G.R. No. 152236; July 28, 2010
RPRP VENTURES MANAGEMENT & DEVELOPMENT CORPORATION, Petitioner, vs. HON. TEOFILO L. GUADIZ, JR., Presiding Judge, Regional Trial Court of Makati City, Branch 147; METROPOLITAN BANK AND TRUST COMPANY AND Atty. ENRIQUETO MAGPANTAY, in his capacity as a Notary Public of Makati City, Respondents.

FACTS

Petitioner RPRP Ventures obtained a loan from respondent Metrobank, secured by a real estate mortgage over a Makati property. The mortgage contract stipulated that foreclosure, in case of default, could be extrajudicially conducted under Act No. 3135. Petitioner defaulted, and Metrobank initiated extrajudicial foreclosure through respondent notary public Atty. Magpantay. The Notice of Sale was published in the Challenger News, and the property was auctioned, with Metrobank as the highest bidder.
Petitioner filed a complaint to annul the foreclosure sale, arguing it was void because: (1) the publication was not assigned by raffle per P.D. 1079; (2) the Challenger News was not a newspaper of general circulation; and (3) Metrobank failed to pay the filing fee under Rule 141. The trial court denied petitioner’s application for a preliminary injunction. The Court of Appeals dismissed petitioner’s subsequent petition for certiorari, prompting this appeal.

ISSUE

Whether the extrajudicial foreclosure sale is null and void due to alleged defects in publication and non-payment of filing fees.

RULING

The Supreme Court denied the petition and affirmed the lower courts’ rulings. The legal logic is anchored on the principle that contracts are binding as the law between the parties. The mortgage contract expressly authorized extrajudicial foreclosure under Act No. 3135, which governs the proceedings. The Court held that the administrative requirements petitioner cited were not applicable at the time of the foreclosure. The publication requirement under P.D. 1079, regarding raffle assignment to newspapers, applies to court-ordered publications, not to notices of extrajudicial foreclosure by a notary public under Act No. 3135. Furthermore, the filing fee under Rule 141, Sec. 7(c), was imposed by an administrative matter (A.M. No. 99-10-05-0) that took effect only on January 15, 2000, after the foreclosure petition was filed and the sale was conducted in late 1999. Thus, the notary public was not obligated to collect such a fee. The Court also noted that petitioner’s challenge regarding the computation of penalties was rendered moot, as Metrobank had abandoned the charge, and petitioner’s default persisted. The foreclosure was therefore valid.