GR 167058; (July, 2008) (Digest)
G.R. No. 167058 ; July 9, 2008
PHILIPPINE NATIONAL BANK, Petitioner, vs. SPOUSES TOMAS CABATINGAN and AGAPITA EDULLANTES Represented by RAMIRO DIAZ as Their Attorney-in-Fact, Respondents.
FACTS
Respondent spouses obtained loans from petitioner Philippine National Bank, secured by a real estate mortgage. Due to their failure to fully pay the obligation, the bank extrajudicially foreclosed the mortgage. A notice of sale stated the auction would be held on November 5, 1991, between 9:00 a.m. and 4:00 p.m. The auction was conducted as scheduled, beginning at 9:00 a.m. and concluding after 20 minutes, with the bank as the highest bidder.
Subsequently, the respondent spouses filed a complaint for annulment of the foreclosure and auction sale. They argued that the sale was void because Section 4 of Act 3135, requiring the sale to be held “between the hours of nine in the morning and four in the afternoon,” mandates that the auction must last the entire seven-hour period. The Regional Trial Court agreed and annulled the sale, ruling that the prescribed timeframe was intended to give more opportunity for bidders to participate.
ISSUE
Whether a sale at public auction, to be valid under Section 4 of Act 3135, must be conducted for the entire duration from 9:00 a.m. until 4:00 p.m. of the scheduled day.
RULING
The Supreme Court granted the petition and reversed the RTC. The Court held that the RTC erred in its interpretation of Section 4 of Act 3135. The provision does not require the auction to last the entire seven-hour period. The phrase “between the hours of nine in the morning and four in the afternoon” merely establishes the permissible time frame within which the sale must be conducted; it sets the earliest start time and the latest end time.
The word “between” signifies a time interval. Therefore, a sale conducted at any point within that interval, from 9:00 a.m. until 4:00 p.m., is legally compliant. The duration of the auction is not prescribed by law. The legislative intent of Act 3135 is to safeguard the rights of both debtor and creditor through a prescribed procedure. A sensible construction of the law must be mutually beneficial. Requiring a full-day auction could unduly delay the creditor’s ability to satisfy a claim without providing a corresponding substantive benefit to the debtor, who remains liable for any deficiency. Since the November 5, 1991 auction began at 9:00 a.m., it was held within the lawful timeframe, rendering the sale valid.