FORTUNE MOTORS vs.

METRO BANK Fortune Motors obtained loans in different dates from the Metropolitan Bank and Trust company Metrobank consolidated the loans of P8 Million and P3 Million into one promissory note, which amounted toP12,650,000.00. This included the interest that had accrued thereon. To secure the obligation in the total amount of P34,150,000.00, petitioner mortgaged certain real estate in favor of respondent bank. Due to financial constraints, petitioner failed to pay the loan upon maturity. Consequently on May 25, 1984, respondent bank initiated extrajudicial foreclosure proceedings and in effect, foreclosed the real estate mortgage. The extrajudicial foreclosure was actually conducted by Senior Deputy Sheriff Pablo Y. Sy who had sent copies of the Notice of Extrajudicial Sale to the opposing parties by registered mail. In accordance with law, he posted copies of the Notice of Sheriffs Sale at three conspicuous public places in Makati 1. the office of the Sheriff, 2. the Assessors office 3. and the Register of Deeds in Makati. He thereafter executed the Certificates of Posting on May 20, 1984. The said notice was in fact published on June 2, 9 and 16, 1984 in three issues of The New Record. An affidavit of publication, dated June 19, 1984,[2] was executed by Teddy F. Borres, publisher of the said newspaper. Subsequently, the mortgaged property was sold at public auction for P47,899,264.91 to the mortgagee bank, the highest bidder. Petitioner failed to redeem the mortgaged property within the one-year redemption period and so, the titles thereto were consolidated in the name of respondent bank by which token the latter was entitled to the possession of the property mortgaged and, in fact possessed the same. Petitioner then filed a complaint for the annulment of the extrajudicial foreclosure.

RTC DECISION: the trial court rendered judgment annulling the extrajudicial foreclosure of the mortgage. CA DECISION: reversed the decision rendered by the lower court. Subsequently, the motion for Reconsideration filed by petitioner was denied on April 26, 1994. RULING 1. YES. Publication in a newspaper of general circulation was satisfied. a. Whether it is a NEWSPAPER OF GENERAL CIRCULATION. To be a newspaper of general circulation, it is enough that it is published for the dissemination of local news and general information; that it has a bona fide subscription list of paying subscribers; that it is published at regular intervals. (Basa v. Mercado, 61 Phil. 632). The newspaper need not have the largest circulation so long as it is of general circulation. (Banta v. Pacheco, 74 Phil. 67). In the case at bench, there was sufficient compliance with the requirements of the law regarding publication of the notice in a newspaper of general circulation. This is evidenced by the affidavit of publication executed by the New Records publisher, Teddy F. Borres, which stated that it is a newspaper edited in Manila and Quezon City and of general circulation in the cities of Manila, Quezon City et al., and in the Provinces of Rizal xxx, published every Saturday by the Daily Record, Inc. This was affirmed by Pedro Deyto, who was the executive editor of the said newspaper and who was a witness for petitioner. b. whether or not it is valid to plublish the notice in QC and not in Makati. YES! In 1984, when the publishers affidavit relied upon by petitioner was executed, Makati, Mandaluyong, San Juan, Paraaque et. al., were still part of the province of Rizal. Apparently, this is the reason why in the New Records affidavit of publication executed by its publisher, the enumeration of the places where it was being circulated, only the cities of Manila, Quezon, Caloocan, Pasay, Tagaytay, et. al., were named. Furthermore, as aptly ratiocinated by the Court of Appeals: For what is important is that a paper should be in general circulation in the place where the properties to be foreclosed are located in order that publication may serve the purpose for which it was intended.[10]

Petitioner also claims that the New Record is not a daily newspaper because it is published only once a week. A perusal of Presidential Decree (P.D.) No. 1079 and Act 3135 shows that the said laws do not require that the newspaper which publishes judicial notices should be a daily newspaper. Under P.D. 1079, for a newspaper to qualify, it is enough that it be a newspaper or periodical which is authorized by law to publish and which is regularly published for at least one (1) year before the date of publication which requirement was satisfied by New Record. Nor is there a requirement, as stated in the said law, that the newspaper should have the largest circulation in the place of publication. 2. EXECUTIVE JUDGE CAUSED THE PUBLICATION. Whether or not the extrajudicial foreclosure should be annulled since it was the executive Judge who caused the publication of the notice of the sale and not the sheriff. NO, because Sec. 2 of P.D. No. 1079 clearly provides that: The executive judge of the court of first instance shall designate a regular working day and a definite time each week during which the said judicial notices or advertisements shall be distributed personally by him[11] for publication to qualified newspapers or periodicals xxx, which distribution shall be done by raffle. The said provision of the law is clear as to who should personally distribute the judicial notices or advertisements to qualified newspapers for publication. There was a substantial compliance with the requirements when it was the Executive Judge of the Regional Trial Court of Makati who caused the publication of the said notice by the newspaper selected by means of raffle. 3. PUBLICATION IS ENOUGH AND NOT PERSONAL NOTICE: Whether or not the petitioner did not personally receive the notices of extrajudicial foreclosure and sale supposedly sent to it by Metrobank. NO! Settled is the rule that personal notice to the mortgagor in extrajudicial foreclosure proceedings is not necessary. Section 3 of Act No. 3135 governing extrajudicial foreclosure of real estate mortgages, as amended by Act No. 4118,

