Chu v. Philippine Bank of Communication
REITERATIONFacts
The Antecedents: Petitioners obtained a loan from Philippine Bank of Communication (PBCom) secured by a real estate mortgage. Upon failure to pay, PBCom initiated extrajudicial foreclosure proceedings. A TRO initially halted the sale, but it was eventually lifted, and PBCom emerged as the highest bidder. A certificate of sale was issued and annotated on the Transfer Certificate of Title (TCT). After the redemption period lapsed without redemption, PBCom consolidated its ownership and obtained a new TCT in its name. PBCom then applied for a writ of possession. Procedural History: The Regional Trial Court (RTC) granted PBCom's motion for a declaration of general default, allowed ex parte presentation of evidence, and denied petitioners' notice of appeal. The Court of Appeals (CA) dismissed petitioners' petition for certiorari, citing a procedural defect (lack of updated PTR number) and ruling on the merits that the writ of possession proceeding is ex parte and not subject to opposition, and that there was no forum shopping. The CA also denied petitioners' motion for reconsideration. The Petition: Petitioners sought review of the CA's dismissal of their petition for certiorari, questioning the propriety of the issuance of the writ of possession despite the pendency of a case challenging the foreclosure's validity and their declaration in default.
Issue(s)
Whether the writ of possession was properly issued despite the pendency of a case questioning the validity of the extrajudicial foreclosure sale. Whether the writ of possession was properly issued despite petitioners being declared in default in the proceeding for the issuance of the writ of possession.
Ruling
The petition is denied. The Resolutions of the Court of Appeals dated 29 April 2005 and 4 August 2005 in CA-G.R. SP No. 88963 are affirmed.
Ratio Decidendi
On the propriety of the writ of possession despite the pendency of a case questioning the validity of the extrajudicial foreclosure sale: The Court held that the right to possession of a purchaser at an extrajudicial foreclosure sale is not affected by a pending case questioning the validity of the foreclosure proceeding. Such a pending case is not a bar to the issuance of the writ of possession. The proceeding for the issuance of a writ of possession under Act No. 3135, as amended, is ex parte and is considered a ministerial duty of the court once the requirements are fulfilled, particularly after the redemption period has lapsed and ownership has been consolidated. The validity of the foreclosure sale itself is a separate issue that can be determined in a subsequent proceeding, as outlined in Section 8 of Act No. 3135, as amended, and should not be used to oppose the issuance of the writ. On the propriety of the writ of possession despite petitioners being declared in default: The Court reiterated that the application for a writ of possession in foreclosure proceedings is ex parte in nature, as provided by Section 7 of Act No. 3135, as amended. This means it is a petition filed by one party without notice to the other, and the court issues the writ upon a simple motion and posting of a bond (if within the redemption period) or as a matter of course after the redemption period has lapsed and ownership has been consolidated. Consequently, petitioners' right to due process was not violated by their declaration in default, as they had no legal right to oppose the ex parte motion for the issuance of the writ. Their remedy was not to oppose the issuance but to file a petition to set aside the sale and cancel the writ within the period prescribed by Section 8 of Act No. 3135, as amended.
Main Doctrine
The issuance of a writ of possession after the lapse of the redemption period following an extrajudicial foreclosure sale is a ministerial duty of the court upon proper application and proof of title, and such proceeding is ex parte in nature, not requiring the debtor's participation or affording them a right to oppose the issuance of the writ. Any challenge to the validity of the foreclosure sale must be pursued in a separate proceeding.