[G.R. No. 146997. April 26, 2005] SPOUSES GODOFREDO & DOMINICA FLANCIA, petitioners, vs.

COURT OF APPEALS & WILLIAM ONG GENATO, respondents. Facts: This is an action to declare null and void the mortgage executed by defendant Oakland Development Resources Corp. in favor of defendant William Ong Genato over the house and lot plaintiffs spouses Godofredo and Dominica Flancia purchased from defendant corporation. Sps. Flancia and Oakland entered into CONTRACT TO SELL involving a parcel of land. While the contract is existing, Oakland mortgage the land to Sps. Genato. Oakland failed to pay the mortgage which prompted Sps. Genato to foreclose the mortgage. Sps. Flancia filled the case to protect their rights. Issues: (1) whether or not the registered mortgage constituted over the property was valid; (2) whether or not the registered mortgage was superior to the contract to sell Held: 1. Yes. Under the Art. 2085 of the Civil Code, the essential requisites of a contract of mortgage are: (a) that it be constituted to secure the fulfillment of a principal obligation; (b) that the mortgagor be the absolute owner of the thing mortgaged; and (c) that the persons constituting the mortgage have the free disposal of their property, and in the absence thereof, that they be legally authorized for the purpose. All these requirements are present in this case. As to the first essential requisite of a mortgage, it is undisputed that the mortgage was executed on May 15, 1989 as security for a loan obtained by Oakland from Genato. 2. In the contract between petitioners and Oakland, aside from the fact that it was denominated as a contract to sell, the intention of Oakland not to transfer ownership to petitioners until full payment of the purchase price was very clear. Acts of ownership over the property were expressly withheld by Oakland from petitioner. All that was granted to them by the occupancy permit was the right to possess it. In sum, we rule that Genatos registered mortgage was superior to petitioners contract to sell, subject to any liabilities Oakland may have incurred in favor of petitioners by irresponsibly mortgaging the property to Genato despite its commitments to petitioners under their contract to sell. WHEREFORE, the petition for review is hereby DENIED. The decision of the Court of Appeals reinstating the August 16, 1996 decision of the trial court is hereby AFFIRMED.

G.R. No. 168736, April 19, 2006 SPOUSES ADELINA S. CUYCO and FELICIANO U. CUYCO, petitioner vs. RENATO CUYCO and FILIPINA CUYCO, respondents Facts:

SPOUSES

Petitioners, spouses Adelina and Feliciano Cuyco, obtained a loan in the amount of P1,500,000.00 from respondents, spouses Renato and Filipina Cuyco, payable within one year at 18% interest per annum, and secured by a Real Estate Mortgage. Subsequently, petitioners obtained additional loans from the respondents in the aggregate amount of P1,250,000.00, broken down as follows: (1) P150,000.00 on May 30, 1992; (2) P150,000.00 on July 1, 1992; (3) P500,000.00 on September 5, 1992; (4) P200,000.00 on October 29, 1992; and (5) P250,000.00 on [6] January 13, 1993. Petitioners made payments amounting to P291,700.00, but failed to settle their outstanding loan obligations. Respondents filed a case against petitioner, they alleged that petitioners loans were secured by the real estate mortgage; that as of August 31, 1997, their indebtedness amounted to P6,967,241.14, inclusive of the 18% interest compounded monthly; and that petitioners refusal to settle the same entitles the respondents to foreclose the real estate mortgage. The RTC rendered judgment in favor of the respondents. Petitioners appealed to the CA reiterating their previous claim that only the amount of P1,500,000.00 was secured by the real estate mortgage. CA held that by express intention of the parties, the real estate mortgage secured the original P1,500,000.00 loan and the subsequent loans of P150,000.00 and P500,000.00 obtained on July 1, 1992 and September 5, 1992, respectively. As regards the loans obtained on May 31, 1992, October 29, 1992 and January 13, 1993 in the amounts of P150,000.00, P200,000.00 and P250,000.00, respectively, the appellate tribunal held that the parties never intended the same to be secured by the real estate mortgage. Issue: WON the mortgage contract contains blanket mortgage clause. Held: No. While a real estate mortgage may exceptionally secure future loans or advancements, these future debts must be sufficiently described in the mortgage contract. An obligation is not secured by a mortgage unless it comes fairly within the terms of the mortgage contract. A dragnet clause operates as a convenience and accommodation to the borrowers as it makes available additional funds without their having to execute additional security documents, thereby saving time, travel, loan closing costs, costs of extra legal services, recording fees, et cetera.
[12] [7]

