G.R. No. 153951 . July 29, 2005.
PHILIPPINE NATIONAL BANK, Petitioner, vs. SANAO MARKETING CORPORATION, SPOUSES AMADO A. SANAO and SOLEDAD F. SANAO and SPOUSES WILLIAM (Willy) F. SANAO and HELEN SANAO and the COURT OF APPEALS, Respondents.

FACTS

Respondents obtained a loan from petitioner Philippine National Bank (PNB) secured by a real estate mortgage. The contract stipulated that foreclosure would be governed by Act No. 3135 , as amended. Upon respondents’ default, PNB extrajudicially foreclosed the mortgage. The Notice of Sale announced the auction would be held at the entrance of the Municipal Trial Court of Pili, Camarines Sur. However, the auction was actually conducted at the lobby/main entrance of the Regional Trial Court Hall of Justice in Naga City. PNB was the highest bidder and a Provisional Certificate of Sale was issued and subsequently registered.
PNB then filed a petition for a writ of possession with the Regional Trial Court (RTC) of Pili, which granted it. The RTC also ordered the execution of the writ pending appeal. Respondents challenged these orders via a petition for certiorari before the Court of Appeals, arguing the foreclosure sale was void for being conducted at a place different from that specified in the notice. The Court of Appeals nullified the RTC orders, holding the variance in the venue rendered the sale invalid and thus PNB had no right to a writ of possession.

ISSUE

Whether the Court of Appeals erred in nullifying the RTC orders granting the writ of possession on the ground that the foreclosure sale was void due to a discrepancy in the venue.

RULING

Yes, the Court of Appeals erred. The Supreme Court reversed its decision and reinstated the RTC orders granting the writ of possession. The legal logic is anchored on the nature of a writ of possession under Act No. 3135 . The Court held that the issuance of a writ of possession is a ministerial duty of the court once the mortgagee-purchaser files a petition after the consolidation of title or during the redemption period. The writ is a consequence of the registration of the sale and the certificate of title issued in the purchaser’s name. At this stage, the court does not inquire into the validity of the sale or the foreclosure proceedings. Any question regarding the regularity or validity of the sale is a separate issue that must be raised in a proper proceeding, such as an action to annul the sale or to set aside the foreclosure.
In this case, PNB had consolidated its ownership over the properties, and the titles were already issued in its name. The alleged defect in the venue of the auction sale, even if true, pertains to the validity of the foreclosure proceedings, not to the ministerial issuance of the writ. The remedy for such a defect is a separate action, not a collateral attack in the possessory proceedings. Therefore, the RTC correctly performed its ministerial duty in granting the writ, and the Court of Appeals overstepped by delving into the merits of the foreclosure’s validity. The ministerial duty to issue the writ proceeds from the fact of registration and issuance of a new title, which confers the right to possession.