Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 71832 September 24, 1991
LEON
BERNARDEZ
and
vs.
ARSENIO REYES, respondent.

ANICETA

BERNARDEZ,

petitioners,

Wenceslao S. Fajardo for petitioners.

Perfecto R. Bautista for private respondent.

PARAS, J.:p
This is a petition for review on certiorari seeking the annulment of the June 26, 1985
decision 1 of the then Intermediate Appellate Court in AC-G.R. CV No. 67344 entitled
"Arsenio Reyes v. Leon Bernardez and Aniceta Bernardez" which affirmed the order 2 of
the Court of First Instance of Rizal dated June 23, 1978 declaring that no valid tender of
payment was made by petitioners who had lost their right to redeem the property and
ordering the respondent to pay the petitioners the sum of P6,140.00.
The undisputed facts of the case are as follows:
Petitioner Leon Bernardez mortgaged a parcel of land to the Government Service
Insurance System (GSIS for short) to secure a loan. The said land was, however,
subsequently foreclosed upon. On April 17, 1962, it was sold at public auction to herein
respondent Arsenio Reyes. Inscribed on the certificate of title was the date of the sale
and the provision that the period of redemption expires one year after the date of the
auction sale or on April 17, 1963. Thereafter, GSIS as attorney-in-fact of the Bernardez
spouses, executed a Deed of Sale over the land in favor of Reyes on November 8,
1962. On April 18, 1963, both the certificate of foreclosure sale issued by the Provincial
Sheriff and the said Deed of Sale were registered at the Office of the Register of Deeds
of Rizal. On even date, a new Transfer Certificate of Title was likewise issued in the
name of Arsenio Reyes. On October 26, 1963, believing that the period of redemption
had already expired, Reyes, filed an action in the Court of First Instance of Rizal praying
that he be declared the owner of the land and asking the court to order the Bernardez
spouses to pay the attorney's fees as well as the back rentals from April 17, 1962 to

April 17, 1963. With leave of court, GSIS intervened as third-party defendant (Rollo, p.
33). On August 23, 1967, after a trial on the merits, the court ruled as follows:
WHEREFORE, premises considered, judgment is hereby rendered in
favor of the defendants and against the plaintiff and the third-party
defendant Government Service Insurance System giving defendant Leon
Bernardez 173 days from and after receipt of a copy of this decision within
which to redeem the property from the plaintiff by paying P1,315.00, the
balance of the redemption price to be furnished by third-party defendant
Government Service Insurance System. However, defendant Leon
Bernardez shall shoulder the legal interest of the redemption price from
the date of registration of the Deed of Sale executed by the Provincial
Sheriff, plus all the other expenses incidental to said redemption. The
complaint is dismissed in so far as Ligaya Ramos and Dominador Vicente
are concerned. The plaintiff is, likewise, ordered to pay the defendants
Leon Bernardez and Aniceta Bernardez the sum of P5,000.00
representing moral damages due to anguish, anxiety besmirched
reputation caused the defendants by the filing of this case; to pay the
further sum of P1,000.00 as attorney's fees; and to pay the costs.
SO ORDERED.
(Rollo, pp. 27-28).
Reyes appealed to the Court of Appeals which, in turn, rendered its decision dated June
20, 1977, in this wise:
WHEREFORE, the decision appealed from is affirmed in all respects with
the modification that the third-party plaintiffs-appellees (Bernardez) should
pay to appellant Arsenic Reyes as redemption price the amount of
P6,510.00 with interest thereon at 1 per cent a month from the date of the
auction sale on April 17, 1962 up to the time of redemption which the thirdparty plaintiffs-appellees should exercise within thirty (30) days from the
time the present decision has become final and executory. The
Government Service Insurance System must refund the amount of
P704.99 to Bernardez which is the excess of the auction sale and the
further amount of P851.46 which was the amount deducted from the
salary of Bernardez after the foreclosure, with costs against the appellant,
Arsenio Reyes.
SO ORDERED.
(Record on Appeal, pp. 27-28; Rollo, p. 33).

On January 31, 1978, the Bernardez spouses offered the sum of P18,000.00 to Reyes
apparently to redeem the property, but the latter refused (Petition, Rollo p. 11). Such
prompted the spouses to consign the sum to the same lower court which ruled in their
favor and at the same time, they filed a manifestation and a motion for modification of
judgment praying that the court fix the redemption price including interest in the amount
of P18,944.10 and to allow deduction therefrom of the sum of P6,114.00 representing
the award of damages due them by Reyes and finally to order Reyes to accept the
balance of P12,831.00 (Rollo, pp. 55, 13). Reyes accordingly filed an opposition and a
motion for clarification thereto. The court a quo on June 23, 1978, laid down the
following verdict, presently in dispute:
WHEREFORE, in view of the foregoing, the court declares that there was
no valid tender of payment on the part of the defendants who had lost their
right to redeem the property upon the failure to exercise such right within
the period provided in the Decision of the Court of Appeals. The plaintiff,
on the other hand, is liable to the defendants in the amount of P6,140.00
as decided by this Court and affirmed by the Court of Appeals.
SO ORDERED.
(Record on Appeal, pp. 49-50; Rollo, p. 33).
The Bernardez spouses moved to reconsider but the motion was denied by the court in
its order dated November 3, 1978 (Rollo, p. 33). The case was then elevated to the
Intermediate Appellate Court (now renamed Court of Appeals) which simply affirmed the
decision of the lower court in all respects. Hence, this petition.
The issue in this case is whether or not the right of redemption was exercised in time.
The petition is devoid of merit.
Well-settled is the rule that where a mortgage is foreclosed extrajudicially, Act 3135
grants to the mortgagor the right of redemption within one (1) year from the registration
of the sheriffs certificate of foreclosure sale. (Eastman Chemical Industries, Inc. v. Court
of Appeals, G.R. No. 76733, June 30, 1989, 174 SCRA 619; Gregorio Limpin v.
Intermediate Appellate Court, et al., G.R. No. 70987, September 29, 1988, 166 SCRA
87; Philippine National Bank v. Court of Appeals, G.R. Nos. L-30831 & L-31176,
November 21, 1979, 94 SCRA 357; Matilde Gorospe v. Dolores Santos, G.R. No. L30079, January 30, 1976, 69 SCRA 191; Ernesto Salazar v. Flor de Lis Meneses, G.R.
No. L-15378 July 31, 1963, 8 SCRA 495; Leon Santos v. Rehabilitation Finance
Corporation, et al., G.R. No. L-9796, July 31, 1957, 101 Phil. 980). Considering then
that in the case at bar, the certificate of foreclosure sale issued by the Sheriff was
registered on April 18, 1963, the right of redemption may be exercised only until April
18, 1964. The Bernardez spouses have clearly lost their right to redeem the property

beyond the said date. Their much belated attempt to do so, notwithstanding their offer of
considerable interest added to the redemption price, can no longer revive such right
rendered inutile more than fourteen years before. The statutory period of redemption
counted from the registration of the Certificate of Sale remains fixed at one year from
the date of registration of the certificate of foreclosure sale (Eastman Chemical
Industries, Inc. v. Court of Appeals, supra). Even the thirty-day 'grace period' to redeem
the property granted by the Court of Appeals from the time its decision has become final
and executory has no basis in law. In fact, this Court has ruled that if no redemption is
made within the said period, the purchaser has the absolute right to a writ of possession
which is the final process to carry out or consummate the extrajudicial foreclosure.
Henceforth the debtors lose their right over the property (Malonzo, et al. v. Mariano,
G.R. No. 53998, May 31, 1989, 173 SCRA 667).
Turning now to respondent Reyes claim for back rentals covering the period of
redemption, Section 34, Rule 39 of the Rules of Court explicitly provides that a
purchaser, from the time of the sale until a redemption is made, is entitled to receive the
rents of the property if such property is in the possession of a tenant. (Quintin v. Espe,
G.R. No. L-16777 April 20, 1961, 1 SCRA 1004) (Emphasis supplied). The Bernardez
spouses, being judgment debtors and not tenants, may then possess the property
without having to pay rents for the use thereof (Velasco v. Rosenberg's Inc., 32 Phil. 72
[1951]). Reyes, therefore, cannot claim back rentals from the spouses during the period
of redemption.
PREMISES CONSIDERED, the decision appealed from is AFFIRMED with the
modification that there was no valid tender of payment as the period of redemption had
lapsed on April 18, 1964 as provided by law, and not because of the 30-day period
given by the respondent Court of Appeals.
SO ORDERED
G.R. No. 134068

