GR 179691; (December, 2013) (Digest)
G.R. No. 179691 ; December 4, 2013
PHILIPPINES BANK OF COMMUNICATIONS, Petitioner, vs. MARY ANN O. YEUNG, Respondent.
FACTS
Respondent Mary Ann O. Yeung obtained a loan from petitioner Philippine Bank of Communications, secured by a real estate mortgage. After Yeung defaulted, the bank extrajudicially foreclosed the property. The bank emerged as the highest bidder at the auction for a price exceeding the mortgage debt. Following the lapse of the redemption period without redemption by Yeung, the bank consolidated its ownership and filed an ex parte petition for a writ of possession with the Regional Trial Court (RTC), which was granted.
Yeung moved for the recall of the writ, arguing that the bank failed to remit the surplus from the foreclosure sale. The RTC denied her motion. The Court of Appeals (CA) reversed the RTC, ruling that the bank’s failure to account for and remit the excess proceeds was a valid equitable ground to defer the issuance of the writ, citing Sulit v. Court of Appeals. The bank’s motion for reconsideration of the CA decision was filed late, leading to a procedural question on the finality of the CA ruling.
ISSUE
The primary substantive issue is whether the bank’s failure to remit the surplus from the foreclosure sale constitutes a valid ground to deny the issuance of a writ of possession.
RULING
The Supreme Court granted the bank’s petition, modifying the CA decision. On procedure, the Court relaxed the rules on the reglementary period for filing a motion for reconsideration in the interest of justice, allowing a review of the merits.
On the substantive issue, the Court clarified the ministerial duty to issue a writ of possession upon consolidation of title in favor of the purchaser at an extrajudicial foreclosure sale. The right to a writ becomes absolute upon the expiration of the redemption period without redemption. The Court distinguished the present case from Sulit, noting that in Sulit, the petition for a writ was filed during the redemption period, creating an equitable exception to defer issuance pending determination of the surplus. Here, the petition was filed after consolidation of title, making the duty to issue the writ ministerial and not subject to delay.
However, the Court affirmed that the bank has a concomitant duty under Article 2112 of the Civil Code to account for and deliver any surplus from the foreclosure sale to the mortgagor. This duty is separate from the right to possession. Thus, the Court ordered the RTC to issue the writ of possession to the bank, while simultaneously affirming the CA’s order for the bank to remit the lawful surplus to Yeung after proper accounting. The two obligations are distinct and enforceable independently.