.R. No.

121943

March 24, 2003

CHINA BANKING CORPORATION, petitioner, vs. SPOUSES OSCAR an !O!ITA OR"INARIO, respondents. SAN"O#A!$GUTIERRE%, J.& For our resolution is the petition for review on certiorari of the Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 40 !" dated #arch $0, % ! and &epte'(er ), % !, respectivel*. % Records show that, on various dates, petitioner China +an,in- Corporation -ranted three ."/ loans in the total su' of 0$1,"!",000.00 to 2ransA'erican &ales and 34position, 5nc. .2ransA'erican/ owned and controlled (* spouses 6esus and 7orelie Garcia. 2he loans were secured (* real estate 'ort-a-es constituted (* 6esus Garcia .with the consent of his wife/ on his fort*-five .4!/ parcels of land covered (* 2C2 Nos. 1$8 to 1$ %, 1)%" to 1)%!, 1)%1, 1)%8, and 1)$% to 1)!1, all of the Re-istr* of Deeds of 9ue:on Cit*. 2he contracts of 'ort-a-e were all re-istered in the sa'e Re-istr*. For failure of 2ransA'erican to pa* its loans, petitioner (an, foreclosed e4tra;udiciall* the three real estate 'ort-a-es. <n Au-ust $1, % 0, the 'ort-a-ed properties were sold at pu(lic auction for 0"8,004,$0!.0% to petitioner (an,, (ein- the hi-hest (idder. <n &epte'(er ", % 0, the Certificate of &ale was re-istered in the Re-istr* of Deeds of 9ue:on Cit*. <n <cto(er 4, % 0, petitioner (an, filed with the Re-ional 2rial Court .R2C/ of 9ue:on Cit*, +ranch 0, an ex parte verified petition for issuance of a writ of possession, doc,eted as 7RC Case No. 9-4!"4. 0/. <n April %0, % %, the trial court issued an order -rantin- the petition and placin- petitioner (an, in possession of the 4! parcels of land, thus= >ACC<RD5NG7?, upon postin- (* the petitioner China +an,in- Corporation of the re@uisite (ond in the a'ount of 01 $,000.00, let a writ of possession (e issued co''andin- the placin- in possession of said petitioner over those parcels of land covered (* 2ransfer Certificate of 2itle Nos. 1$8 , 1$ 0, 1$ %, 1)%", 1)%4, 1)%!, 1)%1, 1)%8, 1)$%, 1)$$, 1)$", 1)$4, 1)$!, 1)$), 1)$1, 1)$8, 1)$ , 1)"0, 1)"%, 1)"$, 1)"", 1)"4, 1)"!, 1)"), 1)"1, 1)"8, 1)" , 1)40, 1)4%, 1)4$, 1)4", 1)44, 1)4!, 1)4), 1)41, 1)48, 1)4 , 1)!0, 1)!%, 1)!$, 1)!", 1)!4, 1)!!, 1)!), and 1)!1, all of the Re-istr* of Deeds of 9ue:on Cit*, to-ether with all the i'prove'ents thereon, e;ectintherefro' 6esus V. Garcia and all persons clai'in- ri-ht under hi'.> <n 6ul* % , % %, petitioner posted the re@uired suret* (ond which was approved (* the R2C. <n Au-ust %), % %, spouses <scar and 7olita <rdinario, herein respondents, filed a 'otion for reconsideration pra*in- that the parcel of land with its i'prove'ent covered (* 2C2 No. 1)"1 (e e4cluded fro' the a(ove order. 2he* alle-ed, a'on- others, that the* are indispensa(le parties in the case, clai'inthat in Nove'(er % 8 , the* purchased the land covered (* 2C2 No. 1)"1 on which was constructed their townhouseA that the petition for a writ of possession does not (ind the' for lac, of noticeA that petitioner (an, should have filed an action for recover* of possession, not an ex-parte petition for a writ of possession since there are parties in actual possession of the lots involvedA that the* filed with the Bousinand 7and Cse Re-ulator* +oard .B7CR+/ a co'plaint for the deliver* of title and da'a-es a-ainst petitioner (an,, 6esus Garcia and 2ransA'ericanA and that the 'ort-a-e foreclosure cannot prevail over their superior ri-ht as le-iti'ate (u*ers of the area covered (* 2C2 No. 1)"1. <n Au-ust $", % %, petitioner (an, filed its opposition to respondentsD 'otion for reconsideration. 5t alle-ed that the trial court, actin- as a land re-istration court with li'ited ;urisdiction, cannot pass upon the 'erits of respondentsD 'otionA that respondents should have filed a separate actionA that the assailed order dated April %0, % % directin- the issuance of a writ of possession had (eco'e finalA and that the proceedin-s, (ein- inrem, (ind herein respondents. <n &epte'(er $%, % $, the trial court issued an order den*in- respondentsD 'otion for reconsideration. !, the <n appeal (* respondents, the Court of Appeals rendered the assailed Decision dated #arch $0, % dispositive portion of which reads= >EB3R3F<R3, the appealed order dated &epte'(er $%, %