December 25, 2001

UNION
BANK
OF
THE
PHILIPPINES,
petitioner,
vs.
COURT OF APPEALS, APOLONIA DE JESUS GREGORIO, LUCIANA DE JESUS
GREGORIO, GONZALO VINCOY, married to TRINIDAD GREGORIO VINCOY,
respondents.
RESOLUTION
DE LEON, JR., J.:
This is a motion for reconsideration of the resolution of this Court dated July 12, 1999
dismissing the petition for review on certiorari filed by petitioner Union Bank of the

Philippines which assailed the decision of the Court of Appeals (a) upholding the validity
of the real estate mortgage executed by respondents Gonzalo and Trinidad Vincoy in
favor of petitioner as security for a loan in the principal amount of Two Million Pesos
(P2,000,000.00), and (b) fixing the redemption price of the property mortgaged at Three
Million Two Hundred Ninety Thousand Pesos (P3,290,000.00) representing the
purchase price of the said property at the foreclosure sale plus one percent (1%)
monthly interest from April 19, 1991, the date of the foreclosure sale, until its redemption
pursuant to Section 30, Rule 39 of the Rules of Court.
The following are the factual antecedents.
On March 2, 1990, respondents-spouses Gonzalo and Trinidad Vincoy mortgaged their
residence in favor of petitioner to secure the payment of a loan to Delco Industries
(Phils.), Incorporated1 in the amount of Two Million Pesos (P2,000,000.00). For failure of
the respondents to pay the loan at its date of maturity, petitioner extrajudicially
foreclosured the mortgage and scheduled the foreclosure sale on April 10, 1991. The
petitioner submitted the highest bid of Three Million Two Hundred Ninety Thousand
Pesos (P3,290,000.00) at the foreclosure sale. Accordingly, a certificate of sale was
issued to petitioner and duly annotated at the back of the Transfer Certificate of Title
covering the property on May 8, 1991.2
Prior to the expiration of the redemption period on May 8, 1992, the respondents filed a
complaint for annulment of mortgage with the lower court. In their complaint,
respondents alleged that the subject property mortgaged to petitioner had in fact been
constituted as a family home as early as October 27, 1989. Among the beneficiaries of
the said family home are the sisters of respondent Trinidad Vincoy, namely Apolonia and
Luciana De Jesus Gregorio whose consent to the mortgage was not obtained. 3
Respondents thus assailed the validity of the mortgage on the ground that Article 158 of
the Family Code4 prohibits the execution, forced sale, attachment or any other
encumbrance of a family home without the written consent of majority of the
beneficiaries thereof of legal age. 5 On the hand, petitioner maintained that the
mortgaged property of respondents could not be legally constituted as a family home
because its actual value exceeded Three Hundred Thousand Pesos (P300,000.00), the
maximum value for a family home in urban areas as stipulated in Article 157 of the
Family Code.6
The lower court rendered judgment declaring the constitution of the family home void
and the mortgage executed in favor of the petitioner valid. It held, among others, that
Article 158 of the Family Code was not applicable to respondents' family home as the
value of the latter at the time of its alleged constitution exceeded Three Hundred
Thousand Pesos (P300,000.00).7 It also ordered respondent Gonzalo Vincoy and/or
Delco Industries (Phils.), Inc. to pay petitioner his and/or its outstanding obligation as of
February 15, 1993 in the amount of Four Million Eight Hundred Sixteen Thousand One

Hundred Ninety-Four Pesos and Forty-Four Centavos (P4,816,194.44) including such

sums that may accrue by way of interests and penalties.8
Aggrieved, respondents appealed to the Court of Appeals contending that the lower
court erred in finding that their family home was not duly constituted, and that the
mortgage in favor of petitioner is valid. Respondents also claimed that the correct
amount sufficient for the redemption of their property as of February 15, 1993 is Two
Million Seven Hundred Seventy-Three Thousand Seven Hundred Twelve Pesos and
Eighty-Seven Centavos (P2,773,712.87)9 and not Four Million Eight Hundred Sixteen
Thousand One Hundred Ninety-Four Pesos and forty-four Centavos (P4,816,194.44) as
found by the lower court.
In a decision promulgated on June 4, 1997, the Court of Appeals sustained the finding
of the lower court that the alleged family home of the respondents did not fall within the
purview of Article 157 of the Family Code as its value at the time of its constitution was
more than the maximum value of Three Hundred Thousand Pesos (P300,000). Hence,
the Court of Appeals upheld the validity of the mortgage executed over the said property
in favor of the petitioner.10 However, it found that the amount sufficient for the
redemption of the foreclosed property is Three Million Two Hundred Ninety Thousand
Pesos (P3,290,000.00) equivalent to the purchase price at the foreclosure sale plus one
percent (1%) monthly interest from April 19, 1991 up to the date of redemption 11
pursuant to Section 30, Rule 39 of the Rules of Court. 12
Dissatisfied with the ruling of the Court of Appeals, the petitioner filed a petition for
review on certiorari with this Court submitting the following issues for resolution:
1. The Court of Appeals resolves an issue of redemption which was not even
directly raised by the parties and contrary to the evidence on record.
2. Assuming without admitting that respondents are entitled to redemption, the
price set by the Court of Appeals is not based on law.13
Petitioner contends, first of all, that in allowing the respondents to redeem the subject
foreclosed property, the Court of Appeals completely ignored the fact that neither
respondents' complaint before the lower court nor their brief filed before the Court of
Appeals prayed for the redemption of the said property. On the contrary, respondents
had consistently insisted on the nullity of the mortgage. Thus, to allow them to redeem
the property would contradict the very theory of their case. 14
Petitioner also contends that the respondents had already lost their right to redeem the
foreclosured property when they failed to exercise their right of redemption by paying
the redemption price within the period provided for by law. 15 In the event, however, that
the Court upholds the right of the respondents to redeem the said property, the
petitioner claims that it is not Section 30, Rule 39 of the Rules of Court that applies in

