THIRD DIVISION
|
METROPOLITAN BANK AND
TRUST COMPANY, INC., Petitioner, - versus - EUGENIO PEÑAFIEL, for
himself and as Attorney-in-Fact of ERLINDA PEÑAFIEL, Respondents. |
G.R.
No. 173976
Present: QUISUMBING,*
J., CARPIO,** CARPIO MORALES,*** CHICO-NAZARIO,****
Acting Chairperson, and NACHURA, JJ. Promulgated: February
27, 2009 |
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DECISION
NACHURA, J.:
This is a petition for review on certiorari of the Decision[1] of
the Court of Appeals (CA) dated July 29, 2005 and Resolution dated July 31,
2006. The assailed decision nullified the extrajudicial foreclosure sale of
respondents’ properties because the notice of sale was published in a newspaper
not of general circulation in the place where the properties were located.
Respondent Erlinda Peñafiel and the
late Romeo Peñafiel are the registered owners of two parcels of land covered by
Transfer Certificate of Title (TCT) No. (350937) 6195 and TCT No. 0085, both
issued by the Register of Deeds of Mandaluyong City. On August 1, 1991, the
Peñafiel spouses mortgaged their properties in favor of petitioner Metropolitan
Bank and Trust Company, Inc. The mortgage deed was amended on various dates as the
amount of the loan covered by said deed was increased.
The spouses defaulted in the payment
of their loan obligation. On July 14, 1999, petitioner instituted an
extrajudicial foreclosure proceeding under Act No. 3135 through Diego A. Alleña,
Jr., a notary public. Respondent Erlinda Peñafiel received the Notice of Sale,
stating that the public auction was to be held on September 7, 1999 at ten
o’clock in the morning, at the main entrance of the City Hall of Mandaluyong
City. The Notice of Sale was published in Maharlika
Pilipinas on August 5, 12 and 19, 1999, as attested to by its publisher in
his Affidavit of Publication.[2]
Copies of the said notice were also posted in three conspicuous places in
At the auction sale, petitioner
emerged as the sole and highest bidder. The subject lots were sold to
petitioner for P6,144,000.00. A certificate of sale[4]
was subsequently issued in its favor.
On August 8, 2000, respondent Erlinda
Peñafiel, through her attorney-in-fact, Eugenio Peñafiel, filed a Complaint[5]
praying that the extrajudicial foreclosure of the properties be declared null
and void. They likewise sought (a) to enjoin petitioner and the Register of
Deeds from consolidating ownership, (b) to enjoin petitioner from taking
possession of the properties, and (c) to be paid attorney’s fees.
On June 30, 2003, the Regional Trial
Court (RTC) rendered judgment in favor of petitioner:
ACCORDINGLY, judgment is hereby rendered as follows:
1. The extrajudicial foreclosure of real estate mortgage instituted by defendants Metrobank and Notary Public Diego A. Alleña, Jr. over the two parcels of land covered by TCT Nos. (350937) 6195 and TCT No. 0085 is hereby declared VALID; and
2. The counterclaim of herein defendants are hereby DISMISSED for insufficiency of evidence.
SO ORDERED.[6]
Respondents appealed to the CA,
raising, among others, the issue of whether petitioner complied with the
publication requirement for an extrajudicial foreclosure sale under Act No.
3135.
On this issue, the CA agreed with respondents.
The CA noted that the law requires that publication be made in a newspaper of
general circulation in the municipality or city where the property is situated.
Based on the testimony of the publisher of Maharlika
Pilipinas, it concluded that petitioner did not comply with this requirement,
since the newspaper was not circulated in
WHEREFORE, the appealed decision is REVERSED and SET ASIDE. A new one is hereby entered declaring the extrajudicial foreclosure sale of the properties covered by TCT Nos. (350937) 6195 and 0085 NULL and VOID.
SO ORDERED.[7]
Petitioner filed a motion for
reconsideration[8] of the
decision which the CA denied on July 31, 2006.
