G.R. No. 137548 September 3, 2007
HEIRS OF THE LATE DOMINGO N. NICOLAS, petitioners, vs. METROPOLITAN BANK & TRUST COMPANY, respondent.

FACTS

Spouses Domingo and Josefa Nicolas owned two conjugal lots. Upon Domingo’s death in 1986, his estate, including his share in the conjugal properties, was left unsettled. After a fire destroyed the original titles, Josefa successfully petitioned for their reconstitution, but the new titles were issued solely in her name. Unbeknownst to petitioners, who are the compulsory heirs of Domingo, Josefa mortgaged the properties to Metropolitan Bank & Trust Company (Metrobank). The mortgage was foreclosed, and Metrobank consolidated title in its name. It then filed and was granted a petition for a writ of possession.
Petitioners, claiming ownership over portions of the lots as their legitime from their father’s estate, filed a separate civil case for annulment of the reconstituted titles, mortgage, and sale. Simultaneously, they moved to quash the writ of possession, arguing they were not parties to the foreclosure and were strangers to that proceeding. The motion was denied, and the Court of Appeals upheld the denial, ruling the issuance of the writ was a ministerial duty after consolidation of title.

ISSUE

Whether a writ of possession issued in favor of an extra-judicial foreclosure sale purchaser can be enforced against compulsory heirs who were not parties to the mortgage and foreclosure proceedings, and who claim a right over portions of the property as their legitime from an unsettled estate.

RULING

The Supreme Court granted the petition and modified the appellate court’s decision. The Court affirmed the general rule that after consolidation of title, the issuance of a writ of possession to the purchaser in an extra-judicial foreclosure is a ministerial function. However, this rule is not absolute. Citing the precedent in Rivero de Ortega v. Natividad, the Court held that a writ of possession cannot be used to eject a party in possession who was not a party to the foreclosure suit and who did not derive title from the mortgagor.
Petitioners, as compulsory heirs, acquired a vested right to their legitime upon Domingo’s death, prior to the mortgage and foreclosure. Since the estate remained unsettled, their specific shares were undetermined but their ownership interest was established. They were strangers to the foreclosure proceedings. Therefore, the writ of possession could not summarily deprive them of their shares. The Court ruled that the writ should apply only to the portion pertaining to Josefa Nicolas, as may be determined in the pending annulment case or in a proper settlement of Domingo Nicolas’s estate.