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SUPREME COURT RULING
The Supreme Court affirmed the CA’s ruling and denied Fei Hua’s petition, holding that Castañeda is a third-party adverse possessor who should have been excluded from the writ of possession’s enforcement.
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Citing Rule 39, Section 33 of the Rules of Court, the Court reiterated that a purchaser in an extrajudicial foreclosure sale is entitled to possession unless a third-party possessor holds the property adversely to the judgment debtor. If such an adverse possessor exists, the writ of possession is no longer ministerial, and the purchaser must file a separate judicial action to recover possession.
Here, Castañeda had purchased and possessed the property before the mortgage was executed and continued to occupy it independently of Goldland’s ownership. His claim was not derived from Goldland but from his direct purchase, making him a third-party adverse possessor rather than a mere successor-in-interest. As such, he could not be summarily ejected through a writ of possession.
The Supreme Court further clarified that the RTC misapplied China Banking Corporation v. Spouses Lozada, as the rule disqualifying transferees of the mortgagor had already been modified in Spouses Rosario v. GSIS. Under this modification, buyers of condominium units and subdivision lots in actual possession are protected from dispossession via a writ of possession. Since Castañeda had been in continuous possession and had fully paid for the property before the mortgage, he fell within this protection.
The Court also rejected Fei Hua’s argument that the issue was moot due to the implementation of the writ. Citing Carpio v. Court of Appeals, the Supreme Court ruled that the execution of a void writ does not validate it, and a third-party possessor cannot be deprived of property without due process.
Ultimately, the Court held that Castañeda’s possession was adverse to Goldland and Fei Hua, placing him under the exception in Rule 39, Section 33. The writ of possession should not have been enforced against him, and Fei Hua must file a separate legal action to assert any claim over the property.
Conclusion
The Supreme Court ruled in favor of Castañeda, affirming the CA’s ruling that he was a third-party adverse possessor and should not have been dispossessed by the writ of possession. The RTC erred in automatically granting the writ without considering Castañeda’s rights as a bona fide purchaser in possession.
This case reinforces the legal protection of condominium and subdivision buyers under Presidential Decree No. 957 and Spouses Rosario v. GSIS, ensuring they cannot be summarily ejected from their properties due to undisclosed mortgages or foreclosure proceedings.
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FEI HUA FINANCE AND LEASING SERVICE vs. EDILBERTO CASTAÑEDA, G.R. No. 272689, October 16, 2024
Ponente: Hernando, J.
The Supreme Court affirmed the CA’s ruling and denied Fei Hua’s petition, holding that Castañeda is a third-party adverse possessor who should have been excluded from the writ of possession’s enforcement.
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Citing Rule 39, Section 33 of the Rules of Court, the Court reiterated that a purchaser in an extrajudicial foreclosure sale is entitled to possession unless a third-party possessor holds the property adversely to the judgment debtor. If such an adverse possessor exists, the writ of possession is no longer ministerial, and the purchaser must file a separate judicial action to recover possession.
Here, Castañeda had purchased and possessed the property before the mortgage was executed and continued to occupy it independently of Goldland’s ownership. His claim was not derived from Goldland but from his direct purchase, making him a third-party adverse possessor rather than a mere successor-in-interest. As such, he could not be summarily ejected through a writ of possession.
The Supreme Court further clarified that the RTC misapplied China Banking Corporation v. Spouses Lozada, as the rule disqualifying transferees of the mortgagor had already been modified in Spouses Rosario v. GSIS. Under this modification, buyers of condominium units and subdivision lots in actual possession are protected from dispossession via a writ of possession. Since Castañeda had been in continuous possession and had fully paid for the property before the mortgage, he fell within this protection.
The Court also rejected Fei Hua’s argument that the issue was moot due to the implementation of the writ. Citing Carpio v. Court of Appeals, the Supreme Court ruled that the execution of a void writ does not validate it, and a third-party possessor cannot be deprived of property without due process.
Ultimately, the Court held that Castañeda’s possession was adverse to Goldland and Fei Hua, placing him under the exception in Rule 39, Section 33. The writ of possession should not have been enforced against him, and Fei Hua must file a separate legal action to assert any claim over the property.
Conclusion
The Supreme Court ruled in favor of Castañeda, affirming the CA’s ruling that he was a third-party adverse possessor and should not have been dispossessed by the writ of possession. The RTC erred in automatically granting the writ without considering Castañeda’s rights as a bona fide purchaser in possession.
This case reinforces the legal protection of condominium and subdivision buyers under Presidential Decree No. 957 and Spouses Rosario v. GSIS, ensuring they cannot be summarily ejected from their properties due to undisclosed mortgages or foreclosure proceedings.
🥑, Love our content?
Keep it going by clicking on the ads 🟧 on this page. Your support makes a difference—THANK YOU!
FEI HUA FINANCE AND LEASING SERVICE vs. EDILBERTO CASTAÑEDA, G.R. No. 272689, October 16, 2024
Ponente: Hernando, J.
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