THIRD DIVISION
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HON. JOSE
FERNADEZ, RTC of Petitioners, - versus - SPS. GREGORIO ESPINOZA and JOJI GADOR-ESPINOZA, Respondent. |
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G.R. No. 156421 Present: YNARES-SANTIAGO, J., Chairperson, AUSTRIA-MARTINEZ, CHICO-NAZARIO, NACHURA, and REYES, JJ. Promulgated: April
14, 2008 |
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CHICO-NAZARIO,
J.:
Before this
Court is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court filed by petitioner United Overseas Bank[1]
(UOB) seeking to reverse and set aside the Decision[2]
of the Court of Appeals dated
The dispositive portion of the Court of Appeals Decision reads:
WHEREFORE,
premises considered the assailed Orders dated
The
UOB is a banking institution duly organized and existing as such under
the Philippine laws; while Firematic Philippines,
Inc. (FPI) is a domestic corporation duly organized and existing under
Philippine laws represented by its President, Gregorio Espinoza.
On P11,000,000.00. Using the said
credit line, FPI obtained on several occasions from UOB loans in different
amounts, reaching the total sum of P4,000,000.00, as evidenced by
promissory notes executed by Gregorio Espinoza.
Likewise drawn against the credit line of FPI were trust receipts in the
sum of P6,325,588.71.
As a security for the loan
obligations of FPI, the spouses Espinoza executed a Deed of Real Estate
Mortgage over a parcel of land located in
Subsequently, FPI defaulted in the
payment of the promissory notes and trust receipts drawn against its credit
line, which prompted UOB to cause the extrajudicial foreclosure of its mortgage
on the subject property, and the public auction sale thereof. The UOB was the highest bidder at the auction
sale as evidenced by the Certificate of Sale[7]
dated
For
failure of FPI and the spouses Espinoza to redeem the subject property within
the redemption period, UOB filed an Affidavit of Consolidation before the
Register of Deeds of Pasig. Consequently, a new TCT covering the subject
property was issued in the name of UOB, particularly,
TCT No. PT-108565.
In
order to retain possession of the subject property, FPI and the spouses
Espinoza instituted an action for nullification of the extrajudicial
foreclosure proceedings and certificate of sale, before the RTC, Branch 164,
docketed as Civil Case No. 66256. In their Amended Complaint, FPI and the
spouses Espinoza alleged that there was bad faith on
the part of UOB who made them sign the Deed of Real Estate Mortgage in
blank. In addition, FPI and the spouses
Espinoza averred that there was already an agreement entered into by the
parties to restructure the loan, but for unknown reasons, the agreement was
unilaterally rescinded by UOB. Finally,
FPI and the spouses Espinoza claimed that at the time they filed their
complaint, FPI already paid UOB the sum of P5,275,012.43. Despite their
repeated requests, however, UOB still failed to give them proper accounting of
their outstanding loan obligations and the payments they made thereon.
For its part, UOB filed an
Ex-Parte Petition for Issuance of a Writ of Possession
before the RTC, Branch 158, docketed as LRC Case No. R-5792. The
spouses Espinoza opposed LRC Case No.
R-5792 in view of the pendency of Civil Case
No. 66256 and moved, instead, for the
consolidation of the two cases
In its Order dated
This resolves the opposition to the ex-parte issuance of writ of possession
with motion for consolidation together with the reply to the opposition and the
opposition to the motion.
Since [UOB] has already
consolidated a title in its name, the pendency of
separate civil action is not a bar to the issuance of writ of possession because
the same is a ministerial act of the trial court (Vaca
v. Court of Appeals, et. al., G.R. No. 1109672, July 14, 1994). Being so, the proceedings of this petition is
ex-parte
that does not require the appearance nor the intervention of the [spouses Espinoza].
Consequently, [the spouses
Espinoza’s] opposition to the issuance of writ of possession and its motion for
consolidation are denied.[8]
The Motion for Reconsideration of the
afore-quoted
This resolves [the spouses Espinoza’s] Motion for
Reconsideration, Addendum to Motion for Reconsideration together with the
opposition to the motion.
