Tambunting v. Court of Appeals
REITERATIONFacts
The Antecedents: Private respondents, spouses Damaso R. Cruz and Monica Andres, obtained a loan of P3,600.00 from petitioners, spouses Antonio and Aurora Tambunting, secured by a Deed of Real Estate Mortgage over a parcel of land. Due to failure to pay, the Tambuntings initiated extrajudicial foreclosure proceedings. Procedural History: The Cruzes filed an action for annulment of mortgage and damages, obtaining temporary restraining orders that repeatedly postponed the scheduled auction sale. Despite these, the property was sold at public auction on January 26, 1968, to Aurora Tambunting. Subsequently, Aurora Tambunting consolidated title and transferred the property to Tambunting Realty Corporation. The Court of First Instance declared the mortgage and promissory note valid but voided the foreclosure sale, deeds of sale, and transfer certificates of title, ordering the reinstatement of the Cruzes' title. The Court of Appeals affirmed this decision, finding that the Tambuntings deviated from the posting and publication requirements of law, rendering the notice of sale ineffective and voiding the auction sale. The Court of Appeals also granted the Cruzes' petition for an accounting of rentals collected by the Tambuntings. The Petition: The Tambuntings filed a petition for review on certiorari, assailing the Court of Appeals' rulings that nullified the auction sale due to lack of compliance with legal formalities and granted the Cruzes' petition for accounting.
Issue(s)
Whether the Court of Appeals erred in nullifying the auction sale for alleged lack of compliance with posting and publication requirements. Whether the Court of Appeals erred in granting the Cruzes' petition for accounting of fruits after judgment had been rendered.
Ruling
The petition is DENIED. The decision and resolution of the Court of Appeals dated December 13, 1977, and May 2, 1978, in CA-G.R. No. 57714-R are AFFIRMED.
Ratio Decidendi
On the nullity of the auction sale: The Court affirmed the ruling of the Court of Appeals, holding that strict compliance with statutory provisions governing publication of notice of mortgage foreclosure sales is mandatory. Even slight deviations from these requirements, such as insufficient publication or posting, will invalidate the notice and render the sale voidable. The Court emphasized that one issue of a newspaper of general circulation is not substantial compliance with the required publication of once a week for at least three consecutive weeks. Furthermore, the failure to present proof of posting and publication of the notice of sale for the January 26, 1968 sale rebutted the presumption of compliance with official duty. The sale could not be considered a mere adjournment of an earlier sale under Section 24 of Rule 39 of the Rules of Court, as there was no written consent of the debtor and creditor for such adjournment. Therefore, the foreclosure sale of January 26, 1968, was null and void for lack of compliance with mandatory requirements. On the petition for accounting of fruits: The Court held that the Court of Appeals did not err in granting the Cruzes' petition for accounting of fruits. The petition for accounting and offsetting of accounts was a direct consequence of the decision which held that the Cruzes were never divested of their ownership over the property. This accounting was merely an incident of the respondents' right of ownership under the Civil Code. The Court also noted that if the respondents had been precluded from filing this petition in the Court of Appeals, they would have had to file a separate action, leading to a multiplicity of suits. The principle underlying Section 34, Rule 39 of the Rules of Court, which allows the debtor to demand an accounting of rents and profits received by a creditor during the period of redemption, was deemed applicable. Thus, the petition for accounting was a proper remedy and was in accordance with law.
Main Doctrine
Strict compliance with statutory provisions governing publication of notice of mortgage foreclosure sales is mandatory; even slight deviations invalidate the notice and render the sale voidable. Failure to present proof of posting and publication of the notice of sale rebuts the presumption of compliance with official duty.