G.R. No. 101083
METROPOLITAN BANK AND TRUST COMPANY, petitioner, vs. HON. COURT OF APPEALS AND SPOUSES FORTUNATO and VIRGINIA VITAL, respondents.

July 8, 1996

FACTS

Spouses Fortunato and Virginia Vital obtained a loan from Metropolitan Bank and Trust Company (Metrobank) secured by a real estate mortgage over their property. They defaulted on the loan. Metrobank extrajudicially foreclosed the mortgage and purchased the property as the highest bidder at the public auction. The one-year redemption period expired without the Vitals redeeming the property. Metrobank then filed a petition for the issuance of a writ of possession with the Regional Trial Court (RTC), which was granted. The Vitals appealed to the Court of Appeals, arguing that the foreclosure and sale were void because Metrobank failed to serve them with a copy of the application for foreclosure, as allegedly required by Act No. 3135. The Court of Appeals set aside the RTC’s order, ruling that the lack of personal notice to the mortgagors rendered the foreclosure sale void. Metrobank elevated the case to the Supreme Court via petition for review.

ISSUE

Whether the extrajudicial foreclosure sale is void for lack of personal notice to the mortgagors of the application for foreclosure.

RULING

No. The extrajudicial foreclosure sale is valid. The Supreme Court reversed the decision of the Court of Appeals and reinstated the RTC order granting the writ of possession to Metrobank.

The Court held that Act No. 3135, as amended, which governs extrajudicial foreclosure of real estate mortgages, does not require that the mortgagor be personally served with a copy of the application for foreclosure. The law only requires the posting of notices of sale in three public places and the publication of the notice in a newspaper of general circulation. Personal notice to the mortgagor is not a jurisdictional requirement. The purpose of the notice and publication is to inform the public of the sale to ensure a competitive bidding and prevent a sacrifice of the property. Since Metrobank complied with the statutory requirements of posting and publication, the foreclosure sale was valid. Consequently, upon expiration of the redemption period without redemption, the purchaser at the foreclosure sale is entitled as a matter of right to a writ of possession, which is a ministerial function of the court.