Venzon v. Rural Bank of Buenavista
REITERATIONFacts
1. The Antecedents: Virginia M. Venzon and her late spouse obtained a P5,000.00 loan from Rural Bank of Buenavista (Agusan del Norte), Inc. in 1983, mortgaging their house and lot. Venzon claims to have paid P2,300.00, leaving a balance of P2,370.00. She alleges that in March 1987, the bank refused her offer to pay the remaining balance and subsequently foreclosed the mortgage. Venzon contends the foreclosure was void due to lack of notice, publication, sheriff's deed, and notice of redemption. She further claims to have paid P6,000.00 in October 1995. The bank denies these claims, asserting the loan was not paid, the foreclosure was regular, and Venzon's action is barred by prescription and laches. 2. Procedural History: Venzon filed a petition to nullify the foreclosure proceedings and related tax declarations with the Regional Trial Court (RTC) of Butuan City. The RTC dismissed the case, ruling that under the Rural Banks Act, foreclosure sales involving loans not exceeding P10,000.00 are exempt from publication requirements, and personal notice to the mortgagor is not mandatory. The RTC denied Venzon's motion for reconsideration. Venzon then filed a Petition for Certiorari with the Court of Appeals (CA). The CA dismissed the petition, holding that Venzon should have filed an appeal under Rule 41, not certiorari under Rule 65, as the RTC's resolution was a final order. The CA also found the petition deficient in stating the factual background. Venzon's motion for reconsideration was denied by the CA. 3. The Petition: Venzon filed a Petition for Review on Certiorari with the Supreme Court, arguing that the CA erred in dismissing her certiorari petition and in not disregarding technicalities to administer substantial justice. She claims no extrajudicial foreclosure occurred, citing a certification from the Clerk of Court that records could not be found, and that her P6,000.00 payment in 1995 should be considered a valid redemption. The respondent bank echoed the CA's findings, emphasizing adherence to procedural rules and the limitation of raising only questions of law in a petition for review on certiorari.
Issue(s)
Whether the Court of Appeals erred in dismissing the Petition for Certiorari. Whether the Court of Appeals erred in not disregarding technicalities to administer substantial justice. Whether the foreclosure proceedings were null and void for lack of notice and publication, considering the Rural Banks Act and Act No. 3135. Whether the petitioner's claim of payment of ₱6,000.00 should be considered a valid redemption, and the implications of the bank's response to this claim.
Ruling
The Supreme Court denied the petition, affirming the resolutions of the Court of Appeals. However, the Court ordered the respondent bank to return the ₱6,000.00 paid by the petitioner, with legal interest.
Ratio Decidendi
On the propriety of the remedy: The Court held that the RTC's resolution dismissing the case was a final order, as it disposed of the core issue of the necessity of publication and notice for the foreclosure sale. Therefore, the petitioner should have filed an appeal under Rule 41 of the Rules of Court, not a petition for certiorari under Rule 65. The CA correctly dismissed the petition on this procedural ground. The Court emphasized that the petitioner's failure to avail of the correct remedy, coupled with the significant delay in filing the case (18 years after the foreclosure sale), weighed against her. On the alleged nullity of foreclosure proceedings: The Court found no error in the CA's treatment of the petition. The Court noted that the petitioner's claim that no foreclosure proceedings ever took place was contradicted by her own attachment of the Sheriff's Certificate of Sale to her petition before the RTC. If no foreclosure occurred, she should have filed a different action, not an action to annul a non-existent proceeding. The certification from the Clerk of Court stating that records could not be found was insufficient to invalidate the proceedings, especially when the petitioner herself provided evidence of the foreclosure. On the alleged lack of notice and publication: The RTC correctly ruled that under the Rural Banks Act, properties with loans not exceeding ₱10,000.00 are exempt from the publication requirement. The petitioner's outstanding obligation at the time of foreclosure was within this limit. Furthermore, citing Bonnevie, et al. vs. CA, et al., the Court reiterated that Act No. 3135, as amended, does not require personal notice to the mortgagor, and the lack of a final demand or notice of redemption does not render an extrajudicial foreclosure sale a nullity. On the ₱6,000.00 payment: While the Court did not consider the ₱6,000.00 payment as a valid redemption because it was made long after the redemption period expired, it ordered the respondent bank to return the amount. The bank's answer with counterclaims contained a "negative pregnant" regarding the receipt of this payment. The bank denied the allegation of payment by stating "Without necessarily admitting that payment of ₱6,000.00 was made, the same however could hardly and could never be considered as redemption price..." This ambiguous denial was deemed an admission of receipt of the payment, which the bank had no right to receive since the foreclosure sale had already covered the entire obligation. Therefore, the bank was obligated to return the amount received unduly.
Main Doctrine
A petition for certiorari under Rule 65 is not the proper remedy to assail a final order of dismissal by the Regional Trial Court; an appeal under Rule 41 should be filed. Furthermore, a certification from the Clerk of Court that records could not be found is insufficient to invalidate foreclosure proceedings when the petitioner herself attached a Sheriff's Certificate of Sale to her petition.