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OFFICE OF THE COURT ADMINISTRATOR v. CELESTINA B. CORPUZ

A.M. No. P-00-1418, 24 September 2003.

FACTS:
Francisco Lu (Lu) was the defendant in a civil case for ejectment with the Municipal
Trial Court of Urdaneta, City Pangasinan (MTC). The MTC rendered judgment against Lu on 7
September 1995, a copy of which Lus counsel received on 13 September 1995. The judgment
stated therein that:

In accordance with the Rules, let a Writ of Execution be issued.

On 11 September 1995, Celestina B. Corpuz, respondent in this case (the respondent),

in her capacity as Clerk of Court IV of the MTC issued a writ of execution which was
implemented by the Sheriff Domingo Lopez (Sheriff Lopez) of the MTC on the same day.

Lu elevated the case to the Regional Trial Court, Urdaneta City, Pangasinan, Branch 47
(RTC) by filing his Notice of Appeal on 13 September 1995. The RTC then issued a writ of
preliminary injunction and declared as void the writ of execution issued by respondent. On 5
February 1996, the RTC rendered a judgment which deleted the portion of the MTC decision
quoted above. Hence, Lu filed administrative complaints against Sheriff Lopez, and Judge
Orlando F. Sapio of the MTC. Respondent was not impleaded in the administrative case, hence
the Supreme Court directed the Office of the Court Administrator (OCA) to institute the
appropriate administrative case against her.

The OCA charged respondent with ignorance of the law, abuse of authority and grave
misconduct for issuing the writ of execution without a motion for execution or a hearing prior to
the issuance of the writ. In this case, respondent issued the writ of execution at least two days
before Lus counsel received a copy of the MTCs decision.

ISSUE:
Whether or not the losing party must first receive notice of the judgment before the court
can execute it.

HELD:
YES. The Supreme Court, citing its ruling in Felongco v. Dictado and Dy v. Court of
Appeals held that the losing party must first receive notice of the judgment before the court or
its personnel can execute the judgment. The reason being that if such judgment is immediately
executed without prior notice to the losing party, then such a party has no remedy if the
evidence or law does not support the judgment.

The Court further explained its ruling by stating that a court cannot direct the issuance
of writ of execution motu proprio as provided in Section 8, Rule 70 (now Section 19, Rule 70 of the
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Rules of Court1) which stated that by perfecting an appeal and filing a supersedeas bond
approved by the court, judgment may be stayed. 2 Hence, the Supreme Court further held that as
Lu immediately perfected his appeal with the RTC, the act of respondent of immediately issuing
the writ of execution was precipitate and against all sense of fair play.

1 Section 19. Immediate execution of judgment; how to stay same. If judgment is rendered against the
defendant, execution shall issue immediately upon motion unless an appeal has been perfected and
the defendant to stay execution files a sufficient supersedeas bond, approved by the Municipal Trial
Court and executed in favor of the plaintiff to pay the rents, damages, and costs accruing down to the
time of the judgment appealed from, and unless, during the pendency of the appeal, he deposits with
the appellate court the amount of rent due from time to time under the contract, if any, as determined by
the judgment of the Municipal Trial Court.

2 Section 19 now requires that a motion must first be filed before execution of judgment.
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BALAJONDA v. COMELEC
G.R. No. 166032, 28 February 2005

FACTS:
On 16 July 2002, petitioner Elenita I. Balajonda (Balajonda) was proclaimed as the duly
elected Barangay Chairman (Punong Barangay). Francisco duly filed a petition for election
protest, within ten (10) days from the date of proclamation, lodged with the Metropolitan Trial
Court (MeTC) of Quezon City, Branch 35. After trial, MeTC dismissed the protest. Francisco
appealed the MeTC Decision to the Commission on Elections (COMELEC). In its Resolution, the
COMELEC First Division reversed the MeTC. The COMELEC First Division thus annulled the
proclamation of Balajonda, and declared Francisco as the duly elected Barangay Chairman.

Balajonda seasonably filed a Motion for Reconsideration of the COMELEC First

Divisions Resolution. In the meantime, Francisco filed a Motion for Execution, praying for a
writ of execution in accordance with Section 2(a) of Rule 39 of the Revised Rules of Court [Sec.
2(a), Rule 39], which allows discretionary execution of judgment upon good reasons to be stated
in the order.

