A couple entered into a credit accommodation agreement (credit agreement) with a bank. As security to the credit agreement, real estate mortgages were executed on several properties in Kalibo, Aklan. Eventually, the couple failed to comply with the conditions of the credit agreement and a extrajudicial foreclosure took place. During the public auction, the bank emerged as the sole and highest bidder of the foreclosed properties.
Upon the issuance of the sheriff’s certificate of sale, the bank entered the sale in the Register of Deeds of Kalibo. An annotation on the transfer certificates of title (TCT) were also made. After a lapse of one (1) year, however, the couple failed to exercise their right to redeem the foreclosed properties. Hence, the bank consolidated the ownership over the properties and had new TCTs issued in its name. The bank also filed a petition for the issuance of a writ of possession with the Regional Trial Court (RTC) since the period to redeem the foreclosed properties had already lapsed. The couple opposed the petition on the ground that a civil case seeking to nullify the credit agreement, particularly the rate of interest in the promissory notes, was still pending with the court.
The RTC resolved that the “obligation of the court to issue a writ of possession in favor of the purchaser in a foreclosure of mortgage property” is not ministerial due to the pendency of the civil case. The Court of Appeals (CA), on the other hand, held that the issuance of a writ of possession is ministerial after the lapse of the one-year redemption period.
The Supreme Court reiterated the CA’s ruling that the issuance of a writ of possession is a ministerial function of the court –
The issuance of a writ of possession to a purchaser in a public auction is a ministerial function of the court, which cannot be enjoined or restrained, even by the filing of a civil case for the declaration of nullity of the foreclosure and consequent auction sale.
We have long recognized the rule that once title to the property has been consolidated in the buyer’s name upon failure of the mortgagor to redeem the property within the one-year redemption period, the writ of possession becomes a matter of right belonging to the buyer. Consequently, the buyer can demand possession of the property at anytime. Its right to possession has then ripened into the right of a confirmed absolute owner and the issuance of the writ becomes a ministerial function that does not admit of the exercise of the court’s discretion. The court, acting on an application for its issuance, should issue the writ as a matter of course and without any delay.
Citing Spouses Sagun v. Philippine Bank of Communications, the Court added that “a writ of possession may be issued either (1) within the one-year redemption period, upon the filing of a bond, or (2) after the lapse of the redemption period, without need of a bond.” It is clear that after the expiration of the redemption period, the purchaser already acquires an absolute right to possess the property since he is now the owner. The right to possess a property follows ownership.
Lastly, the Court reminded that there are exceptions to the rule that the issuance of a writ of possession is a ministerial function of the court. These are: 1) Gross inadequacy of purchase price; 2) Third party claiming right adverse to debtor/mortgagor; and 3) Failure to pay the surplus proceeds of the sale to mortgagor. None of these peculiar circumstances were found in the present case (Nagtalon v. United Coconut Planters Bank , G.R. No 172504, 31 July 2013, J. Brion).