determining the amount sufficient for redemption but Section 78 of the General Banking
Act as amended by Presidential Decree No. 1828 16 which provides:
"xxx. In the event of foreclosure, whether judicially or extrajudicially, of any
mortgage on real estate which is security for any loan granted before the
passage of this Act or under the provisions of this Act, the mortgagor or debtor
whose real property has been sold at public auction, judicially or extrajudicially,
for the full or partial payment of an obligation to any bank, banking or credit
institution, within the purview of this Act shall have the right, within one year after
the sale of the real estate as a result of the foreclosure of the respective
mortgage, to redeem the property by paying the amount fixed by the court in the
order of execution, or the amount due under the mortgage deed, as the case
may be, with interest thereon at the rate specified in the mortgage, and all the
costs, and judicial and other expenses incurred by the bank or institution
concerned by reason of the execution and sale and as a result of the custody of
the said property less the income received from the property." [Italics supplied].
This Court dismissed the petition in a Resolution promulgated on July 12, 1999 on the
ground that the Court of Appeals did not commit any reversible error and that the
petition raises mere questions of fact already amply passed upon by the appellate
court.17 Hence, the instant motion for reconsideration.
We are persuaded to reconsider.
First of all, it is important to note that the lower court decided this case on the basis only
of the pleadings submitted by the parties. No trial was conducted, thus, no evidence
other than that submitted with the pleadings could be considered.
A careful scrutiny of the pleadings filed by the respondents before the lower court
reveals that at no time did the respondents pray that they be allowed to redeem the
subject foreclosed property.18 On the other hand, respondents never wavered from the
belief that the mortgage over the said property is, in the first place, void for having been
executed over a duly constituted family home without the consent of the beneficiaries
thereof. After upholding the validity of the mortgage, the lower court ordered respondent
Gonzalo Vincoy and/or Delco Industries, Inc. to pay petitioner the amount of Four Million
Eight Hundred Sixteen Thousand One Hundred Ninety-Four Pesos and Forty-Four
Centavos (P4,816,194.44) plus interest and penalties representing Vincoy's and/or
Delco's outstanding obligation to petitioner as of February 15, 1993. 19 There is no
mention whatsoever of respondents' right to redeem the property.
Respondents raised the issue of redemption for the first time only on appeal in
contesting the amount ordered by the lower court to be paid by respondents to the
petitioner. Thus, the actuation of the Court of Appeals in allowing the respondents to
redeem the subject foreclosured property is not legally permissible. In petitioners for

review or appeal under Rule 45 of the Rules of Court, the appellate tribunal is limited to
the determination for whether the lower court committed reversible error.20
It is settled jurisprudence that an issue which was neither averred in the complaint nor
raised during the trial in the court below cannot be raised for the first time on appeal as
it would be offensive to the basic rules of fair play, justice and due process. 21 On this
ground alone, the Court of Appeals should have completely ignored the issue of
respondents' right to redeem the subject foreclosed property. In addition, a reason just
as glaringly obvious exists for declaring the respondents' right of redemption already
non-existent one year after May 8, 1991, the date of the registration of the sale at public
auction.
Pursuant to Section 78 of the General banking Act, a mortgagor whose real property
has been sold at a public auction, judicially or extrajudicially, for the full or partial
payment of an obligation to any bank, shall have the right, within one year after the sale
of the real estate to redeem the property. The one-year period is actually to be reckoned
from the date of the registration of the sale. 22 Clearly therefore, respondents had only
until May 8, 1992 to redeem the subject foreclosed property. Their failure to exercise
that right of redemption by paying the redemption price within the period prescribed by
law effectively divested them of said right. It bears reiterating that during the one year
redemption period, respondents never attempted to redeem the subject property but
instead persisted in their theory that the mortgage is null and void. To allow them now to
redeem the same property would, as petitioner aptly puts it, e letting them have their
cake and eat it too.
It cannot also be argued that the action for annulment of the mortgage filed by the
respondents tolled the running of the one-year period of redemption. In the case of
Sumerariz v. Development Bank of the Philippines, 23 petitioners therein contended that
the one-year period to redeem the property foreclosed by respondent was suspended
by the institution of an action to annul the foreclosure sale filed three (3) days before the
expiration of the period. To this we ruled that:
"We have not found, however, any statute or decision in support of this pretense.
Moreover, up to now plaintiffs have not exercised the right of redemption. Indeed,
although they have intimated their wish to redeem the property in question, they
have not deposited the amount necessary therefor. It may not be amiss to note
that, unlike Section 30 of Rule 39 of the Rules of Court, which permits the
extension of the period of redemption of mortgaged properties, Section 3 of
Commonwealth Act No. 459, in relation to Section 9 of Republic Act No. 85,
which governs the redemption of property mortgaged to the Bank does no
contain a similar provision. Again this question has been definitely settled by the
previous case declaring that plaintiff's right of redemption has already been
extinguished in view of their failure to exercise it within the statutory period." 24

Also, in the more recent case of Vaca v. Court of Appeals,25 we declared that the
pendency of an action questioning the validity of a mortgage cannot bar the issuance of
the writ of possession after title to the property has been consolidated in the
mortgagee.26 The implication is clear: the period of redemption is not interrupted by the
filing of an action assailing the validity of the mortgage, so that at the expiration thereof,
the mortgagee who acquires the property at the foreclosure sale can proceed to have
the title consolidated in his name and a writ of possession issued in his favor.
To rule otherwise, and allow the institution of an action questioning the validity of a
mortgage to suspend the running of the one year period of redemption would constitute
a dangerous precedent. A likely offshoot of such a ruling is the institution of frivolous
suits for annulment of mortgage intended merely to give the mortgagor more time to
redeem the mortgaged property.
As a final word, although the issue pertaining to the correct amount for the redemption
of the subject-foreclosed property has been rendered moot by the foregoing, a point of
clarification should perhaps be made as to the applicable legal provision. Petitioner's
contention that Section 78 of the General Banking Act governs the determination of the
redemption price of the subject property is meritorious. In Ponce de Leon v.
Rehabilitation Finance Corporation, 27 this Court had occasion to rule that Section 78 of
the General Banking Act had the effect of amending Section 6 of Act No. 3135 28 insofar
as the redemption price is concerned when the mortgagee is a bank, as in this case, or
a banking or credit institution. 29 The apparent conflict between the provisions of Act No.
3135 and the General Banking Act was, therefore, resolved in favor of the latter, being a
special and subsequent legislation. This pronouncement was reiterated in the case of
Sy v. Court of Appeals30 where we held that the amount at which the foreclosed property
is redeemable is the amount due under the mortgage deed, or the outstanding
obligation of the mortgagor plus interest and expenses in accordance with Section 78 of
the General Banking Act.31 It was therefore manifest error on the part of the Court of
Appeals to apply in the case at bar the provisions of Section 30 Rule 39 of the Rules of
Court in fixing the redemption price of the subject foreclosed property.
WHEREFORE, the motion for reconsideration is hereby GRANTED. This Court's
Resolution dated July 12, 1999 is MODIFIED insofar as respondents are found to have
lost their right to redeem the subject foreclosed property.
SO ORDERED.1wphi1.nt
Bellosillo, Mendoza, Quisumbing, JJ., concur.
FIRST DIVISION
[G.R. No. 80791 : December 4, 1990.]
192 SCRA 34

PEOPLE'S FINANCING CORP. and ENRIQUE V. ARCENAS, Petitioners, vs.

