GR 173610; (October, 2012) (Digest)
G.R. No. 173610 & 174132; October 1, 2012
Town and Country Enterprises, Inc. vs. Hon. Norberto J. Quisumbing, Jr., et al. / Town and Country Enterprises, Inc. vs. Metropolitan Bank and Trust Co.
FACTS
Petitioner Town and Country Enterprises, Inc. (TCEI) obtained loans from respondent Metropolitan Bank and Trust Co. (Metrobank), secured by a real estate mortgage over twenty parcels of land. Upon TCEI’s default, Metrobank extrajudicially foreclosed the mortgage and purchased the properties at a public auction. Metrobank then filed a petition for a writ of possession before the Regional Trial Court (RTC). Concurrently, TCEI filed a petition for corporate rehabilitation before the same court, sitting as a Rehabilitation Court, which issued a Stay Order.
The RTC initially suspended the writ of possession proceedings due to the rehabilitation case. However, the Court of Appeals directed the RTC to proceed with the issuance of the writ, citing Section 47 of Republic Act No. 8741 . Subsequently, the Rehabilitation Court approved TCEI’s Rehabilitation Plan. Despite this, the RTC granted Metrobank’s petition and issued the writ of possession. TCEI appealed, arguing the writ violated the rehabilitation rules and denied it due process.
ISSUE
Whether the approval of a corporate rehabilitation plan bars the issuance of a writ of possession to the purchaser in an extrajudicial foreclosure sale conducted prior to the rehabilitation proceedings.
RULING
No. The Supreme Court ruled that the issuance of the writ of possession was proper. The right to a writ of possession is a ministerial function once the foreclosure sale is concluded and the certificate of sale is registered. This right accrues to the purchaser as a necessary consequence of the sale. The pendency or even approval of a corporate rehabilitation case does not automatically suspend the issuance of such a writ.
The Court clarified that a corporate rehabilitation proceeding, while imposing a stay order on actions for the enforcement of claims against the debtor, does not affect actions that are not for the collection of money or the enforcement of a claim. A petition for a writ of possession is not an action to collect a debt or enforce a monetary claim; it is merely a means for the purchaser to obtain the possessory rights incident to its established ownership following the foreclosure. Since the foreclosure was completed before the rehabilitation case was filed, Metrobank’s right to possession had already vested. The approval of the rehabilitation plan, which dealt with the restructuring of TCEI’s financial obligations, could not divest Metrobank of this possessory right, which stemmed from a concluded extrajudicial sale. The Court affirmed the decisions of the Court of Appeals.