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China Bank vs Ordinario Digest

China Bank vs Ordinario Digest

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Published by cmv mendoza

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Published by: cmv mendoza on Dec 31, 2011
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11/03/2012

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CHINA BANKING CORPORATION VSORDINARIO
GR No. 121243SANDOVAL-GUTIERREZ; March 24, 2003
NATURE
petition for review on certiorari of the Decision andResolution of the Court of Appeals
FACTS
on various dates, petitioner China BankingCorporation granted three (3) loans in the total sumof P27,353,000.00 to TransAmerican Sales andExposition, Inc. (TransAmerican) owned andcontrolled by spouses Jesus and Lorelie Garcia. Theloans were secured by real estate mortgagesconstituted by Jesus Garcia (with the consent of hiswife) on his forty-five (45) parcels of land all of theRegistry of Deeds of Quezon City. The contracts of mortgage were all registered in the same Registry.For failure of TransAmerican to pay its loans,petitioner bank foreclosed extrajudicially the threereal estate mortgages. On August 27, 1990, themortgaged properties were sold at public auction forP38,004,205.01 to petitioner bank, being the highestbidder. On September 3, 1990, the Certificate of Salewas registered in the Registry of Deeds of QuezonCity.On October 4, 1990, petitioner bank filed with theRegional Trial Court (RTC) of Quezon City, Branch 90,an
ex parte
verified petition for issuance of a writ of possession. On April 10, 1991, the trial court issuedan order granting the petition and placing petitionerbank in possession of the 45 parcels of land.On July 19, 1991, petitioner posted the requiredsurety bond which was approved by the RTC.On August 16, 1991, spouses Oscar and LolitaOrdinario, herein respondents, filed a motion forreconsideration praying that the parcel of land withits improvement covered by TCT No. 7637 beexcluded from the above order. They alleged, amongothers, that they are indispensable parties in thecase, claiming that in November 1989, theypurchased the land covered by TCT No. 7637 onwhich was constructed their townhouse; that thepetition for a writ of possession does not bind themfor lack of notice; that petitioner bank should havefiled an action for recovery of possession, not an
ex- parte
petition for a writ of possession since there areparties in actual possession of the lots involved; thatthey filed with the Housing and Land Use RegulatoryBoard (HLURB) a complaint for the delivery of titleand damages against petitioner bank, Jesus Garciaand TransAmerican; and that the mortgageforeclosure cannot prevail over their superior right aslegitimate buyers of the area covered by TCT No.7637petitioner bank filed its opposition to respondents?motion for reconsideration. It alleged that the trialcourt, acting as a land registration court with limited jurisdiction, cannot pass upon the merits of respondents? motion; that respondents should havefiled a separate action; that the assailed order datedApril 10, 1991 directing the issuance of a writ of possession had become final; and that theproceedings, being in
rem
, bind herein respondents.On September 21, 1992, the trial court issued anorder denying respondents? motion forreconsideration.CA set aside the order, and a new judgment is issued by the Court granting movants-appellants motion for reconsideration to the effect of excluding from the lower courts orders dated April10, 1991 and September 21, 1992, movants-appellants property covered by Transfer Certificateof Title No. 7637 as the same property should nothave been covered by the writ of possession issuedin the said orders of the lower court. Petitioner bankmoved for a reconsideration but it was denied by theAppellate Court in a Resolution
ISSUES
1. WON Respondent Court gravely erred in settingaside the order dated September 21, 1992 in LRCCase No. Q-4534 which granted the petition
ex-parte
for a writ of possession of the forty-five parcels of land to include the property covered by TransferCertificate of Title No. 7637.2. WON Respondent Court committed a grave errorwhen it failed to consider that the third party referredto in the case of 
PNB vs. Adil
, 118 SCRA 110, is athird party actually holding the property
adversely
to the owner.3. WON Respondent Court committed a grave errorwhen it failed to consider that the April 10, 1991order is already final and executory, hence, can nolonger be disturbed.
HELD1.
Under Section 7 of Act No. 3135, the purchaser ina foreclosure sale is entitled to possession of theproperty.
2
Thus the writ prayed for by petitionergranting it possession has to be issued
as a matterof course
.
3
This Court has consistently ruled that itis a
ministerial duty
of the trial court to grant suchwrit of possession.
4
 
No discretion is left for thetrial court
. Any question regarding the cancellationof the writ or in respect of the validity and regularityof the public sale should be determined in asubsequent proceeding as outlined in Section 8 of Act No. 3135.
5
Consequently, respondents? motionfor reconsideration of the trial court?s order datedApril 10, 1991 granting the writ of possession mustbe denied being bereft of merit.Section 7 of Act No. 3135, as amended, provides:"Sec. 7. In any sale made under the provisions of thisAct, the purchaser may petition the Court of FirstInstance (now RTC) of the province or place wherethe property or any part thereof is situated, to givehim possession thereof during the redemptionperiod, furnishing bond in an amount equivalent tothe use of the property for a period of twelvemonths, to indemnify the debtor in case it be shownthat the sale was made without violating the

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