G.R. No. 230200 . July 03, 2023.
ANTONIO BACLIG, PETITIONER, VS. THE RURAL BANK OF CABUGAO, INC., FLORANTE R. RIGUNAY, MIGUEL A. FRANDO AND THE REGISTER OF DEEDS OF ILOCOS SUR, RESPONDENTS.

FACTS

In 1972, the parents of petitioner Antonio Baclig and his siblings obtained a loan from respondent Rural Bank of Cabugao, Inc., secured by a real estate mortgage over a parcel of land. Upon maturity, the parents failed to pay, leading the Bank to foreclose the property extrajudicially. The Bank was the sole bidder at the auction sale. After the redemption period lapsed without redemption, the Bank consolidated ownership. In 2004, the parents filed a case for Annulment of Foreclosure and Auction Sale, alleging the sale was unconscionable due to price inadequacy and void for lack of personal notice. They were later substituted by their children, the Bacligs. The Regional Trial Court dismissed the complaint, a decision affirmed by the Court of Appeals in its June 11, 2014 Decision. The CA later issued an Entry of Judgment, stating no Motion for Reconsideration or Supreme Court petition was filed. The Bacligs’ counsel, Atty. Melver Tolentino, filed an Urgent Motion to Set Aside, claiming he had filed a Motion for Reconsideration via registered mail. The CA required proof, and a Certification from the Philippine Postal Corporation indicated receipt by the CA of a registered mail item. However, the Division Clerk of Court reported that what was received was a Compliance for a different case, not the Motion for Reconsideration. The CA denied the Urgent Motion. Atty. Tolentino was later murdered. New counsel, Atty. Mayvelyn Tajon, filed a manifestation, but the CA, in its assailed January 20, 2017 Resolution, denied the prayer to consider the alleged motion and directed remand of records for execution. Petitioner filed this Petition for Review on Certiorari.

ISSUE

Did the appellate court err in issuing the assailed Resolution?

RULING

The Petition is partly meritorious. The Supreme Court relaxed the procedural rules on the reglementary period for filing a motion for reconsideration and the immutability of final judgments. While the records showed no Motion for Reconsideration was filed within the period, the Court found exceptional circumstances: a serious irregularity in the foreclosure proceedings that would render them void, and the failure to file the correct pleading was an honest mistake not attributable to the Bacligs, with their counsels exerting efforts to rectify it. Strict application would result in outright deprivation of property and a miscarriage of justice. The Court held that the rule on negligence of counsel binding the client has exceptions, including where its application results in deprivation of property or where justice so requires. On the merits, the Court found the foreclosure sale void. Act No. 3135 requires the sale to be held at the time specified in the notice. The Notice of Extra-Judicial Sale stated the auction would be on August 30, 1973, at 10:00 a.m. However, the Certificate of Sale indicated the sale was conducted on August 30, 1973, at 2:00 p.m. This discrepancy in the time of sale constituted a substantial violation of the statutory requirement, rendering the sale void. The Court reversed the CA and RTC decisions, declared the foreclosure sale void, and ordered the Register of Deeds to cancel the Bank’s title and reinstate the original title in the names of the Bacligs’ parents, subject to the payment of the outstanding loan obligation.