requires only the posting of the notice of sale in three public places and the publication of that notice in a newspaper of general circulation. It is pristine clear from the above provision that the lack of personal notice to the mortgagor, herein petitioner, is not a ground to set aside the foreclosure sale.[12] 4. LOCATION Petitioner also claims that it had transferred to a different location but the notice was sent to its old address. Petitioner failed to notify respondent of its supposed change of address. Needless to say, it can be surmised that respondent had sent the notice to petitioners official address. 5. NOT LESS THAN THREE PUBLIC PLACES: Whether or not the posting of the notices of sale by the Sheriff in the Office of the Sheriff, Office of the Assessor and the Register of Deeds are not the conspicuous public places required by law. Furthermore, it also questions the non-posting of the notice of sale on the property itself which was to be sold. NO! Act 3135 does not require posting of the notice of sale on the mortgaged property. Section 3 of the said law merely requires that the notice of the sale be posted for not less than twenty days in at least three public places of the municipality or city where the property is situated. The aforementioned places, to wit: the Sheriffs Office, the Assessors Office and the Register of Deeds are certainly the public places contemplated by law, as these are places where people interested in purchasing real estate congregate.

GC DALTON INDUSTRIES, INC., vs. EQUITABLE PCI BANK FACTS: Equitable PCI Bank extended a P30-million credit line to Camden Industries, Inc. (CII) allowing the latter to avail of several loans (covered by promissory notes) and to purchase trust receipts. To facilitate collection, CII executed a hold -out agreement in favor of respondent authorizing it to deduct from its savings account any amounts due.

To guarantee payment, petitioner GC Dalton Industries, Inc. executed a third-party mortgage of its real properties in Quezon City and Malolos, Bulacan] as security for CIIs loans. CII did not pay its obligations despite respondents demands. Consequently, respondent filed a petition for extrajudicial foreclosure of petitioners Bulacan properties in RTC of Bulacan. On August 3, 2004, the mortgaged properties were sold at a public auction where respondent was declared the highest bidder. Consequently, a certificate of sale[6] was issued in respondents favor on August 3, 2004. Thereafter respondent filed the certificate of sale and an affidavit of consolidation of ownership in the Register of Deeds of Bulacan pursuant to Section 47 of the General Banking Law.[Hence, petitioners TCTs covering the Bulacan properties were cancelled and new ones were issued in the name of respondent. Respondent filed an ex parte motion for the issuance of a writ of possession] in the RTC Bulacan. Previously, however, CII had filed an action for specific performance and damages in the RTC of Pasig, asserting that it had allegedly paid its obligation in full to respondent. CII sought to compel respondent to render an accounting in order to prove that the bank fraudulently foreclosed on petitioners mortgag ed properties. Because respondent allegedly failed to appear during the trial, the Pasig RTC rendered a decision based on the evidence presented by CII. It found that, while CIIs past due obligation amounted only to P14,426,485.66 as of November 30, 2002, respondent had deducted a total of P108,563,388.06 from CIIs savings account. Respondent filed a notice of appeal. CII, on the other hand, moved for the immediate entry and execution of the abovementioned decision.

Pasig RTC DECISION: dismissed respondents notice of appeal due to its failure to pay the appellate docket fees. It likewise found respondent guilty of forum-shopping for filing the petition for the issuance of a writ of possession in the Bulacan RTC. Thus, the Pasig RTC ordered the immediate entry of its March 30, 2005 decision. Meanwhile, in view of the pending case in the Pasig RTC, petitioner opposed respondents ex parte motion for the issuance of a writ of possession in the Bulacan RTC. It claimed that respondent was guilty of fraud and forum-shopping, and that it was not informed of the foreclosure. Furthermore, respondent fraudulently foreclosed on the properties since the Pasig RTC had not yet determined whether CII indeed failed to pay its obligations. Thereafter Bulacan RTC granted the motion and a writ of possession was issued in respondents favor on December 19, 2005. Petitioner immediately assailed the order of the Bulacan RT. It claimed that the order violated Section 14, Article VIII of the Constitution[17] which requires that every decision must clearly and distinctly state its factual and legal bases. CA dismissed the petition for lack of merit on the ground that an order involving the issuance of a writ of possession is not a judgment on the merits, hence, not covered by the requirement of Section 14, Article VIII of the Constitution. ISSUES: 1. Petitioner likewise cites the conflict between the order of the Bulacan RTC and order the Pasig RTC. Petitioner claims that, since the Pasig RTC already ordered the entry of its March 30, 2005 decision (in turn ordering respondent to return TCT No. 351231 and all such other owners documents of title as may have been placed in its possession by virtue of the subject trust receipt and loan transactions), the same was already final and executory. Thus, inasmuch as CII had supposedly paid respondent in full, it was erroneous for the

