Banco Filipino Savings and Mortgage Bank v. Intermediate Appellate Court
REITERATIONFacts
The Antecedents: Spouses Gerardo and Celestina Pahimutang purchased a house and lot, financing the balance through a loan from Banco Filipino Savings and Mortgage Bank (Banco Filipino), secured by a real estate mortgage. The spouses defaulted on their loan payments. Procedural History: Banco Filipino initiated an extrajudicial foreclosure of the mortgage. The property was awarded to Banco Filipino as the highest bidder at the public auction sale, and a certificate of sale was registered. Subsequently, Banco Filipino filed a petition for a writ of possession. The spouses opposed, alleging prior payment, improper foreclosure, and lack of notice. The Regional Trial Court (RTC) granted the writ of possession. The spouses filed an action for cancellation of the foreclosure and damages. Despite this, the RTC ordered the issuance of the writ of possession. The spouses then filed a petition for certiorari and prohibition with the Intermediate Appellate Court (IAC). The Petition: The IAC set aside the writ of possession, ruling that the purchaser is not entitled to collect rents and profits from the owner during the redemption period, implying the owner's right to remain in possession until the redemption period expires. The Supreme Court reviewed the IAC's decision.
Issue(s)
Whether the Intermediate Appellate Court gravely abused its discretion in annulling and setting aside the Writ of Possession when the purchaser in an extrajudicial foreclosure sale sought possession after the expiration of the redemption period. Whether, after the expiration of the redemption period and the issuance of a new title, any question regarding the regularity of the extrajudicial foreclosure sale can prevent the issuance of a writ of possession.
Ruling
The decision of the Intermediate Appellate Court is reversed. The writ of possession issued by the Regional Trial Court is upheld.
Ratio Decidendi
On the issue of grave abuse of discretion and entitlement to a writ of possession: The Supreme Court found the petition meritorious, reversing the IAC's decision. The Court clarified that the certificate of sale was registered on September 21, 1982, and a new title was issued to Banco Filipino on October 10, 1983, after the redemption period had lapsed without redemption. The RTC directed the issuance of the writ of possession on October 12, 1983, and December 7, 1983, which was after the lapse of the redemption period. Under Section 7 of Act No. 3135, the purchaser is entitled to possession during and after the redemption period. Section 35 of Rule 39 of the Revised Rules of Court also provides that if no redemption is made within twelve months after the sale, the purchaser is entitled to a conveyance and possession of the property. Therefore, with the redemption period having lapsed without redemption, there was no justifiable ground to deny the issuance of the writ of possession. On the issue of the effect of questions regarding the regularity of the sale: Citing Marcelo Steel Corp. vs. Court of Appeals, the Court stated that the order for a writ of possession issues as a matter of course upon the filing of the proper motion and approval of the bond, and any question regarding the regularity of the sale is to be determined in a separate proceeding. The Court also reiterated the ruling in JFC Service Leasing and Acceptance Corp. vs. Nera and Philippine National Bank vs. Adil, holding that if a court has the power to issue a writ of possession during the redemption period, it certainly has the same power after the expiration of that period, especially when a new title has been issued.
Main Doctrine
The purchaser in an extrajudicial foreclosure sale is entitled to a writ of possession after the expiration of the redemption period, even if a new title has already been issued in the purchaser's name, and any question regarding the regularity of the sale must be ventilated in a separate proceeding.