Certeza v. Philippine Savings Bank
REITERATIONFacts
1. The Antecedents: Spouses Norman K. Certeza, Jr. and Ma. Rosanila V. Certeza, and Amada P. Villamayor and Herminio Villamayor, Jr. (petitioners) obtained a loan from Philippine Savings Bank (respondent) secured by two parcels of land. Upon failure to pay their outstanding obligation, the respondent bank instituted an action for extrajudicial foreclosure of the real estate mortgage. During the auction sale, the respondent bank emerged as the sole and highest bidder, and a Certificate of Sale was issued in its favor. Subsequently, the respondent bank filed a petition for a Writ of Possession, which was granted by the Regional Trial Court (RTC) after the redemption period expired. 2. Procedural History: The petitioners sought to intervene in the proceedings and stay the issuance of the Writ of Possession, arguing that the extrajudicial foreclosure sale was null and void for failing to comply with procedural requirements and violating their right to due process. The RTC denied their motion to intervene and to stay the implementation of the writ, citing the ministerial nature of issuing and enforcing writs of possession. The petitioners then filed a Petition for Certiorari with the Court of Appeals (CA), which affirmed the RTC's denial, holding that certiorari was not the proper remedy and that there was no irregularity in the foreclosure sale. The CA's decision was later denied reconsideration. 3. The Petition: The petitioners are now before the Supreme Court via a Petition for Review on Certiorari, assailing the CA's ruling. They contend that the CA erred in ruling that certiorari was not the proper remedy, that the denial of their motion to intervene was proper, and crucially, that there may be only one bidder in a foreclosure sale. The petitioners argue that A.M. No. 99-10-05-0 requires at least two participating bidders in an auction sale, and its absence renders the sale void. They seek the nullification of the foreclosure sale and the cancellation of the certificate of sale and writ of possession.
Issue(s)
Whether certiorari is the proper remedy for a party in a writ of possession case. Whether the denial of petitioners' motion to intervene was proper. Whether there may be only one bidder in a foreclosure sale.
Ruling
The petition is denied. The Court of Appeals' Decision dated May 8, 2009, and its Resolution dated October 20, 2009, are affirmed.
Ratio Decidendi
On the issue of whether certiorari is the proper remedy: While the Court did not explicitly rule on this issue as a separate point, its affirmation of the CA's dismissal of the petition for certiorari implies that, in this instance, it was not the proper remedy to question the denial of the motion to intervene and stay the writ of possession, especially when the underlying foreclosure sale was found to be valid. The CA itself found that certiorari was not the proper remedy, and the Supreme Court upheld this finding by dismissing the petition. On the propriety of the denial of petitioners' motion to intervene: Given that the foreclosure sale was found to be regular and valid, and the subsequent writ of possession was also regular and valid, the denial of the motion to intervene was proper. The Court noted that the issuance of a writ of possession is generally a ministerial function of the court, and intervention is typically allowed only when there are substantial grounds to question the validity of the foreclosure proceedings or the writ itself. Since no such substantial grounds were found, the denial was consistent with established jurisprudence. On the issue of whether there may be only one bidder in a foreclosure sale: The Court held that the requirement of at least two participating bidders in an auction sale, as initially provided in A.M. No. 99-10-05-0, is not found in Act No. 3135, the law governing extrajudicial foreclosure of mortgages. Subsequent amendments to A.M. No. 99-10-05-0, particularly the Resolution of January 30, 2001, removed this requirement. The Court reasoned that this requirement was impractical and burdensome, considering that not all auction sales are commercially attractive. The original publication of the notice of sale should not be rendered moot by the need for republication due to a lack of bidders. Thus, the extrajudicial foreclosure sale conducted with only one bidder was deemed regular and valid. The Court further clarified that the use of the word "bids" in the amended A.M. No. 99-10-05-0 and Circular No. 7-2002 does not mandate more than one bidder for a valid auction sale. Simple mistakes or omissions in the notice of sale that do not deter or mislead bidders are not fatal to the validity of the sale.
Main Doctrine
The requirement of at least two bidders in an extrajudicial foreclosure sale, as initially provided in A.M. No. 99-10-05-0, is not found in Act No. 3135 and has been removed by subsequent amendments to A.M. No. 99-10-05-0. Therefore, an auction sale with only one bidder is valid.