There is no stipulation that the mortgaged realty shall also secure future loans and advancements. Even if the parties intended the additional loans of P150,000.00 obtained on May 30, 1992, P150,000.00 obtained on July 1, 1992, and P500,00.00 obtained on September 5, 1992 to be secured by the same real estate mortgage, as shown in the acknowledgement receipts, it is not sufficient in law to bind the realty for it was not made substantially in the form prescribed by law.

WON additional loan granted by Metrobank to Sps. Co were secured by the real estate mortgage. Held: No. But without prejudice to the right of Metrobank to foreclose anew the mortgage. Neither petitioners, the brothers Teoco, nor respondent, Metrobank, were able to present sufficient evidence to prove whether the additional loans granted to the spouses Co by Metrobank were covered by the mortgage agreement between them. While we agree with Metrobank that mortgages intended to [13] secure future advancements are valid and legal contracts, entering into such mortgage contracts does not necessarily put within its coverage all loan agreements that may be subsequently entered into by the parties. In order to prevent any injustice to, or unjust enrichment of, any of the parties, this Court holds that the fairest resolution is to allow the brothers Teoco to redeem the foreclosed properties based on the amount for which it was foreclosed (P255,441.14 plus interest). This is subject, however, to the right of Metrobank to foreclose the same property anew in order to satisfy the succeeding loans entered into by the spouses Co, if they were, indeed, covered by the mortgage contract. In the case at bar, Metrobank would not be prejudiced by the assignment by the spouses Co of their right of redemption in favor of the brothers Teoco. As conceded by Metrobank, the assignees, the brothers Teoco, would merely step into the shoes of the assignors, the spouses Co. WHEREFORE, the decision of the Court of Appeals is SET ASIDE. The decision of the Regional Trial Court in Catbalogan, Samar is REINSTATED with the following MODIFICATION: the redemption by Bienvenido C. Teoco and Juan C. Teoco, Jr. of the properties covered by TCT Nos. T-6910 and T-6220 shall be without prejudice to the subsequent foreclosure of same properties by Metropolitan Bank and Trust Company to satisfy other loans covered by the Real Estate Mortgage.

G.R. No. 162333, December 23, 2008 BIENVENIDO C. TEOCO and JUAN C. TEOCO, JR., Petitioners, vs. METROPOLITAN BANK AND TRUST COMPANY, Respondent. Facts: Lydia T. Co, married to Ramon Co, was the registered owner of two parcels of land. Ramon Co mortgaged the said parcels of land to Metrobank for a sum of P200,000.00. The properties were sold to Metrobank in an extrajudicial foreclosure sale under Act No. 3135. One year after the registration of the Certificates of Sale, the titles to the properties were consolidated in the name of Metrobank for failure of Ramon Co to redeem the same within the one year period provided for by law. Metrobank filed a petition for the issuance of a writ of possession against Ramon Co and Lydia Co (the spouses Co). The brothers Teoco filed an answer-in-intervention alleging that they are the successors-in-interest of the spouses Co, and that they had duly and validly redeemed the subject properties within the reglementary period provided by law. Teoco had deposited the amount of P356,297.57 to the clerk of court of the RTC. Metrobank refused to accept the amount deposited by the brothers Teoco, alleging that they are obligated to pay the spouses Cos subsequent obligations to Metrobank as well. Issues: WON petitioners need to pay not only the P200,000 principal obligation but also that previously extended.

