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  • Sps. Gema O. Torrecampo and Jaime B. Torrecamp substituted by his heirs namely_ Gaie Marie T. Ouano, Gaie Annah Marie T. Arzadon, Jee Jasper O. Torrecampo, Elsbeth Gaie Marie O. Torrecampo and Jee Edsel O. Torrecampo Vs. Wealth Development Bank _ Supr

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    Sps. Gema O. Torrecampo and Jaime B. Torrecamp substituted by his heirs namely_ Gaie Marie T. Ouano, Gaie Annah Marie T. Arzadon, Jee Jasper O. Torrecampo, Elsbeth Gaie Marie O. Torrecampo and Jee Edsel O. Torrecampo Vs. Wealth Development Bank _ Supr

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    Republic of the Bhilippines Supreme Court Manila SECOND DIVISION SPS.GEMA 0. TORRECAMPO and G.R, No. 221845 JAIME B. TORRECAMPO. ‘substitwted by his heirs namely: GATE MARIE'T. OUANO, —GAIE ANNAH MARIET, ARZADON,JEE —PERLAS-BERNABE, S.J," JASPER 0. TORRECAMPO, HERNANDO, Present: ELSBETH GAIE MARIE. Acting Chairperson, TORRECAMPO, and JEE EDSEL — ZALAMEDA, 0. TORRECAMPO, ROSARIO, and Petitioners, MARQUEZ, JJ. Promulgated WEALTH DEVELOPMENT BANK corr, MAR 21 2622 PE Respondent. x DECISION HERNANDO, J: ‘This petition for review on certiorari! seeks the reversal ofthe May 27,2015, Decision? and October 6, 2015 Resolution’ of the Court of Appeals (CA) in CA~ GR. CV. No. 04839. The CA Decision affirmed the June 8, 2012 Order" ofthe Regional Trial Court (RTC), Branch 5 of Cebu City which dismissed petitioners’ s+ RaSe o a ond ven , , 2 Bra: by Asoc ate tarp Y- Lope om 8 Mente of be Cut ence in by Ee James Gal Inga ote ates Marge ase ap (Ca ral 45-46, Pence by Jodge Dough A.C. Marigaoen Desision 2 GR No. 21645 motion to set aside the extra-judicial foreclosure sale and cancel the writ of possession with prayer for damages for properties covered by Transfer Certificate of Tite (TCT) No. 187864, in the name of Gema Quano Torrecampo, married t0 Jaime Torrecampo. Factual Antecedents: On December 12, 2008, the spouses Gemma and Jaime Torrecampo (spouses Torecampo) entered into « housing loan agreement® with Wealth Development Bank Corp. (respondent bank). The housing Joan agreement was, secured by a real estate mortgage* over a property owned by the spouses Torrecampo known as Lot No. 5 of the consolidated subdivision plan PCS-07- (005237, covered by TCT No. 187864.” The aggregate amount of the loan is, 10,500,000.00, evidenced by promissory notes’ signed by the spouses Gaie ‘Maric and Daryl Ouano and spouses Richel and Faustino Masong. Subsequently, the spouses Torrecampo defaulted on the payment of their loan obligation. Thus, respondent bank commenced an action to foreclose the eal estate mortgage extra judicially under the provisions of Act No. 3135, oran Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed 10 Real-Estate Mortgages, as amended. A certificate of sae was issued on June 11, 2010 and was duly registered withthe Register of Deeds of Cebu City on June 24, 2010. ‘After the lapse of the one-year redemption period without any attempt on the part of the spouses Torrscampo to redeem the mortwaged property, the ‘ownership of the lot was then consolidated in favor of respondent bank a5 the purchaser in the auction sae, (On September 1, 20L1, TCT No. 187864 in the name of the spouses ‘Torrecamapo was cancelled and a new one, TCT No, 107-201 1003690, was issued by the Register of Deeds of Cebu City in the name of respondent bank: ‘When petitioners refused to vacate the property upon respondent bank’s demand, the latter filed an ex-parte petition for the issuance of @ writ of ‘possession, which was granted by the RTC in an Order" dated August 25, 2011 (On September 30, 2011, a notice to vacate! was issued by the sherfT. evade pp 2728, 1 Rolo, 9495 96100 and 102108 : ee * ieee Deision 3 GR No. 21645 In ts Fanuary 20, 2012 Resolution," the RTC denied petitioners’ motion for reconsideration’ of the RTC's Onder granting the application for a writ of possession. Subsequently, the writ of possession was successfully implemented and the petitioners were evicted from the property as shown in the Sherif's| Return on Writ of Possession and Delivery Receipt. ® On March 8, 2012, the