G.R. No. 175380 ; March 22, 2010
Gregorio Espinoza, in his own personal capacity and as surviving spouse, and Jo Anne G. Espinoza, herein represented by their attorney-in-fact, Ben Sangil, Petitioners, vs. United Overseas Bank Phils. (formerly Westmont Bank), Respondent.

FACTS

On March 24, 1996, Firematic Philippines was granted a credit line by respondent United Overseas Bank. As security, petitioners Gregorio Espinoza and the late Joji Gador Espinoza executed a third-party mortgage in favor of respondent over four parcels of land. Due to Firematic’s failure to pay its loans, respondent filed a petition for extrajudicial foreclosure. The property covered by TCT No. 197553 was sold at public auction to respondent as the highest bidder. The certificate of sale was registered on September 25, 1996. Ownership was consolidated in the name of respondent on July 24, 1998, evidenced by TCT No. C-328807. On March 10, 2000, respondent filed an ex parte petition for the issuance of a writ of possession (LRC Case No. C-4233). Petitioners opposed this and moved for its consolidation with Civil Case No. C-17913, a pending action for the nullification of the extra-judicial foreclosure proceedings and certificate of sale. The Regional Trial Court (RTC) Branch 124 granted the motion for consolidation. Respondent’s motion for reconsideration was denied. Respondent then filed a petition for certiorari and mandamus in the Court of Appeals (CA), which granted the petition, reversed the RTC orders, and directed the issuance of a writ of possession in favor of respondent. The CA held that purchasers in a foreclosure sale are entitled as a matter of right to a writ of possession, and questions regarding the regularity and validity of the sale should be determined in a separate proceeding, not as a justification for opposing the writ. Petitioners filed the present petition.

ISSUE

Whether a case for the issuance of a writ of possession may be consolidated with the proceedings for the nullification of extra-judicial foreclosure.

RULING

No. The petition is denied. The Supreme Court ruled for the respondent. The order for a writ of possession issues as a matter of course upon the filing of the proper motion and approval of the corresponding bond if the redemption period has not lapsed. If the redemption period has expired, the filing of the bond is no longer necessary. Any questions regarding the regularity and validity of the sale are to be determined in a subsequent proceeding and may not be raised to oppose the issuance of the writ. A petition for a writ of possession is ex parte and summary in nature; it is a non-litigious proceeding for the enforcement of the right of possession as purchaser in a foreclosure sale. In contrast, a petition for nullification of foreclosure proceedings contests the presumed right of ownership of the buyer. The two proceedings differ glaringly in nature, militating against consolidation. The long-standing rule is that proceedings for the issuance of a writ of possession are ex parte and non-litigious. The exception in Active Wood Products Co., Inc. v. Court of Appeals does not apply here because, in that case, the petition for a writ of possession was filed before the expiration of the redemption period and title had not yet been consolidated in the mortgagee’s name. In this case, the petition for a writ of possession was filed after the one-year redemption period had lapsed, and title had already been consolidated in the name of the respondent. Thus, the respondent’s right to possession had become absolute as an incident of ownership. Furthermore, petitions for the issuance of writs of possession, being land registration proceedings, do not fall within the ambit of the Rules of Court; therefore, the rules on consolidation should not be applied. Consolidation would be highly improper as it would defeat the purpose of avoiding delay and adversely affect the substantive right of possession.