Bulacan RTC to order the issuance of a writ of possession to respondent. Respondent, on the other hand, asserts that petitioner is raising a question of fact as it essentially assails the propriety of the issuance of the writ of possession. It likewise points out that petitioner did not truthfully disclose the status of the March 30, 2005 decision of the Pasig RTC because, in an order dated April 4, 2006, the Pasig RTC partially reconsidered its December 7, 2005 order and gave due course to respondents notice of appeal. (The propriety of the said April 4, 2006 order is still pending review in the CA.) RULINGS: Denied Petition 1. The issuance of a writ of possession to a purchaser in an extrajudicial foreclosure is summary and ministerial in nature as such proceeding is merely an incident in the transfer of title. The trial court does not exercise discretion in the issuance thereof. For this reason, an order for the issuance of a writ of possession is not the judgment on the merits contemplated by Section 14, Article VIII of the Constitution. 2. The mortgagor loses all legal interest over the foreclosed property after the expiration of the redemption period. Under Section 47 of the General Banking Law, if the mortgagor is a juridical person, it can exercise the right to redeem the foreclosed property until, but not after, the registration of the certificate of foreclosure sale within three months after foreclosure, whichever is earlier. Thereafter, such mortgagor loses its right of redemption. Respondent filed the certificate of sale and affidavit of consolidation with the Register of Deeds of Bulacan on September 13, 2004. This terminated the redemption period granted by Section 47 of the General Banking Law. Because consolidation of title becomes a right upon the expiration of the redemption period,[23] respondent became the

owner of the foreclosed properties.[24]Therefore, when petitioner opposed the ex parte motion for the issuance of the writ of possession on January 10, 2005 in the Bulacan RTC, it no longer had any legal interest in the Bulacan properties. Nevertheless, even if the ownership of the Bulacan properties had already been consolidated in the name of respondent, petitioner still had, and could have availed of, the remedy provided in Section 8 of Act 3135. It could have filed a petition to annul the auction sale and to cancel the writ of possession within 30 days after respondent was given possession. But it did not. Thus, inasmuch as the 30-day period to avail of the said remedy had already lapsed, petitioner could no longer assail the validity of the sale. Any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for the refusal to issue a writ of possession. Regardless of whether or not there is a pending suit for the annulment of the mortgage or the foreclosure itself, the purchaser is entitled to a writ of possession, without prejudice, of course, to the eventual outcome of the pending annulment case[ Needless to say, petitioner committed a misstep by completely relying and pinning all its hopes for relief on its complaint for specific performance and damages in the Pasig RTC,[29] instead of resorting to the remedy of annulment (of the auction sale and writ of possession) under Section 8 of Act 3135 in the Bulacan RTC. DEVELOPMENT BANK OF THE PHILIPPINES vs. ENVIRONMENTAL AQUATICS, INC., LAND SERVICES AND MANAGEMENT ENTERPRISES FACTS: Respondent Environmental Aquatics and Land Services and Management Enterprises loaned P1,792,600 from petitioner . As security for the loan, LSMEI mortgaged to DBP its parcel of land situated in New Manila, Quezon City,

and covered by Transfer Certificate of Title. The mortgage contract stated that: If at anytime the Mortgagor shall fail or refuse to pay any of the amortization on the indebtedness, or the interest when due, or whatever other obligation herein secured or to comply with any of the conditions and stipulations herein agreed, or shall initiate insolvency proceedings or be declared involuntary insolvent (sic), or uses the proceeds of the loan for purposes other than those specified herein then all the amortizations and other obligations of the Mortgagor of any nature, shall become due, payable and defaulted and the Mortgagee may immediately foreclose this mortgage judicially or extrajudicially under Act No. 3135 as amended, or under Republic Act No. 85, as amended and or under Act No. 1508 as amended. EAI and LSMEI failed to pay the loan. Thus, DBP applied for extrajudicial foreclosure of the real estate mortgage. During the 19 December 1990 public auction, the ex-officio sheriff sold the property to DBP as the highest bidder for P1,507,000. On 15 May 1991, LSMEI transferred its right to redeem the property to respondent Mario Matute . In his 27 July 1991 letter, Atty. Julian R. Vitug, Jr. (Atty. Vitug, Jr.) informed DBP that his client Matute was interested in redeeming the property by paying the P1,507,000 purchase price, plus other costs. In its 29 August 1991 letter, DBP informed Atty. Vitug, Jr. that Matute could redeem the property by paying the remaining balance of EAI and LSMEI's loan. Thereafter, EAI, LSMEI and Matute filed with the RTC a complaint praying that DBP be ordered to accept x x x Matute's bonafide offer to redeem the foreclosed property. ISSUE DBP raises as issues that the lower courts erred in finding that the bank chose Act No. 3135 as the governing law for the extrajudicial foreclosure of the property, including the determination of the redemption price, and in ruling that the redemption price is equivalent to the P1,507,000 purchase price. The Court's Ruling

