SECOND DIVISION
[G.R. No. 124372. March 16, 2000]
RENATO
CRISTOBAL and MARCELINA CRISTOBAL, petitioners, vs. THE COURT OF
APPEALS, RURAL BANK OF MALOLOS and ATTY. VICTORINO EVANGELISTA, respondents. Miä sedp
D E C I S I O N
QUISUMBING, J.:
This petition for review on certiorari
seeks to reverse and set aside the Decision dated September 16, 1994, and the
Resolution dated May 18, 1995, of the Court of Appeals in CA G.R. CV No. 39477.
That decision set aside the Judgment of the Regional Trial Court of Malolos,
Branch 72, in Civil Case No. 7887-M, (1) annulling the extrajudicial
foreclosure of mortgage, the sale of the properties at public auction, and the
issuance of titles to the properties in the name of respondent bank, and (2)
ordering the reconveyance of the same properties to petitioners.
The facts of the case on record[1] are as follows:
Petitioners are engaged in the buying and
selling of palay. To augment their capital, they applied and were granted a
loan by the respondent bank in the amount of P30,000.00 payable in 270 days.
The loan was secured by a mortgage over a parcel of land situated in Barrio
Concepcion, Baliwag, Bulacan and covered by TCT No. T-64721. Because
petitioners failed to pay their obligation on the date the loan fell due, the
bank caused the mortgaged property, to be foreclosed extrajudicially. At the
foreclosure sale on November 16, 1981, the bank was the sole and highest
bidder. The sheriff of Bulacan, who conducted the sale, then executed a
certificate of sale in the name of the bank. In turn the bank caused the
registration of the sale in the Office of the Registry of Deeds of Bulacan
(Exh. "17-a"). Petitioners failed to redeem the property, hence, the
title was consolidated in the name of the bank. Thereafter, a new transfer
certificate of title (TCT No. T-275695) was issued in the name of the bank. Misoedpâ
Through their attorney-in-fact Pacita
Cristobal, petitioners were granted another loan by the bank in the amount of
P70,000.00, secured by another real estate mortgage over four (4) parcels of
land covered by TCT Nos. T-235811, T-174185, T-146185 and T-174186 payable in
180 days. When the obligation fell due without plaintiffs paying their
indebtedness, the bank extrajudicially foreclosed the mortgage. As the highest
bidder in the auction sale of subject parcels, titles were consolidated in its
favor when petitioners failed to redeem the land. Consequently, new transfer
certificates of title were issued in the bank's name.
On November 29, 1984, petitioners filed an
action for annulment of extrajudicial foreclosure of mortgage and sale of
property and for reconveyance with damages.
Petitioners, as plaintiffs below, impugned
the validity of the extrajudicial foreclosure sales on the grounds that they
were not furnished a copy of the application for foreclosure by the bank and a
notice of the foreclosure sale; that the bank did not comply with the
requirements of Act No. 3135 with respect to posting of the notice of sale and
the publication of the sale in a newspaper of general circulation; that they
were not notified of the expiration of the period of redemption; and that the
interest due on the principal obligation was bloated. Edpâ mis
The bank, as defendant below, claimed in its
answer that it complied with the requirements of posting and publication
required under Act 3135 and that it had not charged nor increased the interest
rate of the principal obligations. It contended that the computation attached
to the complaint was not the amount of redemption but the amount at which the
bank may sell back, the property to the petitioners.
On January 24, 1985, the trial court issued
a writ of preliminary injunction enjoining the bank from taking the possession
of the property covered by TCT No. 64721.
After trial on the merits, the trial court
rendered its decision on April 21, 1992, disposing as follows:
"WHEREFORE,
in view of the foregoing, judgment is rendered by the Court as follows:
a) Declaring the
annulment of the extrajudicial foreclosure of mortgages, the sale of the properties
at public auction, the issuance of titles to the properties in the name of the
defendant bank and the reconveyance of the same to the plaintiffs.
The following
certificates of titles issued in the name of the defendant bank by the Registry
of Deed, Malolos, Bulacan, is ordered cancelled by the Court:
Exhibit 19 - TCT
No. T-275695
Exhibit 34 - TCT
No. T-281827
Exhibit 34-A - TCT
No. T-281825
Exhibit 34-B - TCT
No. T-281828LEX
Exhibit 34-C - TCT
No. T -281926
The Register of
Deeds is hereby ordered to issue new certificates of titles to the subject
properties in the name of the plaintiffs.
b) The Writ of
Preliminary Injunction previously issued by the Court on January 7, 1985 in
favor of the plaintiffs is hereby made permanent.
c) Ordering the
defendant bank to pay the plaintiffs the following amounts:
P10,000.00
attorney's fees
costs of the suit
with 6% interest
on all amounts due from the filing of this action on November 29, 1984 until
said amounts have been fully paid.
d) Plaintiffs, in
turn, are required to pay the following amounts to the defendant bank: Jjä sc
based on
computation No. 1 – P 73,431.162
based on
computation No. 2 – P171,930.066
P245,361.228
SO ORDERED."[2]
Finding the decision unacceptable, the bank
timely appealed to respondent Court of Appeals. It subsequently reversed and
set aside the judgment of the trial court. Petitioners filed a motion for
reconsideration but it was denied in a Resolution dated May 18, 1995. Hence,
this petition.
