The Supreme Court has affirmed that a court’s duty to issue a writ of possession in favor of a purchaser at a foreclosure sale is ministerial, even if there’s a pending case questioning the validity of the mortgage or foreclosure. This means that once the redemption period expires and ownership is consolidated, the purchaser is legally entitled to possess the property, and the court must enforce that right. The pendency of a separate civil action challenging the mortgage does not halt this process, ensuring the purchaser’s right to possess the foreclosed property remains protected.

Foreclosure Fight: Can a Lawsuit Stop a Bank from Taking Possession?

The case of Spouses De Vera v. Hon. Agloro and BPI Family Savings Bank, Inc., GR No. 155673, decided on January 14, 2005, revolves around a loan obtained by the Spouses De Vera from BPI Family Savings Bank, Inc. To secure this loan, the spouses mortgaged their property. When they defaulted on their payments, the bank initiated foreclosure proceedings. The bank emerged as the highest bidder at the public auction and subsequently consolidated its ownership over the property after the spouses failed to redeem it within the one-year period prescribed by law. This led the bank to file an ex parte petition for a writ of possession.

In response, the Spouses De Vera filed a complaint seeking to nullify the real estate mortgage and the extrajudicial sale. They also filed an Urgent Motion to Suspend Proceedings to await the resolution of Civil Case No. 109-M-2000 or for the consolidation of the two cases. However, the trial court denied the motion, citing that the issuance of the writ of possession is a ministerial duty, not affected by the pending civil case. Aggrieved, the Spouses De Vera elevated the matter to the Court of Appeals (CA), which affirmed the trial court’s decision. This prompted the spouses to file a petition for review on certiorari with the Supreme Court, questioning whether the proceedings for the writ of possession should be suspended due to the pending case for nullification of the mortgage.

The Supreme Court emphasized the provisions of Act No. 3135, specifically Section 6, which allows the mortgagor to redeem the foreclosed property within one year from the registration of the sale. Section 7 of the same Act allows the buyer at public auction to file an ex parte motion for a writ of possession if the mortgagor fails to redeem the property. The court reiterated that the issuance of a writ of possession after the consolidation of ownership becomes a ministerial function. The court cited Chailease Finance Corporation v. Ma, 409 SCRA 250 (2003), stating that after the one-year period, the mortgagor loses all interest over it and the purchaser becomes the absolute owner of the property when no redemption is made.

The Supreme Court addressed the spouses’ argument that the proceedings should have been suspended due to the pending case for nullification of the mortgage. The court held that an ex parte petition for a writ of possession is not a “judicial process” as contemplated in Article 433 of the Civil Code, but rather a non-litigious proceeding authorized in an extrajudicial foreclosure. This means it’s a proceeding for the benefit of one party without requiring notice to adversely interested persons. The court referenced Philippine National Bank v. Court of Appeals, 374 SCRA 22 (2002), emphasizing that this is a judicial proceeding for the enforcement of one’s right of possession as purchaser in a foreclosure sale.

Furthermore, the court stated that the validity of the mortgage or its foreclosure is not a legal ground to refuse the issuance of a writ of execution. The right of the purchaser to possess the property is not defeated by a pending civil case seeking annulment of the mortgage. The court referred to Section 8 of Act No. 3135, stating that even if the mortgagor files a petition assailing the writ of possession, the buyer remains in possession pending resolution of the appeal. The Supreme Court has consistently ruled that it is the ministerial duty of the court to issue a writ of possession in favor of the purchaser in a foreclosure sale, and the trial court has no discretion in this matter. In this regard, the Court held that the pendency of Civil Case No. 109-M-2000 is inconsequential.

Regarding the issue of consolidating LRC Case No. P-97-2000 and Civil Case No. 109-M-2000, the Supreme Court agreed with the Court of Appeals that mandamus would not be granted because the petitioners’ right was not clearly founded in law. The court cited Philippine National Bank v. Adil, which states that after the redemption period has expired, the purchaser of the property has the right to be placed in possession. The duty of the Sheriff to enforce the writ of possession is inescapable, especially when a new title has already been issued in the name of the purchaser. Moreover, Section 1, Rule 31 of the Rules of Court, as amended, states that the trial court has the discretion to consolidate related cases.

The Supreme Court underscored that consolidation should be denied when prejudice would result to any of the parties. In this case, the court believed that consolidating the cases would prejudice the respondent, especially since LRC Case No. P-97-2000 is a non-litigious proceeding, summary in nature, while Civil Case No. 109-M-2000 is an ordinary civil action. Additionally, the issue of consolidation was moot because the RTC had already issued an order granting the writ of possession and declared that the respondent had been placed in actual possession of the property.

In essence, the Supreme Court’s decision reinforces the principle that the right to possess property acquired through foreclosure becomes absolute upon the expiration of the redemption period and consolidation of title. This right is not contingent on the resolution of separate cases questioning the validity of the mortgage, ensuring a swift and efficient process for the purchaser to take possession of the property. This ruling provides clarity and stability in foreclosure proceedings, protecting the rights of purchasers while still allowing mortgagors to pursue legal challenges regarding the mortgage itself.

FAQs

What is a writ of possession?	A writ of possession is a court order directing the sheriff to place someone in possession of a property. In foreclosure cases, it’s used to give the buyer possession after the redemption period expires.
What is the redemption period in a foreclosure?	The redemption period is the time allowed by law for the original owner (mortgagor) to reclaim the property after it has been foreclosed by paying the debt and associated costs. In the Philippines, this period is generally one year from the date of sale registration.
What does it mean for a court’s duty to be ‘ministerial’?	A ‘ministerial’ duty is one that a court must perform without discretion or judgment. In this context, it means the court is legally obligated to issue the writ of possession if the requirements of the law are met.
Can a pending lawsuit stop the issuance of a writ of possession?	Generally, no. According to this ruling, the pendency of a lawsuit questioning the validity of the mortgage or foreclosure does not prevent the court from issuing a writ of possession.
What is an ex parte motion?	An ex parte motion is a request made to the court by one party without prior notice to the other party. In foreclosure cases, the buyer can file an ex parte motion for a writ of possession.
What law governs extrajudicial foreclosures in the Philippines?	Act No. 3135, as amended, governs extrajudicial foreclosures, which are foreclosures conducted outside of court. This law outlines the procedures and requirements for such foreclosures.
What recourse does a mortgagor have if they believe the foreclosure was illegal?	Even with the writ of possession issued, the mortgagor can still pursue legal action to challenge the validity of the mortgage or foreclosure sale. They can file a separate case to annul the proceedings.
What does consolidation of ownership mean?	Consolidation of ownership occurs when the buyer at the foreclosure sale becomes the absolute owner of the property after the redemption period expires and the original owner fails to redeem it.

This case underscores the importance of understanding the legal framework surrounding foreclosure proceedings in the Philippines. It highlights the ministerial duty of courts to issue writs of possession and clarifies that pending legal challenges do not automatically halt the process. This ensures a more efficient and predictable outcome for purchasers while still preserving the mortgagor’s right to seek legal recourse.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Spouses De Vera v. Hon. Agloro and BPI Family Savings Bank, Inc., G.R No. 155673, January 14, 2005