The motion is denied. It is merely a reiteration of their earlier
opposition to their Ex-parte Petition for Issuance of Writ of Possession.[9]
On
WHEREFORE,
let a writ of possession be issued in favor of petitioner United Overseas Bank
Phils., directing the spouses Gregorio Espinoza and Joji
Gador-Espinoza and all persons claiming rights under
them to vacate the premises of the property covered by Transfer Certificate of
Title No. PT-108565 under [UOB’s] name and to turn to
it over [UOB] within ten (10) days from receipt of this Order.[10]
A motion was filed by the spouses
Espinoza seeking reconsideration and clarification of the 13 July 2000 Order of
the RTC, Branch 158, underscoring the alleged irregularities in the procurement
of the mortgage, accounting of the loan obligations, and conduct of the
foreclosure proceedings.
The Motion
for Clarification of the spouses Espinoza, however, was denied by the RTC,
Branch 158, in its Order dated
The motion is denied. There is really nothing to
clarify on the Order of this Court dated
Consequently, this Order of July 13, 2000 stays and
the motion of the [the spouses Espinoza] for the consolidation of its (sic) petition with Civil Case
No. 66256 pending before Branch 164, also of this Court is denied.[11]
Dissatisfied, the spouses Espinoza
filed before the Court of Appeals a Petition for Certiorari under Rule 65 of the Rules of Court, docketed as CA-G.R.
SP No. 60865, averring that the foregoing RTC Orders were issued by the RTC in
grave abuse of discretion and, thus, must be nullified and set aside.
On
In a Resolution dated
Petitioner is now before this Court assailing
the
I.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED GROSS AND
REVERSIBLE ERROR IN GIVING DUE COURSE TO THE SPOUSES ESPINOZA’S PETITION.
II.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED GROSS AND
REVERSIBLE ERROR IN NOT DECLARING THAT [UOB] IS ENTITLED TO THE ISSUANCE OF THE
WRIT OF POSSESSION
At the outset,
it must be emphasized that what is on appeal before us is only the issuance of
the writ of possession over the subject property issued by the RTC, Branch 158,
in LRC Case No. R-5792.
A writ of
possession is an order whereby the sheriff is commanded to place a person in
possession of a real or personal property. It may be issued under the
following instances: (1) land registration proceedings under Sec. 17 of Act No.
496[12];
(2) judicial foreclosure, provided the debtor is in possession of the mortgaged
realty and no third person, not a party to the foreclosure suit, had
intervened; and (3) extrajudicial foreclosure of a real estate mortgage under
Sec. 7 of Act No. 3135[13]
as amended by Act No. 4118.[14] The case at bar falls under the third
instance.
The issuance
of a writ of possession is explicitly authorized by Act No. 3135, as amended by
Act No. 4118, which regulates the manner of effecting an extrajudicial
foreclosure of mortgage.
In case of default of the mortgagor in the payment of the loan obligations,
the mortgagee may foreclose the mortgaged property by filing a Petition for
Extrajudicial Foreclosure of Mortgage following the procedure laid down in A.M. No. 99-10-05-0.[15] The mortgagor or his successor-in-interest
may redeem the foreclosed property within one year from the registration of the
sale with the Register of Deeds.[16]
During the redemption period, the buyer at public auction may file, with the
RTC in the province or place where the property or portion thereof is located,
an ex parte
motion for the issuance of a writ of possession within one year from the
registration of the Sheriff’s Certificate of Sale, and the court shall grant
the said motion upon the petitioner’s posting a bond in an amount equivalent to
the use of the property for a period of twelve (12) months.[17]
A writ of
possession may be issued during the redemption period in favor of the purchaser
of the mortgaged property in the foreclosure sale. Section 7 of Act No. 3135, as amended by Act
No. 4118, provides:
Section 7. Possession during redemption period. – In any
sale made under the provisions of this Act, the purchaser may petition the
[Regional Trial Court] where the property or any part thereof is situated, to
give him possession thereof during the redemption period, furnishing bond in an
amount equivalent to the use of the property for a period of twelve months, to
indemnify the debtor in case it be shown that the sale was made without
violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and
filed in form of an ex parte motion in the registration or cadastral
proceedings if the property is registered, or in special proceedings in the
case of property registered under the Mortgage Law or under section one hundred
and ninety-four of the Administrative Code, or of any other real property
encumbered with a mortgage duly registered in the office of any register of
deeds in accordance with any existing law, and in each case the clerk of the
court shall, upon the filing of such petition, collect the fees specified in
paragraph eleven of section one hundred and fourteen of Act Numbered Four
hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and
sixty-six, and the court shall, upon approval of the bond, order that a writ of
possession issue, addressed to the sheriff of the province in which the
property is situated, who shall execute said order immediately.
