a parcel of land registered under her name (subject property, TCT No. T-108184) in Las Piñas City.
• When MiAoza failed to pay the loan when due, PSB instituted an extrajudicial foreclosure of the REM.
• PSB emerged as the highest bidder at the public auction, resulting in the issuance and later registration of a certificate of sale (June 23, 2008).
• PSB subsequently demanded that MiAoza and all persons claiming rights under her vacate the subject property.

RTC Proceedings and Issuance of Writ of Possession

• On July 29, 2010, the Regional Trial Court (RTC) of Las Piñas City, Branch 198, granted the ex parte petition and issued a writ of possession.
• In its decision, the RTC observed that after the certificate of sale was issued and the redemption period expired, PSB effected the consolidation of title and had a new title (TCT No. T-118772) issued in its name.
• The RTC ruled that the issuance of the writ of possession had become a matter of right for PSB since the underlying foreclosure sale was properly executed.

Petitioners’ Claims and Alternative Actions

• Spouses Salvador Batolinio and Amor P. Batolinio (petitioners) filed an Omnibus Motion with a prayer for a Preliminary Mandatory Injunction.
• They claimed to be the owners of the subject property previously registered under TCT No. T-80337.
• The property had been mortgaged to Union Bank in 2003 and was later sold in September 2007 to MiAoza through intermediaries, with certain conditions attached.
• Petitioners alleged that:
• MiAoza, in cahoots with others, forged their signatures on documents related to the deed of sale and a certificate of full payment.
• They executed a letter of guaranty to assist in facilitating MiAoza’s loan with PSB.
• They maintained open, exclusive, and continuous possession of the subject property.
• They had already initiated separate legal actions, including an adverse claim on the property and a civil case for cancellation of title, specific performance, and damages against MiAoza.
• Petitioners contended that, having sold the property through an absolute sale without any reservation of ownership, they had effectively relinquished their rights and could not be considered as adverse third parties.
• They also argued that PSB did not exercise due diligence as a banking institution in verifying the ownership status of the property when entering into the mortgage agreement.

Court of Appeals (CA) Proceedings

• After the RTC’s issuance of the writ of possession, petitioners filed a petition for certiorari with the Court of Appeals (CA).
• On November 27, 2012, the CA dismissed the petition, basing its decision on:
• The fact that petitioners had executed an absolute sale to MiAoza and thus lost any ownership rights over the property.
• The determination that petitioners were not third parties holding the property adversely since they had already transferred their rights.
• The ruling that the allegation regarding PSB’s lack of diligence (or its status as a mortgagee/purchaser for value) did not warrant the suspension of the writ of possession.
• The CA also noted that the issuance of the writ of possession was ministerial once the certificate of sale was registered and the one-year redemption period lapsed, except when the property was held by a third party in an adverse manner.
• On April 4, 2013, a motion for reconsideration filed by petitioners was denied by the CA.

Issue:

Whether it was proper for the CA to rule that petitioners do not qualify as a “third party actually holding the property adversely to the judgment obligor” on the ground that they had already relinquished ownership by selling the property to MiAoza.

• The contention focuses on the effect of an absolute sale in extinguishing the seller’s rights over the property.

Whether the CA wrongly ruled on an issue of fact that was not raised on appeal and should have been determined by a lower court of competent jurisdiction.

• This issue questions the CA’s authority in addressing factual determinations outside the purview of the appeal.

Whether it was correct for the CA to hold that allegations questioning PSB's status as a mortgagee or a purchaser in good faith did not justify a suspension of the writ of possession.

• This issue challenges whether due diligence failures by PSB should have prevented the issuance of the writ.

Whether the RTC, Branch 198, acted with impartiality and without bias in adjudicating the case (LRC Case No. LP-09-0030).

• The inquiry examines the conduct and decision-making process of the lower trial court regarding fairness in the proceedings.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)