G.R. No. L-48278 November 8, 1988
AURORA TAMBUNTING, ANTONIO TAMBUNTING, JOSE P. TAMBUNTING and THE ACTING PROVINCIAL SHERIFF FOR THE PROVINCE OF RIZAL, petitioners, vs. HON. COURT OF APPEALS, DAMASO R. CRUZ, and MONICA ANDRES, respondents.

FACTS

Private respondents, spouses Damaso R. Cruz and Monica Andres, obtained a loan from petitioners, spouses Antonio and Aurora Tambunting, secured by a real estate mortgage. Upon the debtors’ failure to pay, the creditors petitioned for extrajudicial foreclosure. The initial auction sale was enjoined by a court order due to a suit for annulment of mortgage filed by the Cruzes. After the restraining order was lifted, the sale was rescheduled. On the date of the rescheduled sale, January 26, 1968, the Cruzes, through counsel, sent a letter to the sheriff requesting a postponement and a notice of lis pendens, citing the pending annulment case. The sheriff proceeded with the sale, and the property was sold to the Tambuntings. The title was eventually consolidated in Aurora Tambunting’s name and later transferred to Tambunting Realty Corporation.
The trial court, in the annulment case, upheld the validity of the mortgage and the underlying debt but declared the foreclosure sale null and void. It ordered the Cruzes to pay the loan with interest and directed the reinstatement of the original title in their names. The Court of Appeals affirmed this decision. The Tambuntings elevated the case to the Supreme Court, arguing the foreclosure sale was valid and that the Cruzes were not entitled to the property’s rentals collected during the redemption period.

ISSUE

The core issue is whether the extrajudicial foreclosure sale conducted on January 26, 1968, was valid despite the debtor’s written request for postponement and notice of lis pendens served on the sheriff on the very day of the sale.

RULING

The Supreme Court denied the petition and affirmed the lower courts’ rulings, declaring the foreclosure sale null and void. The legal logic rests on the mandatory nature of the publication and posting requirements under Act No. 3135 , as amended. The Court found that the publication of the notice of sale for the January 26 auction was defective. The notice was published only on December 20, 1967, which was less than the three-week publication period required by law, as the sale date fell on the fifth week from the first publication. This fatal defect rendered the sale void.
Furthermore, the Court addressed the effect of the written request for postponement. While the sheriff is generally not obligated to grant a postponement requested unilaterally by the debtor, the act of sending such a written request, coupled with the notice of lis pendens informing the sheriff of a pending suit directly attacking the mortgage being foreclosed, created a circumstance that should have prompted the sheriff to exercise prudent discretion. Proceeding with the sale despite these communications, especially in light of the defective publication, contributed to the sale’s invalidity. The Court also ruled, on a matter of equity and substantive law, that the purchaser (Tambuntings) must account to the mortgagors (Cruzes) for the rentals or profits derived from the property during the period they were deprived of its possession, to be credited against the redemption price or the outstanding obligation.