G.R. No. 101083
METROPOLITAN BANK AND TRUST COMPANY, petitioner, vs. HON. COURT OF APPEALS AND SPOUSES FORTUNATO and VIRGINIA VITAL, respondents.

July 30, 1996

FACTS

Spouses Fortunato and Virginia Vital 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 purchased the property as the highest bidder at the public auction. The one-year redemption period expired without the Vitals 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 Vitals appealed to the Court of Appeals, arguing that the writ of possession should not issue because the foreclosure and auction sale were void, alleging irregularities such as lack of proper notice and that the auction was conducted by the bank’s counsel instead of the sheriff. The Court of Appeals set aside the RTC’s order and remanded the case for a hearing on the validity of the foreclosure sale. Metrobank filed a petition for review with the Supreme Court.

ISSUE

Whether the trial court, in a proceeding for the issuance of a writ of possession after the expiration of the redemption period in an extrajudicial foreclosure, may still inquire into the validity of the foreclosure sale and the mortgage itself.

RULING

NO. The petition is GRANTED. The Court of Appeals’ decision is REVERSED and SET ASIDE. The order of the RTC granting the writ of possession is REINSTATED.

The Supreme Court held that after the expiration of the redemption period in an extrajudicial foreclosure of a real estate mortgage, the purchaser at the auction sale (in this case, the mortgagee-bank) has the absolute right to a writ of possession as a matter of course, upon mere motion and without any hearing. The proceeding for the issuance of the writ is ex parte and summary in nature. The trial court’s duty is ministerial. It cannot look into the validity of the mortgage, the regularity of the foreclosure proceedings, or any other collateral matter. The only instance where the court may exercise discretion is if the mortgagor is in *actual physical possession* of the property and third parties are claiming rights adverse to the mortgagor, which was not the case here. Any question regarding the validity of the foreclosure sale or the mortgage must be raised in a separate proper action, such as an action for annulment of the sale or the mortgage. To allow a full-blown hearing on the validity of the sale in the summary proceeding for a writ of possession would defeat its very purpose, which is to place the purchaser in possession of the property without delay.