CASE DIGEST: Metropolitan Bank vs. Spouses Cristobal

G.R. No. 175768: December 11, 2013




On 14 September 1998, respondents Spouses Edgardo M. Cristobal and Ma. Teresita S. Cristobal obtained a loan from petitioner Metropolitan Bank and Trust Company in the amount of P4,500,000.00. The loan was secured by two real estate mortgages and its three amendments, which respondents executed in favor of petitioner.

Despite demand, respondents failed to pay their loan, resulting in the extrajudicial foreclosure and auction sale of their mortgaged properties (subject properties). In the auction sale, petitioner emerged as the highest bidder, so a Certificate of Sale was issued in its name. This certificate was duly registered in the Registry of Deeds of Bulacan on 11 September 2002.

Consequently, petitioner demanded that respondents vacate the properties covered by the mortgage. However, this went unheeded, forcing petitioner to file with the trial court a petition seeking a Writ of Possession over the foreclosed properties. On 30 June 2003, the RTC issued an Order stating that petitioner did not submit sufficient evidence from which it could base the amount of bond required in an application for a writ of possession done within the 12 month redemption period.

Petitioner seasonably moved to reconsider the judgment, but this was also denied in an Order dated 22 September 2003.

Aggrieved, petitioner appealed via a Petition for Certiorari on 4 December 2003. Petitioner argued that granting arguendo that petitioner should have presented evidence for the purpose of fixing the bond, the redemption period already expired on September 11, 2003; hence, posting of a bond is no longer necessary.This appeal was however dismissed by the CA in a Decision dated 10 August 2006.

In affirming the RTC, the CA explained that in accordance with Section 7 of Act 3135, the trial court has the duty to issue a writ of possession before the lapse of the 12-month redemption period; but this is qualified by the receipt of an ex-parte application and the posting of the required bond. In this case, the trial court denied the application because petitioner failed to discharge its burden of providing ample information upon which the amount of the bond could be based. Moreover, even if the 12-month redemption period had already expired and the need for a bond already dispensed with, possession could not yet be given to petitioner until the ownership is consolidated and a new transfer certificate of title issued in its name.

On 24 August 2006, petitioner filed a Motion for Reconsideration, arguing that the grounds upon which the CA anchored the denial of the petition has [sic] since disappeared in light of the consolidation of titles over the subject properties by the petitioner. In a Resolution promulgated on 6 December 2006, the CA denied petitioners Motion. Hence, the instant Petition.

ISSUE: Whether or not consolidation of title is necessary before possession may be automatically given to petitioner.

HELD: Case remanded to RTC.

Petitioner insists that a review of Act 3135 will reveal that there is absolutely nothing therein which provides that consolidation of ownership over the foreclosed property is required before a writ of possession may be issued. Moreover, even assuming that consolidation is indeed required, petitioner faults the CA for refusing to recognize the fact that it had already consolidated its ownership over the subject properties, resulting in the issuance of Transfer Certificate of Title Nos. T-432045 (M) and T-432046 (M) in its name on 6 April 2004.

On the other hand, respondent alleges that the consolidated titles under petitioners name were not submitted in the trial court. As such, petitioner cannot raise it as an issue for the first time in appeal.

We rule that a remand of this case to the trial court is necessary for the reception of evidence to determine if consolidation has taken place, this being a necessary requisite to the issuance of a writ of possession.

CIVIL LAW: consolidation of ownership and demand of possession

Jurisprudence articulates that the purchaser can demand possession at any time following the consolidation of ownership in his name and the issuance to him of a new transfer certificate of title. After the consolidation of title in the buyers name for failure of the mortgagor to redeem the property, the writ of possession becomes a matter of right. In fact, in Sps. Edralin v. Philippine Veterans Bank, we have held that: Consequently, the purchaser, who has a right to possession after the expiration of the redemption period, becomes the absolute owner of the property when no redemption is made. In this regard, the bond is no longer needed. The purchaser can demand possession at any time following the consolidation of ownership in his name and the issuance to him of a new TCT. After consolidation of title in the purchasers name for failure of the mortgagor to redeem the property, the purchasers right to possession ripens into the absolute right of a confirmed owner. At that point, the issuance of a writ of possession, upon proper application and proof of title becomes merely a ministerial function. Effectively, the court cannot exercise its discretion.

Hence, for petitioner to be issued a writ of possession, it must first clearly show that it has consolidated ownership of the subject properties in its name. It is only at this point that issuance of the writ becomes a ministerial function of the courts.

CIVIL LAW: definition of a question of fact

On this score, petitioner insists that we must take cognizance of a supervening event that it has already consolidated the propertys title in its name, as evidenced by Transfer Certificate of Title Nos. T-432045 (M) and T-432046 (M). While the Court has ample authority to review and resolve matters not assigned and specified as errors by either of the parties in the appeal if it finds the consideration and determination of the same essential and indispensable in order to arrive at a just decision in the case," we agree with the respondents that the Court cannot automatically accede to the alleged consolidation, for the matter is essentially a question of fact best left to the determination of the lower court. In Republic v. Malabanan, we held that: This Court has differentiated a question of law from a question of fact. A question of law arises when there is doubt as to what the law is. on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one oflaw, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact. Thus, the test of whether a question is one of law or of fact is not the appellation given to such question by the party raising the same; rather, it is whether the appellate court can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a question of law; otherwise it is a question of fact.

Here, no question of law is involved, for it is clear that petitioner has the right to possession once it has established that ownership has been consolidated in its name. Consolidation is essentially factual in nature, as it requires the presentation of evidence.

Consequently, and in the interest of substantial justice, a remand of this case to the lower court is necessary to receive evidence if indeed consolidation has taken place, for the issuance of a writ of possession.