G.R. No. 161882 . July 8, 2005.
BUKIDNON DOCTORS’ HOSPITAL, INC., Petitioner, vs. METROPOLITAN BANK & TRUST CO., Respondent.

FACTS

Petitioner Bukidnon Doctors’ Hospital, Inc. obtained a loan from respondent Metropolitan Bank and Trust Company, secured by a real estate mortgage over six parcels of land. Upon petitioner’s default, the mortgage was extrajudicially foreclosed, and the properties were sold at public auction to respondent as the highest bidder. After the petitioner failed to redeem, the respondent consolidated its ownership and was issued new certificates of title.
Subsequently, the parties entered into a lease agreement over the same properties, with the petitioner, as lessee, paying monthly rent to the respondent, as the new owner. After approximately a year and eight months, the respondent demanded that the petitioner vacate the premises. When the petitioner refused, citing the subsisting lease, the respondent filed an Ex Parte Motion for a Writ of Possession in the Regional Trial Court (RTC). The RTC granted the motion, ruling that the issuance was a ministerial duty.

ISSUE

Whether a writ of possession under Act No. 3135 is the proper remedy to evict a mortgagor who, after the foreclosure and consolidation of title, became a lessee of the mortgagee-purchaser under a lease agreement.

RULING

No. The Supreme Court reversed the RTC’s order. The Court held that the writ of possession under Act No. 3135 is a summary and ex parte proceeding designed to place the purchaser at a foreclosure sale in possession of the property. This remedy is available as a matter of right either during the redemption period (with a bond) or after its expiration (without a bond). However, this ministerial right presupposes the purchaser’s clear and uncontested right to possession based solely on the foreclosure proceedings.
The legal logic is that once the mortgagee-purchaser, after consolidation of title, voluntarily enters into a lease agreement with the former mortgagor, their relationship is fundamentally altered. They are no longer merely purchaser and mortgagor but have established a new, distinct juridical tie as lessor and lessee. Consequently, the right to possess the property is no longer derived from the foreclosure sale but is governed by the law on leases under the Civil Code. Any dispute regarding possession or the right to eject must now be resolved in an ordinary action for ejectment or unlawful detainer, where the validity and terms of the lease can be properly litigated. The summary remedy of a writ of possession is thus rendered improper, as the issue of possession has become a contentious matter arising from a separate contract. The Court emphasized that the ex parte writ cannot be used to circumvent the established rules for terminating a leasehold relationship.