G.R. No. 183058 ; April 3, 2013.
Spouses Montano T. Tolosa and Merlinda Tolosa, Petitioners, vs. United Coconut Planters Bank, Respondent.

FACTS

Petitioners Spouses Montano and Merlinda Tolosa entered into a Credit Agreement with respondent United Coconut Planters Bank (UCPB) on April 7, 1997, secured by deeds of real estate mortgage over four properties. Due to the spouses’ failure to pay their principal obligation of ₱13,300,000.00, UCPB extrajudicially foreclosed the mortgage. The properties were sold at public auction on January 4, 2000, with UCPB as the highest bidder at ₱17,240,000.00. The certificate of sale was registered on January 5, 2000. The spouses failed to redeem the properties within the one-year period, leading UCPB to consolidate its ownership on January 22, 2001, and new titles were issued in its name. On September 2, 2004, UCPB filed an ex-parte petition for a writ of possession. The spouses opposed, citing a pending complaint (Civil Case No. 6180) for the nullity of the promissory notes, foreclosure, and certificate of sale, alleging they were misled and that the foreclosure was invalid. The Regional Trial Court (RTC) held the issuance of the writ in abeyance, citing equity and the pending case. The Court of Appeals (CA) reversed the RTC, nullified its orders, and directed the issuance of the writ of possession. The spouses’ motion for reconsideration was denied.

ISSUE

1. Whether the prima facie nullity of the mortgage obligation and foreclosure sale justified the RTC’s order to hold in abeyance the issuance of the writ of possession.
2. Whether the surplus in the bid price should first be paid to the mortgagor before they can be deprived of possession of the mortgaged property.

RULING

The petition is bereft of merit. The Court affirmed the decision of the Court of Appeals.
1. The issuance of a writ of possession to a purchaser at an extrajudicial foreclosure sale is a ministerial duty of the court after the consolidation of ownership due to the mortgagor’s failure to redeem. The proceeding is ex-parte and summary. The ministerial duty does not become discretionary upon the filing of a complaint questioning the mortgage. Any question regarding the validity of the extrajudicial foreclosure sale and the resulting cancellation of the writ may be determined in a subsequent proceeding as outlined in Section 8 of Act No. 3135 . The mere pendency of an action for annulment of mortgage or foreclosure sale does not justify the refusal to issue a writ of possession.
2. The alleged surplus from the foreclosure sale is not a legal ground to deny the issuance of a writ of possession. The right to a writ of possession is absolute upon consolidation of title in the buyer’s name. The issue of whether there was a surplus in the foreclosure sale and the mortgagor’s entitlement to it is a separate matter that should be threshed out in a proper proceeding, not in the ex-parte petition for a writ of possession.