COURT OF APPEALS (Sixteenth Division), GAUDIOSO MANLIGUEZ and
PURIFICACION MANLIGUEZ, Respondents.
DECISION
CRUZ, J.:
On September 13, 1976, Kalmar Construction and Mining Exploration Co. purchased
several pieces of heavy equipment from J.P. Enterprises for the total amount of
P787,000.00. The buyer made a 30% payment in the sum of P237,000.00, leaving a
balance of P550,000.00, to be paid in 18 monthly installments of P41,217.00 beginning
October 1976. To secure payment of this indebtedness, a promissory note and a chattel
mortgage were signed by Nicolas Kalubiran, as general manager of Kalmar, Gaudioso
Manliguez as operation manager, Adelaida Kalubiran as treasurer, Andrea Bihag as
mining superintendent, and Alan Manliguez as comptroller. These instruments provided
for a 14% interest per annum on each unpaid monthly installment, with a rebate for any
installment paid on or before due date.
On the same date, the promissory note and the chattel mortgage were assigned by the
seller to People's Financing Corporation, the herein petitioner, of which Enrique V.
Arcenas is the manager.
On February 15, 1978, Gaudioso Manliguez and his wife, Purificacion Manliguez,
executed a real estate mortgage on one-third of a parcel of land owned by them and
located at Mandaue City "as additional security for the payment of an existing obligation
in the sum of FIVE HUNDRED SIXTY FOUR THOUSAND ONE HUNDRED SEVENTY
PESOS AND 70/100 (P564,170.70) re Promissory Note dated September 13, 1976."
On February 26, 1979, the petitioners caused the extrajudicial foreclosure of this
mortgage for non-payment of the promissory note. The subject property was sold to
PFC as the highest bidder and the sale was registered in the Office of the Register of
Deeds of Mandaue City on March 5, 1979.:-cralaw
On February 6, 1980, the private respondents filed a complaint in the Regional Trial
Court of Cebu for annulment of the real estate mortgage and the foreclosure sale and
for damages. Judge Valeriano P. Tomol, Jr. issued a restraining order enjoining the
issuance of a final certificate of sale and the consolidation of ownership of the
mortgaged property in the name of PFC. On April 12, 1984, after trial, the complaint was
dismissed; on the counterclaim, Enrique V. Arcenas was awarded P20,000.00 moral
damages, P10,000.00 attorney's fees and P1,000.00 litigation expenses.
On November 9, 1987, the decision was modified by the Court of Appeals, 1 which
disposed as follows:
WHEREFORE, the appealed decision is hereby modified as follows:

1) The grant of moral damages, counsel fees and litigation expenses are
hereby set aside;
2) Defendants-appellees Enrique V. Arcenas and People's Financing
Corporation are hereby ordered jointly and severally to pay or return to
plaintiffs the sum of P191,906.00 with legal interest thereon from the date
of this judgment until fully paid, and subject to the ruling granting plaintiffsappellants the right to redeem the property with the right to offset the
amount of P191,906.00 including interest out of the redemption price and
costs, considering Sections 30 and 34, Rule 39, Rules of Court.
In all other respects, the judgment appealed from is hereby Affirmed. No costs.
SO ORDERED.
The petitioners are now before this Court, contending that the respondent court erred in:
(a) requiring them to return to the private respondents the sum of P191,906.00 as
excessive finance charges not duly disclosed to them; (b) granting the private
respondents the right to redeem the mortgaged property; and (c) setting aside the
award of moral damages, and attorney's fees.
The decision shall be modified.
On the first issue, we find that the private respondents have been sufficiently informed
of the additional charges of P191,906.00, because the real estate mortgage specifically
referred to the promissory note of September 13, 1976. This was the subject of the
disclosure statement issued on the same date in which the amount was indicated as the
"total finance charges." Gaudioso Manliguez could not have not known of such charges
as he was one of the signatories to the promissory note as operation manager of
Kalmar. We are not convinced that his wife was unaware of these charges as the
natural presumption is that her husband would have told her about them, considering
the amount of the indebtedness they were securing and the value of the property they
were mortgaging. It is difficult to believe that they were all along ignorant of the said
charges and that they would never have executed the mortgage had they been properly
informed.
The Court notes that private respondent Gaudioso Manliguez is an experienced
businessman and presumably knowledgeable in business matters, including the
contracting of substantial loans through financing arrangements. He was one of the key
officials of Kalmar who signed the promissory note for more than half a million pesos.
He would not have signed it with his eyes closed or without any idea of where the
payment was coming from. It is more reasonable to suppose that he was fully cognizant
of all the details of the transaction, including the financing charges that had to be paid
as a condition for the extension of the loan.
It might have been different if the borrowers were, say, an ordinary couple eager to buy
their first car and beguiled into accepting onerous terms for the financing of the
installment payments they have to make. Such borrowers are usually not conversant
with the intricacies of financing arrangements and are likely to enter into such
transactions without fully realizing the charges they will have to pay in addition to the
actual purchase price of whatever it is they are buying. In such cases, the Court would

be disposed to be stricter in the application of the Truth in Lending Act and insist on
proof that the borrowers were fully informed of what they were getting into. But in the
case at bar, considering the experience and familiarity of Manliguez with loan and
financing transactions, we must hold, in light of the evidence before us, that he was duly
informed of the financing charges and fully understood their implications and effects.: rd
The contention that the charges are excessive and unlawful are also not acceptable.
Section 5 of R.A. 5980 provides:
Section 5. Limitation on purchase discount, fees, service and other charges. In
the case of assignments of credit or the buying of installment papers, accounts
receivables and other evidence of indebtedness by financing companies, the
purchase discount, exclusive of interest and other charges, shall be limited to
fourteen (14%) per cent of the value of the credit assigned or the value of the
installment papers, accounts receivable and other evidence of indebtedness by
financing companies purchased based on a period of twelve (12) months or less,
and to one and one sixth (1-1/6%) per cent for each additional month or fraction
thereof in excess of twelve months, regardless of the terms and conditions of the
assignment or purchase.
As correctly observed in the petitioner's memorandum:
Private respondents' indebtedness covers an 18-month installment period.
Accordingly, the legal purchase discount is 21%, broken down as follows:
For the 1st 12 months 14%;
Excess 6 months 7%
Please note that this is exclusive of interest and other charges. Under CB
Circular 494, non-banking institutions are allowed to charge 14% as
interest/finance charges on loans.
Therefore, the total Finance Charges applicable under Rep. Act No. 5980 and CB
Circular No. 494 taken together is thirty five (35%) percent (21% and 14%) even
higher than the 34.89% computed by J.P. Enterprises, seller of the accounts
receivables to People's Financing Corporation.
Moreover, in Central Bank Circular No. 905, Series of 1982, it is clearly provided that:
SECTION 1. The rate of interest, including commissions, premiums, fees and
other charges, on a loan or forbearance of any money, goods, or credits,
regardless of maturity and whether secured or unsecured, that may be charged
or collected by any person, whether natural or judicial, shall not be subject to any
ceiling prescribed under or pursuant to the Usury Law, as amended.
Thus, applying that provision in Liam Law v. Olympic Sawmill, 2 this Court said:
Moreover, for sometime now, usury has been legally non-existent. Interest can now be
charged as lender and borrower may agree upon. The Rules of Court in regards to
allegations of usury, procedural in nature, should be considered repealed with
retroactive effect.

