Case Summary (G.R. No. 79906)
Background of the Case
The Regondola spouses obtained a loan from the Development Bank of the Philippines, secured by a real estate mortgage. Following their failure to repay the loan, the bank conducted an extrajudicial foreclosure on the property. After being declared the highest bidder at a public auction, the bank had the corresponding certificate of sale registered. The Regondolas did not redeem the property within the stipulated one-year period, leading to the consolidation of the title in favor of the bank.
Actions Taken by the Petitioner
On October 5, 1985, the bank petitioned for a writ of possession over the foreclosed property. However, the petitioners opposed this claim, asserting their ownership of the property based on a deed of sale with assumption of mortgage they executed with the Regondolas. They filed a complaint for declaration of ownership, which was subsequently acknowledged by the lower court, resulting in a temporary stay of the writ of possession issued in favor of the bank.
Decisions of Lower Courts
The lower court denied the bank's ex-parte petition for an alias writ of possession on March 21, 1986, citing the ongoing civil case for ownership. Upon appeal, the Intermediate Appellate Court reversed this decision, emphasizing that the issuance of a writ of possession is a ministerial act in favor of the highest bidder in a foreclosure sale, in accordance with existing laws.
Issue for Resolution
The central issue for the Supreme Court was whether the pendency of the civil case regarding the ownership of the foreclosed property constituted a barrier to issuing a writ of possession in favor of the Development Bank.
Legal Framework and Judicial Interpretation
The appellate court referred to various legal provisions, including Sections 7 and 8 of Act No. 3135, and Section 4 of Presidential Decree 385. The latter mandates that properties sold to government financial institutions in foreclosure shall be placed in their possession without delay. The Supreme Court reaffirmed that while this provision generally favors the bank, the unique circumstances of the case necessitate a different analysis.
Supreme Court’s Findings
The Supreme Court noted that the right to issue a writ of possession becomes non-ministerial when possession of the property is contested by third parties, as was the situation here with Barican and Alejo claiming ownership. The petition revealed that the bank never took physical possession of the property and delayed
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Case Overview
- The case revolves around a petition for review of the decision made by the Intermediate Appellate Court.
- The appellate court granted an alias writ of possession to the Development Bank of the Philippines (DBP) and overturned the Regional Trial Court's order that denied this application.
- The dispute arose from a real estate mortgage agreement between the DBP and the spouses Antonio Regondola and Dominga Zabat, who defaulted on their loan.
Background Information
- The Regondola spouses borrowed money from the DBP, securing the loan with a mortgage on their property.
- Due to non-fulfillment of the mortgage terms, the DBP conducted an extrajudicial foreclosure, leading to a public auction where the bank emerged as the highest bidder.
- The property, initially under Transfer Certificate of Title No. 57677, was sold at auction and the title was consolidated in the bank’s name after the redemption period lapsed.
- The DBP later sold the property to Nicanor Reyes.
Legal Proceedings
- On October 5, 1985, the DBP filed a petition for issuance of a writ of possession concerning the foreclosed property.
- The lower court initially granted the writ, but the petitioner-spouses, Rafael Barican and Araceli Alejo, contested it, claiming ownership based on a deed of sale with assumption of mortgage from the Regondola spouses.
- The petitioner-spouses filed a separate civil case (Civil Case No. C-