Petitioner
now brings before us this petition for review on certiorari, raising the following issues:
I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT RULED TO APPLY THE PROVISIONS ON THE PUBLICATION OF JUDICIAL NOTICES UNDER SECTION 1 OF P.D. NO. 1079 TO THE EXTRAJUDICIAL FORECLOSURE OF THE MORTGAGE BY NOTARY PUBLIC OVER THE PROPERTIES COVERED BY TCT NO. (350927) 6195 AND TCT NO. 0085.
II.
WHETHER OR NOT THE HONORABLE COURT OF
APPEALS SERIOUSLY ERRED WHEN IT RULED THAT “MAHARLIKA PILIPINAS” IS NOT A
NEWSPAPER OF
III.
WHETHER OR NOT THE HONORABLE COURT OF
APPEALS SERIOUSLY ERRED WHEN IT REVERSED AND SET ASIDE THE DECISION DATED JUNE
30, 2003 ISSUED BY THE
This controversy boils down to one
simple issue: whether or not petitioner complied with the publication
requirement under Section 3, Act No. 3135, which provides:
SECTION 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.[10]
We hold in the negative.
Petitioner insists that Maharlika Pilipinas is a newspaper of
general circulation since it is published for the dissemination of local news
and general information, it has a bona
fide subscription list of paying subscribers, and it is published at
regular intervals. It asserts that the publisher’s Affidavit of Publication
attesting that Maharlika Pilipinas is
a newspaper of general circulation is sufficient evidence of such fact.[11]
Further, the absence of subscribers in Mandaluyong City does not necessarily
mean that Maharlika Pilipinas is not
circulated therein; on the contrary, as testified to by its publisher, the said
newspaper is in fact offered to persons other than its subscribers. Petitioner
stresses that the publisher’s statement that Maharlika Pilipinas is also circulated in Rizal and
Petitioner entreats the Court to
consider the fact that, in an Order[13]
dated April 27, 1998, the Executive Judge of the RTC of Mandaluyong City
approved the application for accreditation of Maharlika Pilipinas as one of the newspapers authorized to participate
in the raffle of judicial notices/orders effective March 2, 1998. Nonetheless,
petitioner admits that this was raised for the first time only in its Motion
for Reconsideration with the CA.[14]
The accreditation of Maharlika Pilipinas by the Presiding
Judge of the RTC is not decisive of whether it is a newspaper of general
circulation in
To prove that Maharlika Pilipinas was not a newspaper
of general circulation in Mandaluyong City, respondents presented the following
documents: (a) Certification[15]
dated December 7, 2001 of Catherine de Leon Arce, Chief of the Business Permit
and Licensing Office of Mandaluyong City, attesting that Maharlika Pilipinas did not have a business permit in Mandaluyong
City; and (b) List of Subscribers[16]
of Maharlika Pilipinas showing that
there were no subscribers from Mandaluyong City.
In addition, respondents
also presented Mr. Raymundo Alvarez, publisher of Maharlika Pilipinas, as a witness. During direct examination, Mr.
Alvarez testified as follows:
Atty. Mendoza: And where is your principal place of business?
Where you actually publish.
Witness: At
Atty. Mendoza: Do you have any other place where you actually
publish Maharlika Pilipinas?
Witness: At
Atty. Mendoza: And
you have a mayor’s permit to operate?
Witness: Yes.
Atty. Mendoza: From what city?
Witness: Originally, it was from
Atty. Mendoza: And
for the year 1996, what city issued you a permit?
Witness:
Atty. Mendoza: What
about this current year?
Witness: Still
from
Atty. Mendoza: So,
you have no mayor’s permit from
Witness: None,
it’s only our residence there.
Atty. Mendoza: What
about for
Witness: We
have no office in
Atty. Mendoza: Now, you said that you print and publish
Maharlika Pilipinas in
Witness: Yes.
Atty. Mendoza: Where
else do you circulate your newspaper?
