PROPERTY

ART. 555
CASE TITLE FACTS RULING/DOCTRINE: Petition for Review Granted
CHINA BANKING Contract to Sell: General rule v. exception
CORPORATION v PPGI (developer of Makati Prime City Condo Project) Spouses Lozada assert the exception.CBC invokes the general rule
SPOUSES TOBIAS sold to Sps. Lozada Unit 402 of Cluster 1 of the Project, Sps. Lozada aver that they are holding Unit 402 adversely to
L. LOZADA and a 2-bedroom residential unit for P1,444,014.04, debtor/mortgagor PPGI
ERLINA P. payable: o Sps possession is obstacle to the ex parte issuance of a
LOZADA o 30% DP @ P 402,803.92 Payable in 15 months, writ of possession in favor of CBC.
beginning 2 Oct 1995 CBC counters that Sps. are mere successors-in-interest of PPGI
o 70% Balance @ P 1,010,809.83 Payable upon who only stepped into the latters shoes and may not claim the
completion or turn-over of the unit defense of possession by third persons.
Art. 555. A PPGI, represented by its Pres Kenneth Yap and Treas Nature of the spouses Lozadas possession of Unit No. 402.
possessor may Gilbert Yap, and w/ Mortgage Clearance from Housing date when Sps. actually entered into possession not established
lose his and Land Use Regulatory Board (HLURB), executed 2 Spsalready in possession at the time CBC filed its Ex Parte Petition
possession: Deeds of REM in favor of CBC Sps possession cannot be considered adverse to that of PPGI.
o to secure the credit facilities granted by CBC to Their right to possess was derived from PPGI via Contract to Sell
(1) By the PPGI It was because PPGI contractually agreed to deliver Unit 402 to
abandonment of o REM covered 51 units of the Project, including them even prior to the transfer of ownership and title over the
the thing; Unit No. 402. same that they came into its possession.
PPGI failed to pay its indebtedness to CBC They cannot assert right of possession is adverse or contrary to
CBC filed a Petition for Extrajudicial Foreclosure w/ PPGI when they have no independent right of possession other
(2) By an
Makati RTC than what they acquired from PPGI.
assignment
public auction sale: CBC was the highest bidder, Sps. are transferee of or successor to the right of possession of
made to another
offering P30,000,000.00 for the foreclosed properties. PPGI over Unit No. 402.
either by
Certificate of Sale issued in favor of CBC China Banking Corporation v. Spouses Ordinario
onerous or
CBC Chief Executive Officer Peter Dee executed an Ca se c it e d b y S ps L oza da
gratuitous title;
Affidavit of Consolidation stating that 21 of the 51 no t a p pl i ca bl e to t h e i n sta nt ca s e
foreclosed properties had been either CBC granted loans to TransAmerican w/c executed REMs to secure
(3) By the released by take-out by certain buyers the same. CBC foreclosed REMs when Trans failed to pay
destruction or or At the public auction sale, CBC was the highest bidder
total loss of the partially redeemed; During redemption period, CBC filed w/ RTC an ex partepetition
thing, or because o the period for redemption of remaining for the issuance of a writ of possession (granted by RTC)
it goes out of foreclosed properties (including Unit 402) spouses Ordinario filed MR w/ RTC claiming to have bought one of
commerce; already expired without having been the foreclosed properties on which they built their townhouse; and
redeemed; praying for the exclusion of said property from the writ of
(4) By the o titles to the remaining foreclosed properties
possession of already consolidated in the name of CBC;
another, subject o Registry of Deeds Makati was requested to
to the provisions issue CCTs in the name of CBC.
of Article 537, if Registry of Deeds Makati
the new o cancelled CCT 34898, Unit 402, registered in
possession has the name of PPGI, & issued in its place
lasted longer o CCT 69096 in the name of CBC
than one year. months prior to REM foreclosure, PCGI thru its Senior
But the real right Manager Salvador Prieto sent a letter to Erlina Lozada:
of possession is o cites PD 957 Sec 18
not lost till after o PCGI wants Lozada to remit all payments
the lapse of ten under your Contract to Sell directly to CBC.
years. o Said payment arrangement shall in no way
cause amendment of other terms nor
cancellation of Contract to Sell w/PPGI.
No immediate action taken by Sps Lozada but a year ff.
public auction sale, Erlina executed a Notice of Adverse
Claim for Unit 402
Erlina sent a letter to both PPGI and CBC
o She was ready to pay balance since Aug 25,
1998 and tendered payment as early as then
o Her liability is limited to amt stated. VAT is
liability of seller not hers
o On delivery of her full payment, she has a right
to demand assurance that title could be
transferred to her immediately
o She was tendering payment by opening an
escrow acct w/ CBC for P1,010,809.83
representing 70% balance of purchase price of
Unit 402 per Contract to Sell w. PPGi.
Erlina sent another letter to PPGI and CBC stating she
was unable to open an escrow account. Instead she
opened a special account with CBC
CBC sent Erlina a letter telling her consideration for
Unit 402 was P1,100,788.29, thus the amt she was
tendering was insufficient
CBC notified Erlina thru letter that it had already
possession, since they did not receive notice of CBCs petition.
