SC: Appeals cannot block foreclosure

The Supreme Court (SC) has ruled that borrowers may challenge an extrajudicial foreclosure or the issuance of a writ of possession, but filing an appeal does not stop the buyer of the foreclosed property from taking possession.

In a decision written by Associate Justice Maria Filomena D. Singh dated 7 April 2026 but released only recently, the SC Third Division denied the petition of spouses Anthony and Ma. Fatima An and upheld the issuance of a writ of possession in favor of the Philippine National Bank (PNB).

The case stemmed from the foreclosure of the spouses’ property after they failed to repay a P2-million loan from PNB.

Although the spouses challenged the foreclosure and appealed the initial court order, the Court of Appeals upheld the issuance of the writ of possession and ruled that the Regional Trial Court (RTC) erred in suspending its implementation.

The Supreme Court affirmed the appellate court’s ruling, explaining that challenges to the validity of a mortgage or foreclosure do not prevent the buyer from obtaining possession of the property.

The Court said a buyer becomes the absolute owner of foreclosed property if the borrower fails to redeem it within one year from the registration of the certificate of sale.

Once ownership is transferred to the buyer, the RTC has a ministerial duty to issue the writ of possession. This means the court is legally required to grant the buyer possession of the property.

The Court clarified that the general rule suspending execution of a judgment while an appeal is pending does not apply to writs of possession issued under Section 7 of Act 3135, as amended.

It outlined the remedies available to borrowers challenging an extrajudicial foreclosure:

During the redemption period, a borrower may petition the RTC that issued the writ to challenge it on the grounds that the mortgage was not violated or that the foreclosure sale failed to comply with the procedural requirements of Act 3135.

However, filing the petition or appealing a judgment upholding the writ does not suspend its implementation.

After the redemption period has expired and ownership has been consolidated in the buyer’s name, the borrower may appeal the order granting the writ if the buyer has not yet taken possession. The appeal, however, will not stay execution of the writ.

The borrower may also file a separate action to annul the mortgage and foreclosure sale. Such a case does not suspend the issuance of the writ, without prejudice to its eventual outcome.

Applying these rules, the Supreme Court held that the RTC had no legal basis to suspend implementation of the writ while the spouses’ appeal was pending.