The
above-quoted provision explicitly allows the purchaser in a foreclosure sale to
apply for a writ of possession during the redemption period by filing a
petition in the form of an ex parte motion under oath for that purpose. Upon the filing of such motion with the RTC
having jurisdiction over the subject property and the approval of the corresponding
bond, the law also in express terms directs the court to issue the order for a
writ of possession.[18]
Upon
the expiration of the redemption period, the right of the purchaser to the
possession of the foreclosed property becomes absolute. The basis of this
right to possession is the purchaser’s ownership of the property. Mere
filing of an ex parte
motion for the issuance of the writ of possession would suffice, and the bond
required is no longer necessary, since possession becomes an absolute right of
the purchaser as the confirmed owner.[19]
Under the foregoing judicial
pronouncement, it is clear that UOB has an absolute right to take possession of
the subject property since it was the highest bidder in the foreclosure sale,
and the spouses Espinoza failed to redeem the said property even after the
redemption period. Act No. 3135, as
amended by Act No. 4118, is categorical in stating that the purchaser must
first be placed in possession of the mortgaged property pending proceedings
assailing the issuance of the writ of possession.[20]
Consequently, the RTC under which the
application for the issuance of a writ of possession over the subject property
is pending cannot defer the issuance of the said writ in view of the pendency of an action for annulment of mortgage and
foreclosure sale. The judge with whom an
application for a writ of possession is filed need not look into the validity
of the mortgage or the manner of its foreclosure.[21]
Any
question regarding the validity of the mortgage or its foreclosure cannot be a
legal ground for the refusal to issue a writ of possession. Regardless of whether or not there is a
pending suit for the annulment of the mortgage or the foreclosure itself, the
purchaser is entitled to a writ of possession, without prejudice, of course, to
the eventual outcome of the pending annulment case. [22]
The spouses Espinoza’s position that
the issuance of the writ of possession must be deferred pending resolution of Civil Case No. 66256 is
therefore unavailing. As we have recounted
above, this Court has long settled that a pending action for annulment of
mortgage or foreclosure sale does not stay the issuance of the writ of
possession.[23]
Indeed, 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. It is a proceeding wherein
relief is granted without affording the person against whom the relief is sought
the opportunity to be heard.[24]
Hence, the RTC may grant the petition in the absence of the mortgagors, who
are, in this case, the spouses Espinoza.
The RTC, Branch
158, which issued the writ of possession cannot be adjudged to have committed
grave abuse of discretion, nor can its order directing the issuance of said
writ be considered patently illegal for, a
fortiori, there is no discretion involved in its issuance of such an order,
it being the ministerial duty of the trial court under the circumstances.
In Mamerto Maniquiz Foundation, Inc. v. Pizarro,[25] we emphasized the principle that the
issuance of a writ of possession in favor of the purchaser in a foreclosure
sale is a ministerial act and does not entail the exercise of discretion:
This Court has consistently held that the duty of the
trial court to grant a writ of possession is ministerial. Such writ issues as a matter of course
upon the filing of the proper motion and the approval of the corresponding
bond. No discretion is left to the trial
court. Any question regarding
regularity and validity of the sale, as well as the consequent cancellation of
the writ, is to be determined in a subsequent proceeding as outlined in Section
8 of Act 3135. Such question cannot be raised to oppose the issuance of
the writ, since the proceeding is ex parte. The recourse is available even before the
expiration of the redemption period provided by law and the Rules of Court.
The purchaser, who has a right to possession
that extends after the expiration of the redemption period, becomes the
absolute owner of the property when no redemption is made. Hence, at any
time following the consolidation of ownership and the issuance of a new
transfer certificate of title in the name of the purchaser, he or she is even
more entitled to possession of the property. In such a case, the bond required under Section
7 of Act 3135 is no longer necessary, since possession becomes an absolute
right of the purchaser as the confirmed owner. (Emphases supplied.)
