Sps. Marcelo v. Philippine Commercial International Bank
REITERATIONFacts
The Antecedents: Spouses Rogelio and Milagros Marcelo obtained several loans from Philippine Commercial International Bank (PCIB) between 1996 and 1997, executing promissory notes and a Disclosure Statement for each. To secure these loans, they executed a Real Estate Mortgage (REM) over six parcels of land in Baliuag, Bulacan. The REM stipulated that in case of default, PCIB could foreclose the mortgage extra-judicially in accordance with Act No. 3135, as amended. The spouses Marcelo defaulted on their loan obligations, which, as of May 30, 1998, amounted to ₱6,836,931.05, and later to ₱7,628,501.98 as of April 30, 2003. Procedural History: PCIB initiated extra-judicial foreclosure proceedings on August 3, 1998. A Notice of Sheriff's Sale was issued, posted on Meralco posts near public places in Baliuag, Bulacan, and published in The Times Newsweekly. The public auction was held on September 15, 1998, where the properties were sold to PCIB. On October 26, 1999, the spouses Marcelo filed a complaint seeking to nullify the foreclosure proceedings, alleging violations of the REM contract and non-compliance with posting and publication requirements under Act No. 3135. The Regional Trial Court (RTC) initially dismissed the complaint but later reversed itself, declaring the foreclosure proceedings null and void for non-compliance with Act No. 3135, specifically questioning the sufficiency of the posting and publication. PCIB appealed to the Court of Appeals (CA), which reversed the RTC's order, reinstating the RTC's initial decision upholding the validity of the foreclosure. The CA ruled that the posting and publication requirements were met. The spouses Marcelo's subsequent motions for reconsideration and extension were denied by the CA, and an Entry of Judgment was made. The Petition: The spouses Marcelo filed a Petition for Review on Certiorari with the Supreme Court, assailing the CA's Decision and Resolution. They argued that the CA erred in ruling that their motion for extension to file a motion for reconsideration was non-extendible, in upholding the validity of the foreclosure sale despite non-compliance with posting and publication requirements, and in upholding the sale despite PCIB's alleged breach of contract by charging unauthorized interests.
Issue(s)
Whether the Court of Appeals gravely erred in ruling that the Motion for Extension of Time to file Motion for Reconsideration is non-extendible. Whether the Court of Appeals gravely erred in upholding the validity of the extra-judicial foreclosure sale despite non-compliance with the posting and publication requirements as mandated by Act No. 3135. Whether the Court of Appeals gravely erred in upholding the validity of the foreclosure sale despite PCIB’s breach of contract by charging interests not agreed upon by the parties.
Ruling
The Supreme Court denied the petition for review on certiorari. It affirmed the Decision dated January 31, 2007, and the Resolution dated August 29, 2007, of the Court of Appeals, upholding the validity of the extra-judicial foreclosure proceedings initiated by Philippine Commercial International Bank (PCIB) and the subsequent public auction sale conducted over the properties of the spouses Marcelo.
Ratio Decidendi
On the issue of the Motion for Extension of Time to file Motion for Reconsideration: The Supreme Court reiterated the rule that a motion for extension of time to file a motion for reconsideration is generally not allowed before lower courts, citing the 2002 Internal Rules of the Court of Appeals and the pronouncement in Habaluyas Enterprises, Inc. v. Japson. The Court clarified that such motions may only be filed with the Supreme Court, which may, in its sound discretion, grant or deny the extension. Therefore, the CA correctly denied the petitioners' motion for extension as it was filed beyond the reglementary period and the CA's decision had already become final and executory. On the issue of compliance with posting and publication requirements under Act No. 3135: The Supreme Court found no merit in the spouses Marcelo's claim of non-compliance. Regarding posting, the Court held that posting notices on Meralco posts within the vicinities of the Baliuag Roman Catholic Church, Baliuag Public Market, and the chapel of Sabang, Baliuag, Bulacan, satisfied the requirement of posting in at least three public places, as these vicinities are accessible to the public and the Meralco posts are component structures of these public places. The law requires notices to be perceptible to the public, not necessarily posted on specific bulletin boards. As for publication, the Court ruled that the publication of the Notice of Sheriff's Sale in The Times Newsweekly, a newspaper of general circulation in the province, was sufficient. The Court clarified that a newspaper of general circulation need not have the largest circulation; it is enough that it is published for the dissemination of local news and general information, has a bona fide subscription list, and is published at regular intervals. The trial court's opinion that the newspaper had minimal readership was deemed too narrow a view to strip it of its privilege as an authorized publication. On the issue of breach of contract by charging unauthorized interests: The Supreme Court found no merit in the allegation that PCIB breached the contract by charging exorbitant interest rates and bank charges without notification. The Court noted that each promissory note had a corresponding Disclosure Statement signed by the spouses Marcelo, acknowledging and conforming to the terms and conditions of their credit transactions. Their signatures on these statements contradicted their claim of ignorance regarding the interests and charges, indicating their agreement to the terms stipulated.
Main Doctrine
The Supreme Court affirmed the validity of the extra-judicial foreclosure proceedings, holding that the posting of notices on Meralco posts within public vicinities and publication in a newspaper of general circulation, even if with limited readership, complied with the requirements of Act No. 3135. The Court also reiterated that a motion for extension of time to file a motion for reconsideration is generally not allowed before lower courts, and that a judgment that has become final and executory is immutable.