Statutes regulating the procedure of the courts will be construed as applicable to actions
pending and undetermined at the time of their passage. Procedural laws are
retrospective in that sense and to that extent.
On the second issue, the respondent court said as follows:
The one-year period of redemption provided for in Sec. 6 of Act No. 3135, as
amended by Act No. 4118, has never commenced. The issuance of the Final
Deed of Sale set for by the Sheriff on February 26, 1980 was stopped by the trial
court on February 11, 1980. The mortgaged lot is covered by Transfer Certificate
of Title No. T-13564. Appellants claim one-third portion thereof is now with a
market value of P3,000,000.00. On registered lands, the one-year period of
redemption starts not from the date of the sale but from the date when the
certificate of sale issued by the sheriff is registered in the office of the register of
deeds (Salazar vs. Maneses, 8 SCRA 495; Reyes vs. Fajardo, CA-G.R. No.
39588-R, Jan. 15, 1973, 69 OG No. 48, Nov. 26, 1973, 18 C.A.R. 2s p. 79).: rd
The record shows, however, that the certificate of sale was duly registered by the
petitioners in the Office of the Register of Deeds of Mandaue City on March 5, 1979.
The one-year redemption period began to run from that date and expired on March 5,
1980, without any redemption having been effected by the private respondents. The
consequence is that ownership was legally consolidated in PFC, which had a right to
the issuance of a new certificate of title in its name.
It is not correct to say that the restraining order issued on February 11, 1980, by the trial
court (which ultimately dismissed the complaint four years later) had the effect of
suspending the running of the redemption period. As we held through Chief Justice
Concepcion in Sumerariz v. Development Bank of the Philippines, 3 "there is no statute
or decision which supports plaintiffs contention that the period of one year to redeem
land sold at the sheriff's sale was suspended by the institution of an action to annul the
foreclosure sale."
On the third issue, we find for the private respondents. It has not been sufficiently
established that the complaint they filed was intended merely to harass and place
petitioner Arcenas in disrepute as they apparently were pursuing a cause of action they
sincerely believed was meritorious. The fact that they have failed does not necessarily
mean that they were acting in bad faith. The mere filing of a complaint against a person,
while it may cause him some anxiety, is not per se evidence of ill will on which a claim
for damages may be based. A contrary role would discourage peaceful recourse to the
courts of justice and induce resort to methods less than legal, and perhaps even
violent.:-cralaw
WHEREFORE, the appealed decision is MODIFIED. The rulings of the respondent
court requiring the petitioner to pay the private respondents the sum of P191,906.00
and allowing the latter to redeem the mortgaged property are SET ASIDE. The rest of
the decision is AFFIRMED.
SO ORDERED.
Narvasa, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

G.R. No. 80739 August 20, 1992

GRACIA
R.
JOVEN,
petitioner,
vs.
COURT OF APPEALS, HON. MANUEL A. PATRON, in his capacity as Presiding
Judge of the RTC, Branch 59, Lucena City, Roberto Paguia & Fernando Lasala,
respondents.
De Castro & Cagampang Law Offices for petitioner.
Castillo, Laman, Tan & Pantaleon for private respondents.

CRUZ, J.:
The petitioner was the registered owner of three parcels of land which she mortgaged in
favor of the Development Bank of the Philippines. Upon the extrajudicial foreclosure of
the mortgage due to her failure to pay her loan, the properties were sold at public
auction to DBP as the biggest bidder. A certificate of sale was issued and annotated on
the certificate of title on November 17, 1982.
After the expiration of the redemption period, no redemption having been made by the
petitioner, DBP sold the subject properties to Roberto Paguia, one of the herein private
respondents, through a deed of sale executed on December 17, 1985. On January 30,
1986, Paguia took possession of the properties through his representative, Fernando
Lasala, the other private respondent.
Earlier, the petitioner had filed on December 3, 1985, an action before the Regional Trial
Court of Lucena City (raffled later to Branch 55) for the annulment of the mortgage and
its foreclosure. Named as defendants were DBP and the private respondents. Later,
when her application for preliminary injunction and restraining order was denied, she
lodged with the Municipal Circuit Trial Court of Lucban-Sampaloc complaint against the
private respondents for forcible entry with a prayer for writ of mandatory injunction. This
was docketed as Civil Case No. 155.
In a decision dated May 14, 1986, the case was dismissed for lack of jurisdiction. But on
May 29, 1986, the petitioner filed a motion for reconsideration, which was granted. In a
resolution dated July 11, 1986, 1 the private respondents were ordered to: 1)
immediately restore and deliver possession of the subject properties to the petitioner; 2)
render to the petitioner an accounting of all the fruits and products gathered from said
property from the time they took possession thereof until they vacate the same; and 3)
reimburse the petitioner the total cost of such accounting.

This resolution was reversed on appeal by the Regional Trial Court of Lucena City,
Branch 59, 2 which held that the court a quo had no jurisdiction over the ejectment case
because of the issue of ownership raised therein and that, assuming such jurisdiction,
the decision had already become final and executory when the resolution dated July 11,
1986, was rendered. The petitioner elevated the case to the respondent Court of
Appeals, which sustained the assailed decision in toto. 3
She is now before us in this petition for review on certiorari, contending that the
Municipal Circuit Trial Court had jurisdiction over the ejectment case and that the private
respondents were guilty of forcible entry on the subject premises for occupying the
same without judicial authorization.
The petition has merit:
The respondents argue that the Municipal Circuit Trial Court had no jurisdiction over the
action for forcible entry on the principal ground that a question of ownership was
involved therein. This view does not jibe with the following observations from Chief
Justice Moran based on a consistent line of decisions from this Court: 4
It would be a mistake to suppose that an action involves a question of title
merely because the plaintiff may allege in his complaint that he is the
owner of the land. Just as the plaintiff may introduce proof of his title in
order to show the character of his (sic) prior possession, so be may allege
ownership in himself as a material and relevant fact in the case, and the
insertion of such an allegation in the complaint cannot by any possibility
place the cause beyond the jurisdiction of the magistrate's court, provided
it otherwise sufficiently appears that what the plaintiff really seeks is the
restoration of possession as against an intruder who has seized the
property within the period of one year. Much less can the defendant in
such an action defeat the jurisdiction of the magistrate's court by setting
up title in himself. In this connection it should be borne in mind that the
factor which defeats the jurisdiction of the court of the justice of the peace
is the necessity to adjudicate the question of title. The circumstance that
proof of title is introduced at the hearing or that a claim of ownership is
made by either or both of the parties is not material
This ruling is embodied in Sec. 33, (2), Batas Pambansa Blg. 129, which vests
municipal courts with:
Exclusive original jurisdiction over cases of forcible entry and unlawful
detainer; Provided, that when, in such cases, the defendant raises the
question of ownership in his pleadings and the question of possession
cannot be resolved without deciding the issue of ownership, the issue of
ownership should be resolved only to determine the issue of possession.

It is true that before the petitioner instituted the action for forcible entry in the Municipal
Circuit Trial Court of Lucban-Sampaloc, the case for annulment of the mortgage and
foreclosure sale, which necessarily involves recovery of ownership, was already being
litigated in the Regional Trial Court of Lucena City. Even so, the municipal court could,
pending final adjudication of that case, exercise its jurisdiction to determine the right of
possession (only) over the subject properties in the ejectment case.
The private respondents also contend that the Municipal Circuit Trial Court had no
jurisdiction over the complaint for forcible entry because; a) under Section 19 par. (2) of
BP 129, as amended, the Regional Trial Court has exclusive original jurisdiction over all
civil actions which involve the title to, or possession of, real property or any interest
therein; and b) under Section 1, par. A (1) of the Rule on Summary Procedure, cases of
forcible entry and detainer involving the question of ownership are expressly excluded
from the summary jurisdiction of the municipal court.
Curiously, however, they also insist that an action for forcible entry and unlawful
detainer shall be governed by the Rule on Summary Procedure pursuant to Section 36
of BP 129 and that the petitioner is now estopped from assailing the applicability of that
Rule.
There is no question that under Section 1, par. A (1), of the said Rule, the Metropolitan
Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts have jurisdiction
over cases of forcible entry and unlawful detainer except where the question of
ownership is involved or where the damages or unpaid rentals sought to be recovered
by the plaintiff exceed P20,000.00 at the time of the filing of the complaint. *
However, it is incorrect to say that the question of ownership was involved in the
ejectment case filed by the petitioner simply because she alleged in her complaint that
she was the original owner of the subject properties. That the petitioner instituted a
separate action for the annulment of the mortgage is not a valid reason either for
defeating the summary remedy of ejectment. On the contrary, it only bolsters the
conclusion that the ejectment case did not involve the question of title as this was the
subject of the annulment case before the Regional Trial Court of Lucena City. The Rule
on Summary Procedure was clearly applicable because the ejectment case involved
only the restoration of possession of the subject land and not its ownership.
The respondent court also sustained the ruling of the Regional Trial Court that the
motion for reconsideration filed by the petitioner with the Municipal Circuit Trial Court did
not stop the running of the reglementary period to appeal because such motion was a
prohibited pleading under Section 15 (c) ** of the Rule on Summary Procedure. Its
conclusion was that the Municipal Circuit Trial Court had already lost jurisdiction to issue
the resolution dated July 11, 1986, because the decision sought to be reconsidered had
then become already final and executory.

