DARCEN v VR GONZALES CREDIT ENTERPRISESApril 3, 2013 |Reyes, J. | Topic

Digester: Angat, Christine Joy F.

SUMMARY: Mamerto Darcen died, leaving an estate constituting three parcels of land. His heirs executed an Extrajudicial Settlement of the Estate with a Waiver, stating that his children are waiving their shares to the property in favor of their mother, Flora. Flora, without the knowledge of his children, mortgaged the properties to VR Gonzales. Eventually, the Flora died. When the loan fell due and VR Gonzales was unable to collect payments, it caused the extrajudicial foreclosure of the mortgage. Petitioners filed a complaint to assail the foreclosure, arguing that their signature in the waiver was forged and their mother’s signature in the mortgage contracts were likewise forged. Meanwhile, the parcels of land were sold to VR Gonzales as the highest bidder. The redemption period lapsed and VR Gonzales’ ownership was consolidated. It then moved for the issuance of the writ of possession, which was granted by the trial court. The Court affirmed the trial court, ruling that once the ownership is consolidated after the lapse of the redemption period, it is the ministerial duty of the trial court to issue the possessory writ. The only exception is when there are adverse claimants, in which case a hearing will be conducted. However, such exception does not apply in the case at bar as petitioners failed to show how their claim is adverse to that of their mother (the mortgagor). DOCTRINE: It is a long-settled rule in extrajudicial foreclosure of real estate mortgage that after consolidation of ownership of the foreclosed property, it is the ministerial duty of the court to issue, as a matter of right, an ex parte writ of possession to the buyer. Nonetheless, the ministerial duty of the court to issue an ex parte writ of possession ceases once it appears that there is a third party in possession of the property, who is a stranger to the mortgage and who claims a right adverse to that of the debtor/mortgagor.

FACTS: Spouses Mamerto Darcen and Flora De Guzman were married

and begot seven children: Teodoro, Mamerto Jr., Nestor, Benilda and Elenida (herein petitioners), and Arturo and Manuel.

Mamerto died and left behind an estate consisting of 3 titled parcels of land located in Baliuag, Bulacan.

Sometime in 1990, a sum of money was borrowed from Veronica Gonzales, president of V.R. Gonzales Credit Enterprises.o The loan was allegedly contracted by their brother Manuel.

Manuel sought their consent in constituting a mortgage over the aforementioned properties, a request which they refused.

An Extrajudicial Settlement of Estate with Waiver was then executed, where it was stated that the petitioners and their siblings are waiving their shares in their father’s estate in favor of their mother, thus making Flora the sole owner of the three lots.

1992: Meanwhile, fire had razed part of the Registry of Deeds and the titles of the three parcels of land were destroyed. The titles were reconstituted, where the new titles were issued in the name of Flora de Guzman. o The petitioner’s hereditary claims over the parcels of land

were allegedly annotated on the new titles. On Dec. 4, 2000, Flora died. Sometime in January 2007, Gonzales appeared, claiming that in

1995, Flora contracted a loan amounting to P7M and executed a real estate mortgage over the aforementioned properties.

Upon investigation, petitioners confirmed that their mother indeed mortgaged the said properties.

Because of the continued failure to pay the loan obligation, VR Gonzales caused the extrajudicial foreclosure of the mortgage.

Meawhile, petitioners filed a case for the “Annulment of Mortgage, Extra-judicial foreclosure, auction sale, and certificate of sale, and Damages”. They allege that:o Their signatures and their mother’s signature on the Extra-

Judicial Settlement of Estate and Waiver were forged by their brother Manuel (being forged, the properties were not really solely owned by their mother)

o The signatures of their mother on the 3 mortgaged contracts were actually forged by their brothers Manuel and Arturo, who appeared as witnesses on the mortgage documents

o The mortgage contracts did not state when the supposed loan obligations would become due and demandable

Pending the case, the three properties were sold for P8M, with VR Gonzales as the highest bidder.

A certificate of sale was issued, and after the lapse of the one-year redemption period, an affidavit of consolidation of ownership was executed.

VR Gonzales then filed an ex parte petition for issuance of a writ of possession.o Petitioners opposed this motion on the ground of forum

shopping, alleging that the company did not disclose the pendency of the civil case for the annulment of the mortgage.

