Case Summary (G.R. No. 169190)
Factual Background
In November 1994, the petitioners obtained a loan amounting to ₱3,200,000 from the Philippine Bank of Communication, secured by a deed of real estate mortgage over their property (Transfer Certificate of Title No. 22990). The loan was increased in August 1997 by ₱1,800,000, totaling ₱5,000,000. Due to failure to pay the outstanding loan upon demand, the private respondent initiated an extrajudicial foreclosure sale. After petitioners filed for annulment of the foreclosure sale and obtained a temporary restraining order, the sale was eventually conducted on May 29, 2002, where the private respondent was the highest bidder. A certificate of sale was issued and annotated on the property title. Following the lapse of the one-year redemption period, the private respondent consolidated ownership through an affidavit and obtained a new title (TCT No. 251835). Private respondent then applied for a writ of possession on August 18, 2004, which petitioners opposed.
Decisions of the Regional Trial Court
The RTC granted private respondent’s motion for a declaration of general default and allowed evidence presentation ex parte. The court denied the motion for reconsideration filed by petitioners and disallowed their notice of appeal.
Court of Appeals Ruling
The Court of Appeals dismissed the petition for certiorari on procedural grounds due to defective filing, and on substantive grounds, it upheld the ex parte nature of the writ of possession issuance, ruling that petitioners’ due process rights were not violated. The appellate court also held that the pending case questioning the foreclosure sale’s validity did not prevent the issuance of the writ of possession, and there was no forum shopping involved.
Legal Issues Presented
Whether the writ of possession was properly issued notwithstanding the pendency of a case challenging the extrajudicial foreclosure sale validity and despite petitioners being declared in default during the possession proceeding.
Supreme Court’s Analysis on Due Process and Possession Rights
The Court emphasized that the issuance of the writ of possession in an extrajudicial foreclosure sale context is ex parte and ministerial once statutory requirements are met. Contrary to petitioners' claims relying on cases involving unlawful detainer and accion reivindicatoria — which involved ownership and possession intertwined in different contexts — the Court cited Banco Filipino Savings and Mortgage Bank v. Pardo and Navarra v. Court of Appeals to clarify that purchasers from extrajudicial foreclosure sales have a right to possession pending or after the redemption period under Act No. 3135, as amended.
The Court noted that in this case, the one-year redemption period already lapsed before private respondent’s application for a writ of possession, entitling it to possession as a matter of right founded on ownership already consolidated by issuance of a new title. Petitioners had no cause to claim denial of due process since opposition or appeal from the writ of possession is not allowed in the ex parte proceeding; instead, remedy lies in filing a petition to set aside the
...continue readingCase Syllabus (G.R. No. 169190)
Nature and Procedural History of the Case
- The case involves a petition for review under Rule 45 of the Rules of Court challenging the resolutions of the Court of Appeals (CA) dated 29 April 2005 and 4 August 2005 in CA-G.R. SP No. 88963.
- The CA dismissed petitioners' Rule 65 petition for certiorari and later denied their motion for reconsideration, affirming that the writ of possession issued in favor of private respondent Philippine Bank of Communication was proper.
- The underlying dispute arose from the extrajudicial foreclosure sale of a real estate mortgage and subsequent issuance of a writ of possession to private respondent.
- The trial court initially granted petitioners a temporary restraining order (TRO) against the foreclose sale which was later lifted, leading to the actual foreclosure sale.
- Petitioners filed opposition to the writ of possession application but were declared in default, triggering the ex parte granting of the writ.
- Petitioners' attempts to appeal or reverse the orders were denied, prompting the present petition challenging due process and the propriety of the writ issuance during pendency of foreclosure validity challenges.
Factual Background and Loan Transaction
- In November 1994, petitioners obtained a loan of P3,200,000 from the Philippine Bank of Communication, secured by a Deed of Real Estate Mortgage over the property covered by Transfer Certificate of Title (TCT) No. 22990.
- In August 1997, the mortgage was amended to increase the loan amount by P1,800,000 to a total loan of P5,000,000.
- Upon petitioners’ failure to pay the outstanding loan amount upon demand, private respondent initiated an extrajudicial foreclosure sale pursuant to Act No. 3135, as amended.
- Petitioners filed a petition to annul the foreclosure sale and obtained a TRO, which delayed but did not prevent the foreclosure sale scheduled on 29 May 2002.
- Private respondent became the highest bidder at the foreclosure sale; a certificate of sale was executed on 4 June 2002 and annotated on the TCT on 7 June 2002.
- Upon the lapse of the one-year redemption period, private respondent secured consolidation of title and had the Register of Deeds issue a new Transfer Certificate of Title (TCT No. 251835) on 8 July 2003 in its name.
Legal Issues Presented
- Whether the writ of possession was properly issued despite:
- The pendency of a case questioning the validity of the extrajudicial foreclosure sale.
- Petitioners being declared in default in the writ of possession proceeding, despite having filed their opposition.
- Whether petitioners’ right to due process was violated by the ex parte nature of the possession proceeding.
- Whether petitioners’ claim of forum shopping with regard to simultaneous cases is tenable.
Court of Appeals’ Ruling
- The CA dismissed petitioners’ certiorari petition citing procedural grounds: failure of petitioners’ counsel to indicate an updated PTR number warranted dismissal under Bar Matter No. 1132.
- On substant