Jetri Construction Corporation/ Anastacia Corpuz Rigor vs. Bank of the Philippine Islands

The dismissal of an appeal for failure to file the appellant's brief within the reglementary period is proper where counsel's negligence, not excusable mistake, caused the non-compliance; and the issuance of a writ of possession to the purchaser in an extrajudicial foreclosure sale is a ministerial act that cannot be refused on grounds of alleged invalidity of the foreclosure sale, which must be resolved in a separate proceeding.

Petitioner Jetri Construction Corporation obtained a ₱20,000,000.00 Omnibus Line Credit Facility from Far East Bank and Trust Company, the predecessor-in-interest of respondent Bank of the Philippine Islands (BPI). The loans were secured by a real estate mortgage over petitioner's land covered by TCT No. 213950 and the 4-storey building erected thereon, with Anastacia Corpuz Rigor, petitioner's president, executing a Comprehensive Surety Agreement binding herself jointly and severally with the corporation. The dispute arises from the extrajudicial foreclosure of the mortgage under Act No. 3135, as amended, and the subsequent issuance of a writ of possession in favor of the purchaser-bank.

Sometime in 1994, petitioner Jetri Construction Corporation applied for a ₱20,000,000.00 Omnibus Line Credit Facility with Far East Bank and Trust Company, predecessor-in-interest of respondent Bank of the Philippine Islands (BPI). Upon approval, petitioner borrowed a total of ₱20,000,000.00 from the bank. As security, petitioner mortgaged its land covered by Transfer Certificate of Title (TCT) No. 213950 of the Registry of Deeds of Manila, as well as the 4-storey building erected thereon located at No. 177 M. dela Fuente St., Sampaloc, Manila. Anastacia Corpuz Rigor, president of Jetri Construction Corporation, also executed a Comprehensive Surety Agreement, binding herself to pay jointly and severally with the corporation all obligations it may incur.

When petitioner defaulted in paying the loan, it entered into a Loan Restructuring Agreement with the bank, acknowledging that its obligation under the Discounting Line was for the total amount of ₱22,621,876.37. For petitioner's failure to pay the loan under the Loan Restructuring Agreement upon maturity, the bank foreclosed the real estate mortgage. On 22 November 1999, an auction sale was held wherein the mortgaged property was sold to the bank, it being the lone and highest bidder. The Certificate of Sale was registered and annotated at the back of TCT No. 213950 on 3 December 1999. Upon expiration of the redemption period, with petitioner failing to redeem the property, ownership was consolidated in favor of the bank and a new certificate of title was issued in its name, TCT No. 250654.

On 28 August 2001, BPI filed before the Regional Trial Court (RTC) of Makati, Branch 62, Civil Case No. 01-1336 against petitioner for alleged foreclosure deficiency in the amount of ₱33,270,131.25. Petitioner, on the other hand, simultaneously filed two complaints against respondent BPI and its managing officers: first, a complaint for (a) annulment of mortgage foreclosure; (b) cancellation of respondent's derivative TCT No. 250654; (c) quieting of petitioner's ownership and restoration of title; and (d) indemnity for damages before the RTC of Manila, Branch 50, docketed as Civil Case No. 04-111298; and second, a complaint for Estafa before the City Prosecutor's Office of Manila against the managing officers of BPI for the alleged misappropriation of the Three Million Pesos paid by petitioner as amortization for its loan.

Despite demands, petitioner refused to vacate the premises of the foreclosed property. On 15 August 2003, respondent filed a Petition for the Issuance of Writ of Possession of Real Property before the RTC of Manila. On 28 February 2005, the RTC of Manila, Branch IV, issued the assailed Order granting the writ of possession, citing jurisprudence that the order for a writ of possession issues as a matter of course with no discretion left to the court, and that any question regarding the validity of the sale should be determined in a subsequent proceeding. The RTC noted that the redemption period had expired without redemption, and a new title had been issued in the name of the bank.

Aggrieved, petitioner appealed to the Court of Appeals, which dismissed the appeal in a Resolution dated 17 November 2005 for failure to file the appellant's brief within the reglementary period despite notice. Petitioner filed a Motion for Reconsideration, averring that counsel did not receive any notice to file its brief from the Court of Appeals, nor a copy of the letter of transmittal of the record from the clerk of the lower court, arguing that non-compliance by the clerk of the lower court in violation of Section 10 of Rule 41 of the Rules of Court caused unwarranted confusion. The Court of Appeals denied the motion, noting that the Registry Return Receipt showed the Notice to File Brief was received by petitioner's counsel on 1 August 2005.