G.R. No. 158997, October 6, 2008 FORT BONIFACIO DEVELOPMENT CORPORATION, Petitioner vs. YLLAS LENDING CORPORATION and JOSE S. LAURAYA, in his official capacity as President, Respondents. Facts: FBDC executed a lease contract in favor of Tirreno, Inc. Section 22, of the lease contract, reads: Section 22. Lien on the Properties of the Lessee Upon the termination of this Contract or the expiration of the Lease Period without the rentals, charges and/or damages, if any, being fully paid or settled, the LESSOR shall have the right to retain possession of the properties of the LESSEE used or situated in the Leased Premises and the LESSEE hereby authorizes the LESSOR to offset the prevailing value thereof as appraised by the LESSOR against any unpaid rentals, charges and/or damages. If the LESSOR does not want to use said properties, it may instead sell the same to third parties and apply the proceeds thereof against any unpaid rentals, charges and/or damages. Tirreno began to default in its lease payments in 1999. By July 2000, Tirreno was already in arrears by P5,027,337.91. FBDC entered and occupied the leased premises. FBDC also appropriated the equipment and properties left by Tirreno pursuant to Section 22 of their Contract of Lease as partial payment for Tirrenos outstanding obligations. Issue: WON the stipulation of the contract of lease partakes of a pledge which is void under Article 2088 of the Civil Code for being pactum commissorium. Held: No. Section 22, as worded, gives FBDC a means to collect payment from Tirreno in case of termination of the lease contract or the expiration of the lease period and there are unpaid rentals, charges, or damages. The existence of a contract of pledge, however, does not arise just because FBDC has means of collecting past due rent from Tirreno other than direct payment. The trial court concluded that Section 22 constitutes a pledge because of the presence of the first three requisites of a pledge: Tirrenos properties in the leased premises secure Tirrenos lease payments; Tirreno is the absolute owner of the said properties; and the persons representing Tirreno have legal authority to constitute the pledge. However, the fourth requisite, that the thing pledged is placed in the possession of the creditor, is absent. There is non-compliance with the fourth requisite even if Tirrenos personal properties are found in FBDCs real property. Tirrenos personal properties are in FBDCs real property because of the

Contract of Lease, which gives Tirreno possession of the personal properties. Since Section 22 is not a contract of pledge, there is no pactumcommissorium. WHEREFORE, we GRANT the petition. We SET ASIDE the Orders dated 7 March 2003 and 3 July 2003 of Branch 59 of the Regional Trial Court of Makati City in Civil Case No. 01-1452 dismissing Fort Bonifacio Development Corporations Third Party Claim and denying Fort Bonifacio Development Corporations Motion to Intervene and Admit Complaint in Intervention. WeREINSTATE Fort Bonifacio Development Corporations Third Party Claim and GRANT its Motion to Intervene and Admit Complaint in Intervention. Fort Bonifacio Development Corporation may hold the Sheriff liable for the seizure and delivery of the properties subject of this case because of the lack of an indemnity bond. [G.R. No. 144882. February 04, 2005] LUISA BRIONES-VASQUEZ, petitioner, vs. COURT OF APPEALS and HEIRS OF MARIA MENDOZA VDA. DE OCAMPO, respondents. Facts: Under an agreement denominated as a pacto de retro sale, Maria Mendoza Vda. De Ocampo acquired a parcel of land from Luisa Briones. The latter thereunder reserved the right to repurchase the parcel of land up to December 31, 1970. On June 14, 1990, Hipolita Ocampo Paulite and Eusebio Mendoza Ocampo, the heirs of Maria Mendoza Vda. De Ocampo, filed a petition for consolidation of ownership, alleging that the seller was not able to exercise her privilege to redeem the property on or before December 31, 1970. CA ruled that the contract entered was of equitable mortgage. Issue: WON the agreement was pacto de retro or equitable mortgage. Held: Equitable mortgage. The Court of Appeals pronounced in its Decision that the contract between the parties is an equitable mortgage. Since the contract is characterized as a mortgage, the provisions of the Civil Code governing mortgages apply. Article 2088 of the Civil Code states: The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose of them. Any stipulation to the contrary is null and void. The private respondents do not appear to have caused the foreclosure of the mortgage much less have they purchased the property at a foreclosure sale. Petitioner, therefore, retains ownership of the subject property. The right of ownership necessarily includes the right to possess, particularly where, as in this case, there appears to have been no availment of the remedy of foreclosure of the mortgage on the ground of default or non-payment of the obligation in question.

