Mirasol v. Intermediate Appellate Court
REITERATIONFacts
The Antecedents: Petitioners Alejandro and Lilia Mirasol entered into a real estate mortgage with Philippine National Bank (PNB) as security for agricultural sugar crop loans. In crop years 1973-74 and 1974-75, sugar prices significantly increased, but PNB liquidated the planters' export sugar at a much lower price. Petitioners demanded an accounting and the balance of the proceeds, but received no definite commitment from PNB. Due to these developments, petitioners failed to pay their 1976-77 loans, leading PNB to extra-judicially foreclose the mortgage and purchase the property at a public auction on August 10, 1982. Procedural History: Petitioners filed a complaint for accounting, specific performance, and damages on August 15, 1979. Subsequently, claiming they only learned of the foreclosure after its consummation, they filed another complaint on October 4, 1982, for annulment of the real estate mortgage, alleging prescription and full payment of the obligation. Meanwhile, on January 10, 1983, PNB filed an ex-parte petition for a writ of possession. The Regional Trial Court (RTC) granted the writ on March 14, 1983, and the Intermediate Appellate Court (IAC) affirmed this order. The Petition: The present petition for review seeks to set aside the IAC's decision, raising the issue of whether the pendency of the civil case for annulment of the mortgage and foreclosure bars the enforcement of the writ of possession.
Issue(s)
Whether the pendency of a civil case for annulment of a real estate mortgage and its extra-judicial foreclosure constitutes a bar or legal impediment to the enforcement of a writ of possession. Whether the trial court erred in issuing the writ of possession despite the pending civil case questioning the validity of the mortgage and foreclosure.
Ruling
The petition is dismissed, and the questioned decision of the Intermediate Appellate Court is affirmed. The issuance of a writ of possession is a ministerial duty of the court and cannot be suspended or restrained by the pendency of a separate civil case questioning the validity of the mortgage or foreclosure.
Ratio Decidendi
On the issue of whether the pendency of a civil case for annulment of a real estate mortgage and its extra-judicial foreclosure constitutes a bar or legal impediment to the enforcement of a writ of possession: The Supreme Court held that the pendency of the civil case does not bar the issuance of a writ of possession. The Court reiterated the principle that it is ministerial upon the court to issue a writ of possession in favor of the purchaser in a foreclosure sale. The issuance of the writ is a consequence of the foreclosure and the purchaser's right to possession as owner. The Court emphasized that P.D. No. 385 mandates governmental financial institutions to foreclose loans with arrearages and places the foreclosed properties under their possession and control, with the court's petition for writ of possession to be acted upon within fifteen (15) days. This decree was enacted to facilitate the collection of delinquent loans and enable financial institutions to continue their financing activities without undue hindrance from borrower actions. On the issue of whether the trial court erred in issuing the writ of possession despite the pending civil case questioning the validity of the mortgage and foreclosure: The Court found the petitioners' arguments that the Philippine National Bank v. Adil case is inapplicable because the mortgage is under attack to be without merit. The Court clarified that the petitioners were not questioning the validity of the real estate mortgage at its inception but rather attacking the extra-judicial foreclosure sale on grounds that arose after the mortgage's execution, specifically prescription and the mortgage becoming "innocuous and lifeless." These defenses do not render the mortgage void ab initio but rather challenge the basis for the foreclosure. The Court stated that any question regarding the regularity and validity of the sale and the setting aside of the writ can be threshed out in the still pending civil case. However, such questions cannot be raised as a justification for opposing the issuance of the writ of possession, as the proceeding for this is ex parte. The Court concluded that the petitioners failed to show why established precedents and specific laws should be set aside in their case, and their recourse is to expedite the resolution of the main case.
Main Doctrine
The pendency of a civil case questioning the validity of a real estate mortgage and its subsequent extra-judicial foreclosure does not constitute a bar to the issuance of a writ of possession in favor of the purchaser, as the issuance of such writ is a ministerial duty of the court.