Monday, February 20, 2012

PNB vs. Sanao Marketing

Facts: Sanao Marketing Corporation and the Sanao spouses obtained a loan in the amount of P150,000,000.00 from PNB secured by a real estate mortgage of several parcels of land situated in the 3 municipalities. The contract provided that if the mortgagors fail or refuse to pay the obligations at any time, then all the obligations covered by the real estate mortgage and all amortization thereof shall immediately become due and payable and that the mortgagee may immediately foreclose the mortgage judicially or extrajudicially. The respondents failed to pay their obligations and so PNB foreclosed the mortgage through Atty. Clavecilla. The mortgage was foreclosed. Thereafter, Atty. Clavecilla executed a Provisional Certificate of Sale certifying that on the 22nd day of March 1999, at exactly ten o’clock in the morning, he sold at a public auction at the “lobby/main entrance of the Regional Trial Court, Hall of Justice, Naga City” the mortgaged properties to PNB for P213,162,787.50, which amount the latter considered as payment pro tanto of petitioners’ loan.

Respondents Amado A. Sanao and Sanao Marketing Corporation filed a complaint with the RTC against PNB, the Register of Deeds of the City of Naga and the Province of Camarines Sur, and Atty. Clavecilla, for the court to declare the Provisional Certificate of Sale and the auction and foreclosure proceedings null and void. PNB, on the other hand, filed with the RTC of Pili a petition for the issuance of a writ of possession over the properties located in Pili. RTC of Pili granted the writ of possession prayed for by PNB. The CA nullified the orders of the RTC. Aggrieved by the Decision, PNB filed the instant petition, arguing in the main that in nullifying the orders of the RTC of Pili, the Court of Appeals departed from the accepted and usual course of judicial proceedings as the issuance of writs of possession is purely ministerial on the part of the trial court.

Issue: Is PNB entitled to the writ of possession?

Held: YES.

A writ of possession is a writ of execution employed to enforce a judgment to recover the possession of land. It commands the sheriff to enter the land and give possession of it to the person entitled under the judgment.

It has been consistently held that the duty of the trial court to grant a writ of possession is ministerial. Such writ issues as a matter of course upon the filing of the proper motion and the approval of the corresponding bond. The court neither exercises its official discretion nor judgment. The judge issuing the order following these express provisions of law cannot be charged with having acted without jurisdiction or with grave abuse of discretion.

In the case at bar, PNB has sufficiently established its right to the writ of possession. It presented as documentary exhibits the contract of real estate mortgage and the Provisional Certificate of Sale on the face of which appears proof of its registration with the Registry of Deeds in Camarines Sur. There is also no dispute that the lands were not redeemed within one year from the registration of the Provisional Certificate of Sale. It should follow, therefore, that PNB has acquired an absolute right, as purchaser, to the writ of possession. The RTC of Pili had the ministerial duty to issue that writ, as it did actually, upon mere motion, conformably to Section 7 of Act No. 3135, as amended.

 The CA also erred in its decision on another ground. The judge to whom an application for writ of possession is filed need not look into the validity of the mortgage or the manner of its foreclosure. In the issuance of a writ of possession, no discretion is left to the trial court. Any question regarding the cancellation of the writ or in respect of the validity and regularity of the public sale should be determined in a subsequent proceeding as outlined in Section 8 of Act No. 3135. In fact, the question of the validity of the foreclosure proceedings can be threshed out in the Civil Case pending before the RTC of Naga which was filed by respondents before PNB had filed a petition for the issuance of a writ of possession. The Court of Appeals should not have ruled on factual issues on which the RTC of Naga had yet to make any finding. Besides, a review of such factual matters is not proper in a petition for certiorari.

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