WHEREFORE, the petition for certiorari is DISMISSED. The parties are directed to proceed upon the basis of the final Decision of the Court of Appeals, dated June 29, 1995, in CA-G.R. CV No. 39025, that the contract in question was an equitable mortgage and not a sale.

accordance with Section 20 of R.A. No. 4726. However, neither annotation nor law vests it with sufficient authority to foreclose on the property. Clearly, Section 20 merely prescribes the procedure by which petitioners claim may be treated as a superior lien i.e., through the annotation thereof on the title of the [31] condominium unit. While the law also grants petitioner the option to enforce said lien through either the judicial or extrajudicial foreclosure sale of the condominium unit, Section 20 does not by itself, ipso facto, authorize judicial as extra-judicial foreclosure of the condominium unit. Petitioner may avail itself of either option only in the manner provided for by the governing law and rules. As already pointed out, A.M. No. No. 99-10-05-0, as implemented under Circular No. 7-2002, requires that petitioner furnish evidence of its special authority to cause the extrajudicial foreclosure of the condominium unit. There being no evidence of such special authority, petitioner failed to establish a clear right to a writ of mandamus to compel the RTC to act on its petition for extrajudicial foreclosure. WHEREFORE, the petition is DENIED for lack of merit.

G.R. No. 163196, July 4, 2008 FIRST MARBELLA CONDOMINIUM GATMAYTAN, Respondent. Facts:

ASSOCIATION,

INC.,

Petitioner,

vs.

AUGUSTO

First MarbellaCondominium Association, Inc. (petitioner) requested for extrajudicial foreclosure against Augusto Gatmaytan (respondent) for having failed to association dues. RTC dismissed the petition there being no mortgage exist between petitioner and respondent. Petitioner asserts that it is expressly provided under Section 20 of Republic Act (R.A.) No. 4726 that it has the right to cause the extrajudicial foreclosure of its annotated lien on the condominium unit. Issue: WON petitioner can cause foreclosure of the condominium unit of respondent. Held: No. Under Circular No. 7-2002, implementing Supreme Court Administrative [27] Matter No. 99-10-05-0, it is mandatory that a petition for extrajudicial foreclosure be supported by evidence that petitioner holds a special power or authority to foreclose, thus: Sec. 1. All applications for extra-judicial foreclosure of mortgage, whether under the direction of the Sheriff or a notary public pursuant to Art. No. 3135, as amended, and Act 1508, as amended, shall be filed with the Executive Judge, through the Clerk of Court, who is also the Ex-Officio Sheriff (A.M. No. 99-10-05-0, as amended, March 1, 2001). In the present case, the only basis of petitioner for causing the extrajudicial foreclosure of the condominium unit of respondent is a notice of assessment annotated on CCT No. 1972 in
[26]

[G.R. No. 125838. June 10, 2003] DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS and EMERALD RESORT HOTEL CORPORATION, respondents. Facts: Private respondent Emerald Resort Hotel Corporation (ERHC) obtained a loan from petitioner Development Bank of the Philippines (DBP). To secure the loan, ERHC mortgaged its personal and real properties to DBP. On 5 June 1986, alleging that ERHC failed to pay its loan, DBP filed with the Office of the Sheriff, Regional Trial Court of Iriga City, an Application for Extrajudicial Foreclosure of Real Estate and Chattel Mortgages. Sheriffs issued the required notices of public auction sale of the personal and real properties. However, they failed to execute the corresponding certificates of posting of the notices. The Office of the Sheriff scheduled on 12 August 1986 the public auction sale of the real properties. The first scheduled public auction was publish. However, the Office of the Sheriff postponed the auction sale on 12 August 1986 to 11 September 1986 at the request of ERHC. DBP did not republish the

