DARCEN v VR GONZALES CREDIT ENTERPRISES

April 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 mothers 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 fathers 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 petitioners 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 mothers signature on the ExtraJudicial 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 oneyear 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 companys 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 purchasers 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 purchasers 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 coowner, 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 mothers 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.