petitioners fled @ motion to set aside the exva- judicial foreclosure sale and cancel the vrit of possession with prayer for damages on the ground that there was no violation of the mortgage contact, Petitioners argued that: (1) the agreed maturity date of the loan has net yet ‘arrived; 2) the term loan agreement, the real esate mortgage contrac, the promissory notes and the diselosure statement of loaneredit wansaction dil not provide forthe amount ofthe monthly amotizations; and 3) no demand letter or Statement of account of any amount payable fr any given month was seat at their address. Further, they alleged thatthe extra-judicial foreclosure sale did not conformn to the prescribed procedures as no notice was sent at their given address. Also, petitioners averred that the respondent bank's ex-pare petition for writ of possession is fatally defective as it contains no allegation as to the posting and Publication of the frst and second notices of extra-judicial forectosure sale, nor the sending of such notices at their given address. Lastly, petitioners contended that they suffered damages arising from the extra-judicial foreclosure of their property and their eviction thereftom, which were both improper, unjust and oppressive." ‘On March 26, 2012, respondent bank countered in its comment and/or opposition that there vas no violation of the realestate mortgage contract. The contract contains an acceleration clause to the effect that in any event of default, the entite obligation immediately becomes due and payable. Thus, as = consequence of such default, the mortgagee has the right to foreclose the ‘mortgage, to have the property seized and sold, and to apply the proceeds to the Obligation. They followed the requirements on posting and publication of the notice of extrasjudicial foreclosure under Act No. 3135. Finally, whatever damages petitioners may have suffered were due to their own acts. Rating of the Regional Trial Court: ‘On June 8, 2012, the RTC issued an Order" denying petitioners" motion to sot aside the extrajudicial foreclosure sale and cance! the writ of possession with taaras-au Carat pe. 46 Decision ‘ GR No. 71645 prayer for damages. The RTC ruled that proceedings for the issuance of the writ ‘of possession are non-Titigious in nature such thatthe court will not delve into the ‘merits of the petition. The pertinent portions of the Order read thus: In fact, te issuance ofthe wat of possesion toa purchaser in an extrudical “recosure is summery apd ministral in nature as Such proceeding 6 mrely a Incident in the taser of thet, The iil court does not exerccecsereton in the snare there. ‘WHEREFORE, finding the instart mation be beret of meri, the same s hereby DENIED. Notify pies and counsels acorns: SO ORDERED? In an Onder! dated July 23, 2012, the RTC gave due course to petitioners” notice of appeal. Thus, the records ofthe case were elevated 0 the CA. R 12 of the Court of Appeals: Ina Decision dated May 27, 2015, the CA denied the petitioners” appeal on the ground that the provisions of Act No. 3135, particularly Section 8, are only applicable until the period of redemption, Once redemption lapses and consolidation of the purchasers title ensues, Act No. 3135 is not applicable anymore, Ths, petitioners’ recourse tothe law is misplaced. The Decision reads in pat: nthe present ease, itis evident thatthe [petitioners failed to redsem the mortgaged property within the period of redemption and. consequent) the ‘Sumetehip over the property was consolidated in favor of the bank. AMerwards ‘ovresponding wit of possession was ised by the al cour afer tbe redemption Period However, the [ptioners] sl avalled ofthe emedy under Section 8 of IReINo. 