We do not agree. The Municipal Circuit Trial Court did not err in holding that the motion
for reconsideration was not covered by the prohibition under Section 15 (c). The motion
prohibited by this section is that which seeks reconsideration of the judgment rendered
by the court after trial on the merits of the case. 5 The decision dismissing the
petitioner's ejectment case for lack of jurisdiction was not an adjudication on the merits.
Review thereof could therefore be sought by the petitioner through her motion for
reconsideration and this motion, which was not pro forma, had the effect of suspending
the running of the period to appeal.
Now, on the issue of possession:
Section 7 of Act No. 3135, as amended by Act No. 4118, provides that in case of
extrajudicial foreclosure of mortgage, the court *** may issue as a matter of course a
writ of possession in favor of the purchaser even during the redemption period, provided
that a proper motion has been filed, a bond is approved, and no third person is involved.
Section 6 of the Act provides that where an extrajudicial sale is made, "redemption shall
be governed by the provisions of sections four hundred and sixty-four to four hundred
and sixty-six, inclusive, of the Code of Civil Procedure, in so far as these are not
inconsistent with the provisions of this Act."
Sections 464-466 of the Code of Civil Procedure were superseded by Sections 25-27
and Section 31 of Rule 39 of the Rules of Court, which in turn were replaced by
Sections 29 to 31 and Section 35 of Rule 39 of the Revised Rules of Court.
Section 35 provides that "if no redemption be made within twelve (12) months after the
sale, the purchaser, or his assignee, is entitled to a conveyance and the possession of
property, . . . The possession of the property shall be given to the purchaser or last
redemptioner by the same officer unless a third party is actually holding the property
adversely to the judgment debtor."
To give effect to his right of possession, the purchaser must invoke the aid of the courts
and ask for a writ of possession. He cannot simply take the law into his own hands and
enter the property without judicial authorization. 6 We have consistently held that he
need not bring a separate and independent suit for this purpose. 7 Nevertheless, it is
essential that he ask for and be granted a writ of possession in order that he may be
legally installed in the property he has bought.
Section 63 (b) of P.D. 1529, otherwise known as the Property Registration Decree,
requires that in case of non-redemption, the purchaser at a foreclosure sale shall file
with the Register of Deeds either a final deed of sale executed by the person authorized
by virtue of the power of attorney embodied in the deed of mortgage or his sworn
statement attesting to the fact of non-redemption. The Register of Deeds shall

thereupon issue a new certificate in favor of the purchaser after the owner's duplicate
certificate shall have been previously delivered and canceled.
In F. David Enterprises vs. Insular Bank of Asia and America, 8 this Court held:
It is settled that the buyer in a foreclosure sale becomes the absolute
owner of the property purchased if it is not redeemed during the period of
one year after the registration of the sale. As such, he is entitled to the
possession of the said property and can demand it at any time following
the consolidation ownership in his name and the issuance to him of a new
transfer certificate of title. The buyer can in fact demand possession of the
land even during the redemption period except that he has to post a bond
in accordance with Section 7 of Act No. 3135 as amended. No such bond
is required after the redemption period if the property is not redeemed.
Possession of the land then becomes an absolute right of the purchaser
as confirmed owner. Upon proper application and proof of title, the
issuance of the writ of possession becomes a ministerial duty of the court.
(Emphasis supplied).
In the case at bar, there is no showing that after the lapse of the redemption period
without the petitioner having redeemed the lands, DBP executed an affidavit of
consolidation of ownership of the subject properties. Neither has it filed with the
Register of deeds a final deed of sale or a sworn statement attesting to the fact of nonredemption. The circumstance that the properties are still in the name of the petitioner
shows that DBP has also not yet obtained a new certificate of title in its name. And
neither does it appear that DBP, on the basis of its purchase of the lands at the
foreclosure sale, ever secured a writ of possession to authorize its entry into the said
lands.
Not having done any of these, DBP had as yet not acquired any perfected right of
possession that it could transfer to the private respondents. And as the petitioner
continued in actual possession of the subject premises, she could undoubtedly maintain
an action for forcible entry against the private respondents when, not being armed with
a court order or a writ of possession, they simply entered and took possession of the
subject lands.
The only issue in an action for forcible entry is the physical or material possession of
real property, that is, possession de facto and not possession de jure. The philosophy
underlying this remedy is that irrespective of the actual condition of the title to the
property, the party in peaceable quiet possession shall not be turned out by strong
hand, violence or terror. In affording this remedy of restitution, the statute seeks to
prevent breaches of the peace and criminal disorder which might ensue from the
withdrawal of the remedy. Another purpose is to discourage those persons who,

believing themselves entitled to the possession of the property, resort to force rather
than to some appropriate action in the courts to assert their claims. 9
Under Section 1, Rule 70, of the Rules of Court, there is forcible entry when one in
physical possession of a land or building is deprived of that possession by another
through force, intimidation, threat, strategy or stealth. The words "by force, intimidation,
threat, strategy or stealth" include every situation or condition under which one person
can wrongfully enter upon real property and exclude another, who has had prior
possession thereof. To constitute the use of "force" as contemplated in the abovementioned provision, the trespasser does not have to institute a state of war. Nor is it
even necessary that he use violence against the person of the party in possession. The
act of going on the property and excluding the lawful possessor therefrom necessarily
implies the exertion of force over the property, and this is all that is necessary. 10
It is noted that the petitioner instituted the action for annulment of mortgage on
December 3, 1985, while the deed of sale in favor of the private respondent was
executed on December 17, 1985. Paguia cannot say that when he took possession of
the subject land on January 30, 1986, he was acting in good faith. Neither can be claim
that he had no knowledge of the pendency of that litigation because he was in fact one
of the defendants in that case. In any event, the fact that the titles were still in the name
of the petitioner should have warned him of the need to ascertain the status of the
properties before he took possession of them.
The private respondents also assert that the institution of the ejectment case resulted in
the splitting of a single cause of action into two, one for the recovery of ownership and
possession and the other for recovery of possession de facto.
In Drilon vs. Gaurana, 11 this Court held:
It is true that a party may not institute more than one suit for a single
cause of action (Rule 2, Sec. 3, Revised Rules of Court) and if two or
more complaints are brought for different parts of a single cause of action,
the filing of the first may be pleaded in abatement of the other (Rule 2,
Sec. 4 Revised Rules of Court). However, a forcible entry or unlawful
detainer action has an entirely different subject from that of an action for
reconveyance of title. What is involved in a forcible entry case is merely
the issue of material possession or possession de facto; whereas in an
action for reconveyance, ownership is the issue. So much so that the
pendency of an action for reconveyance of title over the same property
does not divest the city or municipal court of its jurisdiction to try the
forcible entry or unlawful detainer case, nor will it preclude or bar
execution of judgment in the ejectment case where the only issue involved
is material possession or possession de facto (De la Cruz v. Court of
Appeals, 133 SCRA 520 [1984]).

