G.R. No.

200991 - SPOUSES WILFREDO and DOMINICA ROSARIO,

petitioners, versus GOVERNMENT SERVICE INSURANCE SYSTEM,
respondent.

Promulgated:
MAR 18 2021 ~
x--------------------------------- ----------------------------------x
CONCURRING OPINION

CAGUIOA, J.: l
'

I concur with the ponencia's finding that pet tioners' intervention in the
ex parte possessory writ proceeding is merite& as an exception to the
ministerial nature of the issuance of a writ of po~session under Section 33,
Rule 39 of the Rules of Court (Rules). The ponenc~a characterizes individuals
who purchase condominiwn units or subdivision 11ts from developers such as
petitioners in this case as similarly situated wit~I co-owners, usufructuaries
and agricultural tenants, who are considered tliird-party possessors who
possess the property subject of the writ adversely ~o the judgment obligor. I

I agree with the ponencia's characterizatiol of petitioners as adverse

third-party possessors. In particular, it addresses tlie concern that is central to
this controversy, as that which pertains to the urfaimess attending herein
petitioners' situation, specifically the lack of lnotice to them that the
condominium unit in their possession, Unit 205, 'fas already foreclosed and
sold at an auction, with the Government Service Insurance System (GSIS) as
the sole bidder. As applied to the facts of the instarlt case, it is observable that
even with petitioners' resort to the Housing and Llmd Use Regulatory Board
I

(HLURB) for an annulment of the mortgage and foreclosure of the property

in their possession, such resort would still not affbrd them with an adequate
I

and timely remedy against a dispossession unless they are allowed to

intervene in the possessory writ proceeding.

This is the factual scenario that is precisel what Republic Act No.
(R.A) 65522 or the "Realty Installment Bu~er Act" (Maceda Law)
contemplates. Concurringly, I submit that Section! 18 of Presidential Decree
No. (P.D.) 957 3 or the "Subdivision and Condo~iniwn Buyers' Protective
Decree" and the related and analogous provisions in the Maceda Law should
I

be the proper guideposts which the Court is called upon to follow towards a
reasonably anchored conclusion that allows petitibners, and those similarly

Ponencia. pp. 4-7.

2
AN ACT TO PROVIDE PROTECTION TO BUYERS OF REAL ESTATE ON STALLMENT PAYMENTS August 26
1972. I , •

REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMiIUMS, PROVIDING PENALTIE FO

VIOLATIONS THEREOF, July 12, 1976.

1
Concurring Opinion 6 G.R. No. 200991

favor of buyers. Within the bounds of reason, fairness, and justice,

doubts in its interpretation must be resolved in a manner that will
11
afford buyers the fullest extent of its benefits.

Four years after the Maceda Law came P.D. 957 which, for its part,
likewise directed every intendment towards the protection of innocent lot
buyers from scheming developers or onerous arrangements. The case of
12
Metropolitan Bank and Trust Company v. SLGT Holdings, Jnc., enlightens
in this respect:

As it were, [P.D.] 957 aims to protect innocent subdivision lot and

condominium unit buyers against fraudulent real estate practices. Its
preambulatory clauses say so and the Court need not belabor the matter
presently. Section 18, supra, of the decree directly addresses the problem
of fraud and other manipulative practices perpetrated against buyers
when the lot or unit they have contracted to acquire, and which they
religiously paid for, is mortgaged without their knowledge, let alone
their consent. The avowed purpose of [P.D.] 957 compels, as the OP
correctly stated, the reading of Section 18 as prohibitory and acts committed
contrary to it are void. Any less stringent construal would only accord
unscrupulous developers and their financiers unbridled discretion to
follow or not to follow [P.O.] 957 and thus defeat the very lofty purpose
of that decree. It thus stands to reason that a mortgage contract executed in
breach of Section 18 of the decree is null and void. 13