$ of the lower court in 7RC Case No.

9-4!"4 is &32 A&5D3, and a new ;ud-'ent is issued (* the Court -rantin- 'ovants-appellantsD 'otion for reconsideration to the effect of e4cludin- fro' the lower courtDs orders dated April %0, % % and &epte'(er $%, % $, 'ovants-appellantsD propert* covered (* 2ransfer Certificate of 2itle No. 1)"1 as the sa'e propert* should not have (een covered (* the writ of possession issued in the said orders of the lower court.> 0etitioner (an, 'oved for a reconsideration (ut it was denied (* the Appellate Court in a Resolution dated &epte'(er ), % !. Bence, the instant recourse, petitioner raisin- the followin- assi-n'ents of error = >First. Respondent Court -ravel* erred in settin- aside the order dated &epte'(er $%, % $ in 7RC Case No. 9-4!"4 which -ranted the petition ex-parte for a writ of possession of the fort*-five parcels of land to include the propert* covered (* 2ransfer Certificate of 2itle No. 1)"1. >&econd. Respondent Court co''itted a -rave error when it failed to consider that the third part* referred to in the case of PNB vs. Adil, %%8 &CRA %%0, is a third part* actuall* holdin- the propert* a '(r)(*+ to the owner. >2hird. Respondent Court co''itted a -rave error when it failed to consider that the April %0, % order is alread* final and e4ecutor*, hence, can no lon-er (e distur(ed.> %

Cnder &ection 1 of Act No. "%"!, the purchaser in a foreclosure sale is entitled to possession of the propert*.$2hus the writ pra*ed for (* petitioner -rantin- it possession has to (e issued a) a ,a--(r o. co/r)(." 2his Court has consistentl* ruled that it is a ,0n0)-(r0a* /-+ of the trial court to -rant such writ of possession.4 No 0)cr(-0on 0) *(.- .or -h( -r0a* co/r-. An* @uestion re-ardin- the cancellation of the writ or in respect of the validit* and re-ularit* of the pu(lic sale should (e deter'ined in a su(se@uent proceedinas outlined in &ection 8 of Act No. "%"!. ! Conse@uentl*, respondentsD 'otion for reconsideration of the trial courtDs order dated April %0, % % -rantin- the writ of possession 'ust (e denied (ein- (ereft of 'erit. &ection 1 of Act No. "%"!, as a'ended,) provides= >&ec. 1. 5n an* sale 'ade under the provisions of this Act, the purchaser 'a* petition the Court of First 5nstance .now R2C/ of the province or place where the propert* or an* part thereof is situated, to -ive hi' possession thereof durin- the rede'ption period, furnishin- (ond in an a'ount e@uivalent to the use of the propert* for a period of twelve 'onths, to inde'nif* the de(tor in case it (e shown that the sale was 'ade without violatin- the 'ort-a-e or without co'pl*in- with the re@uire'ents of this Act. &uch petition shall (e 'ade under oath and filed in the for' of an e4 parte 'otion in the re-istration or cadastral proceedin-s if the propert* is re-istered, or in special proceedin-s in the case of propert* re-istered under the #ort-a-e 7aw 444, and in each case the cler, of the court shall, upon the filin- of such petition, collect the fees specified 444, and the court shall upon approval of the (ond, order that a writ of possession issue, addressed to the sheriff of the province in which the propert* is situated, who shall e4ecute said order i''ediatel*.> .underscorin- supplied/. 2he a(ove provision is not without e4ception. Cnder &ection "", Rule " of the % 1 Rules of Civil 0rocedure, as a'ended, the possession of the foreclosed propert* 'a* (e awarded to the purchaser or hi-hest (idder >unless a third part* is actuall* holdin- the propert* adversel* to the ;ud-'ent de(tor.>1 Assu'in- arguendo that respondent spouses are adverse third parties, as the* so averred, &ection %) of the sa'e Rule reserves to the' the re'edies of .%/ terceria to deter'ine whether the sheriff has ri-htl* or wron-l* ta,en hold of the propert* not (elon-in- to the ;ud-'ent de(tor or o(li-or and .$/ an independent >separate action> to vindicate their clai' of ownership andFor possession over the foreclosed propert*.8 &ection %) of Rule " provides= >&ec. %). Proceedings where property claimed by third person . G 5f propert* levied on is clai'ed (* an* person other than the ;ud-'ent o(li-or or his a-ent, and such person makes an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serves the same upon the officer making the levy, and copy thereof upon the udgment obligee, the officer shall not be bound to keep the property, unless such udgment obligee, on demand of the officer, files a bond approved by the court to indemnify the third-party claimant in a sum not less than the value of the property levied on. 5n case of disa-ree'ent as to such value, the sa'e shall (e

