REPUBLIC OF THE PHILIPPINES REGIONAL TRIAL COURT 4th JUDICIAL REGION BRANCH 33 Siniloan, Laguna In Re: Petition for Issuance
of Writ of Possession (ex-parte) RURAL BANK OF MABITAC (LAGUNA), INC.. represented by MARIA CECILIA S. TANAEL, SPL. CIVIL ACTION NO. S-1113-12 Petitioner. X--------------------------------------------------X MOTION TO QUASH THE WRIT AND THE AMENDED WRIT OF POSSESSION/AND OR TO SET ASIDE WRIT Movants, Sps. Antonia and Nestor M. Bonsol, by counsel, unto this Honorable Court most respectfully move that the writ of possession and the Amended Writ of Possession be quashed and set-aside and aver: 1. That the mortgage and its foreclosure proceedings in this case was in gross violation of the requirements of Act No. 3135 as enunciated by Supreme Court rulings, specifically, that no notice was sent to the herein movant and that the notice of auction sale was not posted in the place where the subject property is located (Lucena vs. Court of Appeals, 313 SCRA 47); That the mortgage is null and void as the interest and penalties are unconscionable and exorbitant, hence, the foreclosure case is null and void. That furthermore, movants were not notified of the foreclosure sale. 2. That furthermore, movants were not notified of the proceedings in this case and they were not able to participate and file their objections to the petition filed by the petitioner. That it will be noted that the Notice of Hearing dated October 4, 2012, sent to them stated that the hearing will be held on November 27, 2012 at 8:30 o’clock in the morning, however, the decision of the case stated that the hearing was actually conducted a day after or on November 28, 2012. 3. That it will be noted that the “Notice of Extra-Judicial Sale” in Foreclosure Case No. F-1166 dated January 20, 2011 specifically stated that the mortgage indebtedness amounted to Two Hundred Seventy Thousand Pesos (P270,000.00) plus interests, attorney’s fees and legal expenses. That in the “Certificate of Sale” dated March 23, 2011, the property was sold to the petitioner as the highest bidder in the amount of Seven Hundred Sixty One Thousand Pesos (P761,000.00) which is actually more than twice the amount of P270,000.00. The ballooned amount thus prevented the movant to redeem the property. That it will be noted that petitioner failed to present evidence to substantiate the allegations of interest, attorney’s fees and legal expenses. That furthermore, petitioner failed to pay or return to the movant the difference between the purchase price and the amount of P270,000.00. The total amount of P491,000.00. That it will be noted that the excess purchase price must be given or delivered to the mortgagor of the property and in this case petitioner bank as the mortgagee failed to do. This might also lead to the incorrect payment of filing fees which is enough ground to invalidate the foreclosure sale and to have it set aside. 1
6. that equitable considerations demand that a writ of possession should also not issue in this case.The money realized from the sale of mortgaged property under the regulations hereinbefore prescribed shall. and when there shall be any balance or residue. after paying off such mortgage or other incumbrances. in the sense that instead of an inadequacy in price. 119247. The Supreme Court in the cited case of Sulit vs. inadequacy of price becomes immaterial since the judgment debtor may reacquire the property or sell his right to redeem. has been held insufficient to set aside a sale. Intermediate Appellate Court. et al. February 17. hence. That in the case of Sulit vs. Disposition of proceeds of sale. et al. properties worth at least P500. That in the cited case of Sulit vs Court of Appeals.00. Nevertheless.396. which excess is indisputably a substantial amount. that is. and we so hold. This is because no disadvantage is caused to the mortgagor. not payment by dation. G.85. or to the person entitled to it. However. or if there be no such incumbrancers or there be a balance or residue after payment of such incumbrancers. and thus recover the loss he claims to have suffered by reason of the price obtained at the auction sale. Court of Appeals.000. there is due in favor of private respondent. . in forced sales low prices are generally offered and the mere inadequacy of the price obtained at the sheriff’s sale. after deducting the costs of the sale.000. the Honorable Supreme Court withheld the issuance of a writ of possession because the mortgagee failed to deliver the surplus from the proceeds of the foreclosure sale which is equivalent to approximately 40% of the total mortgage debt. be paid to the person foreclosing the mortgage. Rule 68 of the Rules of Court provides: Sec.R. it is the mortgagee’s duty
. 5. where the properties in question were found to have been sold at an unusually lower price than their true value. to be ascertained by the court.” The application of the proceeds from the sale of the mortgaged property to the mortgagor’s obligation is an act of payment. it is our considered opinion. the same shall be paid to the junior incumbrancers in the order of their priority. as mortgagor. then to the mortgagor or his agent. decided to withhold the issuance of the writ of possession on the ground that it could work injustice because the petitioner might not be entitled to the same. 4. vs. a mortgagor stands to gain with a reduced price because he possesses the right of redemption. When there is the right to redeem. also by way of an exception. On the contrary.4. 1997]. The case at bar is quite the reverse. in Cometa. taking into consideration the factual milieu obtaining therein as well as the peculiar circumstances attendant thereto. the surplus is only 40% then with more reason that the writ of possession in this case must be quashed as the surplus in this case is more than 100% of the amount of P270. Court of Appeals further ruled:
Now. this Court.00 were sold for only P57. unless shocking to the conscience. a surplus from the proceeds of the sale equivalent to approximately 40% of the total mortgage debt. No.
