GR 168061; (October, 2009) (Digest)
G.R. No. 168061 ; October 12, 2009
BANK OF THE PHILIPPINE ISLANDS, Petitioner, vs. TEOFILO P. ICOT, et al., Respondents.
FACTS
Spouses Vicente and Trinidad Velasco obtained a loan from petitioner Bank of the Philippine Islands (BPI), secured by a real estate mortgage over a parcel of land registered under Vicente Velasco’s name. Upon the spouses’ default, BPI foreclosed the mortgage, acquired the property at the auction sale, and consolidated its ownership, resulting in the issuance of a new title in its name. Meanwhile, respondents, the Icot family, claimed ownership and possession of the same property, alleging they acquired it from their father in 1964. They filed a case to quiet title against Velasco.
The Regional Trial Court (RTC) in that quieting of title case issued an order noting Velasco’s offer to repurchase the property from BPI to clear the title. BPI filed a manifestation stating it had endorsed Velasco’s proposal to its Head Office. Subsequently, the RTC rendered a judgment based on a compromise agreement between the Icots and Velasco. The agreement stated that Velasco recognized the Icots’ ownership, that he had mortgaged the property in good faith, and that he would repurchase it from BPI in installments to free it from encumbrance. BPI was not a party to this compromise agreement.
ISSUE
Whether the compromise judgment in the quieting of title case, to which BPI was not a party, is binding upon BPI and constitutes a legal basis to deny its petition for a writ of possession over the foreclosed property.
RULING
No. The compromise judgment is not binding on BPI and does not bar its right to a writ of possession. A writ of possession is a ministerial duty of the court following a foreclosure sale where the debtor fails to redeem the property. It is an ex parte proceeding summary in nature, intended to place the purchaser in possession of the property. The court does not exercise discretion but merely issues the writ as a matter of right upon the filing of the proper motion and approval of the corresponding bond.
The rights of BPI as the purchaser in the foreclosure sale became absolute upon the expiration of the redemption period without redemption. The subsequent compromise agreement between the Icots and Velasco, in a case where BPI was not impleaded as an indispensable party, cannot prejudice BPI’s vested right to possession as the confirmed owner. The Icots’ claim of ownership, while it may be pursued in a separate action, is not a valid defense in the ex parte proceeding for a writ of possession. The trial court in the possession case cannot look into the validity of the mortgage or the foreclosure, nor adjudicate claims of ownership; its duty is purely ministerial. Therefore, the Court of Appeals erred in reversing the trial court’s grant of the writ to BPI.