Writ of Possession for Subsequent Property Purchasers After Foreclosure

The Supreme Court's 2017 decision in Spouses Reyes v. Spouses Chung clarifies an important point for buyers of foreclosed property: a subsequent purchaser can obtain a writ of possession, but the process differs from that available to the original foreclosure buyer. This ruling matters because many properties change hands after foreclosure, and buyers need to know their rights and the procedural steps required to take physical possession.

Facts of the Case

The petitioners obtained a loan from Export and Industry Bank, secured by a real estate mortgage over their Quezon City property. When they defaulted, the bank extrajudicially foreclosed and bought the property at auction. After the one-year redemption period lapsed without redemption, title was consolidated in the bank's name.

The bank then sold the property to LNC Corporation, which later sold it to the respondents. Despite demands to vacate, the petitioners remained. The respondents first filed an ejectment case, which was dismissed. They then filed an ex parte petition for a writ of possession under Act No. 3135 before the Regional Trial Court, which granted it.

The Issues

Two main issues reached the Supreme Court: whether the respondents committed forum shopping by filing both an ejectment case and a petition for writ of possession, and whether the trial court correctly issued the writ in favor of purchasers who were not the original foreclosure buyers.

No Forum Shopping

The Court ruled that no forum shopping existed. Forum shopping requires the elements of litis pendentia (a pending case between the same parties on the same issues) or res judicata (a final judgment barring a second action). Neither was present here.

The ejectment case and the writ of possession petition are different actions. The writ of possession is merely an incident in the transfer of title, not a separate adversarial proceeding. Moreover, the respondents withdrew their ejectment appeal one day after filing the petition, showing good faith correction of a procedural error rather than improper forum shopping.

Writ of Possession: Available to Subsequent Purchasers, But With a Hearing

The Court confirmed that a subsequent purchaser steps into the shoes of the original foreclosure buyer and acquires all rights of ownership, including the right to possession. Under Section 7 of Act No. 3135, the purchaser in an extrajudicial foreclosure may petition the court for possession. Since the respondents purchased the property from the bank's successor, they inherited this right.

However, the Court drew an important distinction. Citing the earlier case of Okabe v. Saturnino, the Court held that while a writ of possession may issue ex parte (without hearing) to the original mortgagee-purchaser, a subsequent purchaser must undergo a hearing first. The court must determine that the mortgagor still possesses the property before issuing the writ.

In this case, the trial court erred by issuing the writ ex parte. Nevertheless, the Supreme Court refused to nullify the writ because the petitioners were eventually heard through their Motion to Quash, and they remained in possession before the writ was implemented. Annulling the writ would only prolong proceedings and unfairly deny the new owners their property.

Practical Takeaways

• Subsequent purchasers have rights. Buying foreclosed property from the original foreclosure buyer or a successor transfers the right to seek a writ of possession.
• A hearing is required. Unlike the original mortgagee-purchaser, a subsequent purchaser cannot obtain a writ ex parte. The court must first determine that the mortgagor still occupies the property.
• Ejectment and writ of possession are different remedies. Filing both does not automatically constitute forum shopping, especially if one is withdrawn in good faith.
• Possession follows ownership. Once title is consolidated and ownership is clear, the owner's right to possession is a natural incident of ownership.
• Procedural defects may be cured. Even if the writ was improperly issued ex parte, the defect may be cured if the mortgagor later gets an opportunity to be heard.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.