Witness: In
Rizal and in
Atty. Mendoza: In the subpoena[,] you were ordered to bring
the list of subscribers.
Witness: Yes.
x x x x
Atty. Mendoza: How do these subscribers listed here in this
document became (sic) regular subscribers?
Witness: They
are friends of our friends and I offered them to become subscribers.
Atty. Mendoza: Other than this list of subscribers, you
have no other subscribers?
Witness: No
more.
Atty. Mendoza: Do
you offer your newspaper to other persons other than the subscribers listed
here?
Witness: Yes, but we do
not just offer it to anybody.[17] (Emphasis supplied.)
It bears emphasis that,
for the purpose of extrajudicial foreclosure of mortgage, the party alleging
non-compliance with the requisite publication has the burden of proving the
same.[18]
Petitioner correctly points out that neither the publisher’s statement that Maharlika Pilipinas is being circulated
in Rizal and
Nonetheless, the
publisher’s testimony that they “do not just offer [Maharlika Pilipinas] to anybody” implies that the newspaper is not
available to the public in general. This statement, taken in conjunction with
the fact that there are no subscribers in
The object of a notice of sale is to
inform the public of the nature and condition of the property to be sold, and
of the time, place and terms of the sale. Notices are given for the purpose of
securing bidders and to prevent a sacrifice of the property.[19]
The goal of the notice requirement is to achieve a “reasonably wide publicity”
of the auction sale. This is why publication in a newspaper of general
circulation is required. The Court has previously taken judicial notice of the
“far-reaching effects” of publishing the notice of sale in a newspaper of
general circulation.[20]
True, to be a newspaper
of general circulation, it is enough that it is published for the dissemination of
local news and general information, that it has a bona fide subscription
list of paying subscribers, and that it is published at regular intervals.[21]
Over and above all these, the newspaper must be available to the public in
general, and not just to a select few chosen by the publisher. Otherwise, the
precise objective of publishing the notice of sale in the newspaper will not be
realized.
In fact, to ensure a
wide readership of the newspaper, jurisprudence suggests that the newspaper
must also be appealing to the public in general. The Court has, therefore, held
in several cases that the newspaper must not be devoted solely to the interests,
or published for the entertainment, of a particular class, profession, trade,
calling, race, or religious denomination. The newspaper need not have the
largest circulation so long as it is of general circulation.[22]
Thus, the Court doubts that the
publication of the notice of sale in Maharlika
Pilipinas effectively caused widespread publicity of the foreclosure sale.
Noticeably, in the Affidavit of
Publication, Mr. Alvarez attested that he was the “Publisher of Maharlika Pilipinas, a newspaper of
general circulation, published every Thursday.” Nowhere is it stated in the
affidavit that Maharlika Pilipinas is
in circulation in
Finally, petitioner argues that the
CA, in effect, applied P.D. No. 1079[24]
when it cited Fortune Motors (Phils.)
Inc. v. Metropolitan Bank and Trust Company,[25] which involved an extrajudicial
foreclosure sale by a sheriff. Petitioner avers that the general reference to
“judicial notices” in P.D. No. 1079, particularly Section 2[26]
thereof, clearly shows that the law applies only to extrajudicial foreclosure
proceedings conducted by a sheriff, and not by a notary public.[27]
P.D. No. 1079 allegedly applies only to notices and announcements that arise from
court litigation.[28]
The Court does not agree with
petitioner that the CA applied P.D. 1079 to the present case. The appellate
court cited Fortune Motors merely to
emphasize that what is important is that the newspaper is actually in general
circulation in the place where the properties to be foreclosed are located.
