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Sulit vs. CA
Uploaded by Mitzi on Aug 15, 2017
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I. Title: Sulit vs. Court of Appeals possession becomes ministerial duty of the court. RTC denied the motion
and ordered the issuance of the writ.
G.R. No. 119247, February 17, 1997, Regalado, J.
Sheet Music
∙ CA set aside the decision of the court a quo. Sulit is ordered to pay the
II. Doctrines:
excess of his bid of P7M after deducting the mortgage debt and interest up
As a general rule, after the filing of a petition for the issuance of the writ of to the date of the auction sale, as well as expenses of foreclosure. It further
possession and the posting of the required bond, the court has no discretion but ruled that in the event that Sulit fails or refuses to pay such excess or
to issue the writ. The proceeding for this is ex parte. However, it is subject to balance, then the auction sale is deemed canceled.
certain exceptions. In this case, the court disallowed the issuance of the writ on
equitable considerations because the mortgagee has not yet returned the
surplus money. IV. Issue: Whether or not the writ of possession should be issued.

III. Facts: V. Held: No, the petition for the issuance of the writ of possession must be
denied considering that Sulit has not yet returned the surplus from the
proceeds of the foreclosure sale.
∙ Iluminada Cayco executed a real estate mortgage in favor of Cesar Sulit to
secure a loan of P4M. She failed to pay her loan and thus the property was
extrajudicially foreclosed. ∙ Section 7 and 8 of Act 3135 explicitly provides that upon the filing of a
petition for writ of possession and the approval of the corresponding bond,
the court is mandated to issue the order for a writ. It is an ex parte
∙ In a public auction, the lot was sold to Sulit for P7M. However, he did not proceeding and any question regarding the regularity and validity of the
pay the same to the notary public. He credited it to the partial satisfaction sale, as well as the consequent cancellation of the writ, is to be determined
of the debt plus interests, attorney’s fees and all o ther incidental expenses in a subsequent proceeding and cannot be raised as a justification for
of foreclosure and sale. opposing the issuance of the writ of possessions

∙ Thereafter, Sulit filed a petition for the issuance of a writ of possession. ∙ This is however subject to exceptions. Section 35, Rule 39 of the Rules of
The RTC issued the writ. Court provides that the writ may not be issued when a third party is
actually holding the property adversely to the judgment debtor.

∙ Cayco filed a Motion to have the auction sale of the mortgaged property set
aside and to defer the issuance of the writ of possession. Sulit opposed the ∙ In the case at bar, the court held that equitable considerations demand
motion on the ground that upon filing of a bond, the issuance of a writ of that a writ of possession should also not be issued because Sulit has not

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Traders Royal 1 DBP vs Zaragoza 11 Foreclosure Godfrey Boh


Bank Digest
yet paid the surplus profits. The court explained that it is the duty of the
Amended…
mortgagee to return any surplus in the selling price to the mortgagor.
Complaint
∙ The general rule that mere inadequacy of price is not sufficient to set aside
a foreclosure sale is not applicable in this case. The general rule is based
on the theory that the lesser the price the easier it will be for the owner to
effect the redemption. However, the same thing cannot be said where the
amount of the bid is in excess of the total mortgage debt. It will be
prejudicial to the substantive rights of the mortgagor and it could even
effectively prevent her from exercising the right of redemption.

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As the order of the court to cancel the sale in the event that Sulit will not
pay the surplus profits, the Supreme Court held that such failure will not
affect the validity of the sale but simply gives the mortgagor a cause of
action to recover such surplus.
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yet paid the surplus profits. The court explained that it is the duty of the
mortgagee to return any surplus in the selling price to the mortgagor.

WHEREFORE the questioned decision of the Court of Appeals is


MODIFIED by deleting the last paragraph of its fallo but its disposition of this
The general rule that mere inadequacy of price is not sufficient to set aside

case ainforeclosure sale is not
all other respects applicable
is hereby Download With Free Trial
in this case. The general rule is based
AFFIRMED.
on the theory that the lesser the price the easier it will be for the owner to
effect the redemption. However, the same thing cannot be said where the
amount of the bid is in excess of the total mortgage debt. It will be
prejudicial to the substantive rights of the mortgagor and it could even
effectively prevent her from exercising the right of redemption.

As the order of the court to cancel the sale in the event that Sulit will not
∙ pay the surplus profits, the Supreme Court held that such failure will not
affect the validity of the sale but simply gives the mortgagor a cause of
action to recover such surplus.

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