Balajonda duly opposed the Motion for Execution, arguing that under Sec. 2(a), Rule 39,
only the judgment or final order of a trial court may be the subject of discretionary execution
pending appeal. However, in its Order, the COMELEC First Division after due hearing granted
the motion and directed the issuance of a Writ of Execution, ordering Balajonda to cease and
desist from discharging her functions as Barangay Chairman and relinquish said office to
Francisco.

ISSUE:
Whether or not execution pending appeal issued by the COMELEC is valid.

HELD:
Yes. The Supreme Court held that, in Batul v. Bayron (Batul case), through Justice
Antonio T. Carpio, it affirmed a similar order of the COMELEC First Division directing the
immediate execution of its own judgment. Despite the silence of the COMELEC Rules of
Procedure as to the procedure of the issuance of a writ of execution pending appeal, there is no
reason to dispute the COMELECs authority to do so, considering that the suppletory
application of the Rules of Court is expressly authorized by Section 1, Rule 41 of the COMELEC
Rules of Procedure which provides that absent any applicable provisions therein the pertinent
provisions of the Rules of Court shall be applicable by analogy or in a suppletory character and
effect.

Although Batul case is different from this case in that in Batul the decision subject of the
order of immediate execution was rendered by the poll body in the exercise of its original
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jurisdiction while the decision in this case was promulgated in the exercise of its appellate
jurisdiction. Still, there is no reason to dispose of this petition in a manner different from Batul.
The public policy underlying the suppletory application of Sec. 2(a), Rule 39 is to obviate a
hollow victory for the duly elected candidate as determined by either the courts or the
COMELEC. The Supreme Court consistently employed liberal construction of procedural rules
in election cases to the end that the will of the people in the choice of public officers may not be
defeated by mere technical objections.

Jalandoni vs. PNB

G.R. No. L-47579, 9 October 1981

FACTS:

On March 31, 1959 the Court of First Instance rendered a judgment ordering Eduardo
Jalandoni to pay the Philippine National Bank the sum of P63,297.53, together with daily
interest. That judgment became final and executory.

On March 9, 1964 or Within five years from the entry of judgment in this case, the sheriff
of Silay City, Negros Occidental pursuant to an alias writ of execution, levied upon Lot No. 657-
C of the Silay cadastre, with an area of seventeen hectares. The levy was annotated on
Jalandoni's TCT in this manner:

Notice of Embargo. ... issued by the City Sheriff of Silay City

subjecting the rights, interests andparticipations of Eduardo Jalandoni
over the lot described in this title, to "levy on execution in relation toCivil
Case entitled Philippine National Bank, Plaintiff vs. Eduardo Jalandoni,.

No effort was made by the bank to have that land sold at public auction to satisfy the
judgment against Jalandoni.

On April 22, 1974, or more than ten years after the levy was made, Jalandoni filed with
the Court of First Instance of Negros Occidental at Silay City in the land registration proceeding
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a petition for the cancellation of the levy on the ground of prescription. The petition was
opposed by the bank.

On May 20, 1975, Jalandoni filed in the same court an action to quiet title or for the
cancellation of the notice of embargo on the ground that, although more than ten years had
elapsed from the time the levy was made, no execution sale had been held and, therefore, the
levy had become inefficacious and was a cloud on his title.

The bank holds the view that the execution sale can be made beyond the ten-year period
for enforcing the judgment as long as the levy was effected within five years from the entry of
judgment as in the instant case.

ISSUE:

May the judgment debtor's land, which was levied upon within five years from the entry of
judgment, be sold at an execution sale after the expiration of the ten-year period for enforcing
the judgment?

HELD:

No.

It should be borne in mind that an action upon a judgment must be brought within ten
years from the time the right of action accrues (Art. 1144, Civil Code). As clarified in the Rules
of Court, that prescriptive period means that "a judgment may be executed on motion within
five (5) years from the date of its entry or from the date it becomes final and executory" and
"after the lapse of such time, and before it is barred by the statute of limitations, a judgment may
be enforced by action" (Sec. 6, Rule 39).