The petition is meritorious. Section 16 of Executive Order (EO) No. 81 states that the redemption price for properties mortgaged to and foreclosed by DBP is equivalent to the remaining balance of the loan. Section 16 states that, Any mortgagor of the Bank whose property has been extrajudicially sold at public auction shall x x x have the right to redeem the real property by paying to the Bank all of the latter's claims against him, as determined by the Bank. In Development Bank of the Philippines v. West Negros College, Inc.,[23] the Court held that the redemption price for properties mortgaged to and foreclosed by DBP is equivalent to the remaining balance of the loan, with interest at the agreed rate. The Court held that: It has long been settled that where the real property is mortgaged to and foreclosed judicially or extrajudicially by the Development Bank of the Philippines, the right of redemption may be exercised only by paying to the Bank all the amount he owed the latter on the date of the sale, with interest on the total indebtedness at the rate agreed upon in the obligation from said date, unless the bidder has taken material possession of the property or unless this had been delivered to him, in which case the proceeds of the property shall compensate the interest. x x x The foregoing rule is embodied consistently in the charters of petitioner DBP and its predecessor agencies. Section 31 of CA 459 creating the Agricultural and Industrial Bank explicitly set the redemption price at the total indebtedness plus contractual interest as of the date of the auction sale. Under RA 85 the powers vested in and the duties conferred upon the Agricultural and Industrial Bank by CA 459 as well as its capital, assets, accounts, contracts, and choses in action were transferred to the Rehabilitation Finance Corporation. It has been held that among the salutary provisions of CA 459 ceded to the Rehabilitation Finance Corporation by RA 85 was Sec. 31 defining the manner of redeeming properties mortgaged with the corporation. Subsequently, by virtue of RA 2081 (1958), the powers, assets, liabilities and personnel of the Rehabilitation Finance Corporation under RA 85 and CA 459, particularly Sec. 31 thereof, were transferred to petitioner DBP. Significantly, Sec. 31 of

CA 459 has been reenacted substantially in Sec. 16 of the present charter of the DBP, i.e., EO 81 (1986) as amended by RA 8523 (1998). xxxx The unavoidable conclusion is that in redeeming the foreclosed property respondent West Negros College as assignee of Bacolod Medical Center should pay the balance of the amount owed by the latter to petitioner DBP with interest thereon at the rate agreed upon as of the date of the public auction on 24 August 1989.[24] (Emphasis supplied) In Development Bank of the Philippines v. Mirang,[25] the Court held that the redemption price for properties morgaged to and foreclosed by DBP is equivalent to the remaining balance of the loan, with interest at the agreed rate. The Court held that, The unavoidable conclusion is that the appellant, in redeeming the foreclosed property, should pay the entire amount he owed to the Bank on the date of the sale, with interest thereon at the rate agreed upon.[26] As early as 1960, the Court has already settled the issue. In Nepomuceno, et al. v. Rehabilitation Finance Corporation,[27]the Court held that the redemption price for properties morgaged to and foreclosed by DBP is equivalent to the remaining balance of the loan, with interest at the agreed rate. The Court held that: The issue posed in this appeal is: considering that the loan of P300,000.00 was obtained from the Rehabilitation Finance Corporation [now DBP] by spouses Jose Nepomuceno and Isabela Acua and Jesus Nepomuceno merely acted as accomodation mortgagor, for what price may the mortgagor redeem his property after the same has been sold at public auction? Would it be for the price at which the property was sold, as contended by the mortgagor, or for the balance of the loan obtained by the borrowers from the banking institution, as contended by appellant? xxxx [T]he inescapable conclusion is that the mortgagor herein or his assignees cannot redeem the property in dispute without paying the balance of the total

indebtedness then outstanding on the date of the sale to the Rehabilitation Finance Corporation.[28] (Emphasis supplied) The lower courts ruled that the redemption price for the property is equivalent to the P1,507,000 purchase price because DBP chose Act No. 3135 as the governing law for the extrajudicial foreclosure. The RTC and Court of Appeals, respectively, stated that: When defendant DBP foreclosed the mortgage at issue, it chose Act 3135. That was an option it freely exercised without the least intervention of plaintiffs. We cannot, therefore, escape the conclusion that what defendant DBP agreed to in respect to (sic) the possible foreclosure of its mortgage was to subject the same to the provisions of Act No. 3135, as amended, should the DBP opt to utilize said law.[29] Thereunder given the choice of resorting to Act No. 3135 as amended, or Republic Act No. 85 as amended, or Act No. 1508 as amended, appellant bank undoubtedly opted for the first of the aforesaid laws as may be gleaned from the following prayer it interposed in the application for foreclosure of mortgage it filed with the Ex-Officio Sheriff of Quezon City on October 25, 1990.[30] The Court disagrees. Republic Act (RA) No. 85 and Act No. 1508 do not provide a procedure for extrajudicial foreclosure of real estate mortgage. When DBP stated in its letter to the exofficio sheriff that the property be sold at public auction in accordance with the provisions of Act 3135, it did so merely to find a proceeding for the sale. In Development Bank of the Philippines v. Zaragoza,[31] Development Bank of the Philippines v. Mirang,[32] andDevelopment Bank of the Philippines v. Jimenez, et al.,[33] the Court held that when the bank resorted to Act No. 3135 in order to sell the mortgaged property extrajudicially, it did so merely to find a proceeding for the sale. In its 10 October 2006 petition, DBP claims that when it resorted to Act No. 3135 in order to sell the mortgaged property extrajudicially, it did so merely to find a proceeding for the sale. DBP stated that:

