Baldueza v. Prudential Bank
REITERATIONFacts
The Antecedents: Cecilia S. Baldueza mortgaged a parcel of land to Prudential Bank to secure a loan of P380,000. Upon failure to pay the loan at maturity, the bank initiated an extrajudicial foreclosure of the mortgaged property under Act No. 3135, as amended. Prudential Bank emerged as the highest bidder in the subsequent public auction. The one-year redemption period expired without the petitioner redeeming the property, leading to the consolidation of ownership in favor of the bank and the issuance of a new Transfer Certificate of Title in its name. Procedural History: Following the consolidation of ownership, Prudential Bank filed an ex-parte petition for a writ of possession with the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 79. The petitioner opposed the petition, but the RTC granted the writ of possession, ordering the petitioner and all occupants to vacate the premises. The RTC's decision was based on Section 7 of Act No. 3135, as amended, and jurisprudence holding that the issuance of a writ of possession is a ministerial duty of the court upon proper application and proof of title after the redemption period. The petitioner's motion for reconsideration was denied. Subsequently, the petitioner filed a petition for certiorari, prohibition, and preliminary injunction with the Court of Appeals, which dismissed the petition for lack of merit. The Court of Appeals also denied the petitioner's motion for reconsideration. The Petition: This case reaches the Supreme Court via a petition for review on certiorari of the Court of Appeals' decision. The petitioner seeks to overturn the appellate court's affirmation of the RTC's order granting the writ of possession. The core of the petitioner's argument is that the respondent bank acted in bad faith, citing the alleged omission of a notice of lis pendens from the new title, failure to disclose the pending annulment case in the petition for writ of possession, a defective verification and certificate of forum shopping, and negligence in conducting an ocular inspection. The petitioner contends that these actions negate the bank's status as a good faith mortgagee or subsequent purchaser. The Supreme Court, however, limited its review to errors of law and found that the factual findings of the lower courts regarding the absence of bad faith were binding, ultimately upholding the Court of Appeals' decision.
Issue(s)
Whether the Court of Appeals correctly sustained the issuance of a writ of possession in favor of respondent bank. Whether respondent bank acted in bad faith in obtaining the writ of possession.
Ruling
The petition is denied. The Decision of the Court of Appeals is affirmed, sustaining the issuance of a writ of possession in favor of respondent Prudential Bank.
Ratio Decidendi
On the issue of the writ of possession: The Court reiterated the settled rule that the buyer in a foreclosure sale becomes the absolute owner of the property if it is not redeemed within the redemption period. As such, the buyer is entitled to possession of the property and can demand it at any time following the consolidation of ownership. The Court emphasized that after the redemption period expires and ownership is consolidated, possession becomes an absolute right of the purchaser as the confirmed owner. Upon proper application and proof of title, the issuance of the writ of possession becomes a ministerial duty of the court. In this case, the facts clearly show that petitioner failed to redeem the property, respondent bank consolidated ownership, and obtained a new title, thus entitling it to the writ of possession as a ministerial duty of the court. On the issue of bad faith: The Court held that allegations of bad faith are factual matters that were already raised and passed upon by the lower courts. It reiterated that it is not a trier of facts and that the factual findings of the RTC and the CA, which did not find respondent bank in bad faith, are binding upon the Supreme Court. The Court noted that petitioner conceded that a writ of possession may be issued ex-parte under Section 7 of Act No. 3135. The alleged badges of bad faith, such as the omission of the lis pendens notice and the failure to disclose the pending annulment case, were not given weight by the lower courts, and the Supreme Court deferred to their factual determination. Therefore, the issuance of the writ was not tainted with bad faith that would warrant its reversal.
Main Doctrine
The issuance of a writ of possession in favor of the purchaser in an extrajudicial foreclosure sale, after the expiration of the redemption period and consolidation of ownership, is a ministerial duty of the court, even if there is a pending case questioning the validity of the mortgage, unless there is a clear showing of bad faith by the purchaser.