SPOUSES NORBERTO OLIVEROS & ELVIRA OLIVEROS, HEREIN REPRESENTED BY HER HUSBAND, NORBERTO OLIVEROS & CABUYAO COMMERCIAL CENTER, INC., PETITIONERS, VS. THE HONORABLE PRESIDING JUD…

Oliveros versus Metropolitan Bank and Trust Company

The Case

This is a petition for review on certiorari brought by spouses Norberto and Elvira Oliveros and Cabuyao Commercial Center, Incorporated against Metropolitan Bank and Trust Company. The petitioners challenge the orders of the Regional Trial Court of Biñan, Laguna granting the bank's ex parte petition for a writ of possession over three foreclosed parcels of land, and the affirmance of those orders by the Court of Appeals. The case matters because it settles, in the clearest terms, that once title is consolidated in the name of the purchaser at an extrajudicial foreclosure sale, the issuance of a writ of possession is a ministerial duty of the court, and the pendency of a separate suit to annul the foreclosure is no bar to that writ.

Procedural History

The bank filed an ex parte petition for the issuance of a writ of possession before the Regional Trial Court of Biñan, Laguna, Branch 24. The petitioners opposed it, and they also moved to cancel the scheduled reception of evidence. The trial court denied the opposition and the motion for reconsideration, holding that the issuance of a writ of possession is a ministerial function and that the proceeding is ex parte. The petitioners then filed a petition for certiorari under Rule 65 before the Court of Appeals, which denied due course and dismissed the petition, reasoning that the bank's right to possess the properties as owner had become absolute until a competent court annulled the sale. The Court of Appeals likewise denied the petitioners' motion for reconsideration. The petitioners then came to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

The mortgagors, including the spouses Oliveros and Cabuyao Commercial Center, Incorporated, obtained two loans from the bank in the total principal amount of 58,000,000 pesos for the construction of the Cabuyao Commercial Complex. To secure the loans, the spouses Oliveros and Florencia Nevalga executed a deed of real estate mortgage over three parcels of land in Santa Rosa, Laguna, together with the improvements thereon.

When the mortgagors failed to pay, the bank instituted extrajudicial foreclosure proceedings under Act Number 3135 and caused the properties to be sold at public auction, where the bank emerged as the highest bidder. The certificate of sale was registered with the Registry of Deeds of Calamba, Laguna, on 4 February 2000. The mortgagors failed to redeem within the one-year period, so the bank consolidated its title, and new transfer certificates of title were issued in its name.

The bank demanded that the mortgagors turn over actual possession, but they refused. The bank then filed its ex parte petition for a writ of possession. The petitioners opposed it, pointing to a complaint for nullification of the foreclosure proceedings that they had earlier filed against the bank. The trial court nevertheless denied the opposition and allowed the bank to present its evidence ex parte, and later denied reconsideration.

Issues

• Whether or not the Court of Appeals erred in sustaining the trial court's orders granting the writ of possession despite the pendency of a separate action for nullification of the foreclosure proceedings.
• Whether or not the issuance of a writ of possession after consolidation of title in the purchaser is a ministerial duty that the court may not refuse.
• Whether or not the petitioners were denied due process when the trial court proceeded with the ex parte petition notwithstanding their opposition.

Applicable Provisions

Section 6 of Act Number 3135, as amended, provides:

Sec. 6. Redemption. — In all cases in which an extrajudicial sale is made under the special power herein before referred to, the debtor, his successors-in-interest or any judicial creditor or judgment creditor of said debtor or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at anytime within the term of one year from and after the date of the sale; and such redemption shall be governed by the provisions of section four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent with the provisions of this Act.

This provision fixes the one-year redemption period, and its expiration without redemption is what consolidates ownership in the purchaser and entitles him to possession.

Article 433 of the Civil Code, which the Court cites to distinguish the ex parte proceeding, provides:

Art. 433. Actual possession under claim of ownership raises a disputable presumption of ownership. The true owner must resort to judicial process for the recovery of the property.

The Court uses this to explain that a petition for a writ of possession is not strictly a judicial process for the recovery of property, but a special proceeding for the enforcement of the purchaser's right of possession.

Ruling

The Court denied the petition for lack of merit. On the first issue, it held that the pendency of an action questioning the validity of the mortgage or its foreclosure cannot bar the issuance of the writ of possession once title has been consolidated in the mortgagee. The writ issues without prejudice to the outcome of that separate action.

On the second issue, the Court held that after consolidation of title in the purchaser's name for failure of the mortgagor to redeem, the writ of possession becomes a matter of right, and its issuance is merely a ministerial function. The Court drew the line between a discretionary and a ministerial act:

A purely ministerial act or duty is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment upon the propriety or impropriety of the act done.

On the third issue, the Court held that a petition for a writ of possession is ex parte and summary in nature, a proceeding brought for the benefit of one party only and without notice to any adverse party. It is not strictly a judicial process, and the law does not require that the petition be granted only after documentary and testimonial evidence have been offered and admitted. As long as a verified petition states facts sufficient to entitle the petitioner to the relief requested, the court shall issue the writ prayed for.

Doctrine

A Bar candidate should retain these rules. First, after the consolidation of title in the buyer's name for failure of the mortgagor to redeem, the writ of possession becomes a matter of right, and its issuance is a ministerial function for which the court exercises neither discretion nor judgment. Second, the pendency of a separate civil suit questioning the validity of the mortgage or its foreclosure cannot bar the issuance of the writ of possession, and the recourse is without prejudice to the outcome of that suit. Third, a petition for a writ of possession is ex parte and summary in nature, and the court may grant it on the strength of a verified petition stating sufficient facts, without need of a full trial. These rules flow directly from Section 6 of Act Number 3135, which fixes the redemption period, and from the nature of the proceeding as distinct from the ordinary judicial process contemplated in Article 433 of the Civil Code.

Disposition

The petition was denied for lack of merit, and the Decision and Resolution of the Court of Appeals were affirmed, with costs against the petitioners.

Remember This

Memorize this line: after consolidation of title upon failure to redeem, the writ of possession is a matter of right and its issuance is a ministerial duty. Examiners use this case to test whether a pending suit to annul the foreclosure can block the writ, and the answer is no.