In the same vein, the Court in Philippine National Bank v. Office ofthe
President14 expounded on the rationale behind P.D. 957, as a tool to protect
condominium unit and/or subdivision lot buyers against developers and
mortgaging banks, to wit:

x x x [T]he unmistakable intent of the law [is] to protect innocent

lot buyers from scheming subdivision developers. As between these small
lot buyers and the gigantic financial institutions which the developers
deal with, it is obvious that the law - as an instrument of social justice
- must favor the weak. Indeed, the petitioner bank had at its disposal vast
resources with which it could adequately protect its loan activities, and
therefore is presumed to have conducted the usual "due diligence" checking
and ascertaining x xx the actual status, condition, utilization and occupancy
of the property offered as collateral. x x x On the other hand, private
respondents obviously were powerless to discover the attempt of the
land developer to hypothecate the property being sold to them. It was
precisely in order to deal with this kind of situation that P.D. 957 was
enacted, its very essence and intendment being to provide a protective
mantle over helpless citizens who may fall prey to the razzmatazz of
what P.O. 957 termed "unscrupulous subdivision and condominium
sellers." 15

11 Id. at 89-90 citing Active Realty & Development Corporation v. Daroya, 431 Phil. 753 (2002). Emphasis
supplied.
12 G.R. Nos. 175181-82 and G.R. Nos. 175354 & 175387-88, September 14, 2007, 533 SCRA 516.
13
Id. at 526. Emphasis supplied.
14
G.R. No. 104528, January 18, 1996, 252 SCRA 9.
15
Id. at 10-11. Emphasis supplied.
 Concurring Opinion 7 G.R. No. 200991

Proceeding from the foregoing, if in the Maceda Law, a buyer who

defaults after a threshold of installment payments (i.e., at least two years) is
given the right to pay the unpaid balance free of additional interests within a
grace period equivalent to one month for every year of installment to be
exercised every five years, as well as the right to be refunded the cash
surrender value of the payments on the property equivalent to 50% of the total
payments made in case of cancellation of the contract by a notarial act, then
much more latitude should be rightly afforded a buyer on installment such as
petitioners in this case, who have not been shown to have defaulted, but
instead have been proven to have had possession of Unit 205 since 1998, and
had been religiously paying installments for their purchase thereof.

Stated differently, if the defaulting buyers are afforded significant

elbow room to ensure that they are given every opportunity to retain the
property they are paying installments for, it is even more reasonably
conceivable that a requirement of proper and effective notice to non-
defaulting buyers/possessors such as herein petitioners is but a meager
condition on the part of the mortgagor (i.e., NSJBI) and mortgagee (i.e.,
GSIS), when viewed in accordance with the overarching protective animus
behind the Maceda Law and P.D. 957.

The Maceda Law and P.D. 957, thus, clearly grant installment
buyers such as petitioners in this case substantive rights which are
positively assertible against the developer/seller and other parties,
including mortgagees of the latter.

Undoubtedly, this characterization is also consistent with the operative

definition of"adverse" in the context of adverse possession under Section 33,
Rule 39 of the Rules, which primarily means a possession that is in the
possessor's own right, such that the third-party possessor may pursue a cause
of action against the judgment debtor in order to preserve his possession over
the property in dispute. The logic behind the nature of "adverse" possession
in this conceptual context dovetails with the Court's elucidation of the same
in the case of Gallent, Sr. v. Velasquez: 16

In China Banking Corporation v. Spouses Lozada, it was held that

for the court's ministerial duty to issue a writ of possession to cease, it is
not enough that the property be held by a third party, but rather the said
possessor must have a claim thereto adverse to the debtor/mortgagor:

Where a parcel levied upon on execution is occupied

by a party other than a judgment debtor, the procedure is for
the court to order a hearing to determine the nature of said
adverse possession. Similarly, in an extrajudicial foreclosure
of real property, when the foreclosed property is in the
possession of a third party holding the same adversely to the
defaulting debtor/mortgagor, the issuance by the RTC of a
writ of possession in favor of the purchaser of the said real

16
G.R. No. 203949, April 6, 2016, 788 SCRA 518.
Concurring Opinion 8 G.R. No. 200991

property ceases to be ministerial and may no longer be done

ex parte. For the exception to apply, however, the property
need not only be possessed by a third party, but also held by
the third party adversely to the debtor/mortgagor.