deter'ined (* the court issuin- the writ of e4ecution. No clai' for da'a-es for the ta,in- or ,eepin- of the propert* 'a* (e enforced a-ainst the (ond unless the action therefor is filed within one hundred twent* .%$0/ da*s fro' the date of the filin- of the (ond. >2he officer shall not (e lia(le for da'a-es for the ta,in- or ,eepin- of the propert*, to an* third part* clai'ant if such (ond is filed. Nothing herein contained shall prevent such claimant or any third person from vindicating his claim to the property in a separate action, or prevent the udgment obligee from claiming damages in the same or a separate action against a third-party claimant who filed a frivolous or plainly spurious claim. 444.> Cnder the a(ove Rule, a third-part* clai'ant or a stran-er to the foreclosure suit, li,e respondents herein, can opt to file a re'ed* ,nown as terceria a-ainst the sheriff or officer effectin- the writ (* servin- on hi' an affidavit of his title and a cop* thereof upon the ;ud-'ent creditor. +* the terceria, the officer shall not (e (ound to ,eep the propert* and could (e answera(le for da'a-es. A third-part* clai'ant 'a* also resort to an independent >separate action,> the o(;ect of which is the recover* of ownership or possession of the propert* sei:ed (* the sheriff, as well as da'a-es arisin- fro' wron-ful sei:ure and detention of the propert* despite the third-part* clai'. 5f a >separate action> is the recourse, the third-part* clai'ant 'ust institute in a foru' of co'petent ;urisdiction an action, distinct and separate fro' the action in which the ;ud-'ent is (ein- enforced, even (efore or without need of filin- a clai' in the court that issued the writ. +oth re'edies are cu'ulative and 'a* (e availed of independentl* of or separatel* fro' the other. Avail'ent of the terceria is not a condition sine !ua nonto the institution of a >separate action.> 2hus, respondentsD resort to a 'otion for reconsideration is o(viousl* a procedural 'isstep. Ee thus hold that the Court of Appeals co''itted palpa(le error when it -ranted respondentDs 'otion for reconsideration and set aside the orders dated April %0, % % and &epte'(er $%, % $ of the R2C in 7RC Case No. 9-4!"4 . 0/, thus e4cludin- the land covered (* 2C2 No. 1)"1 fro' the covera-e of the writ of possession issued in favor of petitioner (an,. 1HERE2ORE, the instant petition is GRANTE". 2he appealed Decision and Resolution of the Court of Appeals dated #arch $0, % ! and &epte'(er ), % ! in CA-G.R. CV No. 40 !" are RE#ERSE" and SET ASI"E. 2he orders of the R2C, +ranch 0, 9ue:on Cit*, in 7RC Case No. 94!"4 . 0/ directin- the issuance of a writ of possession in favor of petitioner (an, are A22IRME".