GR 174581; (February, 2015) (Digest)
G.R. No. 174581 February 4, 2015
ATTY. LEO N. CAUBANG, Petitioner, vs. JESUS G. CRISOLOGO and NANETTE B. CRISOLOGO, Respondents.
FACTS
Respondents spouses Jesus and Nannette Crisologo obtained loans from PDCP Development Bank Inc., secured by a real estate mortgage on their property. After defaulting on payments, the bank initiated extrajudicial foreclosure proceedings. Petitioner Atty. Leo N. Caubang, as Notary Public, prepared the Notices of Sale and caused their posting in three public places and publication in the “Oriental Daily Examiner,” a local newspaper in Davao City. The auction sale proceeded with the bank as the sole bidder. The spouses later filed a Complaint for Nullity of Extrajudicial Foreclosure and Auction Sale and Damages against the bank and Caubang. The Regional Trial Court nullified the foreclosure sale for failure to comply with the publication requirement. The Court of Appeals affirmed the RTC decision with modification, ordering Caubang to pay the spouses attorney’s fees and litigation expenses. Caubang filed the present petition, assailing the CA’s ruling on the publication.
ISSUE
Whether the Court of Appeals erred in affirming the nullity of the extrajudicial foreclosure sale and in holding Atty. Caubang liable for attorney’s fees and litigation expenses due to improper publication of the notices of sale.
RULING
The Supreme Court DENIED the petition and AFFIRMED the Decision and Resolution of the Court of Appeals. The Court held that the statutory requirements for publication of a notice of sale in foreclosure proceedings under Act No. 3135 are mandatory and imbued with public policy. The “Oriental Daily Examiner” was not a newspaper of general circulation as required by law; it was not on the list of accredited newspapers in the Davao RTC’s Office of the Clerk of Court, had no paying subscribers, and published only when there were customers. This failure to properly publish constituted a jurisdictional defect that vitiated the sale. Since Caubang caused the improper publication, which compelled the spouses to litigate to protect their interest, he was properly held liable for the spouses’ litigation expenses and attorney’s fees.