SC did not directly resolve nature of possession by Ordinarios
SC merely presented remedies available to
Ordinarios, assuming arguendo they were adverse 3rd parties:
o (1) a terceria to determine w/n Sheriff rightly taken hold
of property not belonging to judgment debtor or obligor;
o (2) independent separate action to vindicate their claim of
ownership &/or possession over foreclosed property.
Ordinarios did not avail of either remedy and, instead, filed MR
which granted CBCs ex parte petition for issuance of a writ of
possession, SC affirmed RTC denial of MR
EXC EP TI ON
exception under Sec 33 of Rule 39 of RRoC where a third party
holds the property by adverse title or right, such as that of a co-
owner, tenant or usufructuary.
The co-owner, agricultural tenant, and usufructuary possess the
property in their own right, and they are not merely the successor
or transferee of the right of possession of another co-owner or the
owner of the property.
Sps Lozada cannot claim that their right of possession over Unit
No. 402 is analogous to any of these.
It is true that PPGI executed in favor of Lozadas the Contract to Sell
covering Unit 402 before it constituted in favor of CBC REMs on 51
Project units including Unit 402.
Nonetheless, what PPGI executed in favor of Lozadas was a
Contract to Sell, a mere promise to sell, which, at the moment of
its execution, did not yet transfer possession, much less, title to
Unit 402 from PPGI to Lozadas.
When PPGI constituted REM on Unit 402 in favor of CBC 6 months
later, possession of and title to the property still resided in PPGI.
when PPGI subsequently ceded possession of Unit 402, upon its
completion, to Lozadas, such right was already burdened by the
terms and conditions of the mortgage constituted thereon.
By merely stepping into the shoes of PPGI, Lozadas right of
possession to Unit 402 cannot be less or more than PPGIs.
For the same reasons, PD 957 cannot prevent developer from
mortgaging condo unit when title still resides in developer
 consolidated its title and ownership over Unit 402
which she presently occupied and requested her to
vacate and surrender property.
No agreement was reached bet the parties.
CBC filed an Ex Parte Petition for Issuance of a Writ of
Possession against Erlina w/ Makati RTC
Sps. Lozada instituted a complaint w/ HLURB to order
annulment of mortgage, foreclosure, sale, consolidation
of ownership bet CBC and PPGI
RTC Makati: issued writ of possession in favour of CBC
Sheriff failed to enforce the Writ of Possession because
the main door of the said property was padlocked
CBC filed an Urgent Ex Parte Motion top Break Open
door and place CBC in possession w/ RTC Makati
While afore-mentioned events were unfolding in L.R.C.
Case, Sps. Lozada were seeking recourse elsewhere.
Sps. Lozada was able to secure an Order in HLURB Case
directing parties to maintain status quo awaiting
resolution of Application for a Writ or Prelim. Inj. Of
Sps. Lozada
4 days later, Sps. Lozada filed w. CA Petition for
Ceriorari w/ Application for Writ of Prelim Inj/TRO
against RTC Makati, Sheriff, CBC, and PPGI
CA: granting Sps. Lozada TRO enjoining Sheriff et. Al.
from enforcing Writ of Possession and Notices to
Vacate
CBC filed MR. Denied by CA.
CBC filed Petition for Review on Certiorari w/ SC
ISSUE:
W/N writ of possession may be granted and issued by
the Makati RTC ex parte or without notice to other parties
awaiting full payment by installment buyer.
to protect the installment buyer PD 957 imposed the following
conditions on the right of the owner or developer:
Section 18. Mortgages. No mortgage on any unit or lot shall be made
by owner or developer without prior written approval of the
Authority. Such approval shall not be granted unless it is shown that
the proceeds of mortgage loan shall be used for the development of
the condo or subdivision project and effective measures have been
provided to ensure such utilization. The loan value of each lot or unit
covered by mortgage shall be determined and the buyer thereof, if
any, shall be notified before the release of the loan. The buyer may,
at his option, pay his installment for the lot/ unit directly to the
mortgagee who shall apply payments to the corresponding
mortgage indebtedness secured by the particular lot or unit being
paid for, with a view to enabling said buyer to obtain title over the
lot or unit promptly after full payment thereto.
Lozadas allege PPGI did not comply with the foregoing
requirements; thus, the mortgage it constituted was void.
SC will not rule on the matter (not significant).
the issue herein is purely procedural, on whether Makati RTC can
issue writ of possession, the resolution of which hinges on nature
of Lozadas possession, whether it is adverse to PPGI.
SC already determined: Lozadas possessed as successors of PPGI.
annulment of REM will have no bearing for it will not change the
nature of Lozadas possession as to make it adverse to PPGI.
Lozadas, having succeeded PPGI cannot be considered a third
party holding property adversely to PPGI
Resultantly, general rule, not exception, applies
It was mandatory and ministerial duty of RTC to grant
ex parte petition of CBC
The right of the respondent to the possession is
clearly unassailable. It is founded on the right of ownership.
As the purchaser in foreclosure sale + titles already issued,
petitioner's rights has become absolute, vesting upon it right of
possession of the property which the court must aid in affecting its
delivery.
After such delivery, purchaser becomes the absolute owner