Pahang v. Metropolitan Bank & Trust
REITERATIONFacts
The Antecedents: Spouses Antonio and Lolita Pahang obtained a loan of P1,500,000.00 from Metropolitan Bank & Trust Company, secured by a real estate mortgage. Upon their failure to pay, the bank foreclosed the mortgage extrajudicially, with the property being sold at public auction on January 8, 1998, and the bank emerging as the highest bidder. The certificate of sale was registered on January 27, 1998, marking the start of the one-year redemption period. Procedural History: Instead of redeeming the property, the Pahang spouses filed a complaint on January 19, 1999, for the annulment of the extrajudicial sale, alleging inflated charges and fraud. After the redemption period expired and the bank consolidated ownership, the bank filed a Petition for Writ of Possession. The Regional Trial Court (RTC) granted the writ, ruling that the issuance was a ministerial function after the redemption period lapsed. The Pahang spouses appealed to the Court of Appeals (CA) via certiorari, arguing the RTC gravely abused its discretion by not suspending proceedings due to their pending annulment case, which they contended presented a prejudicial question. The CA dismissed their petition, holding that the annulment case did not bar the issuance of a writ of possession and that the Belisario ruling was inapplicable. The Petition: The Spouses Pahang filed this petition for review on certiorari, assigning as errors the CA's findings that their right of redemption had expired, that their annulment complaint did not constitute a prejudicial question, and that the CA erred in deeming the Belisario case inapplicable. They argue that their complaint, filed within the redemption period and seeking to determine their true obligation and allow payment or redemption, should have preserved their right and warranted a suspension of the writ of possession proceedings, thereby preventing their annulment case from becoming moot.
Issue(s)
Whether the petitioners' complaint for annulment of extrajudicial sale constitutes a prejudicial question to the respondent bank's petition for a writ of possession. Whether the Regional Trial Court committed a grave abuse of discretion amounting to excess or lack of jurisdiction in granting the petition for a writ of possession. Whether the filing of a complaint for annulment of extrajudicial sale within the redemption period, with an alternative prayer to redeem, preserves the right of redemption.
Ruling
The petition is denied due course, and the assailed decision of the Court of Appeals is affirmed.
Ratio Decidendi
On the issue of prejudicial question: The Court held that a prejudicial question is one that arises in a case whose resolution is a logical antecedent to the issue in another case, and its cognizance pertains to another tribunal, typically to avoid conflicting decisions. In this case, the complaint for annulment of extrajudicial sale and the petition for a writ of possession are both civil actions pending before the same court. The Court reiterated its ruling in Manalo v. Court of Appeals, stating that the basic issue in the annulment case (whether the foreclosure and sale are null and void) is distinct from the issue in the writ of possession case (whether the purchaser is entitled to possession after the redemption period has expired). Therefore, no prejudicial question can arise from the existence of these two actions, as they can proceed independently. On the propriety of the writ of possession and grave abuse of discretion: The Court found that the petitioners' remedy from the RTC's decision in the writ of possession case was to appeal by writ of error to the Court of Appeals, not a petition for certiorari. Certiorari is only proper when there is no plain, speedy, and adequate remedy at law. Furthermore, the error of the trial court in granting a writ of possession, if any, was an error of judgment correctible by ordinary appeal. The proceedings for a writ of possession after the lapse of the statutory period for redemption are summary in nature, and the trial court is mandated to issue the writ upon finding that the redemption period has lapsed without redemption. The Court concluded that the trial court did not abuse its discretion when it merely complied with its ministerial duty to issue the writ of possession. On the applicability of Belisario v. Intermediate Appellate Court and the preservation of the right of redemption: The Court clarified that the ruling in Belisario is not applicable to the present case. In Belisario, the action was to enforce repurchase within the redemption period, which the Court held to be equivalent to an offer to redeem and preserved the right. However, the petitioners' complaint in Civil Case No. MAN-3454 was for the annulment of the mortgage or extrajudicial sale, not an explicit enforcement of the right to redeem. The Court emphasized that the filing of an action to enforce redemption within the period does not suspend the running of the statutory period to redeem, nor does it bar the purchaser from procuring a writ of possession after the redemption period has lapsed, without prejudice to the final outcome of the complaint to enforce the right of redemption. The petitioners' alternative prayer to redeem did not equate to a formal offer to redeem that would preserve their right beyond the statutory period.
Main Doctrine
The pendency of a separate civil action questioning the validity of a mortgage and its extrajudicial foreclosure does not bar the issuance of a writ of possession in favor of the purchaser at public auction after the consolidation of ownership, as the issuance of such writ becomes a ministerial act of the trial court upon the lapse of the redemption period.