BPI FAMILY SAVINGS BANK, INC., PETITIONER-APPELLEE, VS. SPOUSES VIRGINIA M. CERVERA AND ARLENO M. CERVERA, RESPONDENTS-APPELLANTS.

BPI Family Savings Bank versus Cervera

The Case

This is an appeal brought by spouses Virginia and Arleno Cervera against the decision of the Regional Trial Court of Mariveles, Bataan, Branch 4, which granted the ex parte petition of BPI Family Savings Bank for the issuance of a writ of possession over a parcel of land in Limay, Bataan. The bank had purchased the property at a public auction following an extrajudicial foreclosure, and the spouses failed to redeem it within the one-year period. The case matters because it fixes the character of a writ of possession proceeding as ex parte, non-adversarial, summary, and ministerial, and it settles that a pending suit to annul the foreclosure does not stay the issuance of the writ.

Procedural History

On November 23, 2010, BPI Family Savings Bank filed an Ex-Parte Petition for Issuance of Writ of Possession with the Regional Trial Court of Bataan, docketed as CAD Case No. 734-ML, against the spouses Cervera. The trial court found the petition sufficient in form and substance and set it for initial hearing. Before the hearing, the spouses filed an Opposition, invoking the pendency of a separate case for annulment of the foreclosure and auction sale. The trial court allowed the bank to present its evidence ex parte, and on April 16, 2012, it issued a Decision granting the petition and ordering the issuance of a writ of possession in favor of the bank against the spouses and all persons claiming rights under them.

Displeased, the spouses filed a Notice of Appeal, which the trial court granted in its Order dated May 16, 2012. The appeal was elevated to the Supreme Court, which resolved it in the assailed Decision.

Facts

The spouses Cervera held a parcel of land consisting of 253 square meters in Poblacion, Limay, Bataan, covered by Transfer Certificate of Title No. T-79126 in the name of the spouses. The property was subjected to an extrajudicial foreclosure proceeding under Act No. 3135, as amended. On May 21, 2009, the Provincial Ex-Officio Sheriff of Balanga City sold the property at public auction to BPI Family Savings Bank, which was the highest bidder.

On June 23, 2009, the Certificate of Sale was presented, registered, and annotated at the back of the title. The one-year legal right of redemption of the spouses ran from that date, and they failed to exercise it. Ownership of the property was therefore consolidated in the name of the bank. Transfer Certificate of Title No. T-79126 was canceled, and a new title, Transfer Certificate of Title No. 038-2010006488, was issued in the name of the bank.

Having consolidated its title, the bank filed its ex parte petition for a writ of possession. The spouses opposed it, pointing to a pending case for annulment of the foreclosure and auction sale over the same property, and asking that the proceedings be suspended until that case was finally disposed of. The bank countered that the issuance of the writ is ministerial and may proceed independently of any action seeking to annul the foreclosure and auction sale.

Issues

• Whether or not the trial court correctly excluded the spouses Cervera from the proceedings for the issuance of a writ of possession.
• Whether or not the pendency of the case for annulment of the foreclosure proceedings and public auction has an effect on the proceedings for the issuance of a writ of possession.

Applicable Provisions

Section 7 of Act No. 3135, as amended by Act No. 4118, provides:

SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.

This provision is the source of the purchaser's right to petition for possession and of the court's ministerial duty to issue the writ, and it expressly describes the petition as an ex parte motion.

Ruling

On the first issue, the Court ruled in the affirmative and held that the trial court committed no error in maintaining the non-adversarial nature of the proceeding. A petition for the issuance of a writ of possession is ex parte, non-adversarial, and summary in nature, because the only issue involved is the purchaser's right to possession. The Court stressed that under Section 7 of Act No. 3135, it is the ministerial duty of the court to issue a writ of possession in favor of the purchaser even during the redemption period, unless the case falls under the exceptions provided by law and jurisprudence. Since the one-year redemption period had already lapsed and ownership had been consolidated and a new certificate of title issued in the bank's name, the bank, as the new registered owner, was even more entitled to possession. The Court explained that after consolidation of title in the purchaser's name for failure of the mortgagor to redeem, the purchaser's right to possession ripens into the absolute right of a confirmed owner, and the issuance of the writ upon proper application and proof of title becomes merely a ministerial function. The Court also noted that the case did not fall under any recognized exception, such as when the property is being contested by a third person, so the trial court could very well exclude those who wanted to participate in the ex parte hearings.

On the second issue, the Court held that the pendency of an action for annulment of the foreclosure sale does not preclude the trial court from issuing the writ of possession. The Court reiterated that the issuance of the writ may not be stayed by a pending action for annulment of the mortgage or of the foreclosure itself, and that an injunction is not allowed to prohibit the issuance of a writ of possession. Until the foreclosure sale is annulled by a court of competent jurisdiction, the spouses had no valid title and no right to prevent the issuance of the writ. It was therefore error for the spouses to claim that their action to annul the foreclosure sale could effectively stay the issuance of the writ; until and unless the sale is declared void, they have no legal standing to interfere in the proceedings.

Doctrine

A petition for the issuance of a writ of possession under Section 7 of Act No. 3135 is ex parte, non-adversarial, and summary in nature, because the only issue is the purchaser's right to possession. The court's duty to issue the writ is ministerial, and it may not exercise discretion or judgment, unless the case falls under the recognized exceptions provided by law and jurisprudence, such as when the property is being contested by a third person. After consolidation of ownership in the purchaser's name for failure of the mortgagor to redeem, the purchaser's right to possession ripens into the absolute right of a confirmed owner. Finally, the pendency of an action for annulment of the foreclosure or of the auction sale does not stay the issuance of the writ; until the sale is annulled by a court of competent jurisdiction, the mortgagor has no standing to interfere in the ex parte proceedings.

Disposition

The appeal was dismissed and the Decision of the Regional Trial Court dated April 16, 2012 was affirmed, so the bank won and the writ of possession was upheld.

Remember This

The line worth memorizing is that the issuance of a writ of possession is a ministerial function that cannot be stayed by a pending annulment of the foreclosure. Examiners like to use this case to test the ex parte and non-adversarial character of the writ of possession proceeding and the rule that a pending annulment suit does not bar the writ.