[W]hen herein petitioner resorted to Act 3135 in its application for extrajudicial foreclosure of the subject mortgaged real estate, it did so only to find a proceeding for the extrajudicial sale. The Court of Appeals should have noted that neither Republic Act No. 85 (the Charter of the Rehabilitation Finance Corporation) nor Act 1508 (Chattel Mortgage Law) prescribe a procedure for extrajudicial foreclosure of real estate mortgage as provided under Act 3135. Such action, therefore, cannot be construed to mean a waiver of petitioner's right to demand the payment of respondents' entire obligation as the proper redemption price. There is no such waiver on the part of the petitioner. [I]t is hereby stressed that DBP did not elect Act 3135 to the exclusion of other laws in the extrajudicial foreclosure of the subject mortgaged real property. Such a conclusion is definitely contrary to law and jurisprudence, which settled the rule that Act 3135 is the general law that governs the procedure and requirements in extra-judicial foreclosure of real estate mortgage, but in determining the redemption price of the property mortgaged to the Development Bank of the Philippines, the DBP Charter shall prevail. It is of judicial notice that Act 3135 is the only law governing the proceedings in extrajudicial foreclosure of real estate mortgage. Act No. 1508, on the other hand, governs the extrajudicial foreclosure of chattel mortgage, and should not be in issue in the instant case which involves a real estate mortgage. It should likewise be of judicial notice that Republic Act No. 85 is the charter of the Rehabilitation Finance Corporation, predecessor of appellant DBP. RA 85 prescribes the redemption price, not the proceedings and requirements in an extrajudicial foreclosure of real estate mortgage such as those found in Act 3135. x x x When appellant DBP cited Act 3135 in its Deed of Real Estate Mortgage or even in the application for foreclosure of mortgage, it was not a matter of making an exclusive option or choice because Act 3135 governs the procedure and requirements for an extrajudicial foreclosure or real estate mortgage. In citing said law, Appellant DBP was merely finding a proceeding for extra-judicial

foreclosure sale x x x. And while the said Act 3135 provides for redemption, such provision will not apply in the determination of the redemption price on [sic] mortgages to DBP. In the latter case, the DBP Charter will prevail.[34] Even assuming that DBP chose Act No. 3135 as the governing law for the extrajudicial foreclosure, the redemption price would still be equvalent to the remaining balance of the loan. EO No. 81, being a special and subsequent law, amended Act No. 3135 insofar as the as redemption price is concerned. In Sy v. Court of Appeals,[35] the Court held that RA No. 337 amended Act No. 3135 insofar as the redemption price is concerned. The Court held that: [T]he General Banking Act partakes of the nature of an amendment to Act No. 3135 insofar as the redemption price is concerned, when the mortgagee is a bank or banking or credit institution, Section 6 of Act No. 3135 being, in this respect, inconsistent with Section 78 of the General Banking Act. Although foreclosure and sale of the subject property was done by SIHI pursuant to Act. No. 3135, x x xSection 78 of the General Banking Act, as amended provides the amount at which the subject property is redeemable from SIHI, which is, in this case, the amount due under the mortgage deed, or the outstanding obligation of Carlos Coquinco, plus interest and expenses.) In Ponce de Leon v. Rehabilitation Finance Corporation,[37] the Court held that RA No. 337, being a special and subsequent law, amended Act No. 3135 insofar as the redemption price is concerned. The Court held that: Rep. Act No. 337, otherwise known as The General Banking Act, is entitled An Act Regulating Banks and Banking Institutions and for other purposes. Section 78 thereof limits the amount of the loans that may be given by banks and banking or credit institutions on the basis of the appraised value of the property given as security, as well as provides that, in the event of foreclosure of a real estate mortgage to said banks or institutions, the property sold may be redeemed by paying the amount fixed by the court in the order of execution, or the amount judicially adjudicated to the creditor bank. This provision had the effect of amending Section 6 of Act