While there may be identity of parties and subject matter in the two actions, the issues
involved and the reliefs prayed for are not the same. In the annulment suit, the issue is
the validity of the mortgage and the subsequent foreclosure sale whereas the issue in
the ejectment case is whether, assuming the mortgage and foreclosure sale to be valid,
the private respondents have the right to take possession of the property. In the former
case, the relief prayed for is recovery of ownership of the subject land while in the latter
it is restoration of possession thereof to the petitioner. Hence, the municipal court had
jurisdiction to try the ejectment case while the annulment suit was being litigated in the
regional trial court.
The contention that the petitioner was forum-shopping must also be rejected. As an
injunction cannot be a substitute for the other suits for recovery of possession, 12 such
as an action for forcible entry or unlawful detainer and accion publiciana, denial of the
injunction did not bar the petitioner from availing herself of the more appropriate
remedy, to wit, the action for forcible entry. 13
In sum, the respondent court erred when it affirmed the decision of the Regional Trial
Court declaring that the Municipal Circuit Trial Court had no jurisdiction over the
ejectment case filed by the petitioner. We find that it had.
ACCORDINGLY, the petition is GRANTED and the resolution of the Municipal Circuit
Trial Court of Lucban, Sampaloc dated July 11, 1986, in Civil Case No. 155 is
REINSTATED. Costs against the private respondents.
SO ORDERED.
Grio-Aquino, Medialdea and Bellosillo, JJ., concur.

G.R. No. L-52823 November 2, 1982

PHILIPPINE NATIONAL BANK, petitioner,

vs.
Hon. MIDPANTAO ADIL, in his capacity as Presiding Judge of the CFI Iloilo,
Branch II, and the HEIRS OF THE LATE TEODORO MELLIZA Composed of
ANGELINA LOBATON VDA. DE MELLIZA, etc., ROSEMARIE CHANG, RAYMUNDO
TEODORO MELLIZA, JR., MARILYN MELLIZA, JOSE TEODORO MELLIZA, et al.,
respondents.
Juan L. Diaz, Ramon F. Aviado and Isidro F. Real, Jr., for petitioner.
Eugenio O. Original for respondents.

DE CASTRO, J:
This is a special civil action for certiorari which seeks to annul the several injunctive
orders issued by respondent judge, and praying that, instead, the writ of possession
issued in favor of petitioner, as purchaser in the foreclosure sale, dated April 20, 1979,
be immediately enforced.
It appears that on 'August 2, 1974, respondent Angelina Lobaton Melliza, for herself and
as judicial administratrix of the estate of Teodoro Uy Melliza, obtained a loan from
petitioner in the amount of P80,000.00 which was secured by a mortgage over two
parcels of land covered by TCT Nos. 8266 and T-8267, For failure of said respondent to
pay the loan on maturity, the mortgage was foreclosed extrajudicially on February 16,
1976 at which foreclosure sale, petitioner purchased the properties for P97,923.73. The
properties were not redeemed within the period, hence the title over the same were
consolidated in the name of petitioner, and consequently TCT .Nos. T-50422 and T50423 were issued in its name on June 26, 1978.
On April 19, 1979, petitioner filed an ex-parte petition for issuance of a writ of
possession before the Court of First Instance of Iloilo, Branch II, which was granted by
an order dated April 20, 1979. Upon issuance of the writ, the Deputy Sheriff served the
same upon private respondents, but the latter requested for a grace period of seven (7)
days to vacate the premises in question to which the Sheriff agreed. On May 8, 1979,
the Sheriff returned to the premises in question and finding that private respondents are
still staying in the premises and had not complied with the writ of possession,
immediately ordered their ejectment. At around one o'clock in the afternoon, before the
ejectment was completed, the Sheriff received an order dated May 8, 1979, issued
motu proprio by respondent judge, suspending the implementation of the writ of
possession for "humanitarian reasons" for a period of fifteen (15) days. Before the
expiration of the fifteen (15) day period, private respondents filed a complaint dated May
14, 1979 for the annulment of the extrajudicial foreclosure, writ of possession and
consolidation of ownership on ground that the properties were foreclosed without

personal notice to any of the private respondents. The complaint was docketed as Civil
Case No. 12894 and was assigned to the Court of First Instance of Iloilo, Branch V.
Upon motion of private respondents "to consolidate the trial of the two cases," the
Presiding Judge of said Branch, in an order dated May 24, 1979, transferred the case of
Branch II, presided by respondent judge.
In the proceeding for the writ of possession, private respondents filed a motion for
reconsideration of the order granting the writ of possession, while petitioner filed a
motion to declare private respondents in contempt for refusal to vacate the premises,
which motions were ordered by respondent judge held in abeyance pending the
resolution of the prejudicial question raised by private respondents in Civil Case No.
12894.
On June 1, 1979, respondent judge, acting on private respondents' prayer for injunction,
issued an order restraining petitioner from disturbing the status quo, and on July 5,
1979, respondent judge issued an order granting the writ of preliminary injunction.
Subsequently, petitioner filed the following: 1) Motion to Require Plaintiff to Deposit
Income/Fruits of the Disputed Property dated July 6, 1979; 2) Motion for
Reconsideration of the order of July 5, 1979 dated July 17, 1979; and 3) Motion to
Dismiss, the Complaint dated August 2, 1979. The first two motions were denied by,
respondent judge on August 13, 1979, and the last motion, on November 22, 1979.
As could readily be seen, the main question is whether or not respondent judge grave
abused his discretion, amounting to lack of jurisdiction. in issuing the orders dated May
8, 1979, June 1, 1979, July 5, 1979 and August 13, 1979 all of which, in effect, enjoined
the enforcement of the writ of possession. The petitioner sustains the affirmative,
contending that since pursuant to De los Angeles vs. Court of Appeals, et al. 1 citing De
Gracia vs. San Jose, 94 Phil. 675, it is ministerial upon the court to issue a writ of
possession in favor of the purchaser in a foreclosure sale of a mortgaged property, it
follows that the execution of the writ of possession cannot be suspended, much less,
restrained by respondent judge. It also contends that, as purchaser, it becomes the
owner of the property entitled to jus possidendi as provided in Article 428 of the Civil
Code.
It is, however, claimed by private respondents that respondent judge, contrary to
petitioner's submission, acted within his authority, alleging that pursuant to Section 5 of
Rule 135 of the Rules of Court, the court has inherent power to "amend and control (the
court's) processes and order so as to make them conformable to law and justice." They
further claimed that the case cited by petitioner is not applicable because in the instant
case the writ has already been issued. Petition should be granted.

