Sps. Gema O. Torrecampo and Jaime B. Torrecampo, substituted by his heirs namely: Gaie Marie T. Ouano, Gaie Annah Marie T. Arzadon, et. Al. vs. Wealth Development Bank Corp.,
G.R. No. 221845, March 21, 2022
Facts:
1. The spouses Gemma and Jaime Torrecampo entered into a housing loan agreement with Wealth Development Bank Corp. The housing loan agreement was secured by a real estate mortgage over a property owned by the spouses Torrecampo.
2. Subsequently, the spouses Torrecampo defaulted on the payment of their loan obligation. Thus, respondent bank commenced an action to foreclose the real estate mortgage extra-judicially under the provisions of Act No. 3135, or an Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real-Estate Mortgages, as amended. A certificate of sale was issued and was duly registered with the Register of Deeds.
3. After the lapse of the one-year redemption period without any attempt on the part of the spouses Torrecampo to redeem the mortgaged property, the ownership of the lot was then consolidated in favor of respondent bank as the purchaser in the auction sale.
4. The TCT in the name of the spouses Torrecampo was cancelled and anew one, was issued by the Register of Deeds in the name of respondent bank.
5. When petitioners refused to vacate the property upon respondent bank's demand, the latter filed an ex-parte petition for the issuance of a writ of possession, which was granted by the RTC.
6. Then the petitioners filed a motion to set aside the extrajudicial foreclosure sale and cancel the writ of possession with prayer for damages on the ground that there was no violation of the mortgage contract.
a. they alleged that the extra-judicial foreclosure sale did not conform to the prescribed procedures as no notice was sent at their given address.
b. petitioners averred that the respondent bank's ex-parte petition for writ of possession is fatally defective as it contains no allegation as to the posting and publication of the first and second notices of extra-judicial foreclosure sale, nor the sending of such notices at their given address.
7. RTC: Denied motion to set aside the extra-judicial foreclosure sale and cancel the writ of possession
8. CA: denied the petitioners' appeal on the ground that the provisions of Act No. 3135, particularly Section 8, are only applicable until the period of redemption.
Issue:
Whether or not the Court of Appeal erred in not applying the provisions of Act No. 3135 to the case at bar
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Ruling:
The Supreme Court held that the CA did not err in not applying the provisions of Act No. 3135 in its Decision.
Act No. 3135 only applies when the one-year redemption period has not yet lapsed.
The general rule is that in extra-judicial foreclosures, a writ of possession may be issued to the purchaser in two different instances, and based on two different sources:
a) within the redemption period, in accordance with Act No. 3135, particularly Section 7, as amended; and
b) after the lapse of the redemption period, based on the purchaser's right of ownership.
In the first instance, Section 7 of Act No. 3135 provides that the purchaser in a foreclosure sale may apply for a writ of possession by filing an ex parte motion under oath. The provision also requires that a bond be furnished and approved, and no third person is involved. On the other hand, Section 8 of the same Act, as amended, provides the remedy available to the debtor, that is, the opportunity to contest the transfer of possession but only within the period of redemption,
Under the second instance, which is what happened in the case at bar, a writ of possession may also be issued after consolidation of ownership of the property in the name of the purchaser or, in this case, the respondent bank. The purchaser becomes the absolute owner of the property purchased in the foreclosure sale, if it is not redeemed during the one-year period after the registration of the sale.
After consolidation of ownership in the purchaser's name and issuance of a new TCT, possession of the land too becomes an absolute right of the purchaser. Thus, the issuance of the writ of possession to the purchaser, upon proper application and proof of title, merely becomes a ministerial duty 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. Any question regarding the regularity or validity of the mortgage or its foreclosure cannot be raised as a justification for opposing the issuance of the writ.
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