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

Promulgated: July 8, 1996

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 purchased the property as the highest bidder at the public auction. The one-year redemption period expired without the spouses redeeming the property. Metrobank then filed an ex parte 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 sale were void because they were not properly notified of the foreclosure proceedings. The RTC denied the motion and ordered the issuance of the writ. The Court of Appeals reversed the RTC, holding that the writ of possession should not issue because the validity of the foreclosure sale was being challenged on jurisdictional grounds (lack of notice). Metrobank appealed to the Supreme Court.

ISSUE

Whether a writ of possession may be issued ex parte to a purchaser in an extrajudicial foreclosure sale after the expiration of the redemption period, even when the mortgagor challenges the validity of the sale on the ground of lack of notice.

RULING

YES. The Supreme Court granted Metrobank’s petition and reversed the decision of the Court of Appeals.
The Court held that after the expiration of the redemption period, the purchaser in an extrajudicial foreclosure sale has a clear right to the possession of the property. The issuance of a writ of possession is a ministerial duty of the court. The mortgagor’s remedy is to file a separate action to annul the mortgage or the foreclosure sale. A challenge to the validity of the foreclosure sale, such as an allegation of lack of notice, does not affect the ministerial duty of the court to issue the writ of possession after the redemption period has lapsed. The ex parte petition for a writ of possession is not the proper proceeding to litigate the validity of the sale. The right to possession follows from the purchaser’s consolidation of ownership. Therefore, the trial court correctly issued the writ, and the Court of Appeals erred in reversing that order.