Specifically, the Court held that to be considered in adverse

possession, the third party possessor must have done so in his own right and
not merely as a successor or transferee of the debtor or mortgagor. 17

Given the foregoing, since herein petitioners' possession of Unit 205 in

this case affords them under the Maceda Law and P.D. 957 with substantive
rights which are clearly assertible against the developer/seller and other
parties, including mortgagees of the developer/seller, in order that they may
be preserved in their possession of the same, such a nuanced statutory
configuration effectively sets them apart from the operatively constrained
"transferee" of the debtor or mortgagor, in that as opposed to mere transferees
who obtain no better right to the property than that which the mortgagor had,
petitioners here are granted specific protective substantive rights in order that
they may not be expediently ousted from the property they possess by the
mere fact that they purchased and are paying for the same in installments.

In fine, by reason of these protective statutory rights under the Maceda

Law and P.D. 957, the buyers such as herein petitioners have been accorded
third-party status, which they can assert against both the developer-seller
mortgagor and the mortgagee. Thus, the sole exception under Section 33, Rule
39 of the Rules squarely applies in the instant case.

It is additionally observed that the GSIS as the mortgagee in this case

may not feign unintended disregard or lack of awareness of whether or not the
requirement of notice under Section 18 of P.D. 957 was complied with, and
instead insist that it may proceed with taking possession of the mortgaged
properties which were sold by NSJBI to innocent buyers. On the contrary,
GSIS as the creditor in this case would have known precisely whether the
buyers including petitioners were notified of said mortgage, since Section 18
of P.D. 957 requires such notice before the loan applied for by the developer
may be released.

In this light, notwithstanding the fact that herein petitioners had already
instituted a case before the HLURB which is presently pending with the Office
of the President, and pursuant to a fair disposition of the instant case, I fully
join the ponencia's determination that petitioners should be allowed to
intervene in the otherwise ex parte proceeding for the possessory writ, as these
substantive laws governing sales of condominium units bring petitioners
squarely within the contemplation of adverse third-person party possessors
under Section 33, Rule 39 of the Rules.

17
Id. at 535-536 citing China Banking Corporation v. Spouses Lozada, 579 Phil. 454 (2008).

(
 Concurring Opinion 9 G.R. No. 200991

This is only consistent with the Court's repeated exhortation that the
procedural rules cannot be used to defeat the ends of justice, or upend
substantive rights. 18 Towards this end, I therefore fully agree with the
ponencia's conclusion, thus:

Thus, in keeping with the avowed purpose of [P.D.] 957, the rule
should now be that the issuance of a writ of possession ceases to be
ministerial if a condominium or subdivision lot buyer intervenes to protect
[his/her] rights against a mortgagee bank or financial institution. The court
must order a hearing to determine the nature and source of the buyer's
supposed right to the foreclosed property. Should the judge be satisfied that
the oppositors to the issuance of the writ are bona fide condominium or
subdivision buyers, the writ should thus be issued excluding the aforesaid
buyers from its implementation. It should, however, be clarified that
exclusion of such buyers is without prejudice to the outcome of cases
concerning the validity of mortgage between the developer and the
mortgagee financial institution or bank under Section 18 of [P.D.] 957.

Finally, it is submitted that a disposition otherwise would result in a

remedial gap that effectively circumvents the singular objective of both the
Maceda Law and P.D. 957. For in the final analysis, carving out this route
would genuinely afford the most just and equitable remedy for petitioners in
this case, who otherwise and despite resort to an action before the HLURB,
must still fear an impending eviction by reason of a writ of possession which
was issued as an ultimate consequence of a defaulted loan they had no hand
in taking out or satisfying.

For these reasons, I vote to GRANT the petition.

18
Fajardo, Jr. v. Freedom To Build, Inc., G.R. No. 134692, December 8, 2000, 347 SCRA 474,478.