The order for
a writ of possession issues as a matter of course upon the filing of the proper
motion and the approval of the corresponding bond, if applied for by the
purchaser during the redemption period; and upon the filing of the proper
motion, with no more need for a bond, if applied for by the purchaser after the
lapse of the redemption period. The judge issuing the order, following the
express provisions of law and settled jurisprudence, cannot be charged with
having acted with grave abuse of discretion.[26]
Hence, certiorari does not lie in instances
where the RTC granted the Petition for the Issuance of the Writ of Possession,
for he is mandated by the law to issue such writ and the buyer in the
foreclosure sale is entitled to it as a matter of right. A special civil action for certiorari could be availed of only if
the lower tribunal has acted without or in excess of jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction; and if
there is no appeal or any other plain, speedy, and adequate remedy in the
ordinary course of law. However, where
the assailed Order was forthwith issued by the RTC pursuant to its ministerial
duty, and in the absence of any showing that the said Order is tainted with
illegality, as in the case at bar, certiorari
is not the proper remedy.[27]
In sum, We have established that LRC Case No. R-5792 is ex-parte and
summary in nature, and it can proceed independently of Civil Case No.
66256. The writ of possession shall be
issued in favor of the purchaser of the mortgaged property in the foreclosure
sale, despite the pendency, but without prejudice to
the subsequent outcome, of the case for annulment of the mortgage or the
foreclosure proceedings. Hence,
RTC, Branch 158 also did not commit grave abuse of discretion amounting to lack
or excess of jurisdiction when it issued its Orders dated 10 May 2000 and 10
July 2000 denying the spouses Espinoza’s Motion for Consolidation of LRC Case
No. R-5792 with Civil Case No. 66256.
The Court of
Appeals reversed the 13 July 2000 Order of the RTC, Branch 158, granting the
issuance of a writ of possession over the subject property to UOB, on the
ground that there are peculiar and equitable circumstances attendant in the
case which no longer made the issuance of said writ a mere ministerial duty of
the trial court.
Apparently,
the appellate court relied on Cometa v. Intermediate
Appellate Court[28]
and Barican v. Intermediate Appellate Court[29]
cited in Vaca v. Court of Appeals[30]
in holding that the issuance of writ of possession had ceased to be
ministerial. In Cometa, which actually involved execution of judgment for the prevailing
party in a damages suit, the subject properties were sold at the public auction
at an unusually lower price, while in Barican, the
mortgagee bank took five years from the time of foreclosure before filing the
petition for the issuance of writ of possession. We have considered these
equitable and peculiar circumstances in Cometa and Barican to justify the relaxation of the otherwise absolute
rule. None of these exceptional
circumstances, however, attended herein so as to place the instant case in the
same stature as that of Cometa and
Barican. Instead,
the ruling in Vaca v. Court of Appeals on all fours with the
present petition. In Vaca, there is no dispute that the property was not redeemed within one
year from the registration of the extrajudicial foreclosure sale; thus, the mortgagee
bank acquired an absolute right, as purchaser, to the issuance of the writ of
possession. Similarly, UOB, as the
purchaser at the auction sale in the instant case, is entitled as a matter of
right, to the issuance of the writ of possession.
The Court of Appeals evidently
committed reversible error in finding otherwise.
WHEREFORE, IN VIEW OF THE FOREGOING, the instant
Petition is GRANTED. The Decision dated 25 June 2002,
and the Resolution dated 28 November 2002,
rendered by the Court of Appeals in CA-G.R. SP No. 60865, are hereby REVERSED and SET ASIDE. The Orders dated
SO
ORDERED.
|
|
MINITA V. CHICO-NAZARIO
Associate
Justice |
WE
CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
Associate Justice
Associate Justice
RUBEN T. REYES
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S.
PUNO
Chief Justice
[1] Formerly Westmont Bank.
[2] Penned by Associate Justice B.A. Adefuin-dela Cruz with Associate Justices Wenceslao L. Agnir, Jr. and Regalado E. Maambong, concurring;
rollo, pp. 9-15.
[3] Rollo, p. 17.
[4]
[5]
[6] CA rollo, pp. 55-60.
[7] Rollo, p. 71.
[8]
[9]
[10]
[11]
[12] Land Registration Act.
[13] An Act to Regulate the Sale of
Property Under Special Powers Inserted in or Annexed to Real-Estate Mortgages,
approved
[14] Idolor v. Court of Appeals, G.R. No. 161028,
[15] PROCEDURE IN EXTRA-JUDICIAL
FORECLOSURE OF MORTGAGE. Promulgated on
1. All applications for extra-judicial foreclosure of mortgage whether under the direction of the sheriff or a notary public, pursuant to Act 3135, as amended by Act 4118, and Act 1508, as amended, shall be filed with the Executive Judge, through the Clerk of court who is also the Ex-Officio Sheriff.