and taking into consideration the facts obtaining in this case. that we adopt such interpretation as may be favorable to the private respondent. with a due regard to the rights and interests of the mortgagor in the surplus money to be produced by the sale. but as far as concerns the unconsumed balance. Where the redemptioner chooses to exercise his right of redemption. We are not unmindful of the rule that it is not necessary for the mortgagee to pay cash to the sheriff or. it is more in keeping with the spirit of the rules. We need not elucidate on the obvious. such a construction will undeniably be prejudicial to the substantive rights of private respondent and it could even effectively prevent her from exercising the right of redemption. the vice-chancellor in Robertson vs. a mortgagee who exercises the power of sale contained in a mortgage is considered a custodian of the fund. to the notary public who conducted the extrajudicial foreclosure sale. the mortgagee is deemed a trustee for the mortgagor or owner of the equity of redemption. is liable to the persons entitled thereto if he fails to do so. the court requires that he shall exercise the power of sale in a provident way. And even though the mortgagee is not strictly considered a trustee in a purely equitable sense. Applying this provision to the present case would be highly iniquitous if the amount required for redemption is based on P7. The reason is that in case the mortgagor decides to exercise his right of redemption. when he sells under a power. cannot be considered otherwise than as a trustee. Commenting on the theory that a mortgagee. together with the amount of any assessments or taxes which the purchaser may have paid thereon after purchase. because that would mean exacting payment at a price unjustifiably higher than the real amount of the mortgage obligation. no payment was made by herein petitioner. and interest on such lastnamed amount at the same rate.000. specifically on the exercise of the right to redeem.to return any surplus in the selling price to the mortgagor. Simply put. It would obviously serve no purpose for the sheriff or the notary public to go through the idle ceremony of receiving the money and paying it back to the creditor. therefore. It bears stressing that the rule holds true only where the amount of the bid represents the total amount of the mortgage debt. It stands to reason. in this case. it is the policy of the law to aid rather than to defeat his right. and. 421) observed: “That expression is to be understood in this sense: that with the power being given to enable him to recover the mortgage money. being bound to apply it properly. Conformably hereto.” The general rule that mere inadequacy of price is not sufficient to set aside a foreclosure sale is based on the theory that the lesser the price the easier it will be for the owner to effect the redemption. Admittedly. under the truism that the lawmaking body did not contemplate such a pointless application of the law in requiring that the creditor must bid under the same conditions as any other bidder. a liberal construction will be given to our redemption laws. particularly Section 30 of Rule 39. the notary public who conducted the sale. plus one per cent monthly interest up to the time of the redemption. The same thing cannot be said where the amount of the bid is in excess of the total mortgage debt.000.
. that redemption should be looked upon with favor and where no injury will follow. Perforce. Section 30 of Rule 39 provides that the redemption price should be equivalent to the amount of the purchase price.00. as the highest bidder. Norris (1 Giff.