• Denial of Due Process: Petitioner contended that the dismissal of its appeal by the Court of Appeals amounts to a denial of due process, as counsel failed to receive the Notice to File Appellant's Brief by "honest mistake" or "unforeseen accident," the same having been received and allegedly misplaced by one Angeline Diguinat, a visiting relative of petitioner's counsel seeking financial assistance for victims of calamities in Aurora.
• Proportionality of Sanction: Petitioner contended that the Court of Appeals, in the interest of justice, equity and fair play, could have simply directed petitioner's counsel to show cause why he should not be cited for contempt for failure to comply with the order to file the appellant's brief, rather than dismissing the appeal.
• Validity of Foreclosure Sale: Petitioner raised the validity of the foreclosure sale as a ground to attack the propriety of the issuance of the Writ of Possession.

• Compliance with Rules: Respondent argued that the Notice to File Brief, dated 21 July 2005, was sent to and received by petitioner through counsel on 1 August 2005, as shown by the attached Registry Return Receipt, and no appellant's brief was filed within the 45-day reglementary period.
• Writ of Possession as Ministerial: Respondent maintained that after the consolidation of title in the buyer's name for failure of the mortgagor to redeem the property, the writ of possession becomes a matter of right, and its issuance to a purchaser in an extrajudicial foreclosure sale is merely a ministerial function.

• Dismissal of Appeal: Whether the Court of Appeals erred in dismissing petitioner's appeal for failure to file its appellant's brief within the reglementary period despite notice.
• Issuance of Writ of Possession: Whether the trial court properly issued the writ of possession in favor of respondent notwithstanding petitioner's attack on the validity of the foreclosure sale.

• Dismissal of Appeal: No. The dismissal of the appeal was proper, as petitioner's counsel was negligent in failing to file the required appellant's brief within 45 days from receipt of the notice, and the excuse of a visiting relative misplacing the notice was unacceptable. The Court of Appeals acted in faithful compliance with Rule 50, Section 1(e) of the Rules of Civil Procedure.
• Issuance of Writ of Possession: Yes. The issuance of a writ of possession to a purchaser in a public auction is a ministerial act, and after the consolidation of title in the buyer's name for failure of the mortgagor to redeem the property, the writ of possession becomes a matter of right. Any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of possession.

• Dismissal of Appeal: Rule 44, Section 7 of the Rules of Civil Procedure provides that it is the duty of the appellant to file his brief within 45 days from receipt of notice, and failure to comply is a ground for dismissal of the appeal under Rule 50, Section 1(e). The Registry Return Receipt showed that the Notice to File Brief, dated 21 July 2005, was received by petitioner through counsel on 1 August 2005, yet no appellant's brief was filed until the Resolution dated 17 November 2005 dismissing the appeal. The Court found petitioner's counsel negligent, holding that it is the duty of a practicing lawyer to so arrange matters that official or judicial communications sent by mail reach him promptly, and for failure to do so, he and his clients must suffer the consequences of his negligence. The excuse that a visiting relative misplaced the notice was rejected, as a lawyer can adopt an efficient way of handling court mail matters even if his residence also serves as his office. The Court could not fault the Court of Appeals for dismissing the appeal, which was done in faithful compliance with the rules of procedure.
• Issuance of Writ of Possession: The Court, having carefully perused the records, concluded that the assailed order was in perfect harmony with law and jurisprudence. The Court cited numerous decisions holding that any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of possession, regardless of whether there is a pending suit for annulment of the mortgage or the foreclosure itself. The purchaser is entitled to a writ of possession, without prejudice to the eventual outcome of the case. The issuance of a writ of possession to a purchaser in a public auction is a ministerial act, and after the consolidation of title in the buyer's name for failure of the mortgagor to redeem the property, the writ of possession becomes a matter of right. Since petitioner failed to redeem the property within the redemption period and ownership was consolidated in favor of respondent with a new certificate of title issued, it was purely ministerial for the trial court to issue the writ of possession. The issue of nullity of the extrajudicial foreclosure sale was of no moment and cannot bar the issuance of the writ, especially since petitioner had already commenced Civil Case No. 04-111298 before the RTC of Manila, Branch 50 for annulment of mortgage foreclosure, where the validity of the sale is best left for determination.

