GR 144877; (September, 2001) (Digest)
G.R. No. 144877 ; September 7, 2001
DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. VERONICA AGUIRRE and THE HONORABLE COURT OF APPEALS (Ninth Division), respondents.
FACTS
Petitioner Development Bank of the Philippines (DBP) granted a loan to respondent Veronica Aguirre, secured by a real estate mortgage. Due to Aguirre’s default, DBP initiated extrajudicial foreclosure. A notice of sale was published in a newspaper of general circulation for three consecutive weeks, setting the auction for September 25, 1985. However, the sale did not proceed on that date and was instead held on January 7, 1986, with DBP as the highest bidder. After Aguirre failed to redeem, DBP consolidated title and scheduled a public auction of the property.
Aguirre then filed a complaint to annul the foreclosure sale and enjoin the auction, arguing her loan had been restructured and that she was not personally notified of the sale. The Regional Trial Court dismissed her complaint, finding DBP complied with publication requirements and that no restructuring agreement was finalized. The Court of Appeals reversed, invalidating the foreclosure sale due to DBP’s failure to present proof of posting the notice of sale in public places as additionally required by Act No. 3135 .
ISSUE
Whether the Court of Appeals erred in declaring the extrajudicial foreclosure sale null and void due to lack of proof of posting of the notice of sale.
RULING
The Supreme Court affirmed the Court of Appeals’ decision, but on a different legal ground, and modified the disposition. The Court clarified that under Section 3 of Act No. 3135 , for a property valued over P400.00, the notice of sale must be both posted in public places and published in a newspaper. Citing Olizon v. Court of Appeals, the Court held that newspaper publication alone can be sufficient compliance if it achieves the law’s purpose of wide publicity, rendering the lack of proof of posting non-fatal per se.
However, the Court invalidated the foreclosure sale on a jurisdictional defect not raised by the parties: the lack of republication of the notice. The originally published notice set the sale for September 25, 1985. The sale was unilaterally postponed and held on January 7, 1986, without a new publication. Applying Masantol Rural Bank, Inc. v. Court of Appeals, the Court ruled that a foreclosure sale held on a date different from that specified in the published notice is void, as it deprives the public of the required notice and violates the mandatory publication requirement, which is jurisdictional. Consequently, the foreclosure was annulled. The Court ordered Aguirre to pay her outstanding loan obligation to DBP, without prejudice to DBP’s right to foreclose the mortgage anew upon her failure to pay.