3135 which s misplaoed 8 ‘Therefore the denitl of [paitionst"] motion was proper aeiton a dferent round than tha lied pen by te tl coi, Hiving ruled thatthe recourse taken Bp the [petioners] was improper, i follows that there sno more need to resolve the issues advanced by them WHEREFORE, premises considered the instant appeal is DENIED. The Cnr of the Regional Tal Cou, Branch $ of Cebu Cis, dated 8 June 2012, Aismising(petiioners") Motion 10 Sot Aside the Fxta-udval Foreclosure Sale snd Cantal the Writo! Possession with prayer fw Damages s hereby AFFIRMED. SO ORDERED he Desision GR No, 21845 Issues 1 Whether or not the CA erred in retroactively applying the new doctrine laid down by the Supreme Court in 680 Home Appliances, Inc vs. The Honorable Court of Appeals, etal, GR.No. 206599, Seplember 29, 2014 despite the settled doctrine that when a doctrine of the Supreme Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to partes who had relied on the old doctrine and acted on the faith thereof, 1. Whether or not the CA erred in choosing to apply the new doctrine laid «down by a Division ofthe Supreme Court in 680 Home Appliances, Inc. vs. The Honorable Court of Appeals, et al, GR. No, 206599, September 29, 2014 over the doctrine previously laid down by another Division of the Supreme Court in Bligio P. Mallari vs. Banco Filipino Savings & Mortgage Bank, GR. No. 157660, August 29, 2008 despite the Constitutional provision that "No doctrine ‘or principle of law laid down by the Court in a Decision rendered en Bane or in division may be modified or reversed except by the court sitting en banc” and in spite of the fact that the Mallar precedent is more i accord with far play. mm. Whether or not the CA erred in not ruling that the lower court erred in denying petitioners’ Motion (to Set Aside the Exta-Judicial Foreclosure Sale and. Cancel the Writ of Possession with Prayer for Damages) without delving into the ‘merits of the question onthe propriety ofthe foreclosure. vy, ‘Whether or not the CA erred in not ruling that the lower court erred in filing to find that the extra-judicial foreclosure sale did not conform with the prescribed procedure despite the fact that no written notice (of the application for extra-judicial foreclosure and the subsequent foreclosure sale) was ever Sent to petitioners inspite of it being required by the terms of the mortgage contract and ‘the prevailing jurisprudence interpreting Act No. 3135, as amended by Act No. 4118 and as interpreted by the Supreme Cour] Decision 6 GR No. 26S v. Whether or not the CA erred in not ruling that the lower court erred in failing to find that there was no violation of the mortgage contract that would Warrant the extra-judicial foreclosure ofthe mortgage property despite the fact that athe agreed maturity date of the Joan has not arrived; b.) the term loan agreement, real estate mortgage, promissory notes and, even the disclosure statement of loanveredit transaction did not provide how much is the monthly amortization; .) no demand letter, statement of account or any written notice of ‘any amount payable for any given month was sent to petitioners[] vu ‘Whether or not the CA erred in not ruling that the lower court erred in {ailing to find thatthe respondent's Ex-Parte Petition for Wait of Possession is fatally defective despite respondent’ failure to allege essential facts and to include or introduce important documents] vu Whether or not the CA erred in not ruling that the lower court erred in| failing to find that petitioners suffered damages arising from the extrajudicial foreclosure oftheir property and their eviction therefrom despite the fact thatthe circumstances of this case and the law justify an award for damages] Our Ruling ‘The issues raised by petitioners can be surnmarized in one question: Did the CA err in mot applying the provisions of Act No. 3135 to the case at bar? “The Court answers inthe negative. The CA did not erin not applying the ‘provisions of Act No, 3135 in its Decision ‘Act No. 3135 only applies when the one-year redemption period hhas not yet Iapsed. “The general rule is that in extra-judicial foreclosures, a writ of possession may be issued to the purchaser in two different instances, and based on wo ifferent sources: (I) within the redemption period, in accordance with Aet No. 43135, particularly Section 7, as amended; and (2) after the lapse of the redemption period, based on the purchaser’s right of ownership. 