notice of the rescheduled auction sale because DBP and ERHC signed an agreement to postpone the 12 August 1986 auction sale. Issue: WON the extrajudicial foreclosre of real and chattel mortgage are valid. Held: Valid as to chattel mortgage. Void as to real estate mortgage. There is no question that DBP published the notice of auction sale scheduled on 12 August 1986. However, no auction sale took place on 12 August 1986 because DBP, at the instance of ERHC, agreed to postpone the same to 11 September 1986. Publication, therefore, is required to give the foreclosure sale a reasonably wide publicity such that those interested might attend the public sale. To allow the parties to waive this jurisdictional requirement would result in converting into a private sale what ought to be a public auction. DBP, however, complied with the mandatory posting of the notices of the [27] auction sale of the personal properties. Under the Chattel Mortgage Law, the only requirement is posting of the notice of auction sale. There was no postponement of the auction sale of the personal properties and the foreclosure took place as scheduled. Thus, the extrajudicial foreclosure of the chattel mortgage in the instant case suffers from no procedural infirmity. WHEREFORE, the Joint Decision of the Court of Appeals in CA-G.R. CV Nos. 38569 and 38604 is AFFIRMED with MODIFICATION. The extrajudicial foreclosure of the chattel mortgage is valid whereas the extrajudicial foreclosure of the real estate mortgage is void. The award of moral damages is deleted for lack of basis. No costs. G.R. NO. 144435, February 6, 2007 GUILLERMINA BALUYUT, Petitioner, vs. EULOGIO POBLETE, SALUD POBLETE and THE HON.COURT OF APPEALS, Respondents. Facts: On July 20, 1981, herein petitioner, Guillermina Baluyut (Baluyut), loaned from the spouses Eulogio and Salud Poblete the sum of P850,000.00. As evidence of her indebtedness, Baluyut signed, on even date, a promissory note for the amount borrowed. Under the promissory note, the loan shall mature in one month. To secure the payment of her obligation, she conveyed to the Poblete spouses, by way of a real estate mortgage contract, a house and lot she owns.

Upon maturity of the loan, Baluyut failed to pay her indebtedness. The Poblete spouses subsequently decided to extrajudicially foreclose the real estate mortgage. OnAugust 27, 1982, the mortgaged property was sold on auction by the Provincial Sheriff of Rizal to the Poblete spouses who were the highest bidders. Baluyut failed to redeem the subject property within the period required by law prompting Eulogio Poblete to execute an Affidavit of Consolidation of Title. Baluyut remained in possession of the subject property and refused to vacate the same. Subsequently, the trial court issued an order granting the writ of possession. However, before Eulogio and the heirs of Salud could take possession of the property, Baluyut filed an action for annulment of mortgage, extrajudicial foreclosure and sale of the subject property, as well as cancellation of the title issued in the name of Eulogio and the heirs of Salud, plus damages. Issue: WON extrajudicial foreclose was valid. Held: Yes. In the present case, there was sufficient evidence to prove that notices of the foreclosure sale of the subject property were published in accordance with law and that there was no allegation, much less proof, that the property was sold for a price which is considerably lower than its value as to show collusion between the sheriff and herein private respondents. Hence, even granting that the sheriff failed to post the notices of foreclosure in at least three public places, such failure, pursuant to Olizon, is not a sufficient basis in nullifying the auction sale and the subsequent issuance of title in favor of private respondents. As to petitioners argument that the sheriff in charge of the auction sale is required to execute an affidavit of posting of notices, the Court agrees with private respondents contention that petitioners reliance on the provisions of Section 5, [30] Republic Act (R.A.) No. 720, as amended by R.A. No. 5939 , as well as on the [31] cases of Roxas v. Court of Appeals, Pulido v. Court of [32] [33] Appeals and Tambunting v. Court of Appeals, is misplaced as the said provision of law refers specifically and exclusively to the foreclosure of mortgages covering loans granted by rural banks. In the present case, the contracts of loan and mortgage are between private individuals. The governing law, insofar as the extrajudicial foreclosure proceedings are concerned, is Act No. 3135, as amended [34] by Act No. 4118. Section 3 of the said law reads as follows: Sec. 3. Notice shall be given by posting notices of the sale for not less than twenty days in at least three public places of the municipality or city where the property is situated and if such property is worth more than four hundred pesos, such

