SECOND
DIVISION
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SPOUSES VICTOR ONG and GRACE TIU ONG, Petitioners, - versus - PREMIER
DEVELOPMENT BANK, THE PROVINCIAL SHERIFF OF RIZAL GRACE S. BELVIS and DEPUTY
SHERIFF VICTOR S. STA. ANA , Respondents. |
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G.R. No. 159615 Present: CARPIO, J., Chairperson, NACHURA, PERALTA, ABAD, and MENDOZA, JJ.
Promulgated: February 9, 2011 |
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D E C I S I O N
MENDOZA, J.:
This is a petition for review on
certiorari filed by the petitioners, spouses Victor and Grace Ong (Spouses
Ong), seeking to set aside the March 31, 2003 Decision[1] of
the Court of Appeals (CA) which affirmed the decision[2] of
the Regional Trial Court Branch 267, Pasig City (RTC), dismissing the
petitioners’ complaint for annulment of extra-judicial foreclosure of real
estate mortgage, and its August 13, 2003 Resolution
denying the motion for reconsideration.[3]
The Facts
Records reveal that Kenlene Laboratories, Inc. with Spouses
Ong acting as Director and Treasurer, respectively, obtained a loan from Premier
Development Bank (PDB) in the amount
of P10,000,000.00. On P292,658.08.
The petitioners’ loan application with the
PDB was secured by a real estate mortgage over Spouses Ong’s residential
property in
For failure of the Spouses Ong to pay their monthly
amortizations, PDB initiated extrajudicial foreclosure proceedings on the real
estate mortgage with the Provincial Sheriff in accordance with Act No. 3135,
otherwise known as “An Act to Regulate the Sale of Property Under Special
Powers Inserted in or Annexed to Real-Estate Mortgages.” The Notice of Sheriff’s
On
On P18,914,349.37.
On
On
Thereafter, Spouses Ong filed a petition for
prohibition and preliminary injunction before the CA to enjoin the public
respondents from taking further action in connection with the extra-judicial
foreclosure sale made on
On
On
Records also show that on July 19, 1994, Spouses Ong
instituted an action for annulment of extrajudicial foreclosure before the RTC
alleging non-compliance with the formal requirements of notice and publication
under Act No. 3135[8]
specifically that: 1) the sheriff failed to post the notice of sale in the
premises of the mortgaged property and the place where the auction was
conducted and other conspicuous public places within the Municipality of San
Juan; and 2) the newspaper Alppa Times, where the notice of sale was published,
was not a newspaper of general circulation. Spouses Ong likewise alleged that
the interests and penalties on the loan were over-computed and the figures were
bloated.
On the other hand, PDB countered that there were no
irregularities in the conduct of the foreclosure proceedings explaining that:
1) the Notice of Sheriff’s Sale dated May 19, 1993 was issued by the Office of
the Clerk of Court and Ex-Officio Sheriff; 2) a Certificate of Posting was
signed and issued by the deputy sheriff for the said foreclosure proceedings; and
3) the notice of sale was published once a week for three consecutive weeks in
Alppa Times, as evidenced by the Affidavit of Publication dated June 14, 1993.
Decision of the RTC
On
WHEREFORE, in view of the foregoing
considerations, the instant complaint for annulment of extra-judicial
foreclosure of real estate mortgage with application for preliminary injunction
and/or Temporary Restraining Order filed by plaintiffs Spouses Victor Ong and
Grace Tiu Ong against the defendants Premiere Development Bank, the Provincial
Sheriff of Rizal, Grace S. Belvis and Deputy Sheriff Victor S. Sta. Ana is hereby
ordered DISMISSED.
Finding the counterclaim of private
defendant Premiere Development Bank to be lacking in merit, the same is
likewise ordered DISMISSED.
SO ORDERED.
The RTC ruled, among others, that Spouses
Ong voluntarily and intelligently entered into a valid loan contract with the
PDB. The latter was able to prove that Spouses Ong defaulted in the payment of
their loan obligations, so it was proper for it to foreclose their collateral
for the subject loan.
The RTC further held that there were
no irregularities in the conduct of the foreclosure proceedings, which resulted
in the grant of the writ of possession. First, Spouses Ong’s claim of
irregularities was never previously raised and contrary to their contentions
during the proceedings for the issuance of the writ of possession. In fact, they
intervened only at the time PDB requested for the issuance of a writ of
possession. They did not question the conduct of the foreclosure particularly
the alleged defect in the publication of the notice of sheriff’s sale by Alppa
Times.
Second, the affidavit of publication
executed by the editor of Alppa Times entitled said document to be given full
faith and credit in the absence of competent evidence showing that its due
execution was tainted with defects and irregularities that would warrant a
declaration of its nullity.