3 Pet Leming and Pac, es Sp er GR. No, HDB a 19383, Seenber $2018, ine (50 ome once» Cor ae 4 ha 1, 39-83 28, Decision 7 GR No, 221845 Inthe first instance, Section 7 of Act No, 3135 provides that the purchaser in a foreclosure sale may apply for a writ of possession by filing an ex parte ‘motion under oath. The provision also requires that a bond be furnished and ‘approved, and no thin person is involved (On the other hand, Section 8 of the same Act, as amended, provides the remedy available to the debtor, that i, the opportunity to contest the transfer of | possession but only within the period of redemption, to wit Sec. $.The debtor may, Im the proceedings in which possession was ‘requested, bu not inter than thirty days eter te purchaser was given possession, Beton that these be set aside andthe vee of possession canceled peclyng ‘he dameges suffered by hin, because the momgige Was not veated or the sale ‘was not made in aeeondane withthe provisions here, an the cour ball tke cgnizance ofthis potion in secrdance with the suinary prover provided forin section one hunired and twelve of Act Nombered Four hundred and ninety six; and ft finds the complaint of the debtor justified, it shal dispose in his for ‘ofl or part ofthe bon ished bythe person wo abtsned possesion. Either ‘ofthe pares may appeal from the or of te jodie ia esondance with section fourteen of Act Numbered Four hupired and inety-sxs bot the oder of possession ‘Sl cotince in fect uring the pendency of the appeal. Empiis spied) ‘Under the second instance, which is what happened in the case at bar, @ writ ‘of possession may also be issued after consolidation of ownership of the property in the name ofthe purchaser of in this ease, the respondent bank. The purchaser becomes the absolute owner of the property purchased in the foreclosure sale, i itisnot redeemed during the one-year period after the registration of the sale 3 Secon of et 155 amended By Seton "of At No. AI ee ‘Sec 2. The allowing te sot easy Isr fr tin of sit Aa Nand ‘error bane and thy te Sec. 1-1 yale mde unr he vin of his At he prcser may sto th Cott in icc of te pic a ple whe rope 22 ye’ esto in posses hr crn oempin peo ‘Rnutingtond iar snout cuvette be prepay raped ress seiner ct ru to Destin bet de wand fd in fom of ano prs mote ne ‘pron or canara prosody ifthe property vogue opel ‘ocetngs in cae of prpery eierob Morage Lancs to Ere hndes and inc) hur fe Rimini Cte ots abel per? ‘See ia ge aed i ry gi of Sea Fig of uc pation, cote de fesse nari cen feet oe Fmd an erase of at Numbered For hinds stats sendy "RNa Tey ih hada ys and aa a pon spa ‘tetendorett w ofpseson foe abel he setae oe ‘Sb papery satis exe ni err mes supra me 24, cing Sp Tolaey Cit Coc Pony Bank 70 P14, 113). Decision 8 GR. No. 221845 After consolidation of ownership inthe purchaser's name and issuance ofa new ‘TCT, possession of the land too becomes an absolute right ofthe purchaser ‘Thus, the issuance of the writ of possession to the purchaser, upon proper application and proof of ttle, merely becomes a ministerial duty of the court ‘hich cannot be enjoined or restrained, even by the filing of a civil case forthe declaration of nullity of the foreclosure and consequent auction sale. Any ‘question regarding the regularity or validity of the mortgage or its foreclosure cannot be raised asa justification for opposing the issuance of the writ. In the case at bar, the respondent bunk registered the foreclosure sale on June 24, 2010. Ate the lapse of one year or after June 24, 2011, the provisions of Act No. 3135 no fonger applied to the parties. The respondent bank became the absolute owner of te subject property as a matter of right. In line with this, the wrt of possession was issued as a ministerial duty of the tal court. [¢ was issued tothe respondent bank as « matter of right, a mere incident ofthe bank's ‘ownership, and of in accordance with the remedy provided under Section 8 ‘The CA was correct when it ruled that: [The [petitioners le to redeem the morteaged property within the period of redemption and consequcnily, the onneiship over the property was consolidated {favor othe bank Aersar, a erresponding wit of possesion was issued by ‘he ial cout ater the redemption period. However, te (petitioners) sl availed ofthe remedy tnder Section § of Act No. 3135 whichis spaced. xx x (The provisions of Act No. 3135, particularly the remedy provided under Section § Thereof, apply only dsing the period of redemption. Aer the lapse of the rsdetmption period and hei ofthe purchasers ensolidated Act No, 3135 finds rospmlcaion™ ‘The two cases mentioned by petitioners are not in conflict with cach other. ‘To further explain the limitations of Act No. 3135, the CA relied on the cease of 680 Home Appliances, Ine. v. Cour of Appeals (680 Hone Appliances, Ine) in its raling, in this wise Ina mumber of eases davies by the Supreme Coun, it declare that Section Sof Act No. 3135 the valle remedy to set aside a writ of possesion, without ‘onsieting wie the wet vod each ofthese cases was issued during ot titer the lape ofthe redemption period. However, nthe recent case of 80 Hume “ppllances ne.» The Honorable Cow of Appeals, ea, te Sumeme Cour re ‘hited the aforesaid caes ad conshided that thee is a necessity 10 make a Sisinction and clarify when he remedy under Sevton 8 of Act No. 3135 may be svaled of Fen 185 048. a Desision ° GR No. 221845 ‘The: Supreme Court in the above-cliod cage made the flowing aovet pronouncements redemption of the mortgaged real property in am extra judi foreclosures procesdings beyond these, Le, upon the lapoe of the redewiption period and the consolidation of the purshaser' ile, pe longer thin is sepe Tis iappres o ason | eft In fact, the nine (@)setions of Act No, 3135 pectin to the proceedings governing extejuaieilforsioute, fom the conduct ‘ofthe frecosure sale up to the exercise of te ght of redemption, Our reading of Act No, 3135, defo, should be consistent with the law's limited coverage (Emphasis supplied) However, petitioners contend thatthe 680 Home Appliances, In. case does not apply t them because it was decided in 2014, or four years after the subject dispute, Petitioners allege that the aforesaid case upholds a new doctrine and should only be applied prospectively. Instead, petitioners claim that the pronouncements in the earlier ease of Mallari ¥. Banco Filipino Savings & ‘Mortgage Bank” (Mallar) should spply to them. ‘The Court disagrees. Not only are the doctrines of the two cases consistent with each other, the set of facts and issues ofthe Mallar case are totally different from the set of facts and issue ofthe ease at bar. Briefly, the set of facts and issue of the Mallar case areas follows: Pattioner (Mali) obtained a loan from Banco Filipino Savings and Mortgage Bank (espondent) and at security theres, he executed 4 Deed of “Morisaseover a parcel of land loeated in Pampanga. Duet his fle to pa the Ioan, respondent extajuiiilly foreclosed the mongaged propery. Respondent ‘vaste highest bidder tthe public auction ale, and the Cefiate of ale ssbed ins favor was annotated on the tide of the subject propery en May 20, 1959 Paitioner filed redeem sid property within the redemption period which ‘exired on May 20, 2000. Responent ten consolidated its ite to the foreclosed propery. Psion?’ ceva of tile tothe property was canceled and a new fe was issue inthe nme oF espondent on Aigust 20,2000, Therese, on January 18, 200, respondent ied with the Regional Tal {Court (RTC) an Ex-Pare Petition forthe suanceof Writ of Possession under det ‘io 153. Ou Mareh 22,2001, petitioner Med a Motion to Dismiss/Oppostion to Petition, alleging that there was stil a pending action between the partes for decaration of ality ofthe extra-judicial foreclosure proceedings which Sis esr 009, Decision 0 GR No, 221845 ‘was fled as carly as May 16, 2008, Nevetsless, on May 18, 2001, the RTC ° [sued an Order aranting eypondent's pelo or ssunce of «writ of possession, Petitioner's motion for teconseraton as deni Agevived,ptitoncr He a petiton fer cevtorart withthe CA. On Mach 14,2003, the CA promulemos the heen asied Decision cismissing the pttion| {or lack oF mest ling Hat unde the La, the purchaser the foreclose sale should be place in possession ofthe property without delay and tha it was the Iminitriaduy of te cous to uphold the morgagee's right to possession even uring the redemypsion period. The CA added that an appeal, which Was tvallable to petitioner, was the appropriate remedy, and therefore, be could ‘ot aval himelf ofthe writ of centorrt (Expass sped) Firstly, in the Mallar’ case, the