Title
Spouses Torrecampo vs. Wealth Development Bank Corp.
Case
G.R. No. 221845
Decision Date
Mar 21, 2022
Spouses defaulted on a mortgage loan, leading to foreclosure. After failing to redeem, ownership consolidated to the bank. Writ of possession upheld post-redemption; claims of improper foreclosure, damages denied by SC.

Case Digest (G.R. No. 221845)

Facts:

  • Background of the Loan and Mortgage
    • On December 12, 2008, the spouses Gema and Jaime Torrecampo entered into a housing loan agreement with Wealth Development Bank Corp.
    • The loan, amounting to ₱10,500,000.00, was secured by a real estate mortgage over Lot No. 5 of the consolidated subdivision plan PCS-07-005237, originally covered by Transfer Certificate of Title (TCT) No. 187864.
    • Promissory notes executed by other related parties evidenced the aggregate amount of the loan.
    • The mortgage and related documents, including the housing loan agreement and disclosure statement, formed the basis for the secured transaction.
  • Default, Extra-Judicial Foreclosure, and Title Consolidation
    • Following the spouses’ default on their loan obligations, Wealth Development Bank Corp. commenced an extra-judicial foreclosure pursuant to Act No. 3135.
    • A certificate of sale was issued on June 11, 2010, and subsequently registered on June 24, 2010.
    • The foreclosure process allowed for a one-year redemption period, during which the spouses could redeem their property.
    • The redemption period lapsed with no attempt by the spouses to redeem the property.
    • On September 1, 2011, the original TCT in the names of the Torrecampo spouses was cancelled, and a new TCT (No. 107-2011003690) was issued in favor of the respondent bank, consolidating its ownership.
  • Issuance of the Writ of Possession and Subsequent Proceedings
    • When the petitioners (the heirs of Jaime B. Torrecampo) refused to vacate the property, the respondent bank filed an ex-parte petition for the issuance of a writ of possession.
    • The Regional Trial Court (RTC) granted the ex-parte petition on August 25, 2011, and the writ was eventually executed following the sheriff’s notice to vacate issued on September 30, 2011.
    • Despite the eviction, petitioners filed a motion on March 8, 2012 to set aside the extra-judicial foreclosure sale and cancel the writ of possession—with a prayer for damages—alleging:
      • The loan’s maturity date had not yet been reached.
      • The loan documents failed to specify the monthly amortization amounts.
      • No demand letter or statement of account was sent.
      • The extra-judicial foreclosure sale did not conform to the prescribed procedures, notably by not being properly notified.
      • The ex-parte petition for the writ of possession was fatally defective due to omitted allegations and missing supporting documents.
  • Lower Court Decisions and Appellate Rulings
    • The RTC, in its Order dated June 8, 2012, denied petitioners’ motion on the ground that the issuance of a writ of possession is a ministerial act and non-litigious in nature.
    • The RTC’s decision was elevated to the Court of Appeals (CA) after the RTC gave due course to the notice of appeal in July 2012.
    • In the CA Decision dated May 27, 2015, the appeal was denied on the basis that:
      • The provisions of Act No. 3135 apply only during the redemption period.
      • After the lapse of the redemption period, when consolidation of the purchaser’s title occurs, the remedy under Section 8 loses its application.
      • Petitioners’ reliance on Section 8 (and comparisons with precedents such as the Mallari case) was misplaced.
    • The CA’s ruling reaffirmed the lower court’s determination that any remedy against the extra-judicial foreclosure should have been sought via a separate proceeding, not through a motion to cancel the writ or set aside the sale after consolidation of title.

Issues:

  • Whether the Court of Appeals erred in retroactively applying the new doctrine established in 680 Home Appliances, Inc. v. Court of Appeals despite the settled principle that a new doctrine should be applied prospectively.
  • Whether the CA erred in preferring the new doctrine from 680 Home Appliances, Inc. over the earlier Mallari precedent, especially in light of the constitutional mandate against modifying or reversing a doctrine except by the court sitting en banc.
  • Whether the CA erred by not finding fault in the RTC’s ruling that denied petitioners’ motion to set aside the extra-judicial foreclosure sale and cancel the writ of possession without delving into the merits of the foreclosure’s propriety.
  • Whether the CA erred in not ruling that the lower court was incorrect for failing to find that the extra-judicial foreclosure sale did not conform with the prescribed procedural notice requirements, given that no written notice was sent as mandated by the mortgage contract and prevailing jurisprudence.
  • Whether the CA erred in not finding that the mortgage contract’s terms, including the absence of an agreed maturity date and specific monthly amortization details, precluded the justification for an extra-judicial foreclosure.
  • Whether the CA erred in not condemning the respondent bank’s ex-parte petition for writ of possession as fatally defective for omitting essential allegations and failing to introduce important documents.
  • Whether the CA erred in not acknowledging that petitioners suffered damages from the extra-judicial foreclosure and eviction, which, under the circumstances, would have justified an award for damages.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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