In any case, petitioner’s concern
that the CA may have applied P.D. 1079 to the present case is trifling. While
P.D. No. 1079 requires the newspaper to be “published, edited and circulated in
the same city and/or province where the requirement of general circulation
applies,” the Court, in Fortune Motors,
did not make a literal interpretation of the provision. Hence, it brushed aside
the argument that New Record, the
newspaper where the notice of sale was published, was not a newspaper of
general circulation in
The application given by the trial court to the provisions of P.D. No. 1079 is, to our mind, too narrow and restricted and could not have been the intention of the said law. Were the interpretation of the trial court (sic) to be followed, even the leading dailies in the country like the “Manila Bulletin,” the “Philippine Daily Inquirer,” or “The Philippine Star” which all enjoy a wide circulation throughout the country, cannot publish legal notices that would be honored outside the place of their publication. But this is not the interpretation given by the courts. For what is important is that a paper should be in general circulation in the place where the properties to be foreclosed are located in order that publication may serve the purpose for which it was intended.[29]
Therefore, as it stands, there is no
distinction as to the publication requirement in extrajudicial foreclosure
sales conducted by a sheriff or a notary public. The key element in both cases
is still general circulation of the newspaper in the place where the property
is located.
WHEREFORE, premises
considered, the petition is DENIED.
The Court of Appeals Decision dated July 29, 2005 and Resolution dated July 31,
2006 in CA-G.R. CV No. 79862 are AFFIRMED.
SO ORDERED.
ANTONIO
EDUARDO B. NACHURA
Associate
Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate
Justice
|
ANTONIO T.
CARPIO Associate Justice |
CONCHITA CARPIO MORALES Associate Justice |
MINITA V. CHICO-NAZARIO
Associate Justice
Acting Chairperson
A T T E S T A T I O N
I attest that the conclusions in the above Decision were
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
MINITA V. CHICO-NAZARIO
Associate
Justice
Acting Chairperson,
Third Division
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution
and the Division Acting Chairperson's Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
REYNATO
S. PUNO
Chief
Justice
* Additional member in lieu of Associate Justice Consuelo Ynares-Santiago per Special Order No. 564 dated February 12, 2009.
** Additional member in lieu of Associate Justice Ma. Alicia Austria-Martinez per Special Order No. 568 dated February 12, 2009.
*** Additional member per Raffle dated September 24, 2007.
**** In lieu of Associate Justice Consuelo Ynares-Santiago per Special Order No. 563 dated February 12, 2009.
[1] Penned by Associate Justice Ruben T. Reyes (now a retired member of this Court), with Associate Justices Rebecca de Guia-Salvador and Fernanda Lampas Peralta, concurring; rollo, pp. 27-45.
[2] Rollo, p. 100.
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10] Emphasis supplied.
[11] Rollo, pp. 329-331.
[12]
[13]
[14]
[15]
[16]
[17]
[18] Ruiz,
et al. v. Sheriff of
[19] Olizon v. Court of Appeals, G.R. No. 107075, September 1, 1994, 236 SCRA 148, 156.
[20]
[21] Perez v. Perez, G.R. No. 143768, March 28, 2005, 454 SCRA 72, 81.
[22]
[23] Fortune Motors (Phils.) Inc. v. Metropolitan Bank and Trust Co., 332 Phil. 844 (1996); Bonnevie, et al. v. Court of Appeals, et al., 210 Phil. 100 (1983).
[24] Revising and Consolidating All Laws and Decrees Regulating Publication of Judicial Notices, Advertisements for Public Bidding, Notices of Auction Sales and Other Similar Notices.
[25] Supra note 23
[26] Sec. 2 of P.D. No. 1079 provides:
SECTION 2. The executive judge of the court of first instance shall designate a regular working day and a definite time each week during which the said judicial notices or advertisements shall be distributed personally by him for publication to qualified newspapers or periodicals as defined in the preceding section, which distribution shall be done by raffle: Provided, That should the circumstances require that another day be set for the purpose, he shall notify in writing the editors and publishers concerned at least three (3) days in advance of the designated date: Provided, further, That the distribution of the said notices by raffle shall be dispensed with in case only one newspaper or periodical is in operation in a particular province or city. (Emphasis supplied.)
[27] Rollo, pp. 327-328, 332-333.
[28]
[29] Fortune
Motors (Phils.) Inc. v. Metropolitan Bank and Trust