GR 167998; (April, 2007) (Digest)
G.R. No. 167998 ; April 27, 2007
LZK HOLDINGS AND DEVELOPMENT CORP., Petitioner, vs. PLANTERS DEVELOPMENT BANK, Respondent.
FACTS
Petitioner LZK Holdings obtained a loan from respondent Planters Development Bank, secured by a mortgage on its property. Upon LZK’s default, the bank extrajudicially foreclosed the mortgage and emerged as the highest bidder at the auction sale. After the one-year redemption period expired without redemption, Planters Bank filed an ex parte petition for a writ of possession with the Regional Trial Court (RTC) of San Fernando City, La Union. Meanwhile, LZK filed a separate action for annulment of the foreclosure and mortgage with the RTC of Makati City, which issued a writ of preliminary injunction enjoining the bank from consolidating its title over the property. The San Fernando RTC subsequently held in abeyance its resolution on the writ of possession petition in view of the Makati RTC’s injunction order.
ISSUE
Whether respondent Planters Development Bank is entitled to the issuance of a writ of possession over the foreclosed property despite the pendency of a separate action for annulment and an injunction order against the consolidation of title.
RULING
Yes, the bank is entitled to the writ. The Supreme Court affirmed the Court of Appeals’ ruling granting the petition. The issuance of a writ of possession to a purchaser in an extrajudicial foreclosure sale is a ministerial duty of the court once the redemption period expires without the debtor exercising its right of redemption. This right is founded on Act No. 3135 , as amended. The pendency of a separate action for annulment of the foreclosure does not bar this ministerial issuance. The Makati RTC’s injunction order, which merely enjoined the consolidation of title and was directed at the bank, did not constitute an order to the San Fernando RTC to withhold the writ. The two proceedings are distinct: the writ of possession concerns the right to physical possession, which accrues upon the expiration of the redemption period, while the annulment case pertains to the validity of the foreclosure sale itself. The right to possession is independent and can be granted without waiting for the resolution of the annulment suit. The Court also found no forum-shopping by the bank, as the various petitions raised different issues arising from the separate proceedings in the two trial courts.