TodayisMonday,October16,2017

RepublicofthePhilippines
SUPREMECOURT

THIRDDIVISION

G.R.No.147074July15,2005

SpousesRODRIGOPADERESandSONIAPADERES,Petitioners,
vs.
Hon. COURT OF APPEALS,1 Hon. CARLOTA P. VALENZUELA, in her capacity as the Liquidator of Banco
The
FilipinoSavingsandMortgageBank,2Respondents.

xx

G.R.No.147075

SpousesISABELOBERGARDOandJUANAHERMINIABERGARDO,Petitioners,
vs.
Hon. COURT OF APPEALS,1 Hon. CARLOTA P. VALENZUELA, in her capacity as the Liquidator of Banco
The
FilipinoSavingsandMortgageBank,2Respondents.

DECISION

CARPIOMORALES,J.:

By their Petition for review on certiorari under Rule 45 of the Rules of Court, petitioners spouses Rodrigo and Sonia
PaderesandspousesIsabeloandJuanaBergadoseekthereversaloftheSeptember20,2000Decision3andFebruary
16, 2001 Resolution of the Court of Appeals, which dismissed their original Petition and denied their Motion for
Reconsideration,respectively.

OnSeptember14,1982,ManilaInternationalConstructionCorporation(MICC)executedarealestatemortgage4over21
registered parcels of land including the improvements thereon in favor of Banco Filipino Savings and Mortgage Bank
(BancoFilipino)inordertosecurealoanof1,885,000.00.ThemortgagewasregisteredwiththeRegistryofDeedsof
PasayCityandannotatedonthecorrespondingtransfercertificatesoftitle(TCTs)coveringthepropertiesonDecember
17,1982.5

The21mortgagedpropertiesincludedtwolots,onewithanareaof264squaremeters,andtheotherwithanareaof263,
both located in the then Municipality of Paraaque (now Paraaque City) covered by TCT Nos. 610626 and 61078,7
respectively.

SubsequentlyorinAugust1983,MICCsoldthelot8coveredbyTCTNo.61078,togetherwiththehouse9thereon,tothe
petitionersinthefirstcase,thePaderesspouses.AndonJanuary9,1984,MICCsoldthehouse10builtonthelotcovered
byTCTNo.61062tothepetitionersinthesecondcase,theBergadospouses.Neithersalewasregistered,however.11

On January 25, 1985, for failure of MICC to settle its obligations, Banco Filipino filed a verified Petition12 for the
extrajudicialforeclosureofMICCsmortgage.AttheauctionsaleoftheforeclosedpropertiesonMarch25,1985,Banco
Filipinosubmittedabidof3,092,547.82andwasdeclaredthehighestbidder.ACertificateofSale13wasissuedinits
favorwhichwasregisteredwiththeRegistryofDeedsandannotatedonthecorrespondingTCTscoveringthemortgaged
propertiesonJuly29,1985.

Noredemptionoftheforeclosedmortgagehavingbeenmadewithinthereglementaryperiod,CarlotaP.Valenzuela,the
thenLiquidatorofBancoFilipino,filedonOctober16,1987anexpartePetition14fortheissuanceofaWritofPossession
oftheforeclosedpropertieswiththeRegionalTrialCourt(RTC)ofMakati.Afterhearing,thePetitionwasgrantedbyOrder
datedSeptember8,198815ofBranch59oftheRTC.

On November 7, 1996, copies of the Writ of Possession dated November 5, 1996, together with a notice addressed to
MICC"and/orAllpersonsclaimingrightsunderthem"tovoluntarilyvacatethepremiseswithin7daysfromreceiptthereof,
wereservedonpetitioners.16

Instead of vacating the two lots, however, petitioners filed separate petitions before the Court of Appeals, docketed as
C.A.G.R.Numbers42470and42471whichwerelaterconsolidated,17assailingthevalidityoftheWritofPossession.

On September 20, 2000, the Court of Appeals promulgated its questioned Decision18 dismissing the consolidated
petitionsforlackofmeritandupholdingthevalidityoftheWritofPossession.
PetitionersMotionforReconsiderationoftheappellatecourtsdecisionhavingbeendeniedbyResolutionofFebruary16,
2001,theyjointlycomebeforethisCourtarguingthat:(1)havingpurchasedtheirrespectivepropertiesingoodfaithfrom
MICC,theyarethirdpartieswhoserighttheretoaresuperiortothatofBancoFilipino(2)theyarestillentitledtoredeem
thepropertiesandinfactabindingagreementbetweenthemandthebankhadbeenreached(3)theirrespectivehouses
shouldnothavebeenincludedinthe auctionsaleofthe mortgagedproperties(4)onthe contrary,asbuildersingood
faith,theyareentitledtothebenefitsofArticle448oftheCivilCode

and(5)thewritofpossessionissuedbytheRTCin1996hadalreadylostitsvalidityandefficacy.

Thepetitionmustbedenied.