Third, the Notice of Sale was posted
in a conspicuous place within the Municipal Hall of San Juan. Thus, the
presumption of regularity in the performance of duty by the sheriff prevailed.
Fourth, it was established in the
certification issued by the Office of the Clerk of Court that Alppa Times was
duly accredited as a publisher of the notice of sheriff’s sale at the time of
the foreclosure of the subject property. Spouses Ong’s self-serving statement that
Alppa Times was not a newspaper of general circulation could not prevail over the
issued certification by the Clerk of Court and Ex-Officio Sheriff.
Finally, the RTC found that the newspaper
dealer and newspaper vendor presented by Spouses Ong were not expert witnesses
or even competent enough to declare that Alppa Times was a non-existent
publication and not a newspaper of general circulation.
Not
satisfied with the Decision, Spouses Ong appealed before the
CA in CA G.R. CV No. 68576 entitled Spouses Victor Ong and Grace Tiu Ong v.
Premier Development Bank, The Provincial Sheriff of Rizal Grace S. Belvis and
Deputy Sheriff Victor S. Sta. Ana.
On
The CA ruled, among others, that the
respondents complied with the notice requirement under Act No. 3135. The CA found that the primary objective of
the notice of sale was satisfied considering that there was sufficient
publicity of the sale through a newspaper publication. It further stated that “courts take judicial
notice that newspaper publications have far more reaching effects than posting
on bulletin boards in public places. There is a much greater likelihood and
probability that announcements or notices published in a newspaper of general
circulation shall reach more people than those merely posted in a public
bulletin board, no matter how strategic its location may be.” Hence, the
publication of the notice of sale in the newspaper of general circulation alone
sufficiently complied with the notice and posting requirement of the law.
The
CA likewise reasoned that Spouses Ong failed to discharge the burden of proving
by convincing evidence that there was actually no compliance with the posting
requirement. Therefore, the foreclosure
proceedings had in its favor the presumption of regularity in the absence of
evidence to the contrary. The CA also ruled that there was no proof that the
property was sold for a price below its market value. Neither was there any
proof shown of collusion among the respondents.
Moreover, the CA ruled that Alppa
Times was a newspaper of general circulation for purposes of publication of
notices of sale since it was enough that it was published for the dissemination
of local news and general information; that it has a bona fide subscription
list of paying subscribers; that it was published at regular intervals; and
that it need not have the largest circulation or subscription.
Lastly, the CA ruled that Spouses Ong
failed to prove that there was an error in the computation of their loan
obligation. On the contrary, PDB was able to prove by preponderant evidence
that Spouses Ong defaulted in the payment of their loan obligation.
Upon
the denial of their motion for reconsideration, Spouses Ong filed this petition
raising this lone
ISSUE
WHETHER OR NOT THE
COURT OF APPEALS ERRED IN SUSTAINING THE VALIDITY OF THE EXTRA-JUDICIAL
FORECLOSURE PROCEEDINGS.
Petitioners’ Position
The following arguments
were raised by Spouses Ong in support of their position that the subject
foreclosure sale was null and void for non-compliance with the requirements of
Act No. 3135.
1] There was no posting of the notice of
sheriff’s sale for at least twenty (20) days.
2] There was no showing that the notice of sale
was posted in three (3) public places within the municipality.
3] There was no adequate showing of newspaper
publication for three (3) consecutive weeks.
4] There was no proof that the Alppa Times was
a newspaper of general circulation within the
5] The proper party did not execute the
certificate of sale.
6] Respondent bank’s petition for foreclosure
did not specify the amount sought to be liquidated thereby.
7] Respondent bank’s computation of the
obligation was not in accordance with the promissory notes.
8] The RTC erred in admitting in evidence the
bank ledgers.
PDB counters that the findings of fact
of the CA and the RTC were in accordance with the evidence presented and the
law applicable in the said case. It
further argues that both courts committed no reversible error in ruling that
the foreclosure proceedings were conducted in the regular performance of duties
by the sheriff and strictly in accordance with the law.
PDB likewise asserts that Spouses
Ong’s default on their loan obligations warranted the legitimate exercise by PDB
of its rights under the loan and mortgage contracts. It likewise contends that
to entertain the challenge of Spouses Ong will allow them to re-open the merits
of a final and already executed decision of this Court on the writ of
possession given to PDB.
The petition lacks merit.
First
of all, the issue raised by Spouses Ong of whether the legal requirements for a
valid foreclosure sale under Act No. 3135 has been actually followed is a
question of fact that does not deserve a review by this Court. The recent case
of Century Savings Bank v. Spouses Danilo T. Samonte and Rosalinda M.
Samonte[9] is
instructive:
The distinction between questions of law and questions of fact is
settled. A question of law exists when the doubt or difference centers on
what the law is on a certain state of facts. A question of fact exists if
the doubt centers on the truth or falsity of the alleged facts. Though
this delineation seems simple, determining the true nature and extent of the
distinction is sometimes problematic. For example, it is incorrect to presume that
all cases where the facts are not in dispute automatically involve purely
questions of law.