No. 3135, insofar as the redemption price is concerned, when the mortgagee is a bank or a banking or credit institution, said Section 6 of Act No. 3135 being, in this respect, inconsistent with the above-quoted portion of Section 78 of Rep. Act No. 337. In short, the Paraaque property was sold pursuant to said Act No. 3135, but the sum for which it is redeemable shall be governed by Rep. Act No. 337, which partakes of the nature of an amendment to Act No. 3135, insofar as mortgages to banks or banking or credit institutions are concerned, to which class the RFC belongs. At any rate, the conflict between the two (2) laws must be resolved in favor of Rep. Act No. 337, both as a special and as the subsequent legislation. SPS VICTOR and GRACE ONG vs. CA FACTS: Kenlene Laboratories, Inc. obtained a loan from Premier Development Bank (PDB) in the amount of 10million. Spouses Ong executed a promissory note obligating themselves to pay PDB the amount of the loan with interest at 31% per annum with monthly installment ofP292,658.08. The petitioners loan application with the PDB was secured by a real estate mortgage over Spouses Ongs residential property in West Greenhills, San Juan. For failure of the Spouses Ong to pay their monthly amortizations, PDB initiated extrajudicial foreclosure proceedings on the real estate mortgage with the Provincial Sheriff . . The Notice of Sheriffs Sale dated May 19, 1993 was prepared and issued by the Clerk of Court the deputy sheriff issued a certificate of posting which was followed by the issuance of an affidavit of publication by the editor of Alppa Times The deputy sheriff set the public auction sale of the mortgaged property. The mortgaged property was sold to PDB for P18,914,349.37. A certificate of sale over the mortgaged property was prepared and annotation on the title was made. Within the one-year redemption period, PDB filed a petition for a writ of possession, which was granted by the RTC. A writ of possession was issued. Spouses Ong filed a motion for reconsideration to recall the writ of possession, but it was denied by the RTC. Thereafter, Spouses Ong filed a petition for prohibition and preliminary injunction before the CA

to enjoin the public respondents from taking further action in connection with the extra-judicial foreclosure sale made including the implementation of the writ of possession. CA rendered a decision dismissing their petition. Their motion for reconsideration was likewise denied. Decision of the RTC: dismissing the complaint filed by Spouses Ong, the dispositive portion of which reads, as followsThe RTC ruled, among others, that Spouses Ong voluntarily and intelligently entered into a valid loan contract with the PDB. The latter was able to prove that Spouses Ong defaulted in the payment of their loan obligations, so it was proper for it to foreclose their collateral for the subject loan. The RTC further held that there were no irregularities in the conduct of the foreclosure proceedings, which resulted in the grant of the writ of possession. First, Spouses Ongs claim of irregularities was never previously raised and contrary to their contentions during the proceedings for the issuance of the writ of possession. In fact, they intervened only at the time PDB requested for the issuance of a writ of possession. They did not question the conduct of the foreclosure particularly the alleged defect in the publication of the notice of sheriffs sale by Alppa Times. Second, the affidavit of publication executed by the editor of Alppa Times entitled said document to be given full faith and credit in the absence of competent evidence showing that its due execution was tainted with defects and irregularities that would warrant a declaration of its nullity. Third, the Notice of Sale was posted in a conspicuous place within the Municipal Hall of San Juan. Thus, the presumption of regularity in the performance of duty by the sheriff prevailed. Fourth, it was established in the certification issued by the Office of the Clerk of Court that Alppa Times was duly accredited as a publisher of the notice of sheriffs sale at the time of the foreclosure of the subject property. Spouses Ongs self -serving statement that Alppa Times was not a newspaper of general circulation could not prevail over the issued certification by the Clerk of Court and Ex-Officio Sheriff.

Finally, the RTC found that the newspaper dealer and newspaper vendor presented by Spouses Ong were not expert witnesses or even competent enough to declare that Alppa Times was a non-existent publication and not a newspaper of general circulation. ISSUE WHETHER OR NOT THE COURT OF APPEALS ERRED IN SUSTAINING THE VALIDITY OF THE EXTRA-JUDICIAL FORECLOSURE PROCEEDINGS. Petitioners Position The following arguments were raised by Spouses Ong in support of their position that the subject foreclosure sale was null and void for noncompliance with the requirements of Act No. 3135. 1] There was no posting of the notice of sheriffs sale for at least twenty (20) days. 2] There was no showing that the notice of sale was posted in three (3) public places within the municipality. 3] There was no adequate showing of newspaper publication for three (3) consecutive weeks. 4] There was no proof that the Alppa Times was a newspaper of general circulation within the Municipality of San Juan, Metro Manila, as required by Act No. 3135, as amended. 5] The proper party did not execute the certificate of sale. 6] Respondent banks petition for foreclosure did not specify the amount sought to be liquidated thereby. 7] Respondent banks computation of the obligation was not in accordance with the promissory notes. 8] The RTC erred in admitting in evidence the bank ledgers. Respondent Banks Position PDB counters that the findings of fact of the CA and the RTC were in accordance with the evidence presented and the law applicable in the said case. It further argues that both courts committed no reversible error in ruling that the foreclosure proceedings were conducted in the regular performance of duties by the sheriff and strictly in accordance with the law.PDB likewise asserts that Spouses Ongs default on their loan obligations warranted the legitimate exercise by PDB of its rights under the loan and mortgage contracts. It likewise contends that to entertain the challenge of Spouses Ong will allow them to re-open the merits of a final