RTC denied the petitioners’ opposition and issued the writ of possession in favor of VR Gonzales.o The company was not guilty of forum shopping. The

issuance of writ of possession was a mere ministerial function of the court and was summary in nature. Not being a judgment on the merits, litis pendentia or res judicata would not set in to bar the company’s petition.

CA affirmed the RTC. Hence, the instant petition, where they argue that:o They are third party who has a claim adverse to that of

their mother. While the court has a ministerial function to issue the writ of possession, a recognized exception to this ministerial duty is when the property is in possession of an adverse claimant.

Meanwhile, the RTC denied petitioners’ complaint for the annulment of the mortgage. RTC declared the mortgage contracts and the subsequent extrajudicial foreclosure and auction sale as valid.o Petitioners appealed, the decision of which is pending

before the CA.

RULING: Petition dismissed.

Whether the RTC erred in issuing the writ of possession - NO It is a long-settled rule in extrajudicial foreclosure of real

estate mortgage that after consolidation of ownership of the foreclosed property, it is the ministerial duty of the court to issue, as a matter of right, an ex parte writ of possession to the buyer.o Under Sec. 7 of Act 3135, possession may be granted to the

buyer either (a) within the 1 year redemption period, upon the filing by the purchaser of a bond, or (b) after the lapse of the redemption period, without need of a bond. If no redemption is made within 1 year from the

date of the registration of the certificate of sale, the purchaser becomes the absolute owner of the

property. Thus, the basis of the purchaser’s right of possession is his ownership of the property.

The mere filing of an ex parte motion for the issuance of the writ of possession would suffice, and no bond is required. The ex parte petition for the issuance of the possessory writ is a non-litigious proceeding and summary in nature.

Further, a pending action for annulment of mortgage or foreclosure sale does not stay the issuance of the writ of possession. The trial court need not look into the validity of the mortgage; the purchaser is entitled to a writ of possession without prejudice to the outcome of the pending annulment case.

Nonetheless, the ministerial duty of the court to issue an ex parte writ of possession ceases once it appears that there is a third party in possession of the property, who is a stranger to the mortgage and who claims a right adverse to that of the debtor/mortgagor.o Rule 39.33 states that the possession of the property shall

be given to the purchaser or last redemptioner, unless a third party is actually holding the property adversely to the judgment obligor. Rule 39, which apply to judicial foreclosure, has been extended to extrajudicial foreclosure sales pursuant to Act 3135, Sec. 6.

o The issuance of ex parte writ of possession ceases to be ministerial as the purchaser’s right of possession is recognized only as against the judgment debtor and his successor-in-interest but not against persons whose right of possession is adverse to the latter. In such case, the trial court shall order a hearing to determine the nature of the adverse possession.

o However, it is not enough that the property be possessed by a third party. The same must also be held by the third party adversely to the debtor/mortgagor, such as that of a co-owner, tenant or usufructuary. They possess the property in their own right, and they are not merely the successor or transferee of the right of possession of another co-owner or the owner of the property.

IN THE CASE AT BAR: The redemption period has lapsed, thus it is ministerial upon the court to issue the possessory writ. Further, there are no proof that the petitioners are adverse third party-claimants entitled to be retained in possession. o They failed to show that they are co-owners of the property.

It took the petitioners more than a decade to assail the

waiver that purportedly transferred their rights to their mother. Moreover, their argument that the waiver was forged deserves scant consideration since the waiver named neither Manuel nor Arturo but their mother Flora as the sole beneficiary.

o Moreover, the alleged annotation in the titles of the properties when it was reconstituted stated that “1/2 of the lots would be bound for the next two years to possible claims by other heirs or unknown creditors against the estate of Mamerto.” They failed to assert any claims within that period despite their knowledge thereof.

o The trial court has also dismissed their complaint for annulment of the mortgage, dismissing their claim that their mother’s signatures in the mortgage contracts were forged. Following this, they cannot be permitted to interpose an adverse claim in the subject mortgaged lots and defeat the writ of possession issued to VR Gonzales.

Moreover, petitioners were already evicted from the disputed lots and VR Gonzales already acquired possession. Even granting that the petitioners should be allowed to retain possession, the petition has been rendered moot and academic by the issuance and satisfaction of the writ of possession. For those details which are not important but seems important.