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[G.R. No. 165752.� January 19, 2005]
YUHENGCO vs. NEO ASIAN FINANCE
THIRD DIVISION
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated JAN 19 2005.
G.R. No. 165752 (Spouses Henry P. Yuhengco and Rosalinda C. Yuhengco, and Pedro Chong Wa vs. Neo Asian Finance and Leasing Corporation.)
In this verified petition for review on certiorari under Rule 45 of the Rules of Court, petitioners seek the annulment of the August 16, 2004 decision of the Court of Appeals in CA-G.R. SP No. 76857, upholding the twin orders dated September 26, 2002 and February 4, 2003 of the Regional Trial Court at Quezon City, Branch 217, in LRC Case No. Q-14438(01), which orders respectively granted respondent's petition for issuance of a writ of possession and denied due course to petitioners' notice of appeal therefrom.
In April 1999, the spouses Henry P. Yuhengco and Rosalinda
Yuhengco, two of the three (3) petitioners herein, obtained a loan of P2,000,000.00
from respondent Neo Asia Finance and Leasing Corporation. As security therefor,
the spouses constituted a real estate mortgage over their three (3) parcels of
land covered by TCT Nos. 81781, 81782 and 45430, all located in Novaliches,
Quezon City. When signed by the spouses, the Deed of Real Estate Mortgage was
not yet notarized, albeit notarized later. In payment of the loan, petitioners
issued several checks in favor of respondent corporation. Some of those checks,
however, were subsequently dishonored for the reason "Account Closed".
Meanwhile, on October 7, 1999, petitioners instituted a Petition for Voluntary Insolvency before the Regional Trial Court at Quezon City, Branch 100, then sitting as a corporate court. In that petition, docketed as Civil Case No. Q-99-38944, respondent corporation was included in the list of creditors. In the same proceedings, respondent corporation, evidently to assure its right to proceed against the mortgaged assets, filed a motion to foreclose the real estate mortgage earlier constituted in its favor by the spouses Yuhengco. The motion was granted by the insolvency court on March 4, 2000, and, two (2) days later, or on March 16, 2002, respondent corporation had the Deed of Real Estate Mortgage notarized.
Thereafter, respondent corporation filed with the Clerk of Court and Ex-Officio Sheriff of RTC Quezon City a petition under Act No. 3135 for the extrajudicial foreclosure of the real estate mortgage executed by the spouses. Acting thereon, the Ex-Officio Sheriff issued a notice of extrajudicial sale of the mortgaged properties. In the ensuing auction sale thereof on June 20, 2000, respondent corporation emerged as the highest bidder in whose favor a sheriff's certificate of sale was issued, which certificate of sale was duly annotated on June 27, 2000 at the dorsal side of petitioners' titles.
On account of the foregoing developments, petitioners filed with Branch 83 of the RTC a complaint for the annulment of both the deed of real estate mortgage and the extrajudicial foreclosure and sale, against the respondent corporation and the Ex-Officio Sheriff. Unfortunately, in a decision dated November 13, 2003, RTC Branch 83 dismissed petitioners' complaint.
After the 1-year period for redemption expired without the petitioners having availed thereof, respondent corporation consolidated its ownership over the aforementioned three (3) parcels of land. Hence, petitioners' titles thereon were cancelled and replaced by TCT Nos. N-227317, N-227318 and N-227319, all in the name of the respondent corporation.
Such was the state of things when, in Branch 127 of RTC, Quezon City respondent corporation filed a Petition for Issuance of a Writ of Possession over the foreclosed properties.
In an Order dated September 26, 2002, Branch 127 granted respondent's aforesaid petition and accordingly directed the issuance of the desired writ in its favor. Against said order, petitioners filed a Notice of Appeal, making it known to the court that they are taking an appeal therefrom. For its part, respondent corporation filed an urgent motion to quash the notice of appeal, arguing that under Act No. 3135, no appeal lies against an order granting a writ of possession.
In its subsequent Order of February 4, 2003, the same court granted respondent's quashal motion and thus denied due course to petitioners' Notice of Appeal upon the same reasoning that appeal is not available to petitioners because a writ of possession under Act No. 3135 issues as a matter of course after the redemption period shall have expired without redemption having been effected.
Unable to accept both orders, petitioners went to the Court of Appeals on a petition for certiorari and mandamus in CA-G.R. SP No. 76857, imputing grave abuse of discretion amounting to lack or in excess of jurisdiction on the part of RTC Branch 127 in denying due course to their Notice of Appeal.
In the herein assailed decision dated August 16, 2004, the Court of Appeals denied the petition, thus:
WHEREFORE, finding no grave abuse of discretion on the part of respondent court, petition is DENIED. The Order dated February 4, 2003 is hereby AFFIRMED.
SO ORDERED. [1] cralaw
In a resolution dated October 22, 2004, [2] cralaw the appellate court similarly denied petitioners' motion for reconsideration.
Undaunted, petitioners are now with us via the present recourse, insisting on their right to appeal the RTC Order granting the writ of possession.
Petitioners base their claim on Section 8 of Act No. 3135, which provides:
Sec. 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty day 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 provision hereof, and the court shall take cognizance of this petition in accordance with the summary procedure provided for in section one hundred and twelve of Act Number Four hundred and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person who obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen of Act Numbered Four hundred and ninety six; but the order of possession shall continue in effect during the pendency of the appeal. (Italics ours)
From our reading of the aforequoted statutory provision, it appears clear to us that what is appealable thereunder is the order granting or denying a petition to set aside the foreclosure sale. The main action is the petition to set aside the foreclosure sale. Cancellation of the writ of possession is but the necessary consequence of the denial of the main action. This is the reason why, in the last sentence of the provision, the order/writ of possession continues to remain effective even "during the pendency of the appeal".
For sure, petitioners took the proper course when they filed before Branch 83 of the same RTC a complaint for the annulment of both the real estate mortgage and the extrajudicial foreclosure and sale. Sadly, however, when said complaint was dismissed, petitioners did not take an appeal from said dismissal, thus allowing it to pass to the realm of finality.
It has been the consistent ruling that the issuance of a writ of possession in favor of a purchaser in a foreclosure sale is merely a ministerial duty of the court. Likewise settled is the rule that the buyer in a foreclosure sale becomes the absolute owner of the property purchased if the same is not redeemed during the one-year period after registration of the sale. As such, he is entitled to the possession of said property and can demand it at any time following the consolidation of ownership and the issuance of a new certificate of title in his name. Possession of the land then becomes an absolute right of the purchaser as the confirmed new owner. And upon proper application and proof of title, the issuance of the writ of possession is a ministerial duty of the court. [3] cralaw
WHEREFORE, finding no reversible error in the decision under review, the same is hereby AFFIRMED and this petition DENIED DUE COURSE.
SO ORDERED.
Very truly yours,
(Sgd.) LUCITA ABJELINA-SORIANO
Assistant Division Clerk of Court
Endnotes:
[1] cralaw Rollo, pp 25-29.
[2] cralaw Rollo, pp.31-32.
[3] cralaw F. David Enterprises vs. Insular Bank of Asia and America, 191 SCRA 516 [1990].
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