Espiridion v. Second Bulacan Development Bank
REITERATIONFacts
The Antecedents: Spouses Constantino and Remedios Espiridion and Spouses Renato and Erlinda Ramos (petitioners) mortgaged a parcel of land to Second Bulacan Development Bank (SBDB) as security for a P4,200,000 loan. Upon failure to comply with the mortgage terms, SBDB extrajudicially foreclosed the property. SBDB acquired the property at a public auction held on August 26, 1997, as the sole bidder. The petitioners failed to redeem the property within the one-year redemption period, leading to the consolidation of ownership in SBDB's name. Procedural History: SBDB filed an ex-parte petition for a writ of possession over the foreclosed property with the Regional Trial Court (RTC) of Makati City, docketed as Civil Case No. 99-443. The petitioners contested the validity of the extrajudicial foreclosure sale, alleging SBDB's non-compliance with procedural requirements. The RTC, however, found that the issuance of a writ of possession was a ministerial duty and granted SBDB's petition. The petitioners appealed this decision to the Court of Appeals. While the appeal was pending, SBDB filed a motion for a writ of execution/writ of possession pending appeal, which the Court of Appeals granted. The denial of the petitioners' motion for reconsideration led to the present petition. The Petition: The petitioners filed a special civil action for certiorari under Rule 65 of the Rules of Court, assailing the Court of Appeals' resolutions granting the writ of execution/writ of possession pending appeal. They argued that the appellate court erred and gravely abused its discretion by issuing the writ on two grounds: (a) the extrajudicial foreclosure sale was void due to SBDB's alleged non-compliance with foreclosure requirements, and (b) no justifiable basis was shown for the issuance of the writ, nor was a bond posted by SBDB. The petitioners contended that these issues should have precluded the issuance of the writ pending appeal.
Issue(s)
Whether the Court of Appeals erred or gravely abused its discretion in issuing the writ of execution/possession pending appeal. Whether the alleged nullity of the extrajudicial foreclosure sale is a valid ground to refuse the issuance of a writ of possession. Whether the posting of a bond is a necessary condition for the issuance of a writ of possession after the consolidation of title.
Ruling
The petition is dismissed. The Court of Appeals did not err or gravely abuse its discretion in issuing the writ of execution/possession pending appeal.
Ratio Decidendi
On the alleged grave abuse of discretion and the nature of the writ of possession: The issuance of a writ of possession to a purchaser in a public auction is a ministerial act. After the consolidation of title in the buyer's name due to the mortgagor's failure to redeem the property, the writ of possession becomes a matter of right. The trial court has no discretion in this matter, making any talk of discretion misplaced. A ministerial act is one performed in a prescribed manner, in obedience to the mandate of legal authority, without the exercise of personal judgment. Grave abuse of discretion must be shown to nullify an act within the court's jurisdiction, but since the issuance of the writ of possession did not involve discretion, no abuse of discretion could have been committed by the trial court. Therefore, the petition for certiorari has no basis. On the issue of the nullity of the extrajudicial foreclosure sale: The alleged nullity of the extrajudicial foreclosure sale is of no moment and cannot bar the issuance of a writ of possession. As a general rule, any question regarding the validity of the mortgage or its foreclosure is not a legal ground for refusing the issuance of a writ of execution or possession. The court's role in an ex-parte petition for a writ of possession is limited to determining the entitlement of the purchaser to possession, not the validity of the foreclosure sale itself. The trial court correctly presumed the regularity of the foreclosure sale in the absence of proof to the contrary and proceeded to resolve the issue of SBDB's entitlement to possession. On the posting of a bond: The fact that no bond was posted by SBDB is of no consequence. The posting of a bond as a condition for the issuance of a writ of possession is necessary only if the application is made within one year from the registration of the sale, which is during the redemption period, as ownership has not yet vested on the creditor-mortgagee. However, after the one-year redemption period has expired and ownership has been consolidated in the name of the bank, the mortgagor loses all interest over the property. The purchaser, who has a right to possession that extends beyond the redemption period, becomes the absolute owner when no redemption is made. Thus, the posting of a bond is no longer needed in such circumstances.
Main Doctrine
The issuance of a writ of possession to a purchaser in an extrajudicial foreclosure sale, after the consolidation of title in the buyer's name for failure of the mortgagor to redeem the property, is a ministerial act and a matter of right, and any question regarding the validity of the mortgage or its foreclosure cannot bar its issuance.