Development Bank of the Philippines vs. Spouses Gatal

A petition for the issuance of a writ of possession by a mortgagee-purchaser after consolidation of title is a matter of right and a ministerial duty of the trial court, which cannot be barred by the pendency of a separate civil suit questioning the validity of the sale, mortgage, or foreclosure.

In 1993, Spouses Wilfredo and Azucena Gatal obtained a ₱1,500,000.00 loan from the Development Bank of the Philippines (DBP), secured by a real estate mortgage over a commercial lot in Tagbilaran City. Upon default, DBP foreclosed the mortgage in December 1994, and the title was consolidated in DBP's name in January 1996. After a failed public auction in October 1996, DBP offered the property for negotiated sale in November 1996. The Gatals submitted a bid of ₱2,160,000.00, but Jimmy Torrefranca offered ₱2,300,000.00 and was declared the preferred bidder. The Gatals' request to match Torrefranca's bid was rejected by DBP.

• The Loan and Foreclosure: Spouses Wilfredo and Azucena Gatal obtained a ₱1,500,000.00 loan from DBP in 1993, secured by a real estate mortgage over a commercial lot in Tagbilaran City. Upon default, DBP foreclosed the mortgage in December 1994. In January 1996, after the redemption period lapsed, the title was consolidated in DBP's name.
• The Negotiated Sale: The property was offered at a public auction in October 1996, but no bidders met the ceiling price. In November 1996, DBP offered the property for negotiated sale. The Gatals bid ₱2,160,000.00 and deposited 10% of the bid price. Jimmy Torrefranca subsequently offered ₱2,300,000.00 and was declared the preferred bidder. The Gatals requested to match Torrefranca's bid, but DBP rejected the request.
• The Injunction Suit: Aggrieved by the rejection, the Gatals filed Civil Case No. 5996 for injunction before RTC Branch 4, seeking to declare the sale to Torrefranca void, uphold their right of pre-emption, and maintain the status quo. Branch 4 granted a preliminary injunction on February 22, 1997.
• The Writ of Possession Petition: On August 27, 1997, DBP filed Civil Case No. 6097 before RTC Branch 47, petitioning for the issuance of a writ of possession as the purchaser of the foreclosed property. Branch 47 issued the writ on October 31, 1997.
• Dismissal Based on Litis Pendentia: The Gatals moved to dismiss Civil Case No. 6097 and to quash the writ, arguing that the injunction case pending in Branch 47 involved the same parties, subject matter, and legal issues. Branch 47 dismissed the case and recalled the writ on December 18, 1997, a decision affirmed by the Court of Appeals.

• Absence of Litis Pendentia: DBP argued that litis pendentia did not exist because the rights asserted and the reliefs sought in the two cases were not identical. Civil Case No. 5996 sought to enjoin the sale and assert pre-emption, whereas Civil Case No. 6097 sought possession of the property based on the consolidated title.
• Ministerial Duty to Issue Writ: DBP maintained that after the consolidation of title in the mortgagee's name, the issuance of a writ of possession becomes a matter of right and a ministerial duty of the trial court. The pendency of a separate suit questioning the sale cannot bar this duty.
• No Forum Shopping: DBP contended that forum shopping did not exist because the elements of litis pendentia or res judicata were absent between the two filings.

• Litis Pendentia: The Gatals countered that Civil Case No. 5996 (injunction) and Civil Case No. 6097 (writ of possession) involved the same parties, the same subject matter, and the same legal issues, warranting the dismissal of the latter case on the ground of litis pendentia.
• Forum Shopping: The Gatals argued that DBP committed forum shopping by filing the petition for a writ of possession while the injunction case was still pending.

• Litis Pendentia: Whether the Court of Appeals erred in upholding the dismissal of the petition for a writ of possession on the ground of litis pendentia.
• Writ of Possession: Whether the pendency of a separate civil suit questioning the validity of the sale bars the issuance of a writ of possession to the mortgagee-purchaser after consolidation of title.

