G.R. No. L-4083, August 31, 1953
L.F. LANG, plaintiff-appellee, vs. THE ACTING PROVINCIAL SHERIFF OF SURIGAO, defendant-appellee; PHILIPPINE TRUST COMPANY, defendant-intervenor-appellant; MONTGOMERY W. RICE, intervenor.

FACTS

On July 21, 1948, Bucas Grande Lumber Corporation executed a chattel mortgage for P150,000 in favor of Philippine Trust Company over its machineries and equipment on Bucas Grande Island, Surigao. A second mortgage deed for the same amount and properties was executed on April 12, 1949. Due to non-payment, the mortgagee’s attorneys requested the provincial sheriff of Surigao to foreclose and sell the mortgaged properties on September 30, 1949. The sheriff postponed the sale to October 8, 1949, where Philippine Trust Company was the sole bidder at P40,000, and a certificate of sale was issued. However, the certificate omitted many items listed in the mortgage deed, leading Philippine Trust Company to protest. The sheriff agreed to conduct a second sale on November 10, 1949, but without notifying Philippine Trust Company adequately, he advanced the sale to November 7, 1949. Notice via telegram was sent on November 5 but received by Philippine Trust Company only on November 7. At the advanced sale, L.F. Lang was the sole bidder at P15,000. Philippine Trust Company protested the sale’s legality and later submitted a P16,000 bid on November 10. The provincial fiscal opined the second sale was illegal, prompting the sheriff to schedule a third sale on November 28, where Philippine Trust Company bid P16,000. Lang sued to compel the sheriff to execute a certificate of sale in his favor and to prevent issuance to Philippine Trust Company, which intervened seeking a deed for its P16,000 bid and damages.

ISSUE

1. Whether the first foreclosure sale (October 8, 1949) was valid.
2. Whether the second foreclosure sale (November 7, 1949) was valid despite lack of statutory notice to the mortgagee.
3. Whether Philippine Trust Company waived its right to object to the second sale’s irregularities.

RULING

1. The first sale was invalid. There was no meeting of the minds between the sheriff and Philippine Trust Company regarding the identity of the properties sold, as the certificate of sale omitted items listed in the mortgage deed. This misunderstanding voided the sale.
2. The second sale was invalid. Although the mortgagor waived the 10-day notice requirement under Section 14 of Act No. 1508, the mortgagee did not. The sheriff advanced the sale date without giving Philippine Trust Company sufficient notice or opportunity to bid, violating the mortgagee’s rights. The sale was null and void.
3. Philippine Trust Company did not waive its objections. Its request for postponement and subsequent bid submission did not constitute waiver or estoppel, as it acted in good faith and promptly protested upon learning the sale had been consummated.
4. The third sale (November 28, 1949) was valid. As the first two sales were invalid, the third sale proceeded lawfully. Philippine Trust Company’s P16,000 bid was accepted, and the sheriff was ordered to execute the corresponding certificate of sale in its favor.
5. No damages were awarded. The court found no evidence that the sheriff acted maliciously or that Lang was responsible for the advanced sale. Claims for damages by both parties were dismissed.
The Supreme Court reversed the trial court’s decision, declaring the second sale void and upholding the third sale in favor of Philippine Trust Company. Costs were taxed against Lang.