Case Summary (G.R. No. 171172)
Relevant Loans and Mortgages
On November 13, 1997, Jupiter Real Estate Ventures, Inc. and Spouses Co secured a loan from Far East Bank and Trust Company (FEBTC) for ₱9,434,200.00, pledging eight parcels of land as collateral. This loan arrangement laid the groundwork for subsequent legal disputes once the borrowers defaulted and BPI, as the successor of FEBTC, moved to foreclose the mortgage.
Foreclosure Process and Properties Sold
Due to default on the loan, BPI initiated foreclosure proceedings according to Act No. 3135, leading to an auction sale of the mortgaged properties on July 12, 2000, with BPI emerging as the highest bidder at ₱3,567,000.00. The subsequent actions included the registration of the Certificate of Sale and the issuance of new titles in BPI's name after the redemption period expired without redemption by the mortgagors.
Legal Actions and RTC Proceedings
On August 7, 2002, Spouses Co and Jupiter filed a complaint to nullify the foreclosure, which was met with BPI filing for a writ of possession shortly after. The RTC denied the motion to consolidate these cases, noting they could be pursued independently. The RTC's orders on December 15, 2005, and January 13, 2006, allowed the elevation of a notice of appeal filed by Spouses Co and Jupiter to the Court of Appeals, enabling them to contest the writ of possession.
Issues on Appeal
BPI raised issues regarding the appealability of the RTC's order granting the writ of possession, arguing that it was interlocutory and thus not subject to appeal. Conversely, Spouses Co maintained that the order was appealable and argued for their substantive right to challenge the writ of possession.
Ruling on the Writ of Possession
The court upheld BPI’s right to possess the properties post-foreclosure, stating that following or upon the expiration of the redemption period, the purchaser's entitlement to possession becomes absolute. The court ruled against Spouses Co's claims regarding the pendency of the petition for rehabilitation and a stay order, reaffirming BPI's rights as the new title holder.
Legal Principles on Remedies
The discussion surrounding the remedies available for contesting a writ of possession clarified that following the foreclosure and after the redemption period, the proper recourse is either an appeal or a separate action, not a review under Section 8 of Act No. 3135. The Supreme Court noted that once the redemption period lapsed, the debtor could no longer contest possession through the mechanisms provided in the Act, instead potentially needing to pursue a recovery of ownership action.
Constitutionality of Act No. 3135
Spouses Co also
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Case Overview
- The case involves two consolidated petitions for review on certiorari:
- G.R. No. 171172: Bank of the Philippine Islands (BPI) challenges orders from the Regional Trial Court (RTC) of Parañaque City regarding the issuance of a writ of possession.
- G.R. No. 200061: Spouses Johnson and Evelyn Co, represented by their heir Jobelle Co, contest the Decision of the Court of Appeals which upheld the RTC's orders granting the writ of possession.
Antecedents
- On November 13, 1997, Jupiter Real Estate Ventures, Inc. and Spouses Co secured a loan from Far East Bank and Trust Company (FEBTC) amounting to P9,434,200.00, mortgaging eight parcels of land as collateral.
- Following a merger, BPI became the successor-in-interest to FEBTC.
- After defaulting on the loan, BPI foreclosed on the mortgage, leading to an auction sale on July 12, 2000, where BPI purchased the properties for P3,567,000.00.
- The Certificate of Sale was registered on August 22, 2000, and after the redemption period expired without action from the mortgagors, new titles were issued to BPI.
- On August 7, 2002, Spouses Co and Jupiter filed a complaint to nullify the foreclosure and seek damages.
- BPI sought a writ of possession on April 29, 2003, which led to various motions and orders from the RTC regarding the consolidation of cases and the issuance of the writ.
Procedural History
- The RTC denied Spouses Co and Jupiter's motion to consolidate the writ of possession