• Litis Pendentia: Litis pendentia was not established because the rights asserted and the reliefs sought in the two cases were not identical. The injunction suit sought to nullify the sale to a third party and enforce a right of pre-emption, while the writ of possession suit sought to enforce the purchaser's right to possess the property after consolidation of title. Because the second requisite of litis pendentia—substantial identity in the causes of action and reliefs sought—was absent, the dismissal was erroneous.
• Writ of Possession: The issuance of a writ of possession after consolidation of title is a matter of right for the mortgagee-purchaser and a ministerial duty of the trial court. Pursuant to Section 33, Rule 39 of the Rules of Court and Section 7 of Act 3135, no separate and independent action is necessary to obtain possession once the redemption period expires. The pendency of a separate civil suit questioning the validity of the sale, the mortgage, or the foreclosure cannot bar the issuance of the writ. Branch 47 did not interfere with Branch 4's jurisdiction; it merely performed its ministerial function.
• Forum Shopping: Forum shopping was not committed because the existence of forum shopping presupposes the presence of litis pendentia or res judicata, neither of which subsisted between the two cases.

• Litis pendentia — A ground for the dismissal of an action requiring the concurrence of three requisites: (1) identity of parties, or at least such as representing the same interests in both actions; (2) substantial identity in the causes of action and reliefs sought; and (3) the result of the first action is determinative of the second in any event, regardless of which party is successful. Applied: The second requisite was absent because an action for injunction asserting a right of pre-emption differs from a petition for a writ of possession asserting the right of a purchaser to enter the property.
• Ministerial Duty to Issue Writ of Possession — Once the title to a foreclosed property is consolidated in the name of the mortgagee-purchaser, the issuance of a writ of possession becomes a matter of right for the purchaser and a ministerial duty for the trial court. The pendency of a separate civil suit questioning the validity of the sale, the mortgage, or the foreclosure cannot enjoin or bar the performance of this ministerial duty.

• "Where, as here, the title is consolidated in the name of the mortgagee, the writ of possession becomes a matter of right on the part of the mortgagee, and it is a ministerial duty on the part of the trial court to issue the same. The pendency of a separate civil suit questioning the validity of the sale of the mortgaged property cannot bar the issuance of the writ of possession."

• Tan Soo Huat vs. Ongwico, 63 Phil. 746 (1936) — Followed. Established that once a mortgaged estate is extrajudicially sold and not redeemed, no separate and independent action is necessary to obtain possession; the purchaser need only file a petition for a writ of possession under Section 33, Rule 39.
• Vaca vs. Court of Appeals, G.R. No. 109672, July 14, 1994 — Followed. Held that the pendency of a separate civil suit questioning the validity of the sale, mortgage, or foreclosure cannot bar the issuance of a writ of possession.
• Cooperative Development Authority vs. Dolefil Agrarian Reform Beneficiaries Cooperative, Inc., G.R. No. 137489, May 29, 2002 — Followed. Cited for the requisites of litis pendentia and the principle that forum shopping exists only where the elements of litis pendentia or res judicata are present.

• Section 1(e), Rule 16, 1997 Rules of Civil Procedure — Allows a motion to dismiss on the ground that there is another action pending between the same parties for the same cause. Applied: The provision was not satisfied because the causes of action in the injunction suit and the writ of possession suit were not identical.
• Section 33, Rule 39, Rules of Court — Entitles the purchaser to a conveyance and possession of the property if no redemption is made within one year from the registration of the certificate of sale. Applied: Served as the procedural basis for DBP's right to possess the property and the trial court's duty to issue the writ.
• Section 7, Act 3135, as amended by Act 4118 — Allows a purchaser at an extrajudicial foreclosure sale to petition the court for possession of the property during the redemption period upon furnishing an indemnity bond. Applied: Recognized as the statutory foundation for the summary remedy of obtaining a writ of possession without a separate independent suit.

Panganiban (Chairman), Corona, and Garcia, JJ., concurred.