G.R. No. 187556; May 5, 2010
PLANTERS DEVELOPMENT BANK, Petitioner, vs. JAMES NG and ANTHONY NG, Respondents.

FACTS

Respondents James Ng and Anthony Ng obtained loans from petitioner Planters Development Bank, secured by real estate mortgages over two parcels of land. Upon respondents’ default, petitioner extrajudicially foreclosed the mortgages. The properties were sold at public auction with petitioner as the highest bidder, and a Certificate of Sale was registered. After the one-year redemption period lapsed without redemption, petitioner filed an ex-parte petition for a writ of possession before the Regional Trial Court (RTC), Branch 77.
In the interim, respondents filed a separate action for Annulment of Certificate of Sale, Promissory Note and Deed of Mortgage before RTC Branch 221, which issued a preliminary injunction restraining title consolidation and dispossession. After protracted proceedings, RTC Branch 77 was directed to hear petitioner’s ex-parte petition. The trial court denied the petition, finding petitioner failed to prove compliance with posting requirements under Act 3135 and certain procedural rules under Supreme Court Administrative Order No. 3 regarding the notary public’s conduct and the Executive Judge’s approval.

ISSUE

Whether the RTC correctly denied the petition for a writ of possession based on alleged procedural infirmities in the extrajudicial foreclosure.

RULING

No. The Supreme Court reversed the RTC and directed the issuance of the writ. The legal logic is clear and settled: the issuance of a writ of possession to a purchaser in an extrajudicial foreclosure is a ministerial duty upon the expiration of the redemption period without redemption. The purchaser’s right to possession becomes absolute. Questions regarding the validity of the mortgage or the regularity of the foreclosure sale are not proper grounds to oppose the issuance of the writ in an ex-parte proceeding. Such substantive challenges, like respondents’ claim of jurisdictional defects in the posting of notices or the notary’s compliance, must be litigated in a separate proceeding, which respondents had already initiated in their annulment case before Branch 221.
By denying the writ based on the alleged procedural flaws, RTC Branch 77 effectively pre-empted the co-equal branch (Branch 221) vested with jurisdiction to rule on the validity of the sale. The remedy for the mortgagor, under Section 8 of Act 3135, is to file a petition to set aside the sale and cancel the writ within thirty days after the purchaser is given possession. Therefore, the ministerial duty to issue the writ of possession was improperly withheld by the trial court.