Case Digest (G.R. No. 85041)
Facts:
Spouses Wilfredo and Dominica Rosario bought Unit 205 in St. John Condominium from New San Jose Builders, Inc. (NSJBI), which on 10 December 1997 executed a Php 600 million loan agreement with Government Service Insurance System (respondent) that mortgaged several developed parcels. NSJBI defaulted; respondent applied for extrajudicial foreclosure on 31 March 2003, was highest bidder at the 17 June 2003 auction, and titles were consolidated in respondent's name, whereupon respondent filed for a writ of possession on 23 August 2006 before the RTC.
The RTC, in a 07 April 2008 Resolution, allowed petitioners to intervene and limited the writ as against units actually occupied by third-party buyers; the Court of Appeals reversed on 28 July 2011, prompting this petition to the Supreme Court.
Issues:
- Did the Court of Appeals err in holding that the RTC committed grave abuse of discretion in allowing petitioners to intervene in the ex parte application for a writ of possession?
- Are individual condominium or subdivision buyers occupying units/lots third-party adverse possessors who may be excluded from implementation of a writ of possession?
Ruling:
The petition was granted. The Supreme Court reversed the Court of Appeals and reinstated the RTC Resolution dated 07 April 2008. The Court held that the writ of possession must exclude units actually possessed by petitioners and other bona fide third-party buyers, without prejudice to proceedings on the mortgage's validity.
Ratio:
The Court explained that the ministerial duty to issue an ex parte writ of possession under Section 33, Rule 39 (made applicable by Act No. 3135) ceases when third parties actually possess the property adversely to the mortgagor, requiring a hearing to determine the nature of possession. Because P.D. No. 957 and the protective policy of R.A. No. 6552 (the Maceda Law) afford substantive rights to individual condominium and subdivision buyers, and because respondent's loan agreement manifested awareness that units might be sold, mortgagees cannot summarily dispossess occupying buyers; thus the RTC properly allowed intervention and exclusion pending full adjudication.
Doctrine:
- The issuance of an ex parte writ of possession under Section 33, Rule 39 is ministerial except when the property is in the actual adverse possession of a third party, in which case the court must hold a hearing.
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