Inextrajudicialforeclosuresofrealestatemortgages,theissuanceofawritofpossession,whichisanordercommanding
thesherifftoplaceapersoninpossessionoftheforeclosedproperty,19isgovernedbySection7ofActNo.3135(anact
toregulatethesaleofpropertyunderspecialpowersinsertedinorannexedtorealestatemortgages),asamended:

Sec.7.InanysalemadeundertheprovisionsofthisAct,thepurchasermaypetitiontheCourtofFirstInstanceofthe
provinceorplacewherethepropertyoranypartthereofissituated,togivehimpossessionthereofduringtheredemption
period,furnishingbondinanamountequivalenttotheuseofthepropertyforaperiodoftwelvemonths,toindemnifythe
debtor in case it be shown that the sale was made without violating the mortgage or without complying with the
requirementsofthisAct.Suchpetitionshallbemadeunderoathandfiledinformofanexpartemotionintheregistration
orcadastralproceedingsifthepropertyisregistered,orinspecialproceedingsinthecaseofpropertyregisteredunder
theMortgageLaworundersectiononehundredandninetyfouroftheAdministrativeCode,orofanyotherrealproperty
encumberedwithamortgagedulyregisteredintheofficeofanyregisterofdeedsinaccordancewithanyexistinglaw,and
ineachcasetheclerkofthecourtshall,uponthefilingofsuchpetition,collectthefeesspecifiedinparagraphelevenof
sectiononehundredandfourteenofActNumberedFourhundredandninetysix,asamendedbyActNumberedTwenty
eight hundred and sixtysix, and the court shall, upon approval of the bond, order that a writ of possession issue,
addressedtothesheriffoftheprovinceinwhichthepropertyissituated,whoshallexecutesaidorderimmediately.

That petitioners purchased their properties from MICC in good faith is of no moment. The purchases took place after
MICCs mortgage to Banco Filipino had been registered in accordance with Article 212520 of the Civil Code and the
provisionsofP.D.1529(propertyregistrydecree).21Assuch,underArticles131222and212623oftheCivilCode,areal
rightorlieninfavorofBancoFilipinohadalreadybeenestablished,subsistingoverthepropertiesuntilthedischargeof
theprincipalobligation,whoeverthepossessor(s)ofthelandmightbe.

Inrejectingasimilarargument,thisCourt,inPhilippineNationalBankv.Mallorca,24ratiocinated:

1.Appellantsstandisthatherundividedinterestconsistingof20,000squaremetersofthemortgagedlot,remained
said
unaffected by the foreclosure and subsequent sale to PNB, and she "neither secured nor contracted a loan" with
bank.WhatPNBforeclosed,shemaintains,"wasthatportionbelongingtoRupertaLavillesonly,"notthepartbelongingto
her.

Appellantspositionclasheswithpreceptswellentrenchedinlaw.ByArticle2126oftheCivilCode,a"mortgagedirectly
and immediately subjects the property on which it is imposed, whoever the possessor may be, to the fulfillment of the
obligationforwhosesecurityitwasconstituted."Saleortransfercannotaffectorreleasethemortgage.Apurchaser
is necessarily bound to acknowledge and respect the encumbrance to which is subjected the purchased thing
and which is at the disposal of the creditor "in order that he, under the terms of the contract, may recover the
amount of his credit therefrom." For, a recorded real estate mortgage is a right in rem, a lien on the property
whoever its owner may be. Because the personality of the owner is disregarded the mortgage subsists
notwithstandingchangesofownershipthelasttransfereeisjustasmuchofadebtorasthefirstoneandthis,
independentofwhetherthetransfereeknowsornotthepersonofthemortgagee.Soitis,thatamortgagelienis
inseperable from the property mortgaged. All subsequent purchasers thereof must respect the mortgage,
whetherthetransfertothembewithorwithouttheconsentofthemortgagee.For,themortgage,untildischarge,
followstheproperty.25(Emphasisandunderscoringsupplieditalicsintheoriginalcitationsomitted)

AndinRoxasv.Buan26thisCourtheld:

Contending that petitioner Roxas is a party actually holding the property adversely to the debtor, Arcadio Valentin,
petitioners argue that under the provisions of Act No. 3135 they cannot be ordered to vacate the property. Hence, the
questionofwhether,underthecircumstances,petitionerRoxasindeedisapartyactuallyholdingthepropertyadverselyto
Valentin.

ItwillberecalledthatRoxas'possessionofthepropertywaspremisedonitsallegedsaletohimbyValentinfor
theamountof100,000.00.Assumingthistobetrue,itisreadilyapparentthatRoxasholdstitletoand
possessesthepropertyasValentin'stransferee.Anyrighthehastothepropertyisnecessarilyderivedfromthat
ofValentin.Astransferee,hestepsintothelatter'sshoes.Thus,intheinstantcase,consideringthatthepropertyhad
alreadybeensoldatpublicauctionpursuanttoanextrajudicialforeclosure,theonlyinterest

thatmaybetransferredbyValentintoRoxasistherighttoredeemitwithintheperiodprescribedbylaw.Roxasis
thereforethesuccessorininterestofValentin,towhomthelatterhadconveyedhisinterestinthepropertyfor
thepurposeofredemption[Rule39,Sec.29(a)oftheRevisedRulesofCourtMagnov.Viola,61Phil.80(1934)
Rosetev.Prov.SheriffofZambales,95Phil.560(1954).]Consequently,Roxas'occupancyofthepropertycannotbe
consideredadversetoValentin.