and already executed decision of this Court on the writ of possession given to PDB. RULING : The petition lacks merit. First of all, the issue raised by Spouses Ong of whether the legal requirements for a valid foreclosure sale under Act No. 3135 has been actually followed is a question of fact that does not deserve a review by this Court. The recent case of Century Savings Bank v. Spouses Danilo T. Samonte and Rosalinda M. Samonte[9] is instructive: The main issue in the case at bar is whether the extrajudicial foreclosure sale of respondents mortgaged properties was valid. The resolution of said issue, however, is dependent on the answer to the question of whether the legal requirements on the notice of sale were complied with. Necessarily, the Court must review the evidence on record, most especially, Notary Public Magpantays Certificate of Posting, to determine the weight and probative value to accord the same. Non-compliance with the requirements of notice and publication in an extrajudicial foreclosure sale is a factual issue. The resolution thereof by the lower courts is binding and conclusive upon this Court. However, this rule is subject to exceptions, as when the findings of the trial court and the Court of Appeals are in conflict. Also, it must be noted that non-compliance with the statutory requisites could constitute a jurisdictional defect that would invalidate the sale. In the case at bench, the RTC and the CA ruled that the foreclosure proceedings conducted on the mortgaged property of Spouses Ong enjoyed the presumption of regularity in the absence of evidence to the contrary. The Court respects the ruling of the courts below. It is an elementary rule that the burden of proof is the duty of a party to present evidence on the facts in issue necessary to establish his claim or defense as required by law. The Court has likewise ruled in previous cases that foreclosure proceedings enjoy the presumption of regularity and that the mortgagor who alleges absence of a requisite has the burden of proving such fact. In this case, Spouses Ong failed to overcome this presumption with no sufficient evidence to prove the

contrary. Except for their bare allegations, no convincing proof of non-compliance with the posting requirement was presented. On the other hand, the foreclosure procedure undertaken by PDB was supported by an authenticated and duly executed Affidavit of Publication,[11] Certification of the Office of the Clerk of Court that Alppa Times is an accredited publisher of Notice of Sheriffs Sale,[12] Notice of Sheriffs Sale[13] and Certificate of Posting.[14] Spouses Ong likewise failed to present solid evidence of collusion between the Clerk of Court and Deputy Sheriff, on one hand, and PDB, on the other. Without doubt, the documents shown by PDB prove that the subject foreclosure proceedings were conducted in a regular manner and in accordance with law. With respect to the computation of Spouses Ongs loan obligation, the Court agrees with the ruling of the CA that there was no error committed by PDB in computing their total loan obligation. The loan documents presented by PDB which included the promissory notes, real estate mortgage, and the continuing guaranty/comprehensive security all prove that Spouses Ong owed PDB a sum of money and failed to settle that obligation. Naturally, the petitioners default on their loan obligations warranted the legitimate exercise by the respondent bank of its rights under the loan and mortgage contracts. Spouses Basilio and Norma Hilaga vs. Rural Bank of Isulan, etc., G.R. No. 179781. April 7, 2010 FACTS: Petitioners obtained a loan from respondent Rural Bank of Isulan Inc., in the amount of P2,500.00. To secure the loan, they executed a Real Estate Mortgage4over their land property. When petitioners failed to pay their obligation when it became due, the respondent bank initiated foreclosure proceedings. The subject property was sold at a public auction by the Provincial Sheriff on April 20, 1977 and a Certificate of Extrajudicial Sale a was issued in favor

of the Rural Bank of Isulan (Cotabato) Inc. as the highest bidder. The respondent bank then took possession of the foreclosed property. Meanwhile, unknown to respondent bank, a Free Patent title7(Original Certificate of Title No. P19766) had been issued in favor of petitioners on August 4, 1976 or before the foreclosure sale. On September 21, 1994, or more than seventeen (17) years after the foreclosure sale, petitioner Basilio Hilaga sent a letter to the respondent bank's lawyer, the late Atty. Ismail Arceno, conveying his desire to redeem the subject property. When the letter remained unanswered, petitioners, through their counsel, again sent a letter, seeking to redeem the foreclosed property. The second letter, however, also remained unheeded. Thus, on June 3, 1999, petitioners filed a complaint a for Redemption of Foreclosed Mortgaged Property Under [Act No. 3135], seeking to redeem the subject property from the respondent bank under the provisions of Act No. 3135. In their complaint, petitioners alleged that the mortgage and subsequent foreclosure of the subject property had not been annotated on the title nor registered with the Register of Deeds. Also, no annotation and consolidation of ownership was made in favor of the respondent bank. Thus, the one (1)-year redemption period under Act No. 3135, which commences from the date of registration of the sale, has not yet started. They insisted that, indeed, their right of redemption has not yet expired because under Section 119 of Commonwealth Act No. 141 or the Public Land Act, a homesteader whose homestead has been sold at a public auction by virtue of an extrajudicial foreclosure, may repurchase said land within five (5) years from the date of registration of the sale. Thus, they can still exercise their right of redemption. They signified their willingness to redeem or repurchase the foreclosed property by depositing the amount of P10,000.00 with the court.

