Buyers of condominium units and subdivision lots in actual possession are protected from dispossession via a writ of possession. - SC STATEMENT OF THE CASE Fei Hua Finance and Leasing Service, a lending investor, granted Goldland Properties and Development Corporation a credit facility secured by a Real Estate Mortgage over 60 parking spaces in Porto Vita Condominium, Quezon City. When Goldland defaulted, Fei Hua foreclosed the mortgage, consolidated ownership, and secured a writ of possession from the Regional Trial Court (RTC). Edilberto Castañeda contested the writ, claiming that he had purchased and fully paid for one of the parking spaces in 2013, before Goldland mortgaged it in 2016. He had been in actual possession since 2017 and was unaware of the mortgage. The RTC denied his motion to recall the writ, ruling that it had already been implemented. However, the Court of Appeals (CA) reversed the RTC’s decision, holding that Castañeda was a third-party adverse possessor who should have been excluded from the writ’s enforcement. Arguments Fei Hua argued that the issuance of a writ of possession after an extrajudicial foreclosure is ministerial and that Castañeda was merely a successor-in-interest of Goldland, not a third-party possessor. It also contended that since the writ had already been fully implemented, the case was moot and academic. Castañeda countered that he fully paid for the parking slot in 2013, years before Goldland mortgaged it in 2016. Though Goldland failed to deliver the title, he had been in possession since 2017, using the space and paying real estate taxes and dues. He asserted that, under Rule 39, Section 33 of the Rules of Court, his possession was adverse to Goldland’s, making him a third-party possessor who could not be ejected through a writ of possession. FACTUAL BACKGROUND In 2013, Castañeda purchased and fully paid for a parking slot from Goldland. However, in 2016, Goldland mortgaged multiple parking spaces, including Castañeda’s, to Fei Hua to secure a loan. When Goldland defaulted, Fei Hua foreclosed the mortgage and became the highest bidder in the auction sale on February 23, 2018. Goldland failed to redeem the property, leading to the cancellation of its title and the issuance of a new one in Fei Hua’s name on October 28, 2021. Fei Hua then filed an Ex-Parte Petition for a Writ of Possession, which the RTC granted on June 27, 2022. The decision became final on August 11, 2022, and the writ was implemented on September 13, 2022. On September 9, 2022, Castañeda filed an urgent motion to recall the writ, claiming that he was a third-party adverse possessor. The RTC denied the motion on September 15, 2022, and rejected his motion for reconsideration on January 26, 2023, ruling that the issue was moot since the writ had already been implemented. The RTC also held that Castañeda was not a third-party possessor but merely a successor-in-interest of Goldland, relying on China Banking Corporation v. Spouses Lozada. Aggrieved, Castañeda elevated the case to the CA through a petition for certiorari. LOWER COURT RULING The RTC denied Castañeda’s motion to recall the writ, ruling that since the writ had already been enforced, the issue was moot and academic. It also held that Castañeda was not a third-party adverse possessor but a mere successor-in-interest of Goldland, citing China Banking Corporation v. Spouses Lozada. APPELLATE COURT RULING The CA reversed the RTC’s ruling and ruled in favor of Castañeda. It held that the RTC misapplied China Banking Corporation, as the Supreme Court had already modified the doctrine in Spouses Rosario v. GSIS. The CA explained that bona fide buyers of condominium units and subdivision lots who are in possession must be protected from dispossession via a writ of possession. Since Castañeda had fully paid for the property before the mortgage and had been in continuous possession, he was a third-party adverse possessor who should have been excluded from the writ’s enforcement. ISSUES 1. Did the Court of Appeals err in ruling that the implementation of the writ of possession did not render Castañeda’s motion to recall it moot and academic? 2. Is Castañeda a third-party adverse possessor who should have been excluded from the implementation of the writ of possession? 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. CONTINUE READING: https://pastepeso.com/fxn6yvsq