Thus, in Belleza v. Zandaga [98 Phil. 702 (1956)], the Court held that where the purchaser in an execution sale has
alreadyreceivedthedefinitivedeedofsale,hebecomestheownerofthepropertyboughtand,asabsoluteowner,heis
entitledtoitspossessionandcannotbeexcludedtherefrombyonewhomerelyclaimstobea"successorininterestof
thejudgmentdebtor,"unlessitisadjudgedthattheallegedsuccessorhasabetterrighttothepropertythanthepurchaser
at the execution sale. Stated differently, the purchaser's right of possession is recognized only as against the
judgmentdebtorandhissuccessorininterestbutnotagainstpersonswhoserightofpossessionisadverseto
thelatter.TherulewasreiteratedinGuevarav.Ramos[G.R.No.L24358,March31,1971,38SCRA194].

The rule in Belleza, although relating to the possession of property sold in execution sales under what is now Sec. 35,
Rule 39 of the Revised Rules of Court, is also applicable to the possession of property sold at extrajudicial foreclosure
sales pursuant to Sec. 6 of Act No. 3135 [see IFC Service Leasing and Acceptance Corp. v. Nera, supra]. Thus, as
petitionerRoxasisnotapartyholdingthepropertyadverselytoValentin,beingthelatter'ssuccessorininterest,
therewasnobartotherespondenttrialcourt'sissuanceofawritofpossessionuponprivaterespondentBuan's
application.

ItdoesnotmatterthatpetitionerRoxaswasnotspecificallynamedinthewritofpossession,ashemerelysteppedintothe
shoesofValentin,beingthelatter'ssuccessorininterest.Ontheotherhand,petitionerdeGuiawasoccupyingthehouse
asRoxas'allegedtenant[Rollo,p.24].Moreover,respondentcourt'sdecisiongrantingprivaterespondentBuan'spetition
for the issuance of a writ of possession ordered the Provincial Sheriff of Zambales or any of his deputies to remove
Valentin"oranypersonclaiminginterestunderhim"fromtheproperty[Rollo,p.16].Undeniably,petitionersfellunderthis
category.27(Emphasissupplied)

AstransfereesofmortgagorMICC,petitionersmerelysteppedintoitsshoesandarenecessarilyboundtoacknowledge
andrespectthemortgageithadearlierexecutedinfavorofBancoFilipino.

Asforpetitionersargumentthattheyarestillentitledtoredeemtheforeclosedproperties,itmustberejectedtoo.

ThedebtorinextrajudicialforeclosuresunderActNo.3135,orhissuccessorininterest,has,oneyearfromthedateof
registration of the Certificate of Sale with the Registry of Deeds, a right to redeem the foreclosed mortgage,28 hence,
petitioners,asMICCssuccessorsininterest,hadoneyearfromtheregistrationoftheCertificateofSaleonJuly29,1985
oruntilJuly29,1986forthepurpose.

Petitioners, however, failed to do so. Ownership of the subject properties was thus consolidated in favor of Banco
Filipino,29 and TCT Nos. 112352 (in lieu of TCT No. 61078) and 112353 (in lieu of TCT No. 61062) were issued in its
name.

AsthisCourtheldinF.DavidEnterprisesv.InsularBankofAsiaandAmerica:30

Itissettledthatthebuyerinaforeclosuresalebecomestheabsoluteownerofthepropertypurchasedifitisnot
redeemedduringtheperiodofoneyearaftertheregistrationofthesale.Assuch,heisentitledtothepossession
ofthesaidpropertyandcandemanditatanytimefollowingtheconsolidationofownershipinhisnameandthe
issuancetohimofanewtransfercertificateoftitle.Thebuyercaninfactdemandpossessionofthelandevenduring
theredemptionperiodexceptthathehastopostabondinaccordancewithSection7ofActNo.3135asamended.No
suchbondisrequiredaftertheredemptionperiodifthepropertyisnotredeemed.Possessionofthelandthen
becomesanabsoluterightofthepurchaserasconfirmedowner.Uponproperapplicationandproofoftitle,the
issuanceofthewritofpossessionbecomesaministerialdutyofthecourt.31(Emphasissupplied)

Petitioners assert, however, that a binding agreement for the repurchase of the subject properties was reached with
BancoFilipinoas,sotheyclaim,reflectedinthefollowingexchangeofcommunications:

October17,1996

Mrs.LuzB.Dacasin

Asst.VicePresident

RealEstateDept.

BancoFilipinoSavingsandMortgageBank

101PaseoDeRoxascro.[sic]DelaRosaSts.

MakatiCity

DearMadam:

I am writing to you, on behalf of spouses Sonia and Rodrigo Paderes re: TCT No. 61078 formerly owned by Manila
International Construction Corporation (MICC for short) now TCT No. 112352, registered in the name of Banco Filipino
Savings and Mortgage Bank in July 30, 1996 at the Register of Deeds of Paraaque, Metro Manila. Incidentally, the
propertyisdenominatedasBlock48,Lot5locatedatLeonFlorentinoSt.,BFExecutive,Paraaque,MetroManila.