aetion forthe declaration of nullity of the extricjudicial forectosure proceedings was filed prior to the lapse of, or within, the redemption period, Second, the issue in the Mallar! case deals with the propriety of a petition for certiorari remedy under Rule 65 vis-a-vis an ordinary remedy of appeal ‘mandated under Section 8 of Act No, 3135 in the case at ba, ‘Third, the Mallar ruling is notin conflict but is rather reinforced by and is in consonance with the doctrine laid out in the 68 Home Appliances, In. case. Petitioners quoted in piecemeal the discussion in Mallar in order to tailor ft and Interpret the case to their advantage. However, both the Mallar’ and 680 Home Appliances, Ine. cases clarify that the writ of possession the debtor may petition ‘to set aside under Section 8 of Act No, 3135 undoubtedly refers to the one issued pursuant to Section 7 ofthe same law during the redemption period. Both cases ‘emphasize that Section 8 cannot apply tothe debtor when the redemption period has already expired, and the purchaser in the foreclosure sale has already consolidated his ownership over the property and moved forthe issuance of the ‘writ of possession. ‘The CA was thus correct in ruling that petitioners’ proper recourse should have been to file a separate action in another proceeding, to wit: “The proper reourse is fr Respondents Appellants o flea separate action in snotber proceeding, ike for instanee, an acon for recovery of ovmeship, for huulment of mortgage andlor annulment of frelosure as the Supreme Cout Pile ou inthe aforementione cae. They cannot anymore aval of the remedy Provide under Seton # of Act No. S135 as the tedemption period has already Fapsed. Respondents- Appellants’ case ean be propery thresh out in a separate [poceeting where it wl eed oa the ments and he partes wil be afforded sn ‘opportunity to present their espectve evidence in support of her allegations Rw Decision 4 GR, No, 221845 Petitioners are not entitled to damages. Since petitioners failed to prove any of their claims, they cannot therefore be entitled to damages in any form, whether actual, moral or exemplary. ‘The Court has consistently ruled that there must be pleading and proof of actual damages suffered for the same tobe recovered, Selfserving statements of account are not sufficient basis for an award of actual or compensatory damages. Here, petitioners failed to prove with a reasonable degree of certainty that they lost’ an actual pecuniary amount. Petitioners cannot obtain ‘compensation for their own wrongdoing. Petitioners cannot recover moral damages either. According to Anicle 2217 of the Civil Code, moral damages are meant to compensate the claimant for any physical suffering, mental anguish, fight, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation’ and similar injuries unjustly eaused. Such damages, tobe recoverable, must be the proximate result of a wrongful act or omission, the factual basis for which must be satisfuctorly established by the agerieved party in this case petitioners." Since ‘no wrongful act or omission was proven to be committed by respondent bank, petitioners cannot claim moral damages. Finally, petitioners are not entitled to exemplary damages also, in the absence of wanton, fraudulent, reckless or oppressive acts on the part of respondent bank. WHEREFORE, the petition for review on certirarfis DENIED. The May 27, 2015 Decision and the October 6, 2015 Resolution ofthe Court of Appeals in CA-GR. CV No, 04839, which affirmed the Order of the Regional Trial Court, Branch 5 of Cebu City, dismissing petitioners’ motion to set aside the extra judicial foreclosure sale and cancel the writ of possession with prayer for ‘damages, are hereby AFFIRMED. 7 Gowaring Conran» Bare, dg sins a1, Ligerage, 67 PI, 617 earn, ve nd gen, 8 No.247528, September 302020, Arse 2040 be Cit Cesta pa ‘At as nth sens of spelt tay’ sand expenses of gation, te ane ‘Sto croc be eevee, xe “Gh When very damage esd Desision 2 GR No. 221845 SO ORDERED. nL Gociate Justice WE CONCUR: (On offical leave ESTELA M, PERLAS-BERNABE Senor Associate Justice Ropu MEDA ricardGz Rosario Assfiidte Justice

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