The Supreme Court denied a Petition for Review on Certiorari filed by the Spouses An and affirmed the Court of Appeals rulings that upheld the issuance of a writ of possession in favor of the Philippine National Bank (PNB). The Court held that the mere filing of an appeal by the debtor-mortgagor did not stay the implementation of the writ, and that the Regional Trial Court (RTC) had no legal basis to hold in abeyance its implementation.
The Case
On September 29, 2011, the Spouses An obtained a loan from Allied Banking Corporation (Allied Bank) for PHP 2,000,000.00, secured by a real estate mortgage on land located at Barrio Tahao, Legazpi City covered by Transfer Certificate of Title (TCT) No. 57956.
On February 9, 2013, Allied Bank and PNB entered into a merger, with PNB as the surviving entity. As a result, PNB succeeded to all the rights, obligations and interests of Allied Bank.
The Spouses An failed to pay their loan obligation. PNB extrajudicially foreclosed the mortgaged property in accordance with Act No. 3135. On December 15, 2015, a public auction was conducted and the property was sold to PNB as the highest bidder. A Certificate of Sale was issued in favor of PNB and registered with the Registry of Deeds of Legazpi City on November 10, 2016.
The one-year period for redemption lapsed without the Spouses An exercising their right to redeem. Ownership was consolidated in the name of PNB, TCT No. 57956 was cancelled, and TCT No. 085-2018000630 was issued in the name of PNB.
PNB made demands to vacate, which went unheeded, and filed a Petition for the Issuance of a Writ of Possession before the RTC. The Spouses An filed an Opposition, claiming they were regularly paying their loan and never received personal notice of the auction, and that the waiver of their right of redemption in Section 7 of the Real Estate Mortgage was null and void for being contrary to law.
The RTC granted the petition and ordered the issuance of a writ of possession. After the Spouses An filed a Notice of Appeal, the RTC issued an Order, dated January 11, 2021, holding in abeyance the implementation of the writ. PNB elevated the matter through a Petition for Certiorari to the Court of Appeals.
The Issue
The question was whether the RTC erred in holding in abeyance the implementation of the writ of possession it had earlier issued in favor of PNB because of the appeal filed by the Spouses An.
The Ruling
The Court ruled that the RTC erred in holding in abeyance the implementation of the writ. It held that the mere filing of the appeal by the Spouses An did not stay the implementation of the writ, and that the RTC had no legal basis to issue the Order, dated January 11, 2021.
The Court found that the Court of Appeals did not commit a reversible error in ruling that the RTC committed grave abuse of discretion. The dispositive portion of the Supreme Court's decision reads: "ACCORDINGLY, the Petition for Review on Certiorari is DENIED. The Decision, dated June 6, 2022, and the Resolution, dated January 17, 2023, of the Court of Appeals in CA-G.R. CV No. 116720 and CA-G.R. SP No. 169626 are AFFIRMED."
By the Numbers
- Loan amount: PHP 2,000,000.00
- Loan obtained: September 29, 2011
- Allied Bank–PNB merger: February 9, 2013
- Public auction: December 15, 2015
- Certificate of Sale registered: November 10, 2016
- Redemption period ended: November 10, 2017
- RTC Order held in abeyance: January 11, 2021
- CA Decision: June 6, 2022
- CA Resolution: January 17, 2023
- G.R. No. 266071
The Court's Reasoning
The Court explained that the issuance of a writ of possession is purely ministerial on the part of the RTC and that its issuance is a matter of course. It stated that the filing of an appeal to question the order granting the issuance of the writ will not stay its execution.
Applying its guidelines, the Court noted that after the lapse of the redemption period and consolidation of title in the name of the purchaser, the debtor-mortgagor may appeal the order granting the issuance of the writ or file a separate suit for annulment of the mortgage and foreclosure sale. In both cases, the filing will not stay the implementation of the writ. The Court emphasized that uniformity calls for the consistent application of the same rule for remedies available to the debtor-mortgagor.
The Court defined grave abuse of discretion as judgment exercised in a capricious and whimsical manner that is tantamount to lack of jurisdiction, present when the trial court manifestly disregarded the basic rules and procedures, or acted with obstinate disregard of basic and established rule of law or procedure. It held that the RTC disregarded the basic principles and procedural rules governing extrajudicial foreclosure proceedings under Act No. 3135 when it held in abeyance the implementation of the writ.
Source: Supreme Court decision in G.R. No. 266071.
This report summarizes a public Supreme Court decision and is not legal advice.