ThebackgroundfactsofTCTNo.61078areasfollows:

InAugust1983,theMICCexecutedaDeedofAbsoluteSaleofthatlotcoveredbyTCTNo.61078infavorofspouses
SoniaandRodrigoPadereswhichwasacknowledgedbeforeaNotaryPubliconOctober1,1983.Thevalueofthelotwas
115,720.00. In the same year, the parties executed an addendum to the said deed of absolute sale which covered a
housevaluedat242,874.45.Thenetpackagepriceofthehouseandlotwasfixedat329,405.75.Fromthisamount,
thespousesSoniaandRodrigoPaderespaidMICCinclusiveofequitytheamountof125,437.35leavingabalanceof
212,985.60.ThespousesmovedinthehouseinNovember1983.

Unknown to the spouses, MICC mortgaged TCT No. 61078 in favor of Banco Filipino Savings and Mortgage Bank for
1,885.00 duly inscribed in TCT No. 112352 on December 12, 1982. It was foreclosed by the bank for 3,092,547.82
pursuanttothecertificateofsaleexecutedbythesheriffasinscribedonTCTNo.112352[shouldbeTCTNo.61078]on
July29,1985...

Then came the news that Banco Filipino Savings and Mortgage Bank was under conservatorship by the Board of
Liquidators.Ontheotherhand,MICCbecamebankruptandclosedshop.Thespouseswere[sic]nowheretogotothenat
thetimetogetthetitleofthepropertytheypurchasedfromMICC.

Until,thespousesreceivedaletterdatedApril6,1987fromtheBoardofLiquidatorsviaAlbertoReyes,DeputyLiquidator,
informing the spouses that the property they purchased from MICC was already foreclosed by the bank. The spouses
answeredtheletteranddisclaimedanyknowledgeoftheforeclosure.Intheiranswertothesaidletter,theyemphasized
thattheirunpaidbalancewithMICCwas188,985.60.

Weareaddressingyourgoodself[sic]toinformthebankthatthespousesSoniaandRodrigoPaderesareexercising
theirrightofredemptionassubrogeesofthedefunctMICCunderspeciallaws.

Fromreliableinformation,thebankhadalreadymadeappraisalofthepropertyandfromthatend,maywebe
informed[at]thesoonestpossibletimethevalueofthepropertytoenablethespousestoprepareforsuch
eventuality.And,uponreceiptofthesaidappraisalvalueweshallimmediatelyinformyou[of]ourpositiononthe
matter.

Thankyouverymuch.

Verytrulyyours,

[SGD.]

LUCIANOD.VALENCIA

CounselforSpousesPaderes

JPASubdivision,CityofMuntinlupa32

xxx(Emphasissupplied).

October25,1996

Mr.LucianoD.Valencia

CounselforSps.Paderes

JPASubdivision,Muntinlupa

DearSir:

ThisiswithregardtoyourletterdatedOctober17,1996concerningthepropertyformerlyownedbyManilaInternational
ConstructionCorporation(MICC)foreclosedbytheBank.

PleaseinformSps.RodrigoandSoniaPaderestocometothebanktodiscusssaidforeclosedpropertydirectly
withthebank.

Thankyou.

Verytrulyyours,

[SGD.]

LUZB.DACASIN

AssistantVicePresident

RealEstateDepartment33

xxx(Emphasissupplieditalicsintheoriginal).

November4,1996

Mrs.LuzB.Dacasin

Asst.VicePresident

RealEstateDept.,BancoFilipino

MakatiCity

DearMadam:

ThankyouverymuchforyourletterdatedOctober25,1996,whichwasreceivedonOctober31,1996,thecontentsof
whichhadbeendulynoted.PursuanttheretoIadvisedmyclientsspousesRodrigoandSoniaPaderestosee[you].
Withyourindulgence,IalsoadvisedmyotherclientsspousesIsabeloandJuanaHerminiaBergadotogoalongwiththe
spousesPaderes,whoaresimilarlysituatedwithspousesPaderesproperty.

Incidentally,onOctober28,1996,IalsowroteyourgoodselfanotherletteratthebehestofspousesIsabeloandJuana
HerminiaBergadowhosepropertyisequallyfootedwithspousesPaderes.

Itishopedthat,outofthatconferenceperyourinvitationmyclientsabovenamedbeinformedformallythetotalamounts
due the bank as a consequence of the right of redemption extended to them. Of course, whatever appraised value
arrived at by the bank on the properties subject of redemption the same shall not be construed as my clients
committedliability.

Thankyouverymuch.

Verytrulyyours,

[SGD.]

LUCIANOD.VALENCIA

CounselforSpousesPaderes

JPASubdivision,CityofMuntinlupa34

xxx(Emphasissupplied).

November8,1996

Mrs.LuzB.Dacasin

Asst.VicePresident

RealEstateDepartment

BancoFilipinoSavings&MortgageBank

MakatiCity

Re:Lot18,Block48GamboaSt.

