Langkaan Realty Development, Inc. v. United Coconut Planters Bank
REITERATIONFacts
The Antecedents: Petitioner Langkaan Realty Development, Inc. (LANGKAAN) executed a Real Estate Mortgage over its property in favor of United Coconut Planters Bank (UCPB) to secure loans obtained by Guimaras Agricultural Development, Inc. (GUIMARAS). GUIMARAS defaulted on its loan obligations totaling P5,000,000.00. UCPB initiated extra-judicial foreclosure proceedings under Act No. 3135. A Notice of Extra-judicial Sale was issued and published, and the property was sold at public auction to UCPB as the highest bidder. LANGKAAN failed to redeem the property, leading to the consolidation of title in UCPB's name. Procedural History: LANGKAAN filed a Complaint for Annulment of Extra-judicial Foreclosure and Sale with Damages. The Regional Trial Court (RTC) dismissed the complaint for lack of merit. The Court of Appeals (CA) affirmed the RTC's decision. The CA denied LANGKAAN's Motion for Reconsideration. The Petition: LANGKAAN filed a Petition for Review on Certiorari, assailing the CA's decision and resolution, primarily questioning the validity and legality of the extra-judicial foreclosure sale due to alleged non-compliance with Act No. 3135 regarding venue, posting, and publication of the Notice of Sale, and alleged defects in the Notice.
Issue(s)
Whether the extra-judicial foreclosure sale is valid and legal on account of alleged non-compliance with the provisions of Act No. 3135 on venue, posting, and publication of the Notice of Sale, and alleged defects in such Notice. Whether the venue of the extra-judicial foreclosure sale was improperly laid.
Ruling
The petition is DENIED. The extra-judicial foreclosure sale is declared valid and legal.
Ratio Decidendi
On the validity and legality of the extra-judicial foreclosure sale due to alleged non-compliance with Act No. 3135 on venue, posting, and publication, and alleged defects in the Notice: The Court held that the issue of compliance with notice and publication requirements of an extra-judicial foreclosure sale is a factual issue. The findings of the RTC, sustained by the CA, that the posting and publication were duly complied with, are conclusive. Even if there were clerical errors in the notice, such as the erroneous designation of a mortgagor or mistakes in the technical description, these are considered immaterial and do not affect the sufficiency of the notice or the validity of the sale, especially when the objects of the notice, which are to secure bidders and prevent a sacrifice of the property, were attained through publication in a newspaper of general circulation. The Court reiterated that personal notice to the mortgagor is not necessary in extra-judicial foreclosure proceedings; compliance with posting and publication requirements is sufficient. The Court also noted that a certificate of posting is not a statutory requirement and thus not indispensable for the validity of the sale. On whether the venue of the extra-judicial foreclosure sale was improperly laid: The Court agreed with the petitioner that the stipulation in the mortgage contract regarding the venue of the auction sale should be respected. The contract stipulated that the auction sale shall be held at the capital of the province if the property is within its territorial jurisdiction. The foreclosed property was in Dasmarinas, Cavite, and the capital was Trece Martires City. However, the Court found that venue is waivable, and the petitioner waived its right to object to the venue. The petitioner, through its President, admitted knowledge of the foreclosure sale in 1986 but did not take any steps to question the venue until the filing of the complaint in 1989, after its offer to repurchase the property was rejected. The Court emphasized that an extra-judicial foreclosure sale is an action in rem, requiring only notice by publication and posting to bind interested parties. The failure to object to the venue constituted a waiver, rendering the sale valid despite the potential impropriety of the venue.
Main Doctrine
Clerical errors in the notice of extra-judicial foreclosure sale do not invalidate the sale if the objects of the notice are attained. Furthermore, failure to object to the venue of the sale constitutes a waiver of the right to question it.