GR 164547; (March, 2007) (Digest)
G.R. No. 164547 March 28, 2007
CGP TRANSPORTATION AND SERVICES CORPORATION, Petitioner, vs. PCI LEASING AND FINANCE, INCORPORATED, Respondent.
FACTS
Petitioner CGP Transportation and Services Corporation obtained loans from respondent PCI Leasing and Finance, Inc., secured by real estate mortgages over two parcels of land. Upon CGP’s failure to pay, PCI initiated extra-judicial foreclosure proceedings, emerged as the highest bidder at the public auction, and registered the certificates of sale. After CGP failed to redeem the properties within the statutory period, PCI filed an ex-parte petition for a writ of possession in the Regional Trial Court (RTC).
CGP opposed the petition, citing a pending appeal in a separate civil case (Civil Case No. 99-234) for the annulment of the foreclosure proceedings, wherein the RTC had previously issued a writ of preliminary injunction. Initially, the RTC granted PCI’s petition, scheduling an ex-parte hearing. However, upon CGP’s motion for reconsideration, the RTC reversed itself, nullified the ex-parte proceedings, and reinstated the preliminary injunction, holding that CGP’s verified opposition raised issues requiring a hearing in the presence of both parties.
ISSUE
Whether the trial court may deny an ex-parte petition for a writ of possession over foreclosed properties based on a pending action for annulment of the foreclosure sale and the filing of a verified opposition.
RULING
No. The Supreme Court affirmed the Court of Appeals’ decision setting aside the RTC’s orders. The issuance of a writ of possession to a purchaser in an extra-judicial foreclosure sale is a ministerial duty of the court once the redemption period expires without the mortgagor exercising the right of redemption. This ministerial act is not subject to the discretion of the court and proceeds independently of any pending action questioning the validity of the mortgage or the foreclosure sale itself.
The pendency of Civil Case No. 99-234 for annulment of foreclosure does not bar the issuance of the writ. A writ of possession is an incident of the purchaser’s consolidated ownership after the redemption period. The filing of a verified opposition by the mortgagor does not convert the ex-parte proceeding into a contentious one, as the right to possession is a necessary consequence of the foreclosure process. The mortgagor’s proper remedy is not to oppose the writ but to pursue a separate action to recover the property, if warranted. The preliminary injunction issued in the annulment case was effectively dissolved upon the dismissal of that complaint by the RTC, notwithstanding the pending appeal, as the injunction was merely ancillary to the main action. Therefore, the RTC committed grave abuse of discretion in denying the ex-parte petition.