G.R. No. 242852 . July 29, 2019.
CONSOLACION P. CHAVEZ, CONNIE P. CHAVEZ, CARLA HORTENSIA C. ADELANTAR, CARMELA P. CHAVEZ, CRESENTE P. CHAVEZ, JR., and CECILIA C. GIBE, HEREIN REPRESENTED BY HER ATTORNEY-IN-FACT CARLA P. CHAVEZ, Petitioners, vs. MAYBANK PHILIPPINES, INC., Respondent.

FACTS

Spouses Cresente Chavez, Sr. and Consolacion Chavez obtained a loan from respondent Maybank Philippines, Inc., secured by a mortgage over a property. Upon default, Maybank extrajudicially foreclosed the mortgage, emerged as the highest bidder at the auction, and was issued a Certificate of Sale. The spouses filed an action for nullification of the foreclosure (Civil Case No. 0236). During its pendency, Cresente Sr. died and was substituted by his children. The parties then entered into a Compromise Agreement dated December 13, 2012, approved by the RTC, whereby Maybank allowed the “Chavez Family” to buy back the property for ₱40,000,000.00 payable in installments, notwithstanding the expiration of the redemption period. The agreement stipulated that failure to pay any amortization would constitute default, rendering the whole obligation due and entitling Maybank to secure an order for immediate possession from the RTC. Petitioners defaulted. Maybank filed a Petition for Issuance of a Writ of Possession (Cadastral Case No. 15-0608). Petitioners opposed, arguing the Compromise Agreement was a contract of sale that transferred ownership to them, making their possession adverse to that of a mortgagor-debtor, and filed a separate action to annul a Deed of Promise to Sell executed by Maybank with a third party (Civil Case No. 15-0527). The RTC declined to issue the writ, finding it necessary to first determine the nature of petitioners’ interest and the Compromise Agreement, and ordered the consolidation of the two cases. The CA set aside the RTC’s orders and directed the issuance of the writ of possession.

ISSUE

Whether or not the Court of Appeals erred in directing the issuance of an ex-parte Writ of Possession in favor of respondent Maybank.

RULING

The Supreme Court denied the petition and affirmed the CA’s ruling. The issuance of a writ of possession to a purchaser in an extrajudicial foreclosure sale is a ministerial duty of the court under Act No. 3135 , as amended. The exceptions to this ministerial duty do not apply. Petitioners cannot be considered third parties holding the property adversely to the mortgagor-debtor. Consolacion P. Chavez was one of the original mortgagors and cannot claim adverse possession against herself. Her children merely substituted their deceased father, the other mortgagor. The Compromise Agreement did not extinguish the mortgagor-mortgagee relationship nor transfer ownership to petitioners; it was a contract to avoid litigation, whereby Maybank merely allowed petitioners to buy back the property subject to terms. Upon petitioners’ default, Maybank, under the agreement and as the confirmed owner after the foreclosure, was entitled to possession. The RTC’s consolidation of the writ of possession proceeding with the annulment case was improper, as the former is a non-litigious, ministerial proceeding, while the latter is litigious. The CA correctly directed the issuance of the writ.