There is a question of law if the issue raised is capable of being
resolved without need of reviewing the probative value of the evidence. The
resolution of the issue must rest solely on what the law provides on the given
set of circumstances. Once it is clear that the issue invites a review of
the evidence presented, the question posed is one of fact. If the query requires a re-evaluation of the
credibility of witnesses, or the existence or relevance of surrounding
circumstances and their relation to each other, the issue in that query is
factual. Our ruling in Paterno v.
Paterno [G.R. No. 63680,
Such questions as whether certain items of evidence should be accorded
probative value or weight, or rejected as feeble or spurious, or whether or not
the proofs on one side or the other are clear and convincing and adequate to
establish a proposition in issue, are without doubt questions of fact. Whether
or not the body of proofs presented by a party, weighed and analyzed in
relation to contrary evidence submitted by adverse party, may be said to be
strong, clear and convincing; whether or not certain documents presented by one
side should be accorded full faith and credit in the face of protests as to
their spurious character by the other side; whether or not inconsistencies in
the body of proofs of a party are of such gravity as to justify refusing to
give said proofs weight – all these are issues of fact.
xxx
The main issue
in the case at bar is whether the extrajudicial foreclosure sale of
respondents’ mortgaged properties was valid.
The resolution of said issue, however, is dependent on the answer to the
question of whether the legal requirements on the notice of sale were complied
with. Necessarily, the Court must review
the evidence on record, most especially, Notary Public Magpantay’s Certificate
of Posting, to determine the weight and probative value to accord the
same. 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. However, this rule is subject to exceptions,
as when the findings of the trial court and the Court of Appeals are in
conflict. Also, it must be noted that non-compliance with the statutory
requisites could constitute a jurisdictional defect that would invalidate the
sale. [Emphasis supplied]
In
the case at bench, the RTC and the CA ruled that the foreclosure proceedings
conducted on the mortgaged property of Spouses Ong enjoyed the presumption of
regularity in the absence of evidence to the contrary. The Court respects the ruling of the courts
below.
It is an elementary
rule that the burden of proof is the duty of a party to present evidence on the
facts in issue necessary to establish his claim or defense as required by law. The
Court has likewise ruled in previous cases that foreclosure proceedings enjoy the presumption of regularity and that the mortgagor
who alleges absence of a requisite has the burden of proving such fact.[10]
In this case, Spouses Ong failed to overcome this
presumption with no sufficient evidence to prove the contrary. Except for their bare allegations, no convincing
proof of non-compliance with the posting requirement was presented. On the other hand, the foreclosure procedure
undertaken by PDB was supported by an authenticated and duly executed Affidavit
of Publication,[11] Certification
of the Office of the Clerk of Court that Alppa Times is an accredited
publisher of Notice of Sheriff’s
Without doubt, the documents shown by
PDB prove that the subject foreclosure proceedings were conducted in a regular
manner and in accordance with law.
With
respect to the computation of Spouses Ong’s loan obligation, the Court agrees
with the ruling of the CA that there was no error committed by PDB in computing
their total loan obligation. The loan
documents presented by PDB which included the promissory notes,[15]
real estate mortgage,[16]
and the continuing guaranty/comprehensive security,[17]
all prove that Spouses Ong owed PDB a sum of money and failed to settle that
obligation. Naturally, the petitioners’ default on their loan obligations warranted the legitimate
exercise by the respondent bank of its rights under the loan and mortgage
contracts.
WHEREFORE, the petition is DENIED.
SO ORDERED.
JOSE CATRAL
Associate Justice
WE
CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ANTONIO EDUARDO B. NACHURA DIOSDADO M. PERALTA
Associate Justice Associate
Justice
ROBERTO A.
ABAD
Associate Justice
A T T E S T A T
I O N
I attest 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.
ANTONIO T. CARPIO
Associate
Justice
Chairperson, Second 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 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.
RENATO
C. CORONA
Chief Justice
[1] Rollo, pp. 47-65. Penned by Associate Justice Ruben T. Reyes and concurred in by Associate Justice Elvi John S. Asuncion and Associate Justice Lucas P. Bersamin (now with this Court).
[2]
[3]
[4] CA rollo, pp. 280-284.
[5] Rollo, pp. 288-299.
[6]
[7]
[8] Section 3 of Act No. 3135 provides:
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.
[9] G.R. No.
176212,
[10] Century
Savings Bank v. Spouses Danilo T. Samonte and Rosalinda M. Samonte, G.R.
No. 176212,
[11] Rollo, pp. 206-207.
[12]
[13]
[14]
[15]
[16]
[17]