Section 4 of P.D. No. 385 "requiring governmental financial institutions to foreclosure

mandatorily all loans with arrearages, including interest and charges amounting to at
least 20 % of the total outstanding obligations," provides:
Section 4. As a result of foreclosure or any other legal proceedings
wherein the properties of the debtor which are foreclosed, attached, or
levied upon in satisfaction of a judgment are sold to a government
financial institution, the said properties shall be placed in the possession
and control of the financial institution concerned, with the assistance of the
Armed Forces of the Philippines whenever necessary. The Petition for Writ
of Possession shall be acted upon by the court within fifteen (15) days
from the date of filing.
Pursuant to the above provision, it is mandatory for the court to place the government
financial institution, which petitioner is, in the possession and control of the property. As
stated, the said decree was enacted "in order to effect the early collection of delinquent
loans from government financial institutions and enable them to continue effectively
financing the development needs of the country" without being hampered by actions
brought to the courts by borrowers.
Also, Section 6 of Act No. 3135, as amended by Act 4118, the law that regulates the
methods affecting extrajudicial foreclosure of mortgage provides that in cases in which
an extrajudicial sale is made, "redemption shall be governed by the provisions of
sections four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code
of Civil Procedure insofar as these are not inconsistent with the provisions of this Act."
(Sections 464-466 of the Code of Civil Procedure were superseded by Sections 25-27
and Section 31 of Rule 39 of the Rules of Court which in turn were replaced by Sections
29 to 31 and Section 35 of Rule 39 of the Revised Rules of Court. 2 Section 35 which is
one of the specific provisions applicable to the case at bar provides that "if no
redemption be made within twelve (12) months after the sale, the purchaser, or his
assignee, is entitled to a conveyance and possession of property. ... . The possession of
the property shall be given to the purchaser or last redemptioner by the officer unless a
third party is actually holding the property adversely to the judgment debtor."
The rule, therefore, is that after the redemption period has expired, the purchaser of the
property has the right to be placed in possession thereof. Accordingly, it is the
inescapable duty of the Sheriff to enforce the writ of possession, especially, as in this
case, a new title has already been issued in the name of the purchaser, In fact, under
Section 7 of the said Act 3135, upon which the de los Angeles and de Gracia cases
were based, even before the redemption period, it is ministerial upon the court to issue
a writ of possession in favor of a purchaser, provided that a proper motion has been
filed, a bond approved, and no third person is involved.

The right of the purchaser to be placed in the possession of the property is bolstered by
Section 8 of the aforecited Act which provides that if the judge finds the complaint
assailing the legality of the foreclosure sale justified, it shall not transfer the possession
of the property, even on appeal, but will only proceed against the bond posted by the
purchaser. Section 8 reads:
The debtor may, in the proceedings in which possession was requested;
but not later than thirty days after the purchaser was given possession,
petition that the sale be set aside and the writ of possession cancelled,
specifying the damages suffered by him, because the mortgage was not
violated or the sale was not made in accordance with the provisions
thereof, and the court shall take cognizance of this petition in accordance
with the summary procedure provided for in section one hundred and
twelve of Act Numbered Four Hundred and Ninety-Six, and if it finds the
complaint of the debtor justified, it shall dispose in his favor of all or part of
the bond furnished by the person who obtained possession. Either of the
parties may appeal from the order of the judge in accordance with
sections fourteen of act numbered Four Hundred and Ninety-Six.
In the case at bar, the writ of possession was issued but its enforcement was
suspended by the grace period given by the Sheriff who has no authority to do so, and
later by the order of the judge on a very dubious ground as "humanitarian reason." If the
applicable laws clearly allow the purchaser to have possession of the property
foreclosed and mandate the court to give effect to such right, it would be a gross error
for the judge to suspend the implementation of the writ of possession, which, as shown,
should issue as a matter of course. We are of the opinion that once the writ of
possession has been issued, the Court has no alternative but to enforce the writ without
delay, especially as in this case, no motion for the suspension of the enforcement was
filed.
The right of the petitioner to the possession of the property is clearly unassailable. It is
founded on its right of ownership. As the purchaser of the properties in the foreclosure
sale, and to which the respective titles thereto have already been issued, petitioner's
right o-,,er the property has become absolute, vesting upon him the right of possession
over an enjoyment of the property which the Court must aid in effecting its delivery. After
such delivery, the purchaser becomes the absolute owner of the property. As We said ,
in Tan Soo Huat vs. Ongwico, 3 the deed of conveyance entitled the purchaser to have
and to hold the purchased property, this means, that the purchaser is entitled to go
immediately upon the real property, and that it is the Sheriff's inescapable duty to place
him in such possession.
Respondents cannot claim that the writ of possession was suspended under the
authority set forth in Rule 1135 of the Rules of Court. To invoke the power granted
therein, the court must act within the law and with justice. When the reason given by the

judge in issuing the order of suspension was not specified in the order, but stated only in
general term, as "humanitarian reasons," the Court did not act within the bounds of the
law. The order was, furthermore, issued motu proprio and without the petitioner being
afforded the right to present its side. We cannot give Our approval to the actuation of
respondent judge, for an order suspending the implementation of an earlier order is like
an injunction which must be issued always with circumspection, and upon proper motion
of the party concerned.
As it is, the suspension order has a far-reaching effect. It enabled private respondents
to withhold the possession from petitioner and file the complaint where an injunction
was sought. Had not respondent judge issued such order, petitioner could have already
taken possession of the property, thereby acquiring an absolute ownership over the
property, and injunction could no longer have been issued. A prohibitory injunction
cannot be issued when the act sought to be enjoined has already been committed. 4
Neither can a mandatory injunction issue, for it is a well-settled rule that injunction will
not lie to take the property out of control of the party in possession. 5
The orders of the judge enjoining the enforcement of the writ of possession are
vulnerable to attack. Firstly, the right of private respondents to injunctive order is, at
least, doubtful, and it is a settled rule that to be entitled to the injunction, the applicant's
right or title must be clear and unquestioned.
In the instant case, the ground relied upon by private respondents is not indubitable,
while the foreclosure proceeding has in its favor the presumption of regularity. And
secondly, P.D. No. 385, as aforestated, makes it mandatory for the court to place a
government financial institution in possession of the property. To enjoin PTB from taking
possession of the property would be to render nugatory the provisions of said decree,
particularly Section 2 thereof:
Section 2. No restraining order, temporary or permanent in. junction shall
be issued by the court against any government financial institution in any
action taken by such institution in compliance with the mandatory
foreclosure provided in Section 1 hereof, whether such restraining order,
temporary or permanent injunction is sought by the borrower(s) or any
third party or parties, except after due hearing in which it is established by
the borrower and admitted by the government financial institution
concerned that twenty percent (20%) of the outstanding arrearages has
been paid after the firing of foreclosure proceedings.
In case a restraining order or injunction is issued the borrower shall
nevertheless be legally obligated to liquidate the remaining balance of the
arrearages, paying ten percent (10%) of the arrearages outstanding as of
the time of foreclosure, plus interest and other charges, on every
succeeding thirtieth (30th) day after the issuance of such restraining order

or injunction until the entire arrearages have been liquidated. These shall
be in addition to the payment of amortizations currently maturing. The
restraining order or injunction shall automatically be dissolved should the
borrower fail to make any of the above-mentioned payments on due dates,
and no restraining order or injunction shall be issued thereafter. This shall
be without prejudice to the exercise by the government financial
institutions of such rights and/or remedies available to them under their
respective charters and their respective contracts with their debtors, nor
should this provision be construed as restricting the government financial
institutions concerned from approving, solely at its own discretion, any
restructuring, recapitalization, or any other arrangement that would place
the entire account on a current basis, provided, however, that at least
twenty percent (20%) of the arrearages outstanding at the time of the
foreclosure is paid.
All restraining orders and injunctions existing as of the date of this Decree
on foreclosure proceedings filed by said government financial institutions
shall be considered lifted unless finally resolved by the court within sixty
(60) days from date hereof.
WHEREFORE, judgment is hereby rendered annulling and setting aside all the
injunctive orders issued by respondent judge dated May 8, 1979, June 1, 1979, July 5,
1979 and August 13, 1979; and ordering respondent judge to place petitioner in
possession of the purchased property without delay. Without cost.
SO ORDERED.
Makasiar, Concepcion, Jr., Guerrero and Escolin, JJ., concur.
Abad Santos, J., took no part.