The Jalandoni heirs, in support of their contention that the levy cannot be enforced after
the expiration in 1969 of the ten-year period for enforcing the judgment, rely on the rule laid
down in Ansaldo vs. Fidelity and Surety Co. of the P.I., 88 Phil. 547, a 1951 case, that "properties
levied upon by execution must be sold in public auction within the period of ten years during which the
judgment can be enforced by action" The reason for that rule is that an execution is enforced (and
therefore accomplished) by levy and sale, not by levy alone.
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In the Ansaldo case, a writ of execution was issued by the Court of First Instance of
Manila on April 11, 1933 and a notice of levy was annotated on April 17, 1933 on the Torrens
titles covering the lots of the judgment debtor, Angel A. Ansaldo. No other step was taken by
the judgment creditor on the writ of execution and levy.

More than fourteen years later, or on July 30, 1947, Jose Ma. Ansaldo, the heir of the
judgment debtor, filed a petition with the Court of First Instance of Manila for the cancellation
of the levy in view of the inaction of the judgment creditor. The lower court granted it on the
ground that the judgment creditor's right to enforce the judgment by execution had prescribed
This Court affirmed the lower court's order cancelling the levy annotated on Ansaldo's titles.

We hold that the trial court erred in dismissing the complaint of Jalandoni and in not
applying the ruling in the Ansaldo case which is on all fours with this case.

The employees of the bank were negligent. They did not require the sheriff to sell
Jalandoni's land at public auction. The bank is bound by its employees' negligence. This case
should teach the responsible officers of the bank to be more vigilant in exercising its rights and
in supervising its employees. The law helps the diligent and vigilant, not those who sleep on
their rights.

We find that the "notice of embargo" annotated in 1964 on Jalandoni's title is no longer
enforceable and has become a cloud upon his title. Following the rule in the Ansaldo case, he
and his heirs have a good cause of action under article 476 of the Civil Code for the removal of
that state encumbrance.
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Fiestan v. CA

G.R. No. 81552, 28 May 1990

FACTS:

Petitioners spouses Dionisio Fiestan and Juanita Arconada were the owners of a parcel of
land situated in Ilocos Sur which they mortgaged to the DBP as security for their P22,400.00
loan. For failure of petitioners to pay their mortgage indebtedness, the lot was acquired by the
DBP as the highest bidder at a public auction sale after it was extrajudicially foreclosed by the
DBP. A certificate of sale was subsequently issued by the Provincial Sheriff on the same day and
the same was registered in the Office of the Register of Deeds. Earlier, petitioners executed a
Deed of Sale in favor of DBP which was likewise registered.

Upon failure of petitioners to redeem the property within the one-year period,
petitioners TCT lot was cancelled by the Register of Deeds and in lieu thereof, it was issued to
the DBP upon presentation of a duly executed affidavit of consolidation of ownership. The DBP
sold the lot to Francisco Peria and the same was registered in the Office of the Register of
Deeds. Subsequently, the DBPs title over the lot was cancelled and in lieu thereof, the TCT was
issued to Francisco Peria. Francisco Peria secured a tax declaration for said lot and accordingly
paid the taxes due thereon. He thereafter mortgaged to the PNB as security for his loan.

Since petitioners were still in possession of the lot, the Provincial Sheriff ordered them
to vacate the premises. On the other hand, petitioners filed on August 23, 1982 a complaint for
annulment of sale, mortgage and cancellation of transfer certificates of title against the
DBP, PNB, Francisco Peria and the Register of Deeds before the RTC. Petitioners seek to annul
the extrajudicial foreclosure sale of the mortgaged property on August 6, 1979 in favor of the
Development Bank of the Philippines (DBP) on the ground that it was conducted by the
Provincial Sheriff of Ilocos Sur without first effecting a levy on said property before selling the
same at the public auction sale.
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ISSUE:

Whether or not the extrajudicial foreclosure sale null and void for lack of a valid levy?

