GR 171172; (November, 2015) (Digest)
G.R. No. 171172 & G.R. No. 200061, November 09, 2015.
BANK OF THE PHILIPPINE ISLANDS, PETITIONER, VS. SPOUSES JOHNSON & EVELYN CO & JUPITER REAL ESTATE VENTURES, INC., RESPONDENTS. [G.R. No. 200061] SPOUSES JOHNSON & EVELYN CO REPRESENTED BY THEIR HEIR JOBELLE CO, PETITIONERS, VS. BANK OF THE PHILIPPINE ISLANDS (AS SUCCESSOR-IN-INTEREST OF FAR EAST BANK AND TRUST COMPANY), RESPONDENT.
FACTS
On November 13, 1997, respondents Spouses Johnson and Evelyn Co and Jupiter Real Estate Ventures, Inc. obtained a loan from Far East Bank and Trust Company (FEBTC), secured by a real estate mortgage over eight parcels of land. FEBTC merged with petitioner Bank of the Philippine Islands (BPI), with BPI as the surviving corporation. Due to default, BPI foreclosed the mortgage, and the properties were sold to BPI as the highest bidder at an auction sale on July 12, 2000. After the redemption period expired, BPI consolidated its ownership, and new titles were issued in its name.
On August 7, 2002, Spouses Co and Jupiter filed a complaint for nullification of foreclosure proceedings and damages (Civil Case No. 02-0331). On April 29, 2003, BPI filed a petition for a writ of possession (LRC Case No. 03-0063). Spouses Co and Jupiter moved to consolidate the two cases, but the Regional Trial Court (RTC) Branch 196 denied the motion. They also moved to suspend proceedings due to Jupiter’s petition for corporate rehabilitation, which included a Stay Order (later lifted), but the RTC denied this motion. The RTC issued an Amended Order on December 8, 2005, granting the writ of possession in favor of BPI. Spouses Co and Jupiter filed a notice of appeal, which the RTC granted. BPI assailed this grant of appeal via a petition for review on certiorari ( G.R. No. 171172 ). Meanwhile, the Court of Appeals (CA) denied the appeal of Spouses Co and Jupiter and affirmed the RTC’s Amended Order. Spouses Co then filed a petition for review (G.R. No. 200061), which was consolidated with G.R. No. 171172 .
ISSUE
1. Whether the writ of possession was validly issued.
2. Whether the RTC erred in giving due course to the Notice of Appeal from its order granting the writ of possession.
3. Whether Act No. 3135 , as amended, violates the Constitution.
4. Whether the CA erred in denying the consolidation of LRC Case No. 03-0063 with Civil Case No. 02-0331.
RULING
1. Yes, the writ of possession was validly issued. Under Section 7 of Act No. 3135 , as amended, the purchaser in a foreclosure sale may apply for a writ of possession during the redemption period by filing an ex parte petition and posting a bond. After the redemption period expires and ownership is consolidated with the issuance of a new title in the purchaser’s name, the right to possession becomes absolute, and a writ issues as a matter of course without the need for a bond. Here, Spouses Co and Jupiter failed to redeem the properties, BPI consolidated its ownership, and new titles were issued. Thus, BPI’s right to possession became absolute, and the RTC correctly issued the writ.
2. Yes, the RTC erred in giving due course to the Notice of Appeal. An order granting a writ of possession is interlocutory and not appealable. The proper remedy against such an order is a petition for certiorari under Rule 65, not an ordinary appeal. The RTC therefore committed a grave abuse of discretion in granting the notice of appeal and ordering the elevation of records to the CA.
3. No, Act No. 3135 , as amended, does not violate the Constitution. The law provides a summary remedy for the purchaser to obtain possession after a foreclosure sale. It does not deprive the mortgagor of property without due process, as the mortgagor has the opportunity to be heard in a separate proceeding to annul the foreclosure or to file a petition under Section 8 of the Act to set aside the sale within thirty days after the purchaser is given possession. The constitutionality of Act No. 3135 has been upheld.
4. No, the CA did not err in denying the consolidation. A petition for a writ of possession is a summary proceeding that can be maintained independently from an action for annulment of mortgage or foreclosure sale. The pendency of a separate action for annulment does not justify the suspension of the issuance of a writ of possession, especially after the purchaser has consolidated title. The RTC correctly denied the motion for consolidation, and the CA properly affirmed this.