2. Upon receipt of an application for extra-judicial foreclosure of mortgage, it shall be the duty of the Clerk of Court to:
a) receive and docket said application and to stamp thereon the corresponding file number, date and time of filing;
b) collect the filing fees therefore pursuant to rule 141, Section 7(c), as amended by A.M. No. 00-2-01-SC, and issue the corresponding official receipt;
c) examine, in case of real estate mortgage foreclosure, whether the applicant has complied with all the requirements before the public auction is conducted under the direction of the sheriff or a notary public, pursuant to Sec. 4 of Act 3135, as amended;
d) sign and issue the certificate of
sale, subject to the approval of the Executive Judge, or in his absence, the
Vice-Executive Judge. No certificate of
sale shall be issued in favor of the highest bidder until all fees provided for
in the aforementioned sections and in Rule 141, Section 9(1), as amended by
A.M. No. 00-2-01-SC, shall have been paid; Provided, that in no case shall the
amount payable under Rule 141, Section 9(1), as amended, exceed P100,000.00;
e) after the certificate of sale has been issued to the highest bidder, keep the complete records, while awaiting any redemption within a period of one (1) year from date of registration of the certificate of sale with the Register of Deeds concerned, after which, the records shall be archived. Notwithstanding the foregoing provision, juridical persons whose property is sold pursuant to an extra-judicial foreclosure, shall have the right to redeem the property until, but not after, the registration of the certificate of foreclosure sale which in no case shall be more than three (3) months after foreclosure, whichever is earlier, as provided in Section 47 of Republic Act No. 8791 (as amended, Res. of August 7, 2001).
Where the application concerns the extrajudicial foreclosure of mortgages of real estates and/or chattels in different locations covering one indebtedness, only one filing fee corresponding to such indebtedness shall be collected. The collecting Clerk of Court shall, apart from the official receipt of the fees, issue a certificate of payment indicating the amount of indebtedness, the filing fees collected, the mortgages sought to be foreclosed, the real estates and/or chattels mortgaged and their respective locations, which certificate shall serve the purpose of having the application docketed with the Clerks of Court of the places where the other properties are located and of allowing the extrajudicial foreclosures to proceed thereat.
3. The notices of auction sale in
extrajudicial foreclosure for publication by the sheriff or by a notary public
shall be published in a newspaper of general circulation pursuant to Section 1,
Presidential Decree No. 1079, dated
4. The Executive Judge shall, with the assistance of the Clerk of Court, raffle applications for extrajudicial foreclosure of mortgage under the direction of the sheriff among all sheriffs, including those assigned to the Office of the Clerk of Court and Sheriffs IV assigned in the branches.
5. The name/s of the bidder/s shall be reported by the sheriff or the notary public who conducted the sale to the Clerk of Court before the issuance of the certificate of sale.
This Resolution amends or modifies accordingly Administrative Order No. 3 issued by then Chief Justice Enrique M. Fernando on 19 October 1984 and Administrative Circular No. 3-98 issued by the Chief Justice Andres R. Narvasa on 5 February 1998.
The Court Administrator may issue the necessary guidelines for the effective enforcement of this Resolution.
The Clerk
of Court shall cause the publication of this Resolution in a newspaper of
general circulation not later than
[16] Section 6 of Act No. 3135.
[17] Under Section 7, Act 3135.
[18] Chailease Finance Corporation v. Ma, 456 Phil. 498, 503 (2003).
[19] Idolor v. Court of Appeals, supra note 14 at 401.
[20] Yu
v. Philippine Commercial International Bank, G.R. No. 147902,
[21] Idolor v. Court of Appeals, supra note 14.
[22] Sps. Ong v. Court of Appeals, 388 Phil. 857,
864-865 (2000).
[23] Samson
v. Rivera, G.R. No. 154355,
[24]
[25] A.M. No. RTJ-03-1750,
[26] Ong v. Court of Appeals, supra note 22.
[27] Samson v. Rivera, supra note 23.
[28] G.R. No. L-69294,
[29] G.R. No. L-79906,
[30] G.R. No. 109672,