Philippine Savings Bank v. Geronimo
REITERATIONFacts
The Antecedents: Respondents Spouses Dionisio and Caridad Geronimo obtained a loan from petitioner Philippine Savings Bank, secured by a mortgage on their land. Respondents defaulted on their loan. Petitioner initiated an extrajudicial foreclosure of the mortgage, and the property was sold to petitioner as the highest bidder at an auction sale. Procedural History: Respondents filed a complaint for the annulment of the extrajudicial foreclosure, claiming it was void for non-compliance with the publication requirement. The Regional Trial Court (RTC) dismissed the complaint, upholding the validity of the foreclosure. On appeal, the Court of Appeals (CA) reversed the RTC's decision, declaring the extrajudicial foreclosure null and void for non-compliance with the publication requirement. The Petition: Petitioner Philippine Savings Bank filed a petition for review assailing the CA's decision and resolution.
Issue(s)
Whether the extra-judicial foreclosure is void for non-compliance with the publication requirement under Act No. 3135.
Ruling
The petition lacks merit. The Court affirmed the decision of the Court of Appeals, declaring the extrajudicial foreclosure of real estate mortgage and sale void for failure to comply with the publication requirement under Act No. 3135.
Ratio Decidendi
On the issue of whether the extra-judicial foreclosure is void for non-compliance with the publication requirement under Act No. 3135: The Court ruled that the extrajudicial foreclosure is void because the petitioner failed to prove compliance with the mandatory publication requirement under Section 3 of Act No. 3135. This section mandates publication in a newspaper of general circulation if the property's value exceeds four hundred pesos. The petitioner's evidence, including the testimony of Deputy Sheriff Alberto Castillo regarding publication in 'Ang Pinoy' newspaper, was deemed insufficient. The Court of Appeals' inquiry revealed that 'Ang Pinoy' was not an accredited periodical in Caloocan City, casting doubt on its general circulation status. The blank space for the newspaper's name on the Notice of Extra-Judicial Sale further raised doubts about actual publication. The Court emphasized that the purpose of the notice requirement is to secure bidders and prevent sacrifice sales through wide publicity, which is achieved by publication in a newspaper of general circulation. Since the petitioner failed to prove compliance with this mandatory requirement, the foreclosure is void.
Main Doctrine
The extrajudicial foreclosure of a real estate mortgage is void for non-compliance with the statutory requirement of publication of the notice of sale in a newspaper of general circulation in the city where the property is situated.