GR 169190 Chu v. Hon. Laqui and PBC

G.R. No.
169190 February 11, 2010
CUA LAI CHU, CLARO G. CASTRO, and JUANITA CASTRO, Petitioners,
vs.
HON. HILARIO L. LAQUI, Presiding Judge, Regional Trial Court, Branch 218, Quezon City and
PHILIPPINE BANK OF COMMUNICATION, Respondents.
FACTS:
In November 1994, petitioners obtained a loan in the amount of ₱3,200,000 from private
respondent Philippine Bank of Communication. To secure the loan, petitioners executed in favor
of private respondent a Deed of Real Estate Mortgage over the property of petitioner spouses
covered by Transfer Certificate of Title No. 22990. In August 1997, petitioners executed an
Amendment to the Deed of Real Estate Mortgage increasing the amount of the loan by
₱1,800,000, bringing the total loan amount to ₱5,000,000.
For failure of petitioners to pay the full amount of the outstanding loan upon demand, private
respondent applied for the extrajudicial foreclosure of the real estate mortgage. Upon receipt of
a notice of the extrajudicial foreclosure sale, petitioners filed a petition to annul the extrajudicial
foreclosure sale with a prayer for temporary restraining order (TRO). The petition for annulment
was filed in the Regional Trial Court of Quezon City.
The extrajudicial foreclosure sale did not push through as originally scheduled because the trial
court granted petitioners’ prayer for TRO. The trial court subsequently lifted the TRO and reset
the extrajudicial foreclosure sale on 29 May 2002. At the foreclosure sale, private respondent
emerged as the highest bidder. A certificate of sale was executed in favor of private respondent
and was annotated on TCT No. 22990 covering the foreclosed property.
After the lapse of the one-year redemption period, private respondent filed in the Registry of
Deeds of Quezon City an affidavit of consolidation to consolidate its ownership and title to the
foreclosed property. Forthwith, on 8 July 2003, the Register of Deeds cancelled TCT No. 22990
and issued in its stead TCT No. 25183512 in the name of private respondent.
On 18 August 2004, private respondent applied for the issuance of a writ of possession of the
foreclosed property. Petitioners filed an opposition. The trial court granted private respondent’s
motion for a declaration of general default and allowed private respondent to present evidence
ex parte. The trial court denied petitioners’ notice of appeal.
Undeterred, petitioners filed in the Court of Appeals a petition for certiorari. The appellate court
dismissed the petition. It also denied petitioners’ motion for reconsideration.
Issue:
Whether the writ of possession was properly issued despite the pendency of a case questioning
the validity of the extrajudicial foreclosure sale and despite the fact that petitioners were
declared in default in the proceeding for the issuance of a writ of possession.
Ruling:
In Navarra v. Court of Appeals,23 the purchaser at an extrajudicial foreclosure sale applied for a
writ of possession after the lapse of the one-year redemption period. The Court ruled that the
purchaser at an extrajudicial foreclosure sale has a right to the possession of the property even
during the one-year redemption period provided the purchaser files an indemnity bond.
After the lapse of the said period with no redemption having been made, that right becomes
absolute and may be demanded by the purchaser even without the posting of a bond.
Possession may then be obtained under a writ which may be applied for ex parte pursuant to
Section 7 of Act No. 3135,24 as amended by Act No. 4118,25 thus:
SEC. 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of
First Instance of the province or place where the property or any part thereof is situated, to give
him possession thereof during the redemption period, furnishing bond in an amount equivalent
to the use of the property for a period of twelve months, to indemnify the debtor in case it be
shown that the sale was made without violating the mortgage or without complying with the
requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte
motion x x x and the court shall, upon approval of the bond, order that a writ of possession
issue, addressed to the sheriff of the province in which the property is situated, who shall
execute said order immediately. (Emphasis supplied)
In the present case, since the foreclosed property was not redeemed within one year from the
registration of the extrajudicial foreclosure sale, private respondent had acquired an absolute
right, as purchaser, to the writ of possession.
Ownership has been consolidated, right of possession is vested corollarily.
It had become the ministerial duty of the lower court to issue the writ of possession upon mere
motion pursuant to Section 7 of Act No. 3135, as amended.
Petitioners cannot oppose or appeal the court’s order granting the writ of possession in an ex
parte proceeding. The remedy of petitioners is to have the sale set aside and the writ of
possession cancelled in accordance with Section 8 of Act No. 3135, as amended, to wit:
SEC. 8. The debtor may, in the proceedings in which possession was requested, but not later
than thirty days after the purchaser was given possession, petition that the sale be set aside and
the writ of possession cancelled, specifying the damages suffered by him, because the mortgage
was not violated or the sale was not made in accordance with the provisions hereof. x x x
Any question regarding the validity of the extrajudicial foreclosure sale and the resulting
cancellation of the writ may be determined in a subsequent proceeding as outlined in Section 8
of Act No. 3135, as amended. Such question should not be raised as a justification for opposing
the issuance of a writ of possession since under Act No. 3135, as amended, the proceeding for
this is ex parte.
Further, the right to possession of a purchaser at an extrajudicial foreclosure sale is not affected
by a pending case questioning the validity of the foreclosure proceeding. The latter is not a bar
to the former. Even pending such latter proceeding, the purchaser at a foreclosure sale is
entitled to the possession of the foreclosed property.
Lastly, petitioners’ claim of forum shopping has no basis. Under Act No. 3135, as amended, a
writ of possession is issued ex parte as a matter of course upon compliance with the
requirements. It is not a judgment on the merits that can amount to res judicata, one of the
essential elements in forum shopping.
Petition denied.

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G.R. No.

169190 February 11, 2010

CUA LAI CHU, CLARO G. CASTRO, and JUANITA CASTRO, Petitioners,

Ownership has been consolidated, right of possession is vested corollarily.

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