HELD:

No. The formalities of a levy, as an essential requisite of a valid execution sale

under Section 15 of Rule 39 and a valid attachment lien under Rule 57 of the Rules of Court, are
not basic requirements before an extrajudicially foreclosed property be sold at public auction. At
the outset, distinction should be made of the three different kinds of sales under the law,
namely: an ordinary execution sale, a judicial foreclosure sale, and an extrajudicial foreclosure
sale, because a different set of law applies to each class of sale mentioned. An ordinary
execution sale is governed by the pertinent provisions of Rule 39 of the Rules of Court. Rule 68
of the Rules of Court applies in cases of judicial foreclosure sale. On the other hand, Act No.
3135, as amended by Act No. 4118 otherwise known as "An Act to Regulate the Sale of Property
under Special Powers Inserted in or Annexed to Real Estate Mortgages" applies in cases of
extrajudicial foreclosure sale.

The case at bar, as the facts disclose, involves an extrajudicial foreclosure sale. Act No.
3135, as amended, being a special law governing extrajudicial foreclosure proceedings, the same
must govern as against the provisions on ordinary execution sale under Rule 39 of the Rules of
Court.

Levy, as understood under Section 15, Rule 39 of the Rules of Court in relation to
execution of money judgments, has been defined by this Court as the act whereby a sheriff sets
apart or appropriates for the purpose of satisfying the command of the writ, a part or the whole
of the judgment-debtor's property.

In extrajudicial foreclosure of mortgage, the property sought to be foreclosed need not

be identified or set apart by the sheriff from the whole mass of property of the mortgagor for the
purpose of satisfying the mortgage indebtedness. For, the essence of a contract of mortgage
indebtedness is that a property has been identified or set apart from the mass of the property of
the debtor-mortgagor as security for the payment or fulfillment of the obligation to answer the
amount of indebtedness, in case of default of payment. By virtue of the special power inserted
or attached to the mortgage contract, the mortgagor has authorized the mortgagee-creditor or
 9

any other person authorized to act for him to sell said property in accordance with the
formalities required under Act No. 3135, as amended.

The Court finds that the formalities prescribed under Sections 2, 3 and 4 of Act No. 3135, as
amended, were substantially complied with in the instant case. Records show that the notices of
sale were posted by the Provincial Sheriff of Ilocos Sur and the same were published in Ilocos
Times, a newspaper of general circulation in the province of Ilocos Sur, setting the date of the
auction sale on August 6, 1979 at 10:00 a.m. in the Office of the Sheriff, Vigan, Ilocos Sur.

DAGOOC v. ERLINA
A.M. No. P-04-1857 (formerly OCA I.P.I. No. 02-1429-P)
16 March 2005

FACTS:
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This is a complaint for misconduct and ignorance of the law filed by Merlinda L. Dagooc
of Diatagon, Lianga, Surigao del Sur, against deputy sheriff Roberto A. Erlina of the Regional
Trial Court, Branch 40, Tandag, Surigao del Sur.

Complainant alleged that she was the plaintiff in Civil Case No. L-695 before the
Regional Trial Court, Branch 28, Diatagon, Lianga, Surigao del Sur. The court rendered
judgment by compromise agreement which immediately became final and executory.
Complainant moved for the execution of the decision and, on February 28, 2002, a writ of
execution was issued which was endorsed to respondent deputy sheriff Erlina for execution.
The defendants, however, could not pay the money judgment. Instead of levying on the
properties of the defendants to satisfy the judgment, however, sheriff Erlina asked them to
execute promissory notes in favor of complainant which he asked the latter to collect from the
defendants. Complainant further alleged that respondent sheriff indicated in his return of
service that defendants were insolvent. But upon verification with the assessors office of
Tandag, Surigao del Sur, complainant discovered that defendants owned real properties, as
evidenced by the real property field appraisal and assessment sheet.

ISSUE:
Whether or not the promissory note can be used to satisfy the execution of money
judgments.

HELD:

No. The law mandates that in the execution of a money judgment, the judgment debtor
shall pay either in cash, certified bank check payable to the judgment obligee, or any other form
of payment acceptable to the latter. Nowhere does the law mention promissory notes as a form
of payment. The only exception is when such form of payment is acceptable to the judgment
debtor. But it was obviously not acceptable to complainant, otherwise she would not have filed
this case against respondent sheriff. In fact, she objected to it because the promissory notes of
the defendants did not satisfy the money judgment in her favor.

If the judgment debtor cannot pay all or part of the obligation in cash, certified bank
check or other mode of payment acceptable to the judgment obligee, the money judgment shall
be satisfied by levying on the properties of the judgment debtor.

