Edralin v. Philippine Veterans Bank
REITERATIONFacts
1. The Antecedents: Spouses Fernando and Angelina Edralin (the Edralins) obtained a loan from Philippine Veterans Bank (Veterans Bank) and executed a Real Estate Mortgage (REM) over a property registered under Fernando Edralin's name. The Edralins failed to pay their loan obligation, prompting Veterans Bank to file a Petition for Extrajudicial Foreclosure of the REM. A foreclosure sale was conducted, where Veterans Bank emerged as the highest bidder. After the Edralins failed to exercise their right of redemption within the statutory period, Veterans Bank consolidated ownership of the property in its name and obtained a new Transfer Certificate of Title (TCT) No. 78332. Despite acquiring absolute ownership, the Edralins failed to vacate and surrender possession of the property to Veterans Bank. 2. Procedural History: Veterans Bank filed an ex-parte Petition for the Issuance of a Writ of Possession with the Regional Trial Court (RTC) of Parañaque City, which was dismissed for failure to prosecute. A subsequent petition was filed, but the Edralins moved to dismiss it, arguing res judicata. The RTC denied the motion to dismiss but subsequently dismissed Veterans Bank's application for a writ of possession, citing a contractual provision allowing the bank to take possession without judicial intervention and a perceived prescription of the right to seek possession. Veterans Bank moved for reconsideration, highlighting another contractual clause that expressly allowed extrajudicial foreclosure. The RTC denied the motion for reconsideration. Consequently, Veterans Bank filed a Petition for Mandamus with Prayer for Issuance of a Preliminary Mandatory Injunction before the Court of Appeals (CA). 3. The Petition: Before the Supreme Court, the petitioners (Spouses Edralin) seek a review of the Court of Appeals' Decision, which granted Veterans Bank's petition for mandamus and directed the RTC to issue a writ of possession. The petitioners argue that mandamus was improperly used as a substitute for a lost appeal, that the consolidation of title was invalid (pactum commissorium), and that the right to a writ of possession has prescribed. The petition for certiorari under Rule 45 of the Rules of Court specifically assails the CA's ruling that the issuance of a writ of possession is a ministerial duty that does not prescribe and that Veterans Bank's charter does not prohibit extrajudicial foreclosures. The core of the petition is to reverse the CA's affirmation of the RTC's directive to issue the writ of possession.
Issue(s)
Whether mandamus was resorted to as a substitute for a lost appeal and whether mandamus is the proper remedy to seek a review of the final orders of the trial court. Whether the charter of Veterans Bank prohibits extrajudicial foreclosures. Whether the consolidation of ownership of the extrajudicially foreclosed property through a Deed of Sale is in accordance with law, specifically addressing the issue of pactum commissorium. Whether the issuance of a writ of possession under Act No. 3135 is subject to the statute of limitations.
Ruling
The Supreme Court denied the petition for lack of merit and affirmed the decision of the Court of Appeals. The Court held that the issuance of a writ of possession is a ministerial duty of the court and does not prescribe. Mandamus is the proper remedy to compel the performance of this ministerial duty. The consolidation of title was found to be in accordance with law, and the charter of Veterans Bank does not prohibit extrajudicial foreclosures.
Ratio Decidendi
On the propriety of Mandamus: The Court held that mandamus is a proper remedy to compel the issuance of a writ of possession because it is a ministerial duty. A ministerial act is one performed in a prescribed manner, in obedience to legal authority, without the exercise of discretion. Section 7 of Act No. 3135 outlines the procedure for issuing a writ of possession, and once ownership is consolidated, the purchaser's right to possession ripens into an absolute right, making the issuance of the writ a ministerial function. The Court clarified that the issuance of a writ of possession is not an ordinary action subject to appeal, but rather an order of execution or a motion, for which special civil actions like mandamus are available. Furthermore, the Court noted that the qualifying phrase "and there is no appeal [available]," which appears in certiorari and prohibition petitions, is absent in petitions for mandamus, indicating its availability even if an appeal might theoretically exist. On whether the charter of Veterans Bank prohibits extrajudicial foreclosures: The Court found no merit in the petitioners' contention that Section 18 of RA No. 3518 limits Veterans Bank to judicial foreclosures. The provision merely grants mortgagors the right to redeem judicially foreclosed properties and does not preclude extrajudicial foreclosure. Moreover, the availability of extrajudicial foreclosure depends on the agreement of the contracting parties. In this case, paragraph (c) of the REM expressly granted Veterans Bank the power to extrajudicially foreclose the mortgage under Act No. 3135, thus there was no obstacle to its availing this remedy. On whether the consolidation of title was done in accordance with law: The Court rejected the argument that the Deed of Sale executed by Veterans Bank in its own favor constituted pactum commissorium. The Court explained that pactum commissorium requires the automatic appropriation of the mortgaged property by the creditor upon default, without foreclosure proceedings. In this case, Veterans Bank resorted to extrajudicial foreclosure and was issued a Certificate of Sale, demonstrating that it did not automatically appropriate the property but followed the prescribed legal procedures. The elements of pactum commissorium were therefore not met. On whether the right to a writ of possession prescribes: The Court affirmed the ruling that the purchaser's right to request the issuance of a writ of possession never prescribes. The right to possess a property follows the right of ownership, and it would be illogical to bar an owner from seeking possession. The Court cited Calacala v. Republic of the Philippines, emphasizing that failure to secure a final deed of sale or a writ of possession within a certain period does not restore the mortgagor's rights. The Court further distinguished between an 'action' subject to prescription and a 'petition for the issuance of the writ,' which is an ex parte motion granted as a matter of course upon compliance with legal requirements and approval of the bond, thus not subject to prescription.
Main Doctrine
The right to a writ of possession in extrajudicial foreclosure proceedings, once ownership has been consolidated in the purchaser, is a ministerial duty of the court and does not prescribe. Mandamus is the proper remedy to compel the issuance of such writ.