12.
CUA LAI CHU VS LAQUI then be obtained under a writ which may be applied for ex parte pursuant to Sec. 7 of Act
G.R. NO. 203949/205071
APRIL 6, 2016
TOPIC: (EXTRAJUDICIAL) FORECLOSURE
PETITIONER: CUA LAI CHU AND SPS. CASTRO
RESPONDENTS: JUDGE LAQUI AND PBCOM
PONENTE: CARPIO
FACTS:
1. Petitioners loaned PhP3.2M from PBCOM and as security, they executed a Deed of Real
Estate Mortgage over the Sps. Castro’s property. They then amended said agreement to
increase the loan to PhP5M. Petitioners failed to pay the loan hence PBCOM extrajudicially
foreclosed said property. Upon notice of the extrajudicial foreclosure (EJF), petitioners
filed to annul the EJF w/ TRO before the RTC.
2. The EJF did not push through as the RTC granted petitioner’s TRO but lifted and reset the
EJF sale. At the EJF sale, PBCOM was the highest bidder thus a certificate of sale was
executed in its favor and a TCT was issued to them.
3. After the 1-yr redemption period, PBCOM moved to consolidate its ownership and title in
its name. It then applied for writ of possession over said property to w/c petitioners
opposed. The RTC granted PBCOM’s motion to declare them in default and allowed PBCOM
to present evidence ex parte.
4. The CA dismissed petitioner’s appeal. It upheld the proceeding on the issuance of the ex
parte writ of possession. Petitioner’s right to due process was observed even if they did
not oppose said writ. The issuance of said writ was did not violate forum shopping since
the application for said writ is unaffected by a pending case w/c questioned the EJF sale’s
validity.
5. Petitioners contend that due process was not observed as they were declared in default
despite filing an opposition against PBCOM’s application for issuance of writ of possession.
Said issuance will deprive them ownership and possession over the lot. They contend that
in asserting that physical possession should not be disturbed pending the issue on
ownership. There was forum shopping as the application for said writ was filed pending
the challenge over the validity of the EJF sake.
6. PBCOM countered that said application is ex parte in nature thus due process was
observed even if petitioners did not file an opposition. The issuance should not be stayed
by a pending case that questioned the validity of the EJF sale and there was no forum
shopping.
7. ISSUE: WoN the writ of possession was properly issued despite the pending issue over
the EJF’s sale’s validity and despite petitioner’s being declared in default in the
proceeding in the issuance of said writ– YES
RULING
8. In Banco Filipino Savings, it involved a real estate mortgage as loan security and upon
mortgagor’s default, the bank executed EJF. At the auction, the bank was the highest
bidder and a certificate of sale was issued and registered. It then applied for the issuance
of writ of possession but was dismissed. The SC reversed it as the purchaser at the auction
was entitled to writ of possession pending the lapse of the redemption period via motion.
9. A purchaser at an EJF sale has a right to the possession of the property even during the 1-
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
No. 3135
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.
10. In this case, the certificate of sale was annotated in the TCT on 2002 while the redemption
period lapsed on 2003. When PBCOM applied for the issuance of a writ of possession on
2004, the redemption period had long lapsed.
11. Since the foreclosed property was not redeemed within one year from the registration of
the extrajudicial foreclosure sale, PBCOM had acquired an absolute right, as purchaser, to
the writ of possession. It had become the ministerial duty of the lower court to issue the
writ of possession upon mere motion pursuant to Sec. 7 of Act No. 3135, as amended.
12. Once ownership has been consolidated, the issuance of the writ of possession becomes a
ministerial duty of the court, upon proper application and proof of title. In this case, when
PBCOM applied for the issuance of a writ of possession, it presented a new transfer
certificate of title issued in its name on 2003. The PBCOM’s right to the possession of the
property was thus founded on its right of ownership. As the purchaser of the property at
the foreclosure sale, in whose name title over the property was already issued, the right of
private respondent over the property had become absolute, vesting in it the corollary right
of possession.
13. Due process was observed despite petitioner’s supposed default notwithstanding the filing
of their opposition. The application for the issuance of a writ of possession is in the form
of an ex parte motion. It issues as a matter of course once the requirements are fulfilled.
No discretion is left to the court.
14. Petitioners cannot oppose or appeal the court’s order granting the writ of possession in an
ex parte proceeding. The remedy is to have the sale set aside and the writ of possession
cancelled in accordance with Sec. 8 of Act No. 3135.
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
15. 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 the
aforesaid provision. Such question should not justify for opposing the issuance of a writ of
possession since under Act No. 3135, as amended, the proceeding for this is ex parte.
16. 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
FALLO: WHEREFORE, we DENY the petition for review. We AFFIRM the 29 April 2005 and 4
August 2005 Resolutions of the Court of Appeals in CA-G.R. SP No. 88963.