But even assuming that the defendants/judgment debtors were insolvent, respondent
sheriff should have garnished their salaries (being paid employees) to enforce the judgment in
the subject case as provided for in Section 9(c), Rule 39 of the Revised Rules of Court. In view of
the foregoing, the Supreme Court found respondent sheriff ROBERTO A. ERLINA guilty of
inefficiency and incompetence in the performance of his official duties.

SOSTENES CAMPILLO v. HON. COURT OF APPEALS AND ZENAIDA DIAZ VDA. DE

SANTOS
G.R. No. L-56483, 29 May 1984.

FACTS:
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On 27 February 1961, Tomas de Vera and his wife (De Vera) sold two (2) parcels of
land (the subject properties) to Simplicio Santos (the decedent), now deceased and is
represented by his administratrix, Zenaida Diaz Vda. de Santos (the private respondent). The
sale however was never presented for registration in the office of the Registry of Deeds of
Manila nor noted in the title of the property.

On 27 January 1962, petitioner Sostenes Campillo (the petitioner) obtained a judgment

for a sum of money against de Vera in a civil case which became final and executory. Hence,
petitioner obtained an order for the issuance of a writ of execution. The writ was issued on 4
April 1962 and pursuant thereto, the City Sheriff levied on three (3) parcels of including the
subject properties

On 25 July 1962, after publication of the notice of sale, the parcels of land (including the
subject properties) were sold at public auction in favor of petitioner who was issued the
corresponding certificate of sale. After the lapse of one year, the City Sheriff executed the final
deed of sale in favor of petitioner over the three (3) parcels of land levied and sold on execution.
On 4 February 1964, TCT No. 63559 was cancelled and in lieu thereof, TCT No. 73969 was issued
by the Registry of Deeds of Manila in the name of petitioner.

The decedent, claiming to be the owner of the subject properties by reason of the
previous sale to him by De Vera, filed an action to annul the levy and sale of the subject
properties in favor of petitioner. Petitioner argued therein that he is an innocent purchaser for
value and the previous sale to De Vera could not be preferred over the levy and sale at a public
auction because it was never registered.

The lower court sustained the validity of the levy and sale, ruling that the sale to the
decedent could not bind third persons as it was never registered. The Court of Appeals however
declared that the sale and levy of the subject properties are void because at the time of the
execution sale, De Vera was no longer the owner thereof. It further ruled that even if the sale to
the decedent was never registered, the levy on execution does not take precedence over it
because petitioner is not a third party within the meaning of the law and therefore could not be
considered a purchaser for value in good faith.

ISSUE:
Whether or not the levy on execution in favor of petitioner is valid.

HELD:
YES. The Supreme Court held that a sale of real estate, whether made as a result of a
private transaction or a foreclosure or execution sale, becomes legally effective against third
persons only from the date of its registration. Considering that the subject properties were
attached and levied at a time when the subject properties were still in the name of De Vera in
the official records of the Registry of Deeds, the court held that the execution sale made in favor
of petitioner transferred to him all the rights, interest of De Vera over them.

The Court also held that, citing Leyson v. Tananda, while it may be true hat purchasers
at execution sales should bear in mind that the rule of caveat emptor applies to such sales, that
the sheriff does not warrant the title to real property sold by him as sheriff, and that it is not
incumbent on him to place the purchaser in possession of such property, still the rule applies
that a person dealing with registered land is not required to go behind the register to determine
 12

the condition of the property and he is merely charged with notice of the burdens on the
property which are noted on the face of the register or the certificate of title.

Hence, the petitioner herein, as the purchaser in the execution sale of the registered land
in suit, acquires such right and interest as appears in the certificate of title unaffected by prior
lien or encumbrances not noted therein.

The Manila Remnant Co., Inc. v. CA

G.R. No. 107282, 16 March 1994

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FACTS:
This case involved parcels of land in Quezon City which were owned by petitioner
Manila Remnant Co., Inc. (MRCI) and became the subject of its agreement with A.U. Valencia
and Co., Inc., (AUVCI) by virtue of which the latter was to act as the petitioner's agent in the
development and sale of the property.

