Writ of Possession Is Ministerial Duty, Not a Venue for Fraud Claims

The Supreme Court has long held that the issuance of a writ of possession in favor of a purchaser in an extrajudicial foreclosure sale is a ministerial duty of the trial court. In Metropolitan Bank and Trust Company v. Spouses Bance (G.R. No. 167280, April 30, 2008), the Court reaffirmed this principle and clarified that allegations of fraud in the foreclosure proceedings cannot justify the refusal or annulment of the writ. The ruling provides important guidance for both banks and borrowers navigating the foreclosure process.

The Facts of the Case

The respondents, Spouses Elmor and Rosario Bance, obtained loans from Metropolitan Bank and Trust Company (Metrobank) amounting to over P24 million, secured by real estate mortgages over properties in Binondo and Tondo, Manila. When the spouses failed to pay their obligations, Metrobank instituted extrajudicial foreclosure proceedings under Act No. 3135, as amended.

At the public auction held on October 2, 1998, Metrobank emerged as the highest bidder. A Certificate of Sale was issued and registered with the Registry of Deeds on May 3, 1999. When the spouses failed to redeem the properties within the one-year redemption period, Metrobank demanded possession. The spouses refused.

Meanwhile, the spouses had filed a separate civil case before another branch of the Regional Trial Court (RTC) seeking to nullify the promissory notes, mortgages, and foreclosure proceedings. Despite this pending case, Metrobank filed a petition for a writ of possession, which the RTC granted. The spouses later sought to annul the writ before the Court of Appeals, claiming extrinsic fraud.

The Issue

The central question was whether the Court of Appeals erred in annulling the writ of possession on the ground of extrinsic fraud allegedly committed by Metrobank. A related issue was whether Metrobank was guilty of forum shopping for filing the writ petition while another case involving the same properties was pending.

The Ruling

The Supreme Court reversed the Court of Appeals and upheld the issuance of the writ of possession. The Court made several key rulings:

First, a petition for a writ of possession under Act No. 3135 is not an ordinary action. It is an ex parte motion, heard only on one side. The purchaser in a foreclosure sale need not notify the mortgagor of the filing. Once a proper motion is filed and the bond approved, the writ issues as a matter of course, and the trial court has no discretion to deny it.

Second, the posting of a bond is only required when the writ is applied for within one year from the registration of the sale, during the redemption period. After the expiration of the redemption period, the mortgagor loses all interest in the property, and the bond is no longer necessary.

Third, questions about the validity of the mortgage or the foreclosure itself cannot be used to refuse the issuance of the writ. The writ's ministerial character means that even a pending action for annulment of the mortgage cannot stay its issuance. The Court noted that the proper remedy for a mortgagor who disputes the regularity of the writ is to file a petition to set aside the sale and cancel the writ within 30 days after the purchaser is given possession.

Fourth, there was no forum shopping. The essence of forum shopping is filing multiple suits involving the same parties for the same cause of action. Since the issuance of a writ of possession is summary and ministerial, it is not a judgment on the merits. Moreover, a certificate of non-forum shopping is not required for a writ petition, as it is not a complaint or initiatory pleading.

Practical Takeaways

• Writ of possession is ministerial. Once a foreclosure sale is confirmed and the redemption period expires, the purchaser is entitled to the writ as a matter of right. Courts have no discretion to deny it.
• Fraud claims belong in a separate action. A mortgagor who believes the foreclosure was fraudulent must pursue that claim in a separate proceeding. It cannot be used to block possession.
• Know the 30-day window. A mortgagor who disputes the regularity of the writ must file a petition to set aside the sale within 30 days after the purchaser takes possession. Missing this deadline forfeits the remedy.
• No bond needed after redemption period. The bond requirement under Act No. 3135 applies only during the redemption period. After that, the purchaser may obtain the writ without posting a bond.
• No forum shopping in writ petitions. Filing a writ petition while a separate annulment case is pending does not constitute forum shopping, as the writ proceeding is merely incidental to the transfer of title.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.