Case Summary (G.R. No. 183058)
Facts of the Case
On April 7, 1997, the Spouses Tolosa entered into a credit agreement with UCPB, securing the loan with a real estate mortgage over four properties. Due to their failure to fulfill their financial obligations totaling approximately P13,300,000, UCPB initiated an extrajudicial foreclosure on October 22, 1999. The properties were auctioned on January 4, 2000, with UCPB as the highest bidder, and the sale was registered on January 5, 2000.
The Spouses Tolosa did not redeem the properties within the one-year redemption period, which led UCPB to consolidate its ownership by January 22, 2001. Subsequently, UCPB filed an ex parte petition for a writ of possession on September 2, 2004. The Tolosas opposed this petition, citing a pending civil case against UCPB challenging the validity of the mortgage and the foreclosure.
Court Proceedings and Decisions
On December 1, 2004, the Regional Trial Court (RTC) held in abeyance the issuance of the writ of possession, acknowledging the pendency of the Tolosas' civil case, which raised questions about the validity of the foreclosure. UCPB's motion for reconsideration was denied on January 31, 2005, prompting UCPB to file a petition for certiorari with the Court of Appeals (CA).
On May 31, 2007, the CA granted UCPB's petition, ruling that the issuance of a writ of possession is primarily ministerial and not discretionary, referring to Section 7 of Act No. 3135. The CA stated that legal questions regarding the validity of the foreclosure sale could be adjudicated subsequently, thus revoking the RTC's prior decision and affirming UCPB's entitlement to possession of the properties.
Issues Raised by the Petitioners
The Spouses Tolosa contended that the CA erred in its decision for two primary reasons: first, they argued that the prima facie nullity of their mortgage obligation justified the RTC's order to defer the issuance of the writ of possession; second, they claimed that UCPB was required to pay any surplus from the bid price to the mortgagors before possession could be legally transferred to the bank.
Court's Ruling
The Supreme Court found the petition of the Spouses Tolosa lacking in merit. It elucidated that a writ of possession represents a ministerial order upon consolidation of ownership after the redemption period has lapsed. The Court reiterated that the RTC holds no discretionary power to deny the issuance of the writ based on the pendency of another case regarding the validity of the mortgage, as such issues could be addressed in separate proceedings as per Section 8 of Act No. 3135.
The Court addressed the Tolosas' argument regarding the surplus from the foreclosure sale, indicati
...continue readingCase Syllabus (G.R. No. 183058)
Case Background
- This case arises from a petition for review filed under Rule 45 of the Rules of Court.
- The petition contests the decision dated May 31, 2007, by the Nineteenth Division of the Court of Appeals (CA) in CA-G.R. SP No. 00593.
- The key issue at hand is the entitlement of a purchaser at an extrajudicial foreclosure sale to a writ of possession after the consolidation of ownership due to the mortgagor's failure to redeem the property.
Facts of the Case
- On April 7, 1997, Spouses Montano and Merlinda Tolosa entered into a Credit Agreement with United Coconut Planters Bank (UCPB) to access credit facilities.
- The Spouses Tolosa secured their credit through deeds of real estate mortgage on four properties located in Barangay Caticlan, Malay, Aklan, registered under various titles and tax declarations.
- Due to non-payment of their principal obligation amounting to P13,300,000.00, UCPB initiated a foreclosure process on October 22, 1999.
- The properties were sold at a public auction on January 4, 2000, where UCPB made the highest bid of P17,240,000.00, against a total mortgage obligation of P24,253,847.64.
- Following the sale, UCPB consolidated its ownership on January 22, 2001, after the Spouses Tolosa failed to redeem the properties within the one-year redemption period.
- UCPB filed an ex-parte petition for a writ of possession on September 2, 2004, which was opposed by the Spouses Tolosa due to an ongoing complaint they filed against UCPB regarding the validity of the mortgage and foreclosure procee