Pursuant to the above agreement, AUVCI executed two contracts to sell dated March 3,
1970, covering Lots 1 and 2, Block 17, in favor of spouses Oscar C. Ventanilla and Carmen Gloria
Diaz. Without the knowledge of the Ventanilla couple, Valencia, as president of MRCI, resold
the same parcels to Carlos Crisostomo.The Ventanilla spouses, having learned of the supposed
sale of their lots to Crisostomo, commenced an action for specific performance, annulment of
deeds, and damages against MRCI, AUVCI and Carlos Crisostomo. It was docketed as Civil
Case No. 26411 in the Court of First Instance of Quezon City, Branch 7-B.

On November 17, 1980, the trial court rendered a decision declaring the contracts to sell
in favor of the Ventanillas valid and subsisting, and annulling the contract to sell in favor of
Crisostomo. It ordered the MRCI to execute an absolute deed of sale in favor of the Ventanillas,
free from all liens and encumbrances. Damages and attorney's fees in the total amount of
P210,000.00 were also awarded to the Ventanillas for which the MRCI, AUVCI, and Crisostomo
were held solidarily liable.

On January 25, 1991, the spouses Ventanilla filed with the trial court a motion for the
issuance of a writ of execution in Civil Case No. 26411. The writ was issued on May 3, 1991, and
served upon MRCI on May 9, 1991.

Petitioner contends that the subject properties could not be delivered to the Ventanillas
because they had already been sold to Samuel Marquez. Nevertheless, MRCI offered to
reimburse the amount paid by the respondents, including legal interest plus the aforestated
damages. MRCI also prayed that its tender of payment be accepted and all garnishments on
their accounts lifted.The Ventanillas accepted the amount of P210,000.00 as damages and
attorney's fees but opposed the reimbursement offered by MRCI in lieu of the execution of the
absolute deed of sale.

On July 19, 1991, Judge Elsie Ligot-Telan issued the following order:

To ensure that there is enough amount to cover the value of the lots involved if
transfer thereof to plaintiff may no longer be effected, pending litigation of said
issue, the garnishment made by the Sheriff upon the bank account of Manila
 14

Remnant may be lifted only upon the deposit to the Court of the amount of
P500,000.00 in cash.

The petitioner contends that the trial court may not enforce it garnishment order after
the monetary judgment for damages had already been satisfied and the amount for
reimbursement had already been deposited with the sheriff. Garnishment as a remedy is
intended to secure the payment of a judgment debt when a well-founded belief exists that the
erring party will abscond or deliberately render the execution of the judgment nugatory. As
there is no such situation in this case, there is no need for a garnishment order.

ISSUE:

Whether or not the order for garnishment is proper considering that MRCI has partially
complied with the judgment and expressed willingness to reimburse the Ventanillas in lieu of
execution of the absolute deed of sale.

HELD:

Yes. The alternative judgment of reimbursement is applicable only if the conveyance of

the lots is not possible, but it has not been shown that there is an obstacle to such conveyance.
As the main obligation of the petitioner is to execute the absolute deed of sale in favor of the
Ventanillas, its unjustified refusal to do so warranted the issuance of the garnishment order.

Garnishment is a species of attachment for reaching credits belonging to the judgment

debtor and owing to him from a stranger to the litigation. \ It is an attachment by means of
which the plaintiff seeks to subject to his claim property of the defendant in the hands of a third
person or money owed by such third person or garnishee to the defendant. The rules on
attachment also apply to garnishment proceedings.

A garnishment order shall be lifted if it established that:

(a) the party whose accounts have been garnished has posted a counterbond or
has made the requisite cash deposit;

(b) the order was improperly or irregularly issued as where there is no ground
for garnishment or the affidavit and/or bond filed therefor are defective or
insufficient;
 15

(c) the property attached is exempt from execution, hence exempt from
preliminary attachment or

(d) the judgment is rendered against the attaching or garnishing creditor.

Partial execution of the judgment is not included in the above enumeration of the legal
grounds for the discharge of a garnishment order. Neither does the petitioner's willingness to
reimburse render the garnishment order unnecessary. As for the counterbond, the lower court
did not err when it fixed the same at P500,000.00. As correctly pointed out by the respondent
court, that amount corresponds to the current fair market value of the property in litigation and
was a reasonable basis for determining the amount of the counterbond.