BFHomes,Paraaque,MM(264SQ.M.)

OccupiedbySps.IsabeloBergado&

JuanaHerminiaBergado

Lot5,Block48,L.FlorentinoSt.

BFHomes,Paraaque,MM(263SQ.M.)

OccupiedbySps.RodrigoPaderes&

SoniaPaderes

DearMadamAsst.VicePresident:

Pursuant to our conference this morning November 8, 1996, regarding our desire to redeem the properties above
captioned,whichyourgoodofficeaccommodated,andperyouradvi[c]e,wesubmitthefollowingfactstakenoutandour
proposals:

1. Regarding the lot, you mentioned that, the cost per square meter was 7,500.00. To this price we are no
committalforthesaidpriceishigh.Although,wearestilltohavetheamountrenegotiated.

2. We appreciate very much your having excluded the house built in the said lot for purposes of fixing the redemption
price.

3. Your advi[c]e to subject the properties (house and lot) to a realestate mortgage with the bank so that the
amount to be loaned will be used as payment of the properties to be redeemed is accepted, and we are
committedtoit.

Thankyouverymuch

Verytrulyyours,

[SGD.]

SPS.SONIA&

RODRIGOPADERES

[SGD.]
SPS.ISABELO&

JUANAHERMINIABERGADO35

(Emphasissupplied).

Petitionersassertiondoesnotpassmuster.

Under Article 1318 of the Civil Code, there are three essential requisites which must concur in order to give rise to a
bindingcontract:(1)consentofthecontractingparties(2)objectcertainwhichisthesubjectmatterofthecontractand
(3)causeoftheobligationwhichisestablished."Consent"isfurtherdefinedinArticle1319oftheCodeasfollows:

Art. 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified
acceptanceconstitutesacounteroffer.

Acceptance made by letter or telegram does not bind the offerer except from the time it came to his knowledge. The
contract, in such a case, is presumed to have been entered into in the place where the offer was made. (Emphasis
supplied)

By"offer"ismeantaunilateralpropositionwhichonepartymakestotheotherforthecelebrationofthecontract.Thereis
an"offer"inthecontextofArticle1319onlyifthecontractcancomeintoexistencebythemereacceptanceoftheofferee,
withoutanyfurtheractonthepartoftheofferor.Hence,the"offer"mustbedefinite,completeandintentional.36

Withregardtothe"acceptance,"alearnedauthoritynotesthat:

Toproduceacontract,theacceptancemustnotqualifythetermsoftheoffer.Thereisnoacceptancesufficientto
produceconsent,whenaconditionintheofferisremoved,orapureofferisacceptedwithacondition,orwhenatermis
established,orchanged,intheacceptance,orwhenasimpleobligationisconvertedbytheacceptanceintoanalternative
oneinotherwords,whensomethingisdesiredwhichisnotexactlywhatisproposedintheoffer.Itisnecessarythatthe
acceptancebeunequivocalandunconditional,andtheacceptanceandthepropositionshallbewithoutany
variationwhatsoeverandanymodificationorvariationfromthetermsoftheofferannulsthelatterandfreesthe
offeror.37(Emphasissupplied)

Areadingoftheabovequotedcorrespondencerevealstheabsenceofbothadefiniteofferandanabsoluteacceptanceof
anydefiniteofferbyanyoftheparties.

ThelettersdatedOctober17,1996andNovember4,1996,signedbypetitionerscounsel,whileostensiblyproposingto
redeemtheforeclosedpropertiesandrequestingBancoFilipinotosuggestapricefortheirrepurchase,madeitclearthat
anyproposalbythebankwouldbesubjecttofurtheractiononthepartofpetitioners.

The letter dated October 25, 1996 signed by Luz Dacasin, Assistant VicePresident of Banco Filipino, merely invited
petitionerstoengageinfurthernegotiationsanddoesnotcontainarecognitionofpetitionersclaimedrightofredemption
oradefiniteoffertosellthesubjectpropertiesbacktothem.

Petitionersemphasizethatinitemno.3oftheirletterdatedNovember8,1996theycommittedto"subjecttheproperties
(houseandlot)toarealestatemortgagewiththebanksothattheamounttobeloanedwillbeusedaspaymentofthe
propertiestoberedeemed."Itisclearfromitemno.1ofthesameletter,however,thatpetitionersdidnotacceptBanco
Filipinosvaluationofthepropertiesat7,500.00persquaremeterandintendedto"havetheamount[renegotiated]."

Moreover,whilepurportingtobeamemorandumofthematterstakenupintheconferencebetweenpetitionersandBanco
FilipinoVicePresidentDacasin,petitionersletterofNovember8,1996doesnotcontaintheconcurrenceofMs.Dacasin
oranyotherauthorizedagentofBancoFilipino.Wheretheallegedcontractdocumentwassignedbyonlyonepartyand
therecordshowsthattheotherpartydidnotexecuteorsignthesame,thereisnoperfectedcontract.38

The Court of Appeals, therefore, committed no error in concluding that "nothing concrete came out of the meeting"
betweenpetitionersandBancoFilipino.

