Planters Development Bank v. Ng
REITERATIONFacts
The Antecedents: Respondents James and Anthony Ng obtained loans from petitioner Planters Development Bank (PDB) totaling P25,000,000.00, secured by mortgages on two parcels of land. When respondents failed to settle their loan obligations, PDB initiated extrajudicial foreclosure proceedings. The properties were auctioned, and PDB emerged as the highest bidder, receiving a Certificate of Sale. After the redemption period expired without redemption by the respondents, PDB became entitled to possession. Procedural History: Following the expiration of the redemption period, PDB filed an ex-parte petition for a writ of possession with the Regional Trial Court of Quezon City (RTC-QC), Branch 77. Concurrently, respondents had filed an action for Annulment of Certificate of Sale, Promissory Note, and Deed of Mortgage with RTC-QC, Branch 221, which had issued a preliminary injunction. Despite numerous legal incidents, Branch 77 eventually allowed PDB to present evidence ex parte on its petition. However, by Decision dated January 19, 2009, Branch 77 denied the issuance of the writ of possession, citing alleged non-compliance with procedural requirements for the foreclosure sale. PDB's motion for reconsideration was also denied. The Petition: Petitioner PDB filed the present petition for review on certiorari under Rule 45 of the Rules of Court, raising pure questions of law. PDB argued that the RTC-QC, Branch 77 erred in denying the writ of possession by delving into the validity of the mortgage or the foreclosure proceedings, asserting that such issues should be resolved in the separate annulment case filed by the respondents. PDB contended that the issuance of a writ of possession after the expiration of the redemption period is a ministerial function of the court.
Issue(s)
Whether the Regional Trial Court erred in denying the issuance of a writ of possession by raising questions relating to the validity of the mortgage or its foreclosure. Whether the issuance of a writ of possession is a ministerial function of the court after the expiration of the redemption period.
Ruling
The Supreme Court reversed and set aside the Decision of the Regional Trial Court, Branch 77, and directed the said court to immediately act on petitioner's petition for the issuance of a writ of possession.
Ratio Decidendi
On the issue of whether the Regional Trial Court erred in denying the issuance of a writ of possession by raising questions relating to the validity of the mortgage or its foreclosure: It is settled that questions regarding the validity of a mortgage or its foreclosure, as well as the sale of the property covered by the mortgage, cannot be raised as grounds to deny the issuance of a writ of possession. These questions must be determined in a subsequent proceeding, such as the action for annulment of the certificate of sale, promissory note, and deed of mortgage filed by the respondents. By crediting the respondents' opposition and delving into the validity of the foreclosure proceedings, the RTC pre-empted its co-equal branch, which had jurisdiction over the annulment case. The judge to whom an application for a writ of possession is filed need not look into the validity of the mortgage or the manner of its foreclosure. Until the foreclosure sale is annulled, the issuance of the writ of possession is ministerial. The RTC's denial of the writ based on alleged procedural infirmities in the foreclosure was a grievous error. On the issue of whether the issuance of a writ of possession is a ministerial function of the court after the expiration of the redemption period: Section 33 of Rule 39 of the Rules of Court provides that if no redemption is made within one year from the registration of the certificate of sale, the purchaser is entitled to a conveyance and possession of the property. Upon the expiration of the right of redemption, the purchaser is substituted to and acquires all the rights, title, interest, and claim of the judgment obligor to the property. Since the respondents failed to redeem the mortgage within the reglementary period, the petitioner's entitlement to the writ of possession became a matter of right, and the issuance thereof is merely a ministerial function. Even during the redemption period, the purchaser is entitled to a writ of possession as a matter of right, provided a bond is posted. More so when, as in this case, the redemption period has expired and ownership is vested in the purchaser. The defaulting mortgagor is not without remedy, as they can file a petition for cancellation of the writ within 30 days after possession is given.
Main Doctrine
The issuance of a writ of possession after the expiration of the redemption period in an extrajudicial foreclosure is a ministerial function of the court, and questions regarding the validity of the mortgage or the foreclosure proceedings cannot be raised to deny the writ.