Rayo v. Metrobank

Facts:

Midas, thru its president, Mr. Samuel U. Lee, obtained six (6) loans from private respondent Metrobank as evidenced by promissory notes. To secure the payment of a loan, Louisville, thru its president, Mr. Samuel U. Lee, executed in favor of Metrobank, a real estate mortgage over three parcels of land in Quezon City with all the buildings and improvements thereon.

When the debtor-mortgagor failed to pay, Metrobank extra-judicially foreclosed the real estate mortgage. Thereafter, in a public auction, Metrobank was the highest bidder. When Louisville refused to turn over the real properties, Metrobank filed before the RTC an ex parte petition for the issuance of a writ of possession. RTC granted the petition.

Metrobank posted the required bond. Consequently, a writ of possession was issued. 

Petitioner Eduardo L. Rayo filed a complaint against Metrobank for Nullification of Real Estate Mortgage Contract(s) and Extrajudicial Foreclosure Sale. in the RTC.

Rayo filed with the CA a Petition for Annulment of Judgment. CA denied the petition for lack of merit. The CA ruled that petitioner is neither the registered owner nor the successor-in-interest of the registered owner; hence, not a real party-in-interest. Petitioner sought reconsideration, but was likewise denied.

Issue:

Does petitioner have the legal personality in the annulment of judgment proceedings?

Held:

Petitioner has no present substantial interest to institute the annulment of judgment proceedings and nullify the order granting the writ of possession.

An ex parte petition for the issuance of a writ of possession under Section 7 of Act No. 3135 is not, strictly speaking, a "judicial process" as contemplated in Article 433 of the Civil Code. It is a judicial proceeding for the enforcement of one’s right of possession as purchaser in a foreclosure sale. It is not an ordinary suit filed in court, by which one party "sues another for the enforcement of a wrong or protection of a right, or the prevention or redress of a wrong." It is a non-litigious proceeding authorized in an extrajudicial foreclosure of mortgage pursuant to Act No. 3135, as amended, and is brought for the benefit of one party only, and without notice to, or consent by any person adversely interested. It is a proceeding where the relief is granted without requiring an opportunity for the person against whom the relief is sought to be heard. No notice is needed to be served upon persons interested in the subject property.