where the Supreme Court ordered the deferment of the issuance of the writ of possession. if there be any. 13 October 2010) the Supreme Court ruled therein that under the circumstances. IAC. It must be emphasized that petitioner failed to present the receipts or any other proof of the alleged costs or expenses incurred by him in the foreclosure sale. Surplus money. real property and belong to the mortgagor or his assigns. it is clear that based from the numerous jurisprudence promulgated by the Supreme Court it is clear that there is a very great possibility that the mortgage and foreclosure proceedings will be declared null and void if ever herein movants will be allowed to participate in this petition so that movants can ventilate their side. (G. That. Even the trial court failed or refused to resolve this issue. notwithstanding the fact that this was one of the grounds raised in the motion filed by private respondent before it to set aside the sale. Inevitably. Since it has never been denied that the bid price greatly exceeded the mortgage debt. G. et al. A junior mortgagee may have his rights protected by an appropriate decree as to the application of the surplus. the latter cannot raise the defense that no actual cash was received. 2 March 2010. 162 SCRA 358.R. realizing more than the amount of his debt on a foreclosure sale. And a senior mortgagee.R. and cited in The Parents-Teachers Association (PTA) of St. the surplus money must be applied to their discharge in the order of their priority. 32. 19 September 2008. gains much significance where there are junior encumbrancers on the mortgaged property. IAC. he must still account for the proceeds as if the price were paid in cash. No. 8. June 20. the right of a mortgagor to the surplus proceeds is a substantial right which must prevail over rules of technicality. after satisfying the prior mortgage.. 151 SCRA 563. in case of a foreclosure sale. 1988. 566 SCRA 27. That in the case of Barican. reiterated in Policarpio vs. 79906. No. Active Bank. No. 9. 162 SCRA 358. this Honorable Court can legally defer the issuance of the writ of possession conformably to the rulings of the Supreme Court in Cometa vs. et al. at least. however. G.R.. there is jurisprudence to the effect that while the mortgagee ordinarily is liable only for such surplus as actually comes into his hands. surplus money arising from a sale of land under a decree of foreclosure stands in the place of the land itself with respect to liens thereon or vested rights therein. and Barican vs. is regarded as a trustee for the benefit of junior encumbrancers. but he sells on credit instead of for cash. His lien on the land is transferred to the surplus fund. No. vs.
7. Mathew Christian Academy vs. 157125.In case of a surplus in the purchase price. 176518. G. the obligation of a court to issue a writ of 4
. They are constructively. 177881.R. Upon the strength of the foregoing considerations. We cannot simply ignore the importance of surplus proceeds because by their very nature. petitioner cannot be allowed to unjustly enrich himself at the expense of private respondent. That. Intermediate Appellate Court. and in an action against the mortgagee to recover the surplus. Jurisprudence has it that when there are several liens upon the premises. we cannot countenance the apparent paltriness that petitioner persistently accords the right of private respondent over the surplus proceeds. Metropolitan Bank and Trust Co.
Segunda Parang Lumban. or immediately thereafter as counsel may be heard. Esguerra Pakil. Lumban. it is respectfully prayed that the Writ of possession and the Amended Writ of Possession be set-aside and that the proceedings for the implementation of the same be held in abeyance in the interest of higher justice and for humanitarian reason. 2013. 1987. Laguna NOTICE OF HEARING The Clerk of Court Regional Trial Court Branch 33 Siniloan. Niccolo A. Laguna. PARAISO 5
. Further. supporting the view that a petition for issuance of a writ of possession is not ministerial if there is an opposition. NICCOLO A. 5-24-2013. June 30. it decided to withhold the issuance of the writ of possession on the ground that it could work injustice because the petitioner might not be entitled to the same. The same ruling was applied in Cometa vs. Santa Cruz.R. 1116728. Paraiso Counsel for the movants Gaza Street. Pablo M. PARAISO NOTICE OF HEARING Atty. 42699 IBP Life No. Laguna Roll No.possession in favor of the purchaser in a foreclosure of mortgage case ceases to be ministerial. 55-18-2001 MCLE No. July 12. Laguna Greetings! Please take notice that the undersigned will submit the foregoing for hearing on July 19. III-0018038 PTR No. just and equitable are prayed for. premises considered. Other reliefs. Intermediate Appellate Court (G. 2013 at 8:30 A.M.
Atty. that the Sheriff be restrained from implementing the writ of execution. 69294. Brgy. wherein. or immediately thereafter as counsel may be heard. 151 SCRA 563). NICCOLO A. Hence. Laguna Greetings! Please submit the foregoing for hearing on July 19 2013 at 8:30 A. WHEREFORE. No.M. 02433. Laguna for Siniloan.
NICCOLO A.CERTIFICATION I hereby certify that a copy of the foregoing was served to Atty. Laguna
. Laguna Office of the Sheriff Siniloan. Pablo M. Pablo M. Esguerra by registered mail with return card due to distance and time constraint. Esguerra Pakil. PARAISO Copy furnished: Atty.