SECOND DIVISION

CUA LAI CHU, CLARO G. CASTRO, G.R. No. 169190

and JUANITA CASTRO,
Petitioners, Present:

CARPIO, J., Chairperson,

- versus - BRION,
DEL CASTILLO,
ABAD, and
HON. HILARIO L. LAQUI, Presiding PEREZ, JJ.
Judge, Regional Trial Court, Branch 218,
Quezon City and PHILIPPINE BANK Promulgated:
OF COMMUNICATION,
Respondents. February 11, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CARPIO, J.:

The Case

This is a petition for review[1] of the 29 April 2005 and 4 August 2005
Resolutions[2] of the Court of Appeals in CA-G.R. SP No. 88963. In its 29 April
2005 Resolution, the Court of Appeals dismissed the petition for certiorari [3] of
petitioner spouses Claro G. Castro and Juanita Castro and petitioner Cua Lai Chu
(petitioners). In its 4 August 2005 Resolution, the Court of Appeals denied
petitioners motion for reconsideration.

The Facts
In November 1994, petitioners obtained a loan in the amount of P3,200,000 from
private respondent Philippine Bank of Communication. To secure the loan,
petitioners executed in favor of private respondent a Deed of Real Estate
Mortgage[4] 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[5] increasing the amount of the loan by P1,800,000,
bringing the total loan amount to P5,000,000.

For failure of petitioners to pay the full amount of the outstanding loan upon
demand,[6] private respondent applied for the extrajudicial foreclosure of the real
estate mortgage.[7]Upon receipt of a notice[8] 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 and docketed as Q-02-46184.[9]

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[10] was executed on 4 June 2002 in favor of private
respondent. On 7 June 2002, the certificate of sale was annotated as Entry No.
1855[11] 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.
251835[12] 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.[13] Petitioners filed an opposition.[14] The trial
court granted private respondents 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.
 The Orders of the Trial Court

The 8 October 2004 Order[15] granted private respondents motion for a declaration
of general default and allowed private respondent to present evidence ex parte. The
6 January 2005 Order[16] denied petitioners motion for reconsideration of the prior
order. The 24 February 2005 Order[17] denied petitioners notice of appeal.

The Ruling of the Court of Appeals

The Court of Appeals dismissed on both procedural and substantive grounds the
petition for certiorari filed by petitioners. The appellate court noted that the counsel
for petitioners failed to indicate in the petition the updated PTR Number, a ground
for outright dismissal of the petition under Bar Matter No. 1132. Ruling on the
merits, the appellate court held that a proceeding for the issuance of a writ of
possession is ex parte in nature. As such, petitioners right to due process was not
violated even if they were not given a chance to file their opposition. The appellate
court also ruled that there was no violation of the rule against forum shopping
since the application for the issuance of a writ of possession is not affected by a
pending case questioning the validity of the extrajudicial foreclosure sale.

The Issue
Petitioners raise the question of 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.

The Courts Ruling

The petition has no merit.

Petitioners contend they were denied due process of law when they were declared
in default despite the fact that they had filed their opposition to private respondents
application for the issuance of a writ of possession. Further, petitioners point out
that the issuance of a writ of possession will deprive them not only of the use and
possession of their property, but also of its ownership. Petitioners cite Bustos v.
Court of Appeals[18] and Vda. De Legaspi v. Avendao[19] in asserting that physical
possession of the propertyshould not be disturbed pending the final determination
of the more substantial issue of ownership. Petitioners also allege forum shopping
on the ground that the application for the issuance of a writ of possession was filed
during the pendency of a case questioning the validity of the extrajudicial
foreclosure sale.

Private respondent, on the other hand, maintains that the application for the
issuance of a writ of possession in a foreclosure proceeding is ex parte in nature.
Hence, petitioners right to due process was not violated even if they were not given
a chance to file their opposition. Private respondent argues that the issuance of a
writ of possession may not be stayed by a pending case questioning the validity of
the extrajudicial foreclosure sale. It contends that the former has no bearing on the
latter; hence, there is no violation of the rule against forum shopping. Private
respondent asserts that there is no judicial determination involved in the issuance
of a writ of possession; thus, the same cannot be the subject of an appeal.

At the outset, we must point out that the authorities relied upon by petitioners are
not in point and have no application here. In Bustos v. Court of Appeals,[20] the
Court simply ruled that the issue of possession was intertwined with the issue of
ownership in the consolidated cases of unlawful detainer and accion
reinvindicatoria. In Vda. De Legaspi v. Avendao,[21] the Court merely stated that in
a case of unlawful detainer, physical possession should not be disturbed pending
the resolution of the issue of ownership. Neither case involved the right to
possession of a purchaser at an extrajudicial foreclosure of a mortgage.

Banco Filipino Savings and Mortgage Bank v. Pardo[22] squarely ruled on the right
to possession of a purchaser at an extrajudicial foreclosure of a mortgage. This
case involved a real estate mortgage as security for a loan obtained from a bank.
Upon the mortgagors default, the bank extrajudicially foreclosed the mortgage. At
the auction sale, the bank was the highest bidder. A certificate of sale was duly
issued and registered. The bank then applied for the issuance of a writ of
possession, which the lower court dismissed. The Court reversed the lower court
and held that the purchaser at the auction sale was entitled to a writ of possession
pending the lapse of the redemption period upon a simple motion and upon the
posting of a bond.

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, the certificate of sale of the foreclosed property was annotated
on TCT No. 22990 on 7 June 2002. The redemption period thus lapsed on 7 June
2003, one year from the registration of the sale.[26] When private respondent
applied for the issuance of a writ of possession on 18 August 2004, the redemption
period had long lapsed.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. 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.
Moreover, 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.[27] In the present case, when private respondent applied for the
issuance of a writ of possession, it presented a new transfer certificate of title
issued in its name dated 8 July 2003. The right of private respondent 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.

Petitioners are wrong in insisting that they were denied due process of law when
they were declared in default despite the fact that they had filed their opposition to
the issuance of a writ of possession. 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.[28]
Petitioners cannot oppose or appeal the courts 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.[29]

Lastly, we rule that 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.[30]

The Court of Appeals correctly dismissed the petition for certiorari filed by
petitioners for lack of merit.

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.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice