Philippine National Bank v. Sanao Marketing Corporation
REITERATIONFacts
The Antecedents: Respondents Sanao Marketing Corporation and the spouses Sanao obtained a loan of ₱150,000,000.00 from petitioner Philippine National Bank (PNB), secured by a real estate mortgage. Due to failure to pay, PNB extrajudicially foreclosed the mortgage. A Provisional Certificate of Sale was issued and registered. Respondents filed a complaint to nullify the foreclosure proceedings. Subsequently, PNB filed a petition for a writ of possession over the foreclosed properties. Procedural History: The Regional Trial Court (RTC) of Pili, Camarines Sur, granted PNB's petition for a writ of possession and denied respondents' motion for reconsideration. Respondents filed a petition for certiorari and prohibition with the Court of Appeals (CA), alleging grave abuse of discretion by the RTC. The CA nullified the RTC orders, finding procedural lapses in the foreclosure proceedings. The Petition: PNB seeks review of the CA decision, arguing that the issuance of a writ of possession is purely ministerial and the CA erred in nullifying the RTC orders by delving into the validity of the foreclosure proceedings.
Issue(s)
Whether the Court of Appeals erred in nullifying the writ of possession based on alleged procedural flaws in the foreclosure sale. Whether the issuance of a writ of possession is a ministerial duty of the Regional Trial Court despite a pending case for the annulment of the foreclosure.
Ruling
The petition is granted. The Decision of the Court of Appeals is reversed and set aside. The orders of the RTC of Pili granting the writ of possession are affirmed.
Ratio Decidendi
On Issue 1: The Supreme Court held that the Court of Appeals (CA) exceeded its jurisdiction by ruling on the validity of the foreclosure proceedings within a certiorari proceeding involving the writ of possession. Under Section 7 of Act No. 3135, the issuance of a writ of possession is ministerial, meaning the court does not exercise discretion or judgment once the requirements are met. The CA's reliance on Cometa v. Intermediate Appellate Court was misplaced because that case concerned execution sales under Rule 39, whereas the present case involves extrajudicial foreclosure under Act No. 3135. For extrajudicial foreclosures, the law is clear that the purchaser is entitled to possession as a matter of right once the redemption period expires without redemption. Therefore, the RTC of Pili did not commit grave abuse of discretion, as it was merely performing a duty mandated by law. On Issue 2: The Court reaffirmed that the pendency of a case for the annulment of the mortgage or the foreclosure sale is not a bar to the issuance of a writ of possession. Until the foreclosure sale is actually annulled by a final judgment, the purchaser's right to possession remains absolute and must be enforced by the court. The ministerial character of the writ is so well-defined that even an injunction to prohibit its issuance is generally disallowed. If the mortgagors wish to contest the regularity of the sale, their proper remedy is found in Section 8 of Act No. 3135, which allows them to petition for the cancellation of the writ after possession has been yielded. By investigating the factual validity of the Notary Public's acts, the CA improperly pre-empted the findings of the RTC of Naga City, where the annulment case was still pending. Thus, the RTC of Pili correctly issued the writ as it had no legal basis to do otherwise.
Main Doctrine
The issuance of a writ of possession in extrajudicial foreclosure proceedings is a ministerial duty of the court, and any question regarding the validity of the foreclosure sale must be determined in a subsequent proceeding, not as a justification for opposing the issuance of the writ.