notice shall also be published once a week for at least three consecutive weeks in a newspaper of general circulation in the municipality or city. WHEREFORE, the instant petition is DENIED and the assailed Decision and Resolution of the Court of Appeals are AFFIRMED in toto.

the application included Network in its body. It is the allegations in the body of the [20] petition that control and not the heading or caption. The notice clearly identified Network as the mortgagor. Such identification in the notice of extrajudicial sale was what counted under the rules of procedure in extrajudicial foreclosure of [21] mortgage. 2. Yes. The object of a notice of sale is to inform the public of the nature and condition of the property to be sold, and of the time, place and terms of the sale. Notices are given for the purpose of securing bidders and to prevent a sacrifice of the property. If these objects are attained, immaterial errors and mistakes will not affect the sufficiency of the notice; but if mistakes or omissions occur in the notices of sale, which are calculated to deter or mislead bidders, to depreciate the value of the property, or to prevent it from bringing a fair price, such mistakes or omissions will be fatal to the validity of the notice, [25] and also to the sale made pursuant thereto.
[26]

G.R. No. 167500, October 17, 2008 K-PHIL., INC., SOO MYUNG PARK and NETWORK DEVELOPMENT HOLDING CORP., Petitioners, vs. METROPOLITAN BANK & TRUST COMPANY, REGALADO E. EUSEBIO, in his capacity as Clerk of Court VI and Ex-Officio Sheriff, and REYNALDO R. CAMERINO, in his capacity as Sheriff IV, Regional Trial Court of Imus, Cavite, Respondents. Facts: Metropolitan Bank & Trust Company (Metrobank) extended to petitioner K-Phil., Inc. (K-Phil) various loans and credit accommodations. These loans were secured by [3] a mortgage over two lots owned by petitioner Network Development Holding Corporation (Network) and occupied by K-Phil. Because of petitioners alleged violation of the terms and conditions of the loans, Metrobank filed a petition for extrajudicial foreclosure of real estate and chattel mortgage. Petitioner claimed that the foreclosure of mortgages was premature and in contravention of a restructuring agreement of the loans and obligations of K-Phil. In addition, the petition for extrajudicial foreclosure was defective because it indicated the wrong amount and failed to implead and notify Network, an indispensable party as owner-mortgagor of the subject lots. Issues: (1) whether the petition for extrajudicial foreclosure was null and void for its failure [18] to implead Network and to state the correct amount of indebtedness; (2) whether it was proper to order the issuance of a new notice with the necessary corrections Held: 1. No. Networks name was indeed omitted from the caption of the application/petition for extrajudicial foreclosure. However, this omission was not [19] fatal to Metrobanks application as it was not in violation of Act 3135. Moreover,

The validity of a notice of sale is not affected by immaterial errors; only [27] substantial errors will invalidate it. Unless it was calculated to deter or mislead bidders, to depreciate the value of the property or to prevent it from bringing a fair price, the discrepancy between the amount of the obligation as reflected in the notice of sale and the amount actually due and collected during the bidding does [28] not constitute a substantial error that should invalidate the notice. Therefore, the CAs order for the sheriff to issue, publish and serve a new notice of extrajudicial sale correcting the inaccuracies and inadequacies of the prior notice was sufficient to remedy the discrepancies.

