08 - Kho v. CA, 203 SCRA 160 (1991)

SECOND DIVISION
[G.R. No. 83498. October 22, 1991.]
SPS. MIGUEL S. KHO and JUANITA KHO , petitioners, vs. COURT OF

APPEALS and BANCO FILIPINO , respondents.
Florido & Associates for petitioners.

Angara, Abello, Concepcion, Regala & Cruz for private respondent.
SYLLABUS
REMEDIAL LAW; SPECIAL CIVIL ACTIONS; FORECLOSURE OF MORTGAGE; RIGHT OF

PURCHASER DURING AND AFTER THE PERIOD OF REDEMPTION. The law and
jurisprudence are clear that both during and after the period of redemption, the purchaser
at the foreclosure sale is entitled as of right to a writ of possession, regardless of whether
or not there is a pending suit for annulment of the mortgage or the foreclosure itself
(without prejudice of course to the eventual outcome of said case).
DECISION
PARAS , J : p
Petitioners are assailing the propriety of the lifting of the writ of preliminary injunction by
respondent Court of Appeals 1 which writ was issued by Branches IX and XIV of the
Regional Trial Court of Cebu City, alleging that in doing so, respondent Court acted with
grave abuse of discretion amounting to lack of jurisdiction 2 and virtually preempted the
lower court from determining the merits of the issues raised by the petitioners in Civil
Case No. CEB-759 now pending before Branch XIV of the Regional Trial Court of Cebu City.
3
The facts of the case are as follows:

"On January 31, 1978, the spouses Kho (private respondents herein) constituted
in favor of herein petitioner Banco Filipino a real estate mortgage over a parcel of
land registered in the name of plaintiff Miguel Kho and covered by Transfer
Certificate of Title No. 63021 of the Register of Deeds of Cebu City, located at
Juan Luna St., Cebu City, with an area of 750.72 sq. meters, more or less, to
guarantee a loan granted them by petitioner bank. The real estate mortgage
underwent amendments on June 7, 1978, March 5, 1979 and finally, on
September 24, 1980, when it was made to secure private respondents' obligation
with the bank in the total amount of TWO MILLION EIGHT HUNDRED SIXTY NINE
THOUSAND PESOS (P2,869,000.00) Philippine Currency, payable on or before
September 29, 1995. Cdpr
"After managing to pay the sum of P688,060.00, the Kho spouses defaulted in the
payment of some amortizations. Hence, on May 13, 1982, Banco Filipino
extrajudicially foreclosed the mortgage. As the sole and highest bidder in the
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auction sale, the petitioner bank purchased the mortgaged property for the sum of
P4,153,865.47 covering the plaintiff's obligations, interests, penalties and
attorney's fees as agreed in the mortgage contract. The certificate of sale was
then duly registered on June 17, 1982." 4
Counting one year from June 17, 1982, the petitioners had until June 17, 1983, within which
to redeem the property. In the meantime, the foreclosed property was leased out to third
parties and the rentals (fruits thereof) were remitted monthly by petitioners to respondent
bank, being the purchaser in the extrajudicial foreclosure. The end of the redemption
period was then fast approaching but still petitioners had not made any move to redeem
the foreclosed property. Then just about ten (10) days before the end of the redemption
period, on June 7, 1983 to be exact, petitioners filed with the Regional Trial Court of Cebu
(raffled off to Branch IX) a complaint for: "Annulment of Specific Performance with
Preliminary Injunction, etc." against Banco Filipino, The Provincial Sheriff of Cebu and the
Register of Deeds of Cebu Province later docketed as Civil Case No. CEB-759 which action
was actually for the annulment of the extrajudicial foreclosure of mortgage. The verified
complaint of petitioners specifically prayed for:
" . . . the Honorable Court before judgment and after hearing to issue a writ of
preliminary injunction restraining and enjoining the defendants jointly and
severally from obtaining a writ of possession or a final deed of conveyance over
plaintiffs' land and restrain the defendants from registering the same; as well as
restraining and enjoining the defendants from collecting any rentals of the
properties of the plaintiffs." (p. 129, Rollo).
On November 4, 1983, Judge Candido C. Aguinaldo of Branch IX, Regional Trial Court,
Cebu, granted the prayer of petitioners to which respondent bank strongly objected and in
its Urgent Motion to Lift Injunction prayed, to wit:
" . . . to forthwith lift the order of injunction dated 4 November 1983, and require
plaintiffs to turn over to defendant bank all the income and rents they have
received on the subject property during the redemption period up to and including
the date of their actual remittance of the same.
'It is likewise prayed that the scheduled pre-trial conference on 17

