GR 97070; (March, 1993) (Digest)
G.R. No. 97070 March 19, 1993
ARTURO GRAVINA AND ZENAIDA GRAVINA, petitioners, vs. THE HON. COURT OF APPEALS, THE HON. ALFRIN S. VICENCIO, PRESIDING JUDGE, BR. 50, RTC, MANILA, ALFREDO B. TAN, LUCILA EDNA TAN, DAILY SAVINGS AND LOAN ASSOCIATION, INC., AND MERCANTILE FINANCING CORPORATION, respondents.
FACTS
Petitioners Arturo and Zenaida Gravina were the original owners of a lot in Tondo, Manila. They mortgaged it to Daily Savings and Loan Association (DLSA) in 1973 to secure loans totaling P109,000.00. For failure to settle the obligation, DLSA extrajudicially foreclosed the mortgage on September 10, 1974, and bought the property at the public auction. Ownership was consolidated in favor of DLSA on October 10, 1974, and a new title was issued to it. DLSA sold the property to Mercantile Financing Corporation on January 29, 1976, which in turn sold it to spouses Alfredo and Lucila Edna Tan on February 25, 1976. The Tans filed an ejectment case against the Gravinas, which was dismissed by the RTC, prompting the Tans to file an action for recovery of possession. The RTC ruled in favor of the Tans. The Gravinas appealed to the Court of Appeals, which affirmed the RTC decision. The Gravinas then filed this petition for review, challenging the validity of the foreclosure and subsequent sales.
ISSUE
1. Whether the extrajudicial foreclosure of the mortgage by DLSA was valid.
2. Whether the public auction sale was conducted in accordance with law.
3. Whether the consolidation of title in DLSA’s name was valid.
4. Whether the sale to Lucila Edna Tan, a bank employee, was valid.
RULING
The Supreme Court DENIED the petition for review. On the first three issues, the Court held that the extrajudicial foreclosure was valid. The factual findings of the lower courts, that DLSA sent a notice letter to the petitioners (which they failed to claim) and published the notice in a newspaper of general circulation, are binding. Personal notice to the mortgagors is not required under Section 3 of Act No. 3135 ; posting in three public places and publication are sufficient. On the fourth issue, the sale to the Tans was valid. They purchased the property not directly from DLSA but from Mercantile Financing Corporation. Furthermore, there is no prohibition against a bank selling property acquired at foreclosure to its employee, and the claim of collusion was not proven.