Petitioners now assign the following errors:
1. The public respondent erred when it held
that private respondent has substantially complied with the publication
requirement under the law.
2. Public respondent Court of Appeals erred
when it relied only on the testimony of private respondent's witness. ScÓ jj
3. Public respondent Court of Appeals erred
when it held that publication in the Mabuhay newspaper substantially complies
with the law.
At issue is whether respondent Court of
Appeals erred in finding that private respondents had complied substantially
with Section 3 of Act 3135, which provides that:
"Sec. 3.
Notice shall be given by posting notices of the sale for not less than twenty
days in at least three public places of the municipality or city where the
property is situated, and if such property is worth more than four hundred
pesos, such notice shall also be published once a week for at least three
consecutive weeks in a newspaper of general circulation in the municipality or
city."
Non-compliance with the requirements of
notice and publication in an extrajudicial foreclosure sale is a factual issue.
The resolution thereof by the lower courts is binding and conclusive upon this
Court.[3] However, this rule is subject to exceptions, as when
the findings of trial court and the Court of Appeals are in conflict.[4] Also, it must be noted that non-compliance with the
statutory requisites could constitute a jurisdictional defect that would
invalidate the sale. Sjä cj
Petitioners claim that respondent Court of
Appeals erred when it admitted the testimony of one Pedro Agustin, who
evidently had no personal knowledge of the actual postings of the notice of
sale. Following Section 36, Rule 130 of the Revised Rules of Court, such
testimony could be hearsay. According to petitioners, it is not based on the
personal knowledge of the witness but on the knowledge of some other person.
Hearsay evidence, whether objected to or not, has no probative value unless the
proponent can show that the evidence falls within the exceptions to the hearsay
evidence rule. Petitioners argue that respondent bank not only failed to submit
the certificate of posting but also failed to present before the court the
Deputy Sheriff who allegedly did the postings. The bank merely presented its
own employee, Pedro Agustin, who testified[5] that he was merely verbally notified by the Sheriff
that a notice of sale was posted. Respondent bank responded that the Sheriff
then in-charge of the matter was no longer available, and the records of the
foreclosure proceedings were no longer available also, because of the length of
time that had already elapsed.[6]
Moreover, in Bohanan vs. Court of
Appeals, 256 SCRA 355, 360-61, (1996), we have ruled that
non-presentation of a certificate of posting does not affect the intrinsic
validity of the questioned foreclosure sale. As therein held, "a
certificate of posting is not required, much less considered indispensable, for
the validity of a foreclosure sale" under Act 3135. Supremeä
Further, as respondent bank asserts, a
mortgagor who alleges absence of a requisite has the burden of establishing
that fact. Petitioners failed in this regard. Foreclosure proceedings have in
their favor the presumption of regularity and the burden of evidence to rebut
the same is on the petitioners.[7] As well said by the respondent appellate court:
"...Under the
circumstances, there is a basis for presuming that official duty has been
regularly performed by the sheriff. Being a disputable presumption, the same is
valid unless controverted by evidence. The presumption has not been rebutted by
any convincing and substantial evidence by the appellee who has the onus to
present evidence that appellant has not complied with the posting requirement
of the law. In the absence therefore of any proof to the contrary, the
presumption that official duty has been regularly performed stays."[8]
Petitioners also claim that the Court of
Appeals erred when it held that publication in the Mabuhay newspaper is a
substantial compliance with the requirement of the law. However, the records
show that the sheriff's notice of sale was published in the Mabuhay newspaper
generally circulated in the Province of Bulacan. Petitioners do not dispute
this fact. Affidavits of publication by Jose Pavia, Publisher/Editor of the Mabuhay
Weekly newspaper, and newspaper clippings of Mabuhay containing the notice of
sheriff’s sale in its October 12, 1981, November 1 & 8, 1981, September 26,
1982 and October 3 & 10, 1982 issues, were submitted by respondent bank. In
our view, these pieces of evidence prove substantial compliance. Courtä
In Olizon vs. Court of Appeals, 236 SCRA
148, 156 (1994), we held that, the publication of the notice of sale in a
newspaper of general circulation alone is more than sufficient compliance with
the notice-posting requirements of the law. Clearly, the respondent appellate
court did not err in finding that respondent bank had substantially complied
with those requirements.
ACCORDINGLY, the instant petition is DISMISSED. The decision of
the Court of Appeals in CA-G.R. CV No. 39477 is AFFIRMED. No pronouncement as
to costs.
SO ORDERED. Jä lexj
Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.