Respecting petitioners claim that their houses should have been excluded from the auction sale of the mortgaged
properties,itdoesnotlie.TheprovisionofArticle44839oftheCivilCode,citedbypetitioners,whichpertaintothosewho,
ingoodfaith,mistakenlybuild,plantorsowonthelandofanother,hasnoapplicationtothecaseatbar.

Here, the record clearly shows that petitioners purchased their respective houses from MICC, as evidenced by the
AddendumtoDeedofSaledatedOctober1,1983andtheDeedofAbsoluteSaledatedJanuary9,1984.

BeingimprovementsonthesubjectpropertiesconstructedbymortgagorMICC,thereisnoquestionthattheywerealso
coveredbyMICCsrealestatemortgagefollowingthetermsofitscontractwithBancoFilipinoandArticle2127oftheCivil
Code:

Art.2127.Themortgageextendstothenaturalaccessions,totheimprovements,growingfruits,andtherentsorincome
notyetreceivedwhentheobligationbecomesdue,andtotheamountoftheindemnitygrantedorowingtotheproprietor
from the insurers of the property mortgaged, or in virtue of expropriation for public use, with the declarations,
amplifications and limitations established by law, whether the estate remains in the possession of the mortgagor, or it
passesintothehandsofathirdperson.(Underscoringsupplied).

TheearlycaseofCuUnjiengeHijosv.MabalacatSugarCo.40isillustrative.Inthatcase,thisCourtheld:
. . . (1) That a mortgage constituted on a sugar central includes not only the land on which it is built but also the
buildings, machinery, and accessories installed at the time the mortgage was constituted as well as all the
buildings,machineryandaccessoriesbelongingtothemortgagor,installedaftertheconstitutionthereof(Bischoff
vs.PomarandCompaiaGeneraldeTabacos,12Phil.690)(2)thatthenoticeannouncingthesaleatpublicauctionof
allthepropertiesofasugarcentralextendstothemachineryandaccessoriesacquiredandinstalledinitsmillafterthe
constitutionofthemortgage(3)thatthecourt,thathasorderedtheplacingofthemortgagedpropertiesinthehandsofa
receiver in a foreclosure suit, has jurisdiction to order the sale at public auction of the said mortgaged properties even
beforetheterminationofthereceivershipand(4)thatthefactthatthepriceatwhichthemortgagedpropertiesweresold
atpublicauctionisinadequate,isnotinitselfsufficienttojustifytheannulmentofthesale.41(Emphasissupplied)

Petitionersfinallyprofferthattheissuance,onBancoFilipinosmeremotion,oftheWritofPossessiononNovember5,
1996, more than 8 years since the promulgation of the RTC Order granting its petition on September 8, 1988, violated
Section6,Rule39oftheRulesofCourt,viz:

Sec. 6. Execution by motion or by independent action. A final and executory judgment or order may be executed on
motionwithinfive(5)yearsfromthedateofitsentry.Afterthelapseofsuchtime,andbeforeitisbarredbythestatuteof
limitations,ajudgmentmaybeenforcedbyaction.Therevivedjudgmentmayalsobeenforcedbymotionwithinfive(5)
yearsfromthedateofitsentryandthereafterbyactionbeforeitisbarredbythestatuteoflimitations.

Hence,petitionersargue,thewritofpossessionhadlostitsvalidityandefficacyandshouldthereforebedeclarednulland
void.

Petitionersultimateargumentfailstoo.InRodilvs.Benedicto,42thisCourtcategoricallyheldthattherightoftheapplicant
orasubsequentpurchasertorequestfortheissuanceofawritofpossessionofthelandneverprescribes:

The respondents claim that the petition for the issuance of a writ of possession was filed out of time, the said petition
havingbeenfiledmorethanfiveyearsaftertheissuanceofthefinaldecreeofregistration.Insupportoftheircontention,
therespondentscitethecaseofSorogonvs.Makalintal[80Phil.259(1948)],whereinthefollowingwasstated:

"Itisthelawandwellsettleddoctrineinthisjurisdictionthatawritofpossessionmustbeissuedwithinthesameperiodof
timeinwhichajudgmentinordinarycivilactionsmaybesummarilyexecuted(section17,Act496,asamended),uponthe
petitionoftheregisteredownerorhissuccessorsininterestandagainstallpartieswhoclaimarighttoorinterestinthe
landregisteredpriortotheregistrationproceeding."

Thebetterrule,however,isthatenunciatedinthecaseofManlapasandTolentinovs.Lorente[48Phil.298(1925)],
whichhasnotyetbeenabandoned,thattherightoftheapplicantorasubsequentpurchasertoaskforthe
issuanceofawritofpossessionofthelandneverprescribes...

xxx

Inalatercase[Sta.Anav.Menla,111Phil.947(1961)],theCourtalsoruledthattheprovisionintheRulesofCourtto
theeffectthatjudgmentmaybeenforcedwithinfiveyearsbymotion,andafterfiveyearsbutwithintenyearsby
an action (Section 6, Rule 39) refers to civil actions and is not applicable to special proceedings, such as land
registrationcases.TheCourtsaid:

"Thesecondassignmentoferrorisasfollows:

'ThatthelowercourterredinorderingthatthedecisionrenderedinthislandregistrationcaseonNovember28,1931or
twentysixyearsago,hasnotyetbecomefinalandunenforceable.