• Ministerial issuance of writ of possession in extrajudicial foreclosure — The issuance of a writ of possession to a purchaser in a public auction is a ministerial act. After the consolidation of title in the buyer's name for failure of the mortgagor to redeem the property, the writ of possession becomes a matter of right. Its issuance to a purchaser in an extrajudicial foreclosure sale is merely a ministerial function of the court, and any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing its issuance.
• Duty of counsel to manage court communications — It is the duty of a practicing lawyer to so arrange matters that official or judicial communications sent by mail reach him promptly. For failure to do so, he and his clients must suffer the consequences of his negligence. A lawyer can adopt an efficient way of handling court mail matters even if his residence also serves as his office, and cannot hide behind a relative's negligence to excuse his own failure to adopt an efficient way of managing court notices.

• "It is the duty of a practicing lawyer to so arrange matters that official or judicial communications sent by mail reach him promptly. For failure to do so, he and his clients must suffer the consequences of his negligence." — This passage states the controlling rule on counsel's duty regarding court communications, forming the basis for affirming the dismissal of the appeal for failure to file the appellant's brief.
• "More succinctly, the issuance of a writ of possession to a purchaser in a public auction is a ministerial act. After the consolidation of title in the buyer's name for failure of the mortgagor to redeem the property, the writ of possession becomes a matter of right." — This passage articulates the canonical formulation of the doctrine on the ministerial nature of the writ of possession in extrajudicial foreclosure sales.
• "Any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of possession. Regardless of whether or not there is a pending suit for annulment of the mortgage or the foreclosure itself, the purchaser is entitled to a writ of possession, without prejudice of course to the eventual outcome of the said case." — This passage states the rule that attacks on the validity of the foreclosure cannot bar the issuance of the writ of possession, which must be resolved in a separate proceeding.

• Sps. Ong vs. Court of Appeals, 388 Phil. 857 (2000) — Cited as controlling authority for the rule that any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of possession, and that the purchaser is entitled to a writ of possession regardless of a pending suit for annulment.
• Espiridion vs. Court of Appeals, G.R. No. 146933, 8 June 2006, 490 SCRA 273 — Cited for the proposition that the issuance of a writ of possession to a purchaser in a public auction is a ministerial act.
• De Vera vs. Agloro, G.R. No. 155673, 14 January 2005, 448 SCRA 203 — Cited for the rule that after consolidation of title in the buyer's name for failure of the mortgagor to redeem, the writ of possession becomes a matter of right, and its issuance is merely a ministerial function.
• Javier vs. Madamba, Jr., G.R. No. 81157, 29 June 1989, 174 SCRA 495 — Cited for the duty of a practicing lawyer to arrange matters so that official or judicial communications sent by mail reach him promptly.
• Gonzales vs. Court of Appeals, 450 Phil. 296 (2003) — Cited for the proposition that a lawyer can adopt an efficient way of handling court mail matters even if his residence also serves as his office.
• Samson vs. Rivera, G.R. No. 154355, 20 May 2004, 428 SCRA 759 — Cited for the rule that any question regarding the regularity and validity of the sale, as well as the consequent cancellation of the writ, is to be determined in a subsequent proceeding.
• Mamerto Maniquiz Foundation, Inc. vs. Pizarro, A.M. RTJ No. 03-1750, 14 January 2005, 448 SCRA 140 — Cited in support of the rule that questions on the validity of the mortgage or foreclosure cannot bar the issuance of a writ of possession.

• Section 7, Rule 44, Rules of Civil Procedure — Provides that it is the duty of the appellant to file his brief within 45 days from receipt of the notice of the clerk that all the evidence are attached to the record. The Court applied this provision in determining that petitioner failed to file its appellant's brief within the reglementary period.
• Section 1(e), Rule 50, Rules of Civil Procedure — Provides that an appeal may be dismissed by the Court of Appeals for failure of the appellant to serve and file the required number of copies of his brief or memorandum within the time provided by the Rules. This was the ground for the Court of Appeals' dismissal of petitioner's appeal.
• Section 10, Rule 41, Rules of Civil Procedure — Cited by petitioner in arguing that the clerk of the lower court's alleged non-compliance caused confusion as to when the reglementary period to file the brief commenced, though the Court did not find this argument meritorious.
• Act No. 3135, as amended by Act No. 4118 — The statute governing extrajudicial foreclosure of mortgages, cited by the trial court in issuing the writ of possession, particularly regarding the purchaser's right to possession after the redemption period has expired.

Consuelo Ynares-Santiago (Chairperson), Ma. Alicia Austria-Martinez, Antonio Eduardo B. Nachura