G.R. No. 147902 ; March 17, 2006
SPOUSES VICENTE YU AND DEMETRIA LEE-YU, Petitioners, vs. PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Respondent.

FACTS

Petitioners mortgaged several parcels of land in Dagupan City and Quezon City to respondent bank as security for a loan. Upon default, the bank initiated extra-judicial foreclosure proceedings on the Dagupan properties, purchased them at the auction sale, and obtained a certificate of sale. After the redemption period lapsed, the bank filed an ex-parte petition for a writ of possession in the Regional Trial Court (RTC). Petitioners filed a motion to dismiss this petition, arguing the foreclosure was void for violating the indivisibility of the mortgage by conducting separate foreclosures for the Dagupan and Quezon City properties and for allegedly misstating the obligation. Simultaneously, petitioners filed a separate civil case in another RTC branch for annulment of the certificate of sale.
The RTC denied the motion to dismiss, ruling that a motion to dismiss is not allowed in a summary proceeding for a writ of possession under Act No. 3135 . It also held the principle of a prejudicial question was inapplicable as the pending annulment case was civil, not criminal. The Court of Appeals affirmed the dismissal, stating the issuance of a writ of possession after the redemption period is a ministerial duty and that petitioners violated the rule against multiplicity of suits by filing a separate annulment case.

ISSUE

The core issues are: (1) whether a mortgage on properties in different localities can be foreclosed separately, and (2) whether the pendency of a separate civil action for annulment of the foreclosure sale constitutes a prejudicial question that bars the issuance of a writ of possession.

RULING

The Supreme Court denied the petition and affirmed the lower courts. On the first issue, the Court held that while a real estate mortgage is indivisible under Article 2089 of the Civil Code, this principle does not prohibit the separate foreclosure of mortgaged properties located in different provinces or municipalities. Section 2 of Act No. 3135 mandates that extra-judicial foreclosure must be conducted in the province or municipality where the property is situated. Therefore, the bank’s separate foreclosure proceedings for the Dagupan and Quezon City properties were legally permissible and did not constitute a violation of the mortgage’s indivisibility.
On the second issue, the Court ruled that the pendency of a separate civil action for annulment does not constitute a prejudicial question in the summary proceeding for a writ of possession. A prejudicial question, as defined in the Rules of Court, applies only when a civil action involves an issue similar or intimately related to an issue in a pending criminal action. Here, both proceedings are civil. Furthermore, the Court emphasized that the issuance of a writ of possession is a ministerial duty of the court once the redemption period expires without the mortgagor redeeming the property. Any challenge to the validity of the foreclosure sale or the mortgage itself must be pursued in a separate proceeding and does not affect the ministerial issuance of the writ. The filing of the annulment case was correctly deemed a dilatory tactic that could not bar the grant of possession to the purchaser at the foreclosure sale.