GR 203924; (June, 2016) (Digest)
G.R. No. 203924 , June 29, 2016
Roger Cabuhat and Conchita Cabuhat, Petitioners, vs. Development Bank of the Philippines, represented by Manager Perla L. Favila, Respondent.
FACTS
Petitioners Roger and Conchita Cabuhat mortgaged a property to respondent Development Bank of the Philippines (DBP) to secure a loan. After they defaulted, DBP extrajudicially foreclosed the property, purchased it at auction, and, following the petitioners’ failure to redeem, consolidated its title. DBP subsequently filed an ex parte petition for a writ of possession, which the Regional Trial Court (RTC) granted. The Cabuhats’ appeals against the issuance of the writ were denied by the Court of Appeals and the Supreme Court. After the writ was implemented and DBP sold the property to a third party, the Cabuhats filed in the same RTC case a “Petition to Set Aside the Foreclosure Sale,” arguing the foreclosure was void as it was purportedly based on a previously cancelled mortgage, not the active one.
ISSUE
The core issue is whether the RTC correctly dismissed the Cabuhats’ Petition to Set Aside the Foreclosure Sale.
RULING
The Supreme Court denied the petition and affirmed the RTC’s dismissal. The Court clarified that a petition to set aside a foreclosure sale and to cancel the writ of possession issued pursuant to Act No. 3135 is governed by Section 8 of the law. This provision allows such an action only on grounds of fraud, provided it is filed within thirty days after the purchaser was given possession. The RTC correctly ruled that the Cabuhats’ petition was prematurely filed before DBP had taken possession, rendering it procedurally infirm. The Court further found that the petition raised factual questions inappropriate for a petition for review on certiorari, such as the validity of the mortgage and the specifics of the foreclosure, which require evidentiary substantiation. Moreover, the Court noted the Cabuhats had admitted in a separate pending civil case that the foreclosure was based on the 1998 mortgage, undermining their claim in this proceeding. The dismissal was thus proper due to both procedural prematurity and the substantive nature of the claims raised.