G.R. No. 158635, December 9, 2005 MAGNA FINANCIAL SERVICES GROUP, INC., Petitioner, vs. ELIAS COLARINA, Respondent. Facts: Elias Colarina bought on installment from Magna Financial Services Group, Inc., one (1) unit of Suzuki Multicab. After making a down payment, Colarina executed a promissory note for the balance of P229,284.00 payable in thirty-six (36) equal monthly installments at P6,369.00 monthly. Colarina failed to pay the monthly amortization beginning January 1999, accumulating an unpaid balance of P131,607.00.

Magna Financial Services Group, Inc. filed a Complaint for Foreclosure of Chattel Mortgage with Replevin. RTC ruled in favour of Magna Financial but CA reserved it. Issue: WON Magna Financial can foreclose the mortgage at the same time exact specific performance. Held: No. Article 1484, paragraph 3, provides that if the vendor has availed himself of the right to foreclose the chattel mortgage, he shall have no further action against the purchaser to recover any unpaid balance of the purchase price. Any agreement to the contrary shall be void. Extrajudicial foreclosure, as chosen by the petitioner, is attained by causing the mortgaged property to be seized by the sheriff, as agent of the mortgagee, and have it sold at public auction in the manner prescribed by Section 14 of Act No. [23] 1508, or the Chattel Mortgage Law. This rule governs extrajudicial foreclosure of chattel mortgage. In sum, since the petitioner has undeniably elected a remedy of foreclosure under Article 1484(3) of the Civil Code, it is bound by its election and thus may not be allowed to change what it has opted for nor to ask for more. WHEREFORE, premises considered, the instant petition is DENIED for lack of merit and the decision of the Court of Appeals dated 21 January 2003 is AFFIRMED. Costs against petitioner.

As security, GACDC, represented by petitioner spouses Renato and Delia Legaspi, [5] executed a real estate mortgage forP450,000 in favor of PCILFI. When GACDC failed to pay the loan on maturity, the mortgage was foreclosed extrajudicially. PCILFI was the highest bidder at the foreclosure sale.

PCILFI filed a petition for the issuance of a writ of possession. On the same case, petitioner prayed for the setting aside of the certificate of sale, cancellation of the writ of possession, and the suspension of the implementation of the said writ of possession.

Issue: WON the remedy availed of Green Asia which was prayed for nullification of extrajudicial foreclose was proper. Held: No. Indeed, an original action is not necessary to acquire possession in favor of the purchaser at an extrajudicial foreclosure of real property. The right to possession is based simply on the purchasers ownership of the property. Note that the nullity of the mortgage is not covered by the remedy outlined under Section 8 of Act No. 3135. The said provision specifically lists the following exclusive grounds for a petition to set aside the sale and cancel the writ of possession: (1) that the mortgage was not violated; and (2) that the sale was not made in accordance with the provisions of Act No. 3135. Any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of possession. Indeed, regardless of whether or not there is a pending suit for annulment of the mortgage [17] or the foreclosure itself, the purchaser is entitled to a writ of possession. WHEREFORE, the petition is DISMISSED. The impugned Decision dated March 18, 2004 and Resolution dated May 26, 2004, of the Court of Appeals in CA-G.R. CV No. 78117 are AFFIRMED.

G.R. No. 163735, November 24, 2006 GREEN ASIA CONSTRUCTIONAND DEVELOPMENT CORPORATIONAND SPS. RENATO AND DELIA LEGASPI, Petitioners, vs. THE HONORABLE COURT OF APPEALS AND PCI LEASING AND FINANCE, INC., Respondents.

