Government Service Insurance System v. Honorable Court of Appeals
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns a series of loans obtained by private respondents Felipe T. Ang and Eufrocina C. Toby from the Government Service Insurance System (GSIS) between 1958 and 1971 for the construction of a hotel. These loans, totaling P12,544,201 by 1971, were secured by real estate mortgages on five parcels of land registered in the spouses' names. Upon the respondents' failure to repay the loans, the GSIS initiated an extra-judicial foreclosure of the mortgaged properties. 2. Procedural History: Following the extra-judicial foreclosure sale on March 21, 1974, where the GSIS emerged as the highest bidder for P19,695,369, the GSIS filed a petition for a writ of possession with the former Court of First Instance (CFI) of Manila, Branch IV, under G.L.R.O. Record Numbers 219 and 108. The CFI, presided over by Judge Serafin R. Cuevas, granted the petition on October 1, 1974. The private respondents then sought to annul this order through a petition for certiorari and prohibition with preliminary injunction filed with the Court of Appeals (CA-G.R. No. 04354). The Court of Appeals issued a restraining order and later a writ of preliminary injunction, and ultimately rendered a decision on December 18, 1975, annulling and setting aside the CFI's order for the writ of possession. 3. The Petition: The Government Service Insurance System (GSIS) filed this petition for review on certiorari, seeking to overturn the Court of Appeals' decision. The petition, filed under Rule 45 of the Rules of Court, raises the issue of whether the GSIS is entitled to a writ of possession during the redemption period, as provided by Section 7 of Act 3135, as amended. The GSIS argues that the issuance of the writ is a matter of course upon filing the required motion and bond, and that any dispute regarding the sale's validity should be addressed in a separate proceeding. Furthermore, the GSIS contends that since the redemption period had lapsed and new titles had been issued in its name, there was no basis to deny the writ of possession.
Issue(s)
Whether the purchaser in an extra-judicial foreclosure sale is entitled to a writ of possession during the redemption period. Whether the Court of Appeals erred in annulling the writ of possession issued by the CFI.
Ruling
The Supreme Court reversed the decision of the Court of Appeals and reinstated the writ of possession issued by the CFI. The Court held that the purchaser is entitled to possession as a matter of course.
Ratio Decidendi
On the entitlement to a writ of possession during the redemption period: The Court reiterated its ruling in Marcelo Steel Corp. v. Court of Appeals, citing De Gracia v. San Jose, that Section 7 of Act 3135 expressly authorizes a purchaser to petition for a writ of possession during the redemption period by filing an ex parte motion under oath and furnishing a bond. The law mandates the court to issue the writ upon the filing of the motion and approval of the bond, leaving no discretion to the court. Any question regarding the regularity and validity of the sale is to be determined in a subsequent proceeding, not as a justification for opposing the issuance of the writ. On the Court of Appeals' annulment of the writ: The Court found that the CA erred in annulling the writ of possession. The law clearly provides for the issuance of the writ as a ministerial duty of the court upon compliance with the procedural requirements. The fact that the period of redemption had long lapsed without redemption, and new titles had already been issued in the name of GSIS, further strengthened its right to possession. The Court cited JFC Service Leasing and Acceptance Corp. v. Nera to support the principle that if a court can issue a writ of possession during the redemption period, it can also do so after the period has expired, especially when new titles have been issued.
Main Doctrine
The purchaser in an extra-judicial foreclosure sale is entitled to a writ of possession as a matter of course upon filing an ex parte motion and a bond, and any question regarding the validity of the sale is to be determined in a subsequent proceeding.