GR 129279; (March, 2003) (Digest)
G.R. No. 129279 ; March 4, 2003
ALFREDO M. OUANO, petitioner, vs. COURT OF APPEALS, and HEIRS OF JULIETA M. OUANO, respondents.
FACTS
Julieta M. Ouano obtained a loan from the Philippine National Bank (PNB), secured by a real estate mortgage over two parcels of land. Upon her default, PNB initiated extrajudicial foreclosure. The sheriff published the notice of sale for December 5, 1980, in a newspaper of general circulation and posted it as required by law. However, the sale did not proceed on that date. Instead, the parties executed four separate “Agreements to Postpone Sale,” which successively moved the auction date to February 5, 1981, February 28, 1981, March 30, 1981, and finally to May 29, 1981. Each agreement stipulated that the postponement was to be “without any further republication of the notice of sale as required by law.” The sale was finally conducted on May 29, 1981, with PNB as the winning bidder. After the redemption period lapsed, PNB consolidated title and later sold the properties to Alfredo Ouano, Julieta’s brother.
ISSUE
Whether the extrajudicial foreclosure sale conducted on May 29, 1981, is valid despite the lack of republication of the notice of sale for the postponed dates.
RULING
The Supreme Court affirmed the decisions of the lower courts and declared the foreclosure sale null and void. The legal logic is anchored on the mandatory nature of the publication requirement under Act No. 3135 , as amended. The law requires that notice of sale in extrajudicial foreclosure must be published once a week for at least three consecutive weeks in a newspaper of general circulation. This requirement is jurisdictional; non-compliance renders the sale void. The Court held that the original publication for the December 5, 1980 sale could not extend its effectivity to the rescheduled dates months later. Each new sale date set by the agreements constituted a distinct auction, necessitating a new publication to inform the public and ensure competitive bidding. The parties’ stipulation to waive republication was invalid, as the publication requirement is a matter of public policy designed to protect the mortgagor and the public interest, not merely a right that can be waived by private agreement. Consequently, the sale conducted on May 29, 1981, without republication, was void. The Court also rejected the defense of laches, finding that Julieta acted promptly to annul the sale upon discovering the irregularities.