G.R. No. 147820. March 18, 2005] SPOUSES RUBEN SANTIAGO and INOCENCIA SANTIAGO, petitioners, vs. MERCHANTS RURAL BANK OF TALAVERA, INC., respondent. Facts: Respondent Merchants Rural Bank of Talavera, Inc. filed an Ex Parte Petition with the Regional Trial Court (RTC) of Cabanatuan City, for the issuance of a writ of

Facts: Green Asia Construction and Development Corporation (GACDC), represented by its [4] president, petitioner Renato Legaspi, obtained a loan of P2,600,000 from private respondent PCI Leasing and Finance, Inc. (PCILFI).

possession over the two parcels of land covered by Transfer Certificate of Title (TCT) Nos. NT-196197 and NT-187791 located in San Mariano, Sta. Rosa, Nueva Ecija. Issue: Whether testimonial or documentary are needed to support petition for writ of execution. Held: No. The proceeding in a petition for a writ of possession is ex parte and summary in nature. It is a judicial proceeding brought for the benefit of one party only and without notice by the court to any person adverse of interest. The petitioners have not cited any law or rule requiring that documentary and testimonial evidence be first adduced in support of a petition for a writ of possession before the trial court may act upon and grant the same. Section 7 of Act No. 3135 merely requires that a petition for the issuance of a writ of possession shall be in the form of an ex parte motion. Upon the filing of the said petition, the payment of the requisite fees therefor, and the approval of the trial court if such petition is filed during the period for the redemption of the property, the court shall order that a writ of possession be issued. IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. Costs against the petitioners. SO ORDERED.

When the Parays attempted to foreclose the pledges on account of respondents failure to pay their loans, respondents filed complaints which sought the declaration of nullity of the pledge agreements. Respondents consign to RTC which they interpreted as redemption. Notwithstanding the consignations, the public auction took place as scheduled, with petitioner Vidal Espeleta successfully bidding the amount of P6,200,000.00 for all of the pledged shares. Issue: WON Petitioners were authorized to refuse as they did the tender of payment since they were undertaking the auction sale pursuant to the final and executory decision in Civil Cases. Held: Yes. it must be clarified that the subject sale of pledged shares was an extrajudicial sale, specifically a notarial sale, as distinguished from a judicial sale as typified by an execution sale. Under the Civil Code, the foreclosure of a pledge occurs extrajudicially, without intervention by the courts. All the creditor needs to do, if the credit has not been satisfied in due time, is to proceed before a Notary [9] Public to the sale of the thing pledged. In this case, petitioners attempted as early as 1980 to proceed extrajudicially with the sale of the pledged shares by public auction. However, extrajudicial sale was stayed with the filing of Civil Cases No. R-20120 and 20131, which sought to annul the pledge contracts. The final and executory judgment in those cases affirmed the pledge contracts and disposed. Since the pledged shares in this case are not subject to redemption, the Court of Appeals had no business invoking and applying the inexistent right of redemption. We cannot thus agree that the consigned payments should be treated with liberality, or somehow construed as having been made in the exercise of the right of redemption. We also must reject the appellate courts declaration that the buyer of at the public auction is not ipso facto rendered the owner of the auctioned shares, since the debtor enjoys the one-year redemptive period to redeem the property. Obviously, since there is no right to redeem personal property, the rights of ownership vested unto the purchaser at the foreclosure sale are not entangled in any suspensive condition that is implicit in a redemptive period. WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals is SET ASIDE and the decision of the Cebu City RTC, Branch 16, dated 18 November 1992 is REINSTATED. Costs against respondents

G.R. No. 132287, January 24, 2006 SPOUSES BONIFACIO and FAUSTINA PARAY, and VIDAL ESPELETA, Petitioners, vs. DRA. ABDULIA C. RODRIGUEZ, MIGUELA R. JARIOL assisted by her husband ANTOLIN JARIOL, SR., LEONORA NOLASCO assisted by her husband FELICIANO NOLASCO, DOLORES SOBERANO assisted by her husband JOSE SOBERANO, JR., JULIA R. GENEROSO, TERESITA R. NATIVIDAD and GENOVEVA R. SORONIO assisted by her husband ALFONSO SORONIO, Respondents.

Facts: Respondents were the owners, in their respective personal capacities, of shares of stock in a corporation known as the Quirino-Leonor-Rodriguez Realty Inc.Respondents secured by way of pledge of some of their shares of stock to petitioners Bonifacio and Faustina Paray (Parays) the payment of certain loan obligations.