Wefailtounderstandtheargumentsoftheappellantinsupportoftheaboveassignment,exceptinsofarasitsupports
histheorythatafteradecisioninalandregistrationcasehasbecomefinal,itmaynotbeenforcedafterthelapseofa
period of 10 years, except by another proceeding to enforce the judgment or decision. Authority for this theory is the
provisionintheRulesofCourttotheeffectthatjudgmentmaybeenforcedwithin5yearsbymotion,andafterfiveyears
but within 10 years, by an action (Sec. 6, Rule 39). This provision of the Rules refers to civil actions and is not
applicabletospecialproceedings,suchasalandregistrationcase.Thisissobecauseapartyinacivilaction
must immediately enforce a judgment that is secured as against the adverse party, and his failure to act to
enforce the same within a reasonable time as provided in the Rules makes the decision unenforceable against
thelosingparty.Inspecialproceedingsthepurposeistoestablishastatus,conditionorfactinlandregistration
proceedings,theownershipbyapersonoraparceloflandissoughttobeestablished.Aftertheownershiphas
beenprovedandconfirmedbyjudicialdeclaration,nofurtherproceedingtoenforcesaidownershipis
necessary, except when the adverse or losing party had been in possession of the land and the winning party
desirestoousthimtherefrom.43(Emphasisandunderscoringsupplied)

PetitionershavenotsuppliedanycogentreasonforthisCourttodeviatefromtheforegoingruling.

The established doctrine that the issuance of a writ of possession is a ministerial function whereby the issuing court
exercises neither discretion nor judgment bears reiterating. The writ issues as a matter of course upon the filing of the
propermotionand,iffiledbeforethelapseoftheredemptionperiod,theapprovalofthecorrespondingbond.44

Petitioners,however,arenotwithoutremedy.AsreflectedinthechallengedCourtofAppealsdecision,underSection845
of Act No. 3135, as amended, petitioners, as successorsininterest of mortgagor MICC, have 30 days from the time
BancoFilipinoisgivenpossessionofthesubjectpropertiestoquestionthevalidityoftheauctionsaleunderanyofthe
twogroundsthereinstatedbyfilingapetitiontosetasidethesameandcancelthewritofpossession.

WHEREFORE,thepetitionisherebyDENIED.
Costsagainstpetitioners.

SOORDERED.

CONCHITACARPIOMORALES

AssociateJustice

WECONCUR:

ARTEMIOV.PANGANIBAN

AssociateJustice

Chairman

ANGELINASANDOVALGUTIERREZ RENATOC.CORONA

AssociateJustice AssociateJustice

CANCIOC.GARCIA

AssociateJustice

ATTESTATION

IattestthattheconclusionsintheaboveDecisionhadbeenreachedinconsultationbeforethecasewasassignedtothewriterofthe
opinionoftheCourtsDivision.

ARTEMIOV.PANGANIBAN

AssociateJustice

Chairman,ThirdDivision

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision
werereachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourt.

HILARIOG.DAVIDE,JR.

ChiefJustice

Footnotes
1Thepresentpetition(jointlyfiledbypetitioners),whichwasassignedtwodocketnumbers,involvesanAppealby
CertiorariunderRule45oftheRulesofCourt.Consequently,theCourtofAppeals,whichrenderedtheDecision
underreview,shouldnothavebeenimpleaded,evenasanominalparty,followingSection4,Rule45oftheRules
ofCourt.

2InitsCommentintheproceedingsaquo,BancoFilipinoSavings&MortgageBankstatedthatit"hasresumedits
normalbankingoperationandisnolongerundertheliquidationofCarlotaP.Valenzuela."Thus,saidbankshould
have been indicated as the respondent in the caption in lieu of its former liquidator. Indeed, petitioners identify
BancoFilipinoSavings&MortgageBankasthe"privaterespondent"inthebodyoftheirPetition.
3CARolloat139144.

4CARolloVol.Iat5060.

5Id.at63106.

6Rolloat5253.

7Id.at5051.

8Id.at2932.

9CARolloVol.Iat135.

10Rolloat33.

11Id.at10.

12CARolloVol.Iat107110.
13Id.at111118.

14Id.at119124.

15Id.at166167.

16Id.at1214CARolloVol.IIat1113.

17ByResolutionsofJanuary15,1997andJanuary21,1997.

18Rolloat2227.

19A.G.DevelopmentCorp.v.CourtofAppeals,281SCRA155,159(1997).

20Art.2125.InadditiontotherequisitesstatedinArticle2085,itisindispensable,inorderthatamortgagemaybe
validlyconstituted,thatthedocumentinwhichitappearsberecordedintheRegistryofProperty.Iftheinstrumentis
notrecorded,themortgageisneverthelessbindingbetweentheparties.

