GR 159296; (February, 2006) (Digest)
G.R. No. 159296 February 10, 2006
ALLGEMEINE-BAU-CHEMIE PHILS., INC., Petitioner, vs. METROPOLITAN BANK & TRUST CO., HON. N. C. PERELLO, Presiding Judge of the RTC-MUNTINLUPA, BRANCH 276 and SHERIFF FELIX FALCOTELLO, Respondents.
FACTS
Asian Appraisal Holdings, Inc. (AAHI) obtained a loan from Solidbank, secured by a real estate mortgage over the Asian Star Building and its underlying lots. Petitioner Allgemeine-Bau-Chemie Phils., Inc. subsequently purchased specific condominium units and parking slots from AAHI, fully paying the purchase price. AAHI later defaulted on its loan. Metrobank, as Solidbank’s successor, extrajudicially foreclosed the mortgage, purchased the properties at auction, and obtained a writ of possession from the Regional Trial Court (RTC), Branch 276.
Petitioner, in possession of its purchased units, sought to enjoin the writ’s implementation. It filed a complaint-in-intervention in a separate case (AAHI vs. Solidbank) pending before RTC Branch 256, seeking annulment of the foreclosure sale. Concurrently, petitioner filed a petition with the Court of Appeals (CA) for a writ of preliminary injunction specifically to restrain the enforcement of the writ of possession issued by Branch 276.
ISSUE
Whether the Court of Appeals correctly denied petitioner’s application for a writ of preliminary injunction to enjoin the implementation of the writ of possession.
RULING
Yes, the Court of Appeals was correct. The Supreme Court affirmed the denial. The legal logic centers on the nature of the action filed by petitioner before the CA and the purpose of a writ of possession. Petitioner’s CA petition sought solely a preliminary injunction to preserve the status quo pending resolution of its complaint-in-intervention for annulment of foreclosure in Branch 256. However, a writ of possession issued in favor of the purchaser in a foreclosure sale is a ministerial duty of the court; the issuance is a mere incident of the foreclosure process. The right to possession becomes absolute upon the expiration of the redemption period without a redemption being made.
The Court emphasized that the pendency of a separate action for annulment of the mortgage or foreclosure sale does not itself justify enjoining the writ of possession. To obtain such an injunction, a party must demonstrate a clear legal right to the property superior to that of the purchaser at the foreclosure sale. Petitioner failed to establish such a clear and unmistakable right. Its claim, based on being a buyer in good faith from the mortgagor, was a matter to be fully litigated in its principal action before Branch 256. It did not constitute a legal ground to deprive the foreclosure sale purchaser of its immediate right to possession, which is ministerial and summary in nature. The CA therefore correctly found no basis for the extraordinary remedy of injunction.