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LZK HOLDINGS v. PLANTERS DEVELOPMENT BANK

FACTS:

LZK Holdings obtained a loan from Planters Bank and secured it with a real estate mortgage. Due to LZK Holdings' failure to pay the loan, Planters Bank extrajudicially foreclosed the mortgage and became the highest bidder in the auction sale of the lot. LZK Holdings filed a complaint to annul the foreclosure and sought a TRO or preliminary injunction. While the TRO and preliminary injunction were issued, Planters Bank consolidated its ownership over the lot. The Court of Appeals granted Planters Bank's appeal, annulling the order that held the issuance of the writ of possession in abeyance. The Supreme Court affirmed this decision, stating that Planters Bank was entitled to a writ of possession. Planters Bank filed a motion for the issuance of the writ of possession, opposed by LZK Holdings. The RTC-San Fernando denied LZK Holdings' opposition and granted Planters Bank's motion for the issuance of the writ of possession.

ISSUES:

  1. Whether or not Planters Bank is entitled to a writ of possession as the purchaser of the property in the foreclosure sale.

  2. Whether or not the pending case for annulment of the foreclosure sale, mortgage contract, promissory notes, and damages stays the issuance of the writ of possession.

RULING:

  1. Yes, Planters Bank is entitled to a writ of possession as the purchaser of the property in the foreclosure sale. The duty of the trial court to grant a writ of possession is ministerial. The issuance of the writ of possession is a matter of course upon the filing of the proper motion and approval of the corresponding bond. The question regarding the regularity and validity of the sale, as well as the cancellation of the writ, can be determined in a subsequent proceeding. The trial court has no discretion to deny the issuance of the writ.

  2. No, the pending case for annulment of the foreclosure sale, mortgage contract, promissory notes, and damages does not stay the issuance of the writ of possession. An injunction is not allowed to prohibit the issuance of a writ of possession. The trial on the merits has not even started, and until the foreclosure sale is annulled by a court of competent jurisdiction, the petitioner is bereft of valid title and the right to prevent the issuance of the writ of possession.

PRINCIPLES:

  • The duty of the trial court to grant a writ of possession is ministerial.

  • The issuance of a writ of possession is a matter of course upon the filing of the proper motion and approval of the corresponding bond.

  • Any question regarding the regularity and validity of the sale, as well as the cancellation of the writ of possession, can be determined in a subsequent proceeding.

  • An injunction is not allowed to prohibit the issuance of a writ of possession.

  • The pending case for annulment of the foreclosure sale, mortgage contract, promissory notes, and damages does not stay the issuance of the writ of possession.