Sagarbarria v. Philippine Business Bank
REITERATIONFacts
The Antecedents: Petitioner Martin Sagarbarria executed a deed of real estate mortgage over his property in favor of Philippine Business Bank (PBB) to secure a loan of ₱11,500,000.00 for Key Commodities Inc. Upon failure of Key Commodities to pay, PBB filed an application for foreclosure. Petitioner filed a complaint for annulment of the mortgage and foreclosure, leading PBB to withdraw its application. PBB later filed an Answer and a counterclaim for the mortgage loan, which had ballooned to ₱18,000,000.00. While the annulment case was pending, PBB filed a new petition for extrajudicial foreclosure, stating the obligation had reached ₱30,000,000.00, a dacion en pago offer was rejected, and a demand to pay was served. The property was foreclosed and awarded to PBB for ₱13,000,000.00, with a certificate of sale registered. PBB then filed a petition for a writ of possession. The RTC granted the writ, initially requiring a bond, but later deleted the bond requirement after PBB consolidated ownership. Procedural History: Petitioner assailed the writ of possession via a petition for certiorari with the Court of Appeals (CA), alleging denial of due process due to improper notice of sale and forum shopping by PBB. The CA affirmed PBB's entitlement to the writ, stating its issuance is ministerial and not defeated by a pending annulment case. The CA also rejected the forum shopping claim and ruled that certiorari was improper, as an ordinary appeal under Section 8 of Act No. 3135 was available. The CA denied petitioner's motion for reconsideration. This Court initially denied petitioner's petition for review on certiorari. Petitioner filed a motion for reconsideration, which this Court required PBB to comment on but denied the motion to elevate the case to the en banc. The Petition: Petitioner, in his motion for reconsideration, argued that the RTC committed grave abuse of discretion in granting the writ of possession despite the alleged invalidity of the foreclosure proceedings, and thus the CA erred in dismissing his certiorari petition. He urged the Court to reconsider its denial of his appeal.
Issue(s)
Whether the RTC committed grave abuse of discretion in issuing the writ of possession despite the pendency of a case assailing the validity of the mortgage and foreclosure proceedings. Whether the Court of Appeals erred in dismissing the petition for certiorari.
Ruling
The Supreme Court denied the motion for reconsideration with finality. It affirmed that the issuance of a writ of possession after the lapse of the redemption period and consolidation of ownership is a ministerial duty of the court. The Court also held that certiorari was an improper remedy, as an ordinary appeal was available.
Ratio Decidendi
On the RTC's alleged grave abuse of discretion in issuing the writ of possession: The Court reiterated that under Section 7 of Act No. 3135, a writ of possession may be issued within the redemption period upon filing a bond, or after the lapse of the redemption period without need of a bond. In the latter case, after the redemption period expires and ownership is consolidated in the purchaser, the purchaser's right to possession ripens into an absolute right of a confirmed owner, making the issuance of the writ a ministerial function. The petitioner failed to redeem the property, thus PBB had the right to file an ex parte motion for the writ, and it was the trial court's ministerial duty to grant it. The Court rejected the contention that the petitioner was denied due process, as proceedings for a writ of possession are ex parte and summary, requiring no notice to interested parties, especially when the mortgagor has lost all interest by failing to redeem. Furthermore, the pendency of a case for annulment of the mortgage or foreclosure sale does not stay the issuance of a writ of possession, as the judge need not look into the validity of the mortgage or foreclosure in such proceedings. Any question regarding validity is to be resolved in the annulment case, without prejudice to the purchaser's right to possession. On the CA's dismissal of the petition for certiorari: The Court agreed with the CA that certiorari was an improper remedy. A special civil action for certiorari is only available when the lower tribunal acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no other plain, speedy, and adequate remedy. In this case, the soundness of the order granting the writ of possession was a matter of judgment, correctible by ordinary appeal under Section 8 of Act No. 3135. The petitioner failed to show grave abuse of discretion, and thus should have availed of the remedy of appeal instead of certiorari. Errors of judgment are correctible by appeal, while errors of jurisdiction are reviewable by certiorari. Since no grave abuse of discretion was demonstrated, the CA correctly dismissed the petition.
Main Doctrine
The issuance of a writ of possession to a purchaser in an extrajudicial foreclosure sale becomes a ministerial function of the court after the lapse of the redemption period and consolidation of ownership, and any pending case assailing the validity of the mortgage or foreclosure sale does not stay this ministerial duty. Certiorari is not the proper remedy to question the issuance of a writ of possession when an ordinary appeal is available.