G.R. No. 101083
METROPOLITAN BANK AND TRUST COMPANY, petitioner, vs. HON. COURT OF APPEALS AND SPOUSES ANTONIO and LETICIA BERNARDO, respondents.

July 8, 1992

FACTS

Spouses Antonio and Leticia Bernardo obtained a loan from Metropolitan Bank and Trust Company (Metrobank) secured by a real estate mortgage over their property. They defaulted on the loan. Metrobank extrajudicially foreclosed the mortgage, and the property was sold at a public auction where Metrobank was the highest bidder. The one-year redemption period expired without the spouses redeeming the property. Metrobank then filed a petition for the issuance of a writ of possession with the Regional Trial Court (RTC), which was granted. The spouses Bernardo filed a motion to quash the writ, arguing that the foreclosure and auction sale were void because they were not properly notified of the foreclosure proceedings. The RTC denied their motion. The Court of Appeals, however, set aside the RTC’s order and quashed the writ of possession, ruling that the issue of the validity of the foreclosure sale, which affects Metrobank’s title, should first be resolved in a separate action. Metrobank elevated the case to the Supreme Court via petition for review.

ISSUE

Whether the issuance of a writ of possession in favor of the purchaser in an extrajudicial foreclosure sale is a ministerial duty of the court, such that it can be granted ex parte and without hearing, even if the mortgagor raises the nullity of the foreclosure sale as a defense.

RULING

The Supreme Court GRANTED the petition, REVERSED the decision of the Court of Appeals, and REINSTATED the RTC order granting the writ of possession.

The Court held that after the expiration of the redemption period without the mortgagor having redeemed the property, the purchaser at the extrajudicial foreclosure sale has a clear right to the possession of the property. The issuance of a writ of possession to such purchaser is a ministerial duty of the court. The rationale is that the mortgagor is considered to have lost all interest over the foreclosed property upon the expiration of the redemption period. The duty to issue the writ is based on the purchaser’s right of ownership, which is consolidated after the redemption period.

The Court emphasized that any question regarding the validity of the mortgage or the foreclosure sale itself does not affect the ministerial duty to issue the writ. Such defects, if any, do not make the issuance of the writ discretionary. The proper recourse for the mortgagor who claims that the sale is void is to file a separate action to annul the certificate of sale and the mortgage, and to seek damages. In that separate action, the mortgagor may also apply for a preliminary injunction to restrain the issuance or implementation of the writ of possession. However, in the summary proceeding for the issuance of the writ, the court cannot look into the validity of the sale. The Court of Appeals therefore erred in quashing the writ based on the alleged nullity of the foreclosure proceedings. The ministerial duty to issue the writ must be performed, leaving the mortgagor to ventilate their claims in the appropriate separate proceeding.