G.R. No. 162757; December 11, 2013
UNITED COCONUT PLANTERS BANK, Petitioner, vs. CHRISTOPHER LUMBO and MILAGROS LUMBO, Respondents.

FACTS

Respondents Christopher and Milagros Lumbo borrowed ₱12,000,000.00 from petitioner United Coconut Planters Bank (UCPB), secured by a real estate mortgage on their Boracay property, Titay’s South Beach Resort. Upon the respondents’ failure to pay, UCPB extrajudicially foreclosed the mortgage on January 12, 1999, emerged as the highest bidder, and consolidated the title in its name after the redemption period lapsed. On January 7, 2000, the respondents filed an action (Civil Case No. 5920) against UCPB for annulment of the foreclosure, legal accounting, injunction against consolidation of title, and damages. During the pendency of that case, UCPB filed an ex parte petition for a writ of possession, which the Regional Trial Court (RTC) granted on September 5, 2000. The writ was issued on December 4, 2001, served on the respondents on January 23, 2002, and possession was turned over to UCPB on February 1, 2002, though the respondents were allowed to temporarily remain. On February 14, 2002, the respondents filed in the same RTC (Special Proceedings No. 5884, later consolidated with Civil Case No. 5920) a petition to cancel the writ of possession and to set aside the foreclosure sale, which included an application for a writ of preliminary injunction to prevent the writ’s implementation. The RTC denied the application for injunction on March 19, 2002. The Court of Appeals (CA) reversed the RTC, granted the petition, set aside the orders, and enjoined the implementation of the writ of possession pending the final disposition of the petition for its cancellation and the annulment of the foreclosure sale.

ISSUE

Whether the Court of Appeals erred in enjoining the implementation of the writ of possession issued pursuant to Act No. 3135, as amended, pending the resolution of the respondents’ action for annulment of the foreclosure sale.

RULING

Yes, the Court of Appeals erred. The Supreme Court reversed the CA decision and reinstated the RTC order denying the injunction. The issuance of a writ of possession to a purchaser in an extrajudicial foreclosure sale is a ministerial duty once the title is consolidated in the purchaser’s name. The pendency of a separate action for annulment of the mortgage or foreclosure sale does not bar the issuance or implementation of the writ. The writ of possession issues as a matter of right, and the trial court has no discretion to deny it. The remedy of a mortgagor who remains in possession is to file a petition to cancel the writ under Section 8 of Act No. 3135 within thirty days after the purchaser is given possession, but the order of possession continues in effect during the pendency of any appeal. Injunctive relief is not available to thwart the implementation of a writ of possession issued under these circumstances. The respondents’ proper recourse was not an injunction but to file the petition under Section 8, which they did, but the implementation of the writ proceeds independently.