In its Answer with Counterclaim, the respondent bank averred that when the real estate mortgage in its favor was executed, the parcel of land was merely covered by a tax declaration. That unknown to the respondent bank, petitioners proceeded to apply for and cause the issuance in 1976 of a free patent and torrens title to the land; hence, they are estopped to claim that the parcel of land mortgaged is covered by a free patent and torrens title. They likewise cannot avail of the benefits afforded to a grantee of a public land under the Homestead and Free Patent Laws because they violated the terms and conditions of their application to avail of a grant by homestead or free patent when they mortgaged the land. As aforesaid, the trial court rendered judgment in favor of petitioners. The trial court ruled that because the certificate of sale was not registered, petitioners can still redeem the subject property. On appeal, the CA reversed the trial court. According to the CA, the right of petitioners to redeem their foreclosed property can only be exercised within two (2) years from the date of foreclosure, as provided under Republic Act No. 72013ca or the Rural Banks' Act, as amended by Republic Act No. 2670. The CA also ruled that petitioners are guilty of laches. CA Denied the MR of the petitioners. ISSUE: Whether or not the petitioners have only 2 years to redeem their property from the issuance certificate of sale after the same was foreclosed. RULING: Section 5 of Republic Act No. 720, as amended by Republic Act Nos. 2670 and 5939, specifically provides for the redemption period for lands foreclosed by rural banks. It provides in part as follows: Loans may be granted by rural banks on the security of lands without Torrens titles where the owner of private property can show five years or more of peaceful, continuous and uninterrupted possession in the concept of an owner; x x x or of homesteads or free patent lands pending the issuance of titles but already approved, the provisions of any law or regulations to the contrary notwithstanding:

Provided, That when the corresponding titles are issued the same shall be delivered to the register of deeds of the province where such lands are situated for the annotation of the encumbrance: x x x Provided, That when a homestead or free patent land is foreclosed, the homesteader or free patent holder, as well as their heirs shall have the right to redeem the same within two years from the date of foreclosure in case of a land not covered by a Torrens title or two years from the date of the registration of the foreclosure in case of a land covered by a Torrens title x x x. In Sta. Ignacia Rural Bank, Inc. v. Court of Appeals, we summarized the rules on redemption in the case of an extrajudicial foreclosure of land acquired under our free patent or homestead statutes as follows. If the land is mortgaged to a rural bank under Republic Act No. 720, as amended, the mortgagor may redeem the property within two (2) years from the date of foreclosure or from the registration of the sheriffs certificate of sale at such foreclosure if the property is not covered or is covered, respectively, by a Torrens title. If the mortgagor fails to exercise such right, he or his heirs may still repurchase the property within five (5) years from the expiration of the two (2)-year redemption period pursuant to Section 119 of the Public Land Act (C.A. No. 141). If the land is mortgaged to parties other than rural banks, the mortgagor may redeem the property within one (1) year from the registration of the certificate of sale pursuant to Act No. 3135. If he fails to do so, he or his heirs may repurchase the property within five (5) years from the expiration of the redemption period also pursuant to Section 119 of the Public Land Act. In the present case, petitioners admit that when the property was mortgaged, only the tax declaration was presented. Although a free patent title was subsequently issued in their favor on August 4, 1976, petitioners failed to inform the creditor rural bank of such issuance. As a result, the certificate of sale was not registered or annotated on the free patent title.

Petitioners are estopped from redeeming the property based on the free patent title which was not presented during the foreclosure sale nor delivered to the Register of Deeds for annotation of the certificate of sale as required under Section 5 of Republic Act No. 720, as amended. Estoppelin pais arises when one, by his acts, representations or admissions, or by his own silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts. Petitioners cannot fault respondent for the nonregistration of the certificate of sale because petitioners did not inform the respondent bank that a Torrens title had already been acquired by them on August 4, 1976. By their silence and inaction, petitioners misled the respondent bank to believe that their only proof of ownership was the tax declaration. Thus, the two (2)-year redemption period shall be reckoned from the date of the foreclosure. For the same reason, petitioners assertion that they will have five (5) years from the date of registration of the sale to redeem the foreclosed property under Section 119 of the Public Land Act has no merit, the reckoning period for the redemption period being properly from the date of sale. But even assuming arguendo that petitioners can avail of the five (5)-year redemption period provided under Section 119 of the Public Land Act, they still failed to exercise their right of redemption within the reglementary period provided by law. As mentioned earlier, Section 119 of said Act expressly provides that where the land involved is acquired as a homestead or under a free patent, if the mortgagor fails to exercise the right of redemption, he or his heirs may still repurchase the property within five (5) years from the expiration of the two (2)-year redemption period. The auction sale having been conducted on April 20, 1977, petitioners had until April 20, 1984 within which to redeem the mortgaged property. Since petitioner only filed the

instant suit in 1999, their right to redeem had already lapsed. It took petitioners twenty-two (22) years before instituting an action for redemption. The considerable delay in asserting ones right before a court of justice is strongly persuasive of the lack of merit in petitioners claim, since it is human nature for a person to enforce his right when the same is threatened or invaded.