May 1983 at 8:30 a.m. be cancelled and held in abeyance pending final
determination of defendant bank's motion to lift injunction." (pp. 144-145,
Rollo). LexLib
In the meantime, present counsel of record for respondent bank entered his appearance.
Judge Aguinaldo claimed some relationship with him. Hence, the reraffle of the case to
another sala, Branch XIV presided over by Judge Juan Y. Reyes. After more than 5
months' series of extensions, particularly on October 26, 1984, the petitioners finally
submitted their Memorandum in support of their opposition to the respondent bank's
aforestated Motion to Lift Injunction. On April 30, 1985, respondent bank's motion was
denied and a motion for reconsideration was thereafter immediately filed. While the
motion for reconsideration was pending, Judge Reyes retired and again there was a
reraffle of the case which resulted in its being assigned to Judge Meinrado P. Paredes, of
RTC XIII who denied on April 29, 1987, respondent bank's aforestated motion for
reconsideration.
Finally the three (3) above mentioned orders of November 4, 1983 (granting writ of
injunction); April 30, 1985 (denying respondent bank's motion to lift injunction), and April
29, 1987 (denying respondent bank's motion for reconsideration) were all reversed by
respondent Court in its decision dated February 17, 1988.
Petitioners then filed a motion for reconsideration on February 29, 1988 which was denied
thru a Court of Appeals resolution dated March 17, 1988, hence, this petition dated March
25, 1988 with the following prayer
"WHEREFORE, petitioners most respectfully pray that the decision of respondent
Court of Appeals dated February 17, 1988 be reversed and the Orders of the lower
court dated November 4, 1983 and April 30, 1985 be restored and further, that
preliminary restraining order and preliminary injunction be issued restraining and
enjoining the defendants jointly and severally from obtaining a writ of possession
or a final deed of conveyance over petitioners' land and to restrain the defendants
from registering the same as well as restraining and enjoining the defendants
from collecting any rentals of the properties of petitioners." (pp. 21-22, Rollo)
This petition is completely without merit.

The law and jurisprudence are clear that both during and after the period of redemption,
the purchaser at the foreclosure sale is entitled as of right to a writ of possession,
regardless of whether or not there is a pending suit for annulment of the mortgage or the
foreclosure itself (without prejudice of course to the eventual outcome of said case).
Hence, an injunction to prohibit the issuance of the writ of possession is entirely out of
place (See Act 3135). prcd
WHEREFORE, the instant petition is DENIED for lack of merit. The assailed decision of
respondent Court of Appeals lifting the writ of preliminary injunction is hereby AFFIRMED.
Let this case be REMANDED to the Regional Trial Court of Cebu City, Branch XIV for further
proceedings on Civil Case CEB-759.
SO ORDERED
Padilla and Regalado, JJ., concur.
Melencio-Herrera, J., is on leave.
Footnotes
1. Decision promulgated on February 17, 1988, penned by Associate Justice Alfredo L.

Benipayo and concurred in by Associate Justices Jose C. Campos, Jr. and Ricardo J.
Francisco.
2. p. 9, Rollo.
3. p. 11, Rollo.
4. Decision of Court of Appeals dated February 17, 1988.

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SECOND DIVISION

[G.R. No. 83498. October 22, 1991.]

SPS. MIGUEL S. KHO and JUANITA KHO , petitioners, vs. COURT OF

Florido & Associates for petitioners.

REMEDIAL LAW; SPECIAL CIVIL ACTIONS; FORECLOSURE OF MORTGAGE; RIGHT OF

The facts of the case are as follows:

'It is likewise prayed that the scheduled pre-trial conference on 17

This petition is completely without merit.

1. Decision promulgated on February 17, 1988, penned by Associate Justice Alfredo L.

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