Thepersonsinwhosefavorthelawestablishesamortgagehavenootherrightthantodemandtheexecutionand
therecordingofthedocumentinwhichthemortgageisformalized.
21ThepertinentprovisionsofP.D.1529read:

Sec.54.Dealingslessthanownership,howregistered.Nonewcertificateshallbeenteredorissuedpursuantto
anyinstrumentwhichdoesnotdivesttheownershiportitlefromtheownerorfromthetransfereeoftheregistered
owners.AllinterestsinregisteredlandlessthanownershipshallberegisteredbyfilingwiththeRegisterofDeeds
theinstrumentwhichcreatesortransfersorclaimssuchinterestsandbyabriefmemorandumthereofmadebythe
RegisterofDeedsuponthecertificateoftitle,andsignedbyhim.Asimilarmemorandumshallalsobemadeonthe
ownersduplicate.Thecancellationorextinguishmentofsuchinterestsshallberegisteredinthesamemanner.

xxx

Sec.60.Mortgageorleaseofregisteredland.Mortgagesandleasesshallberegisteredinthemannerprovided
inSection54ofthisDecree.Theownerofregisteredlandmaymortgageorleaseitbyexecutingthedeedinaform
sufficientinlaw.Suchdeedofmortgageorleaseandallinstrumentswhichassign,extend,dischargeorotherwise
dealwiththemortgageorleaseshallberegistered,andshalltakeeffectuponthetitleonlyfromtimeofregistration.

xxx

22Art.1312.Incontractscreatingrealrights,thirdpersonswhocomeintopossessionoftheobjectofthecontract
areboundthereby,subjecttotheprovisionsoftheMortgageLawandtheLandRegistrationlaws.

23Art.2126.Themortgagedirectlyandimmediatelysubjectsthepropertyuponwhichitisimposed,whoeverthe
possessormaybe,tothefulfillmentoftheobligationforwhosesecurityitwasconstituted.
2421SCRA694(1967).

25Id.at697698videAsuncionv.Evangelista,316SCRA848,874(1999).

26167SCRA43(1988).

27Id.at4951.

28 Sta. Ignacia Rural Bank v. Court of Appeals, 230 SCRA 513, 519 (1994) citing: Belisario v. Intermediate
AppellateCourt,165SCRA101,106107(1988)PhilippineNationalBankv.CourtofAppeals,94SCRA357,371
(1979).
29Rolloatdorsalportionsofpages51and53.

30191SCRA516(1990).

31Id.at523videVda.deZaballerov.CourtofAppeals,229SCRA810,814(1994)ChaileaseFinanceCorp.v.
Ma,409SCRA250,253254(2003).

32Rolloat3637.

33Id.at38.

34Id.at39.

35Id.at40.

36IVA.Tolentino,CommentariesandJurisprudenceontheCivilCodeofthePhilippines448(1991ed.).
 37Id.at450citing8Manresa651,Great Pacific Life Association v. Court of Appeals,89SCRA543(1979)and
Beaumontv.Prieto,41Phil.670(1916)Bataganv.Cojuangco,78Phil.481(1947)Cronicov.J.M.Tuason&Co.,
Inc.,78SCRA331(1977)WeldonConstructionv.CourtofAppeals,154SCRA618(1987).

38Guardinov.Encarnacion,29SCRA326,331(1969)Rikarv.Ople,155SCRA85,94(1987).

39Art.448.Theownerofthelandonwhichanythinghasbeenbuilt,sownorplantedingoodfaith,shallhavethe
righttoappropriateashisowntheworks,sowingorplanting,afterpaymentoftheindemnityprovidedforinArticles
546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the
properrent.However,thebuilderorplantercannotbeobligedtobuythelandifitsvalueisconsiderablymorethan
thatofthebuildingortrees.Insuchcase,heshallpayreasonablerent,iftheownerofthelanddoesnotchooseto
appropriatethebuildingortreesafterproperindemnity.Thepartiesshallagreeuponthetermsoftheleaseandin
caseofdisagreement,thecourtshallfixthetermsthereof.

4058Phil.439(1933).

41Id.at445videCeav.Villanueva,18Phil.538,541(1911)CastroJr.v.CourtofAppeals,250SCRA661,665
666(1995).
4295SCRA137(1980).

43Id.at142144.

44ChaileaseFinanceCorp.v.Ma,supraat253.

45 Sec. 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty days
afterthepurchaserwasgivenpossession,petitionthatthesalebesetasideandthewritofpossessioncancelled,
specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in
accordancewiththeprovisionshereof,andthecourtshalltakecognizanceofthispetitioninaccordancewiththe
summaryprocedureprovidedforinsectiononehundredandtwelveofActNumberedfourhundredandninetysix
[nowSection108ofP.D.No.1529]andifitfindsthecomplaintofthedebtorjustified,itshalldisposeinhisfavorall
orpartofthebondfurnishedbythepersonwhoobtainedthepossession.Eitherofthepartiesmayappealfromthe
orderofthejudgeinaccordancewithsectionfourteenofActNumberedFourhundredandninetysix[nowSection
33ofP.D.No.1529]buttheorderofpossessionshallcontinueineffectduringthependencyoftheappeal.

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