G.R. No. 201881 . September 05, 2018
SPOUSES FLAVIO P. BAUTISTA AND ZENAIDA L. BAUTISTA, PETITIONERS, V. PREMIERE DEVELOPMENT BANK; AND ATTY. PACITA ARAOS, SENIOR ASSISTANT VICE PRESIDENT & ACTING HEAD OF LEGAL AND COLLECTION GROUP, PREMIERE DEVELOPMENT BANK, RESPONDENTS.

FACTS

Petitioners obtained a loan from respondent Premiere Development Bank, secured by a real estate mortgage. Upon default, the bank initiated extrajudicial foreclosure. The sheriff initially scheduled a sale for January 15, 2002, with the notice properly published and posted. However, the sale did not proceed on that date and was rescheduled to February 18, 2002. Crucially, no new publication or posting of notice for this rescheduled date was made. Despite this lack of republication and reposting, the foreclosure sale was conducted on February 18, 2002, with the bank as the winning bidder.
The petitioners later attempted to redeem the property by tendering a sum they believed was sufficient, but the bank refused, consolidated its ownership, and a new title was issued in its name. The petitioners filed a complaint for annulment of the foreclosure sale, arguing it was void due to the lack of publication and posting for the rescheduled date. The Regional Trial Court dismissed the complaint, ruling the petitioners had waived the requirements by requesting prior postponements and were estopped by their redemption attempt. The Court of Appeals affirmed this decision.

ISSUE

Whether the extrajudicial foreclosure sale conducted on the rescheduled date without republication and reposting of the notice is valid.

RULING

No. The Supreme Court reversed the lower courts and declared the foreclosure sale void ab initio. The publication and posting of the notice of sale are mandatory and jurisdictional requirements under Act No. 3135 . These requirements are rooted in public policy to ensure a competitive bidding process and afford the mortgagor and the public adequate notice; they are not merely for the benefit of the contracting parties and cannot be waived.
The legal logic is clear: a postponement creates a new sale date. The notice for the original date cannot serve the new date. The purpose of publication—to inform the public and attract the highest possible bid—is defeated if notice is not given for the actual date of the sale. The Court emphasized that the statutory mandate is absolute. The petitioners’ prior requests for postponement did not constitute a waiver of the publication requirement for the new date. Furthermore, their act of tendering a redemption price did not estop them from challenging the sale’s validity, as the sale itself was a nullity from the beginning. Consequently, the Court ordered the annulment of the sale and the related certificate of title issued to the bank, and directed the reinstatement of the petitioners’ original title.