Aclon v. Court of Appeals
REITERATIONFacts
The Antecedents: Pedro Aclon obtained a loan from the Philippine National Bank (PNB) secured by a mortgage on two parcels of land. Despite extensions and demands, Aclon failed to fully repay the loan. Consequently, PNB initiated extra-judicial foreclosure proceedings. The mortgaged properties were sold at public auction to PNB as the highest bidder, and a Certificate of Sale was issued. After the redemption period expired without Aclon redeeming the properties, PNB consolidated its ownership. Subsequently, PNB sold the residential lot to respondents Sps. Zosimo and Natalia Opimo. Aclon, however, remained in possession of the residential lot, leading to separate legal actions initiated by both Aclon and the Opimo spouses. Procedural History: Aclon filed a complaint against PNB and the Opimo spouses for the annulment of sale with damages and consignation. Concurrently, the Opimo spouses filed a complaint against Aclon for the recovery of real property with injunction and damages. These cases were consolidated and heard jointly by the Regional Trial Court (RTC). The RTC rendered separate decisions, upholding the validity of the foreclosure proceedings and the subsequent sales, and ordering Aclon to vacate the property and pay damages. Aclon appealed both decisions to the Court of Appeals (CA). The CA affirmed the RTC decision in one case with a modification regarding attorney's fees, and in the other case, it modified the decision to declare the foreclosure proceedings and sale to PNB valid, while also upholding the sale to the Opimo spouses and ordering Aclon to vacate. The Petition: Petitioner Pedro Aclon filed two separate petitions for review on certiorari under Rule 45 of the Rules of Court, assailing the decisions of the Court of Appeals. The petitions primarily argue that the extra-judicial foreclosure proceedings and the subsequent auction sale were null and void due to alleged non-compliance with mandatory provisions of Act 3135 regarding posting, publication of the notice of sale, and the venue of the auction. Aclon contends that if the foreclosure sale was void, the subsequent sale of the property by PNB to the Opimo spouses was also void. He further argues against the trial court's awards for the use and occupation of the property. The Supreme Court consolidated the petitions, finding that the core issues involved questions of fact, and generally, factual findings of the CA affirming the RTC are conclusive. The Court noted that Aclon's attempt to repurchase the property after the redemption period, without reservation, constituted a waiver of any defects in the foreclosure proceedings and estopped him from challenging its validity.
Issue(s)
Whether the extrajudicial foreclosure proceedings and the subsequent sale of the mortgaged properties to PNB are null and void for alleged non-compliance with the mandatory provisions of Act 3135. Whether the sale of the residential lot by PNB to the Opimo spouses is null and void, given the alleged invalidity of the foreclosure sale. Whether the Opimo spouses are purchasers in bad faith. Whether there is a legal basis for the award of damages for the use and occupation of the property.
Ruling
The petitions are DENIED. The decision of the Court of Appeals in C.A. G.R. CV No. 24106 is AFFIRMED in toto. The decision of the Court of Appeals in C.A. G.R. CV No. 24133 is AFFIRMED with MODIFICATION to the effect that the extrajudicial foreclosure proceedings in question and the sale at public auction to PNB are declared valid.
Ratio Decidendi
On the validity of the extrajudicial foreclosure proceedings and the sale to PNB: The Supreme Court held that petitioner Aclon's assigned errors primarily involved questions of fact, which are generally not reviewable in a petition for review on certiorari under Rule 45. The Court reiterated the rule that findings of fact of the Court of Appeals, especially when affirming the trial court, are final and conclusive. The Court found no compelling reason to depart from the CA's factual findings, which included compliance by PNB with Act 3135 regarding posting and publication of the notice of sale. Furthermore, the Court noted that Aclon's attempt to redeem the property after the redemption period lapsed, without any reservation, constituted a waiver of any defects or irregularities in the foreclosure proceedings. This action was construed as an implied admission of the regularity of the sale, estopping him from later impugning its validity. The Court emphasized that redemption is inconsistent with a claim of invalidity of the sale. On the validity of the sale by PNB to the Opimo spouses: Since the Supreme Court affirmed the validity of the extrajudicial foreclosure proceedings and the sale to PNB, it logically followed that the subsequent sale of the residential lot by PNB to the Opimo spouses was also valid. The Court also affirmed the CA's finding that the Opimo spouses were buyers in good faith. Aclon's attempt to repurchase the property, which was considered a redemption attempt, further supported the validity of the transaction from PNB's perspective, even though Aclon failed to complete the repurchase payments. On the issue of purchasers in bad faith: The Court affirmed the appellate court's finding that the Opimo spouses were purchasers in good faith. There was no evidence presented to show that they acted with malice or knowledge of any defect in the title they acquired from PNB. Their purchase was based on the sale conducted by PNB, which the Court ultimately found to be valid. On the award of damages for use and occupation: The Court upheld the trial court's decision, as affirmed by the CA with modification, ordering Aclon to pay damages for the use and occupation of the property. This was based on the finding that Aclon remained in possession of the property after it was validly sold to the Opimo spouses. The amount awarded was deemed reasonable compensation for the use of the house and lot from the date of sale until possession was delivered.
Main Doctrine
A party who attempts to redeem foreclosed property, even after the redemption period has lapsed, without reservation, is deemed to have waived any defects or irregularities in the foreclosure proceedings and is estopped from challenging the validity of the sale. Such an attempt to redeem constitutes an implied admission of the regularity of the sale.