Malonzo v. Mariano

G.R. No. L-53998, 31 May 1989

FACTS:

Universal Ventures, Inc. mortgaged its properties in favor of Banco Filipino Mortgage &
Savings Bank, as security for the payment of a loan. The mortgage deed authorized the extra-
judicial foreclosure of the property in the event of default in the repayment of the loan.

Universal Ventures, Inc. failed to repay the loan. Consequently, Banco Filipino caused the
extra-judicial foreclosure of the property by the City Sheriff of Manila. The foreclosure sale took
place in due course; the mortgaged property was struck off to the bank, as highest bidder, and
the bank registered the sheriff's certificate of sale with the Register of Deeds of Manila and on
 16

July 27, 1976 obtained a certificate of title in its name, numbered 122496, in lieu of that of the
mortgagor, which was accordingly cancelled.

On the same day that title was issued to it, Banco Filipino filed a petition for a writ of
possession with the Court of First Instance of Manila. The petition recited the foregoing facts
and the additional circumstances that (1) the mortgagor, Universal Ventures, Inc., had failed to
redeem the property within the one-year period allowed by law, and (2) the mortgagor was still
in possession of the property, as well as certain other persons claiming rights under said
mortgagor although said rights had not been recorded in the Register of Deeds. Among the
persons named in the petition as "claiming (rights) under" Universal Ventures, Inc., were
petitioners Avelina Malonzo, Barbara Brown, and Bonifacia Monzon.

The writ of possession issued on March 4, 1980 and on the strength thereof, the Sheriff of
Manila attempted to evict the persons in occupancy of the property. Three of the persons sought
to be evicted, Enrico Malonzo, husband of Avelina Malonzo, Barbara Brown, and Bonifacia
Monzon, filed suit against Banco Filipino and the City Sheriff in the same Court of First Instance
of Manila seeking to perpetually restrain the enforcement of the writ of possession against them
on the ground that there was no ejectment case filed against them and that they were not made
a party to the Petition for Writ of Possession of Banco Filipino. Hence, they were entitled to
remain in possession of the properties and could not be ousted under the writ of possession.

ISSUE:

Whether or not a writ of possession issued by a Court of First Instance (Regional Trial
Court) in accordance with Act 3135, to give possession of property sold at an extrajudicial
foreclosure sale to the purchaser thereof, may be enforced against persons other than the
mortgagor who are in occupancy of the foreclosed property.

HELD:

Yes. Under section 6 of Act No. 3135 and Sections 29 to 31 and Section 35 Rule 39 of the
Revised Rules of Court, in case of an extra-judicial foreclosure of a real estate mortgage, the
possession of the property sold may be given to the purchaser by the sheriff after the period of
redemption had expired, unless a third person is actually holding the property adversely to the
mortgagor. An ordinary action for the recovery of possession is not necessary. There is no law in
this jurisdiction whereby the purchaser at a sheriffs sale of real property is obliged to bring a
separate and independent suit for possession after the one year period for redemption has
expired and after he has obtained the sheriffs final certificate of sale. The same rule was
followed in a judicial foreclosure of mortgage and in an execution sale. If the court can issue a
writ of possession during the period of redemption there is no reason why it should not also
have the same power after the expiration of that period.
 17

The petitioners cannot be deemed third parties "actually holding the property adversely"
to the mortgagor. They derive their rights to the possession of the property exclusively from the
mortgagor, in virtue of verbal agreements of lease. They were lessees at the time that the
property occupied by them was mortgaged by their lessor to respondent Banco Filipino. And of
that mortgage they were charged with constructive knowledge upon its registration in the
Registry of Property, if they did not indeed, actually know of it. The right pertaining to them in
this situation was that of being notified of the application for a writ of possession and of being
accorded an opportunity at a hearing to oppose the same, as by showing that they were
"actually holding the property adversely" to the mortgagor. That right was duly accorded to
them. They were served with copies of the motion or petition for issuance of the writ of
possession and had ample opportunity to oppose the same, to persuade the Court that the writ
should not issue or be executed against them. The proceedings showed that, by their own
assertions, they were not holding the property adversely to the mortgagor, but were exercising
rights under, derived from, said mortgagor, who was their lessor. Upon the cessation of their
lessor's rights over the property, their own also ceased. The writ of possession was therefore
properly enforceable against them.