1) GODFREY BOHANAN, petitioner, vs.
COURT OF APPEALS, On 17 February 1987 L & Rs titles were in turn cancelled to give way to
L&R CORPORATION and Spouses ROSARIO & DIONISIO
CABRERA, JR., respondents.
BELLOSILLO, J.:
Petitioner questions the Decision of the Court of Appeals1 which
reversed the Regional Trial Court of Manila2 declaring the foreclosure
sale dated 14 September 1984 null and void. He also assails the
Resolution denying his motion for reconsideration.3
On 7 September 1983 petitioner Godfrey Bohanan obtained a loan of
P200,000.00 from private respondent L & R Corporation (hereinafter
referred to as L & R) payable in sixty (60) equal monthly installments.
To secure payment petitioner executed a deed mortgaging his two lots
with the four-unit apartment building thereon situated in Sta. Ana,
Manila, and covered by Transfer Certificates of Title Nos. 92334 and
92335 of the Registry of Deeds of Manila. The deed further provided
that in case petitioner failed to pay any monthly amortization the
overdue amortization or amortizations would draw monthly interest at
1-3/4% without prejudice to the right of L & R to declare the whole
indebtedness or the entire unpaid balance, as the case may be, due
and demandable. In addition, petitioner would have to pay collection
charges including attorneys fees and other incidental expenses
equivalent to 2% of the total outstanding obligation in case the matter
was placed in the hands of a lawyer for collection.
Petitioner was remiss in his fourth amortization. Consequently, the
remaining unpaid obligation (then supposedly amounting to
P194,169.15) became due and demandable and petitioner was given a
grace period of ten (10) days within which to pay but the latter failed.
Thus L & R sent a notice of foreclosure and filed a petition in the Manila
Sheriffs Office to commence extrajudicial foreclosure proceedings
against him. Accordingly, a notice of extrajudicial foreclosure sale under
Act 3135,4 as amended, was made and copies thereof sent to L & R
and petitioner Godfrey Bohanan by the Deputy Sheriff acting for the
Sheriff of Manila. The notice was published in the 20 and 27 August
and 3 September 1984 issues of The Metropolitan Mail per affidavit of
its editor-publisher.
At the scheduled sale on 14 September 1984 L & R became the
successful bidder with its bid of P327,615.54 and was issued a
certificate of sale. However, upon failure of petitioner to redeem his
property within the one-year redemption period provided by law, L & R
executed an Affidavit of Consolidation of Ownership leading to the
issuance on 1 October 1985 of TCT Nos. 167051 and 167052 in its
name and the cancellation of petitioners TCT Nos. 92334 and 92335.
TCT Nos. 172718 and 172719 in the name of Rosario Guanzon,
married to Dionisio Cabrera Jr., who bought the property from L & R for
P200,000.00.
On 23 February 1987 petitioner filed a complaint against L & R
Corporation and its vendees, the spouses Cabrera Jr., for recovery of
property with preliminary injunction5 contending that the sale between
the Cabreras on one hand and L & R on the other, was undertaken in
fraud of a contractual commitment to him. Subsequently the complaint
was amended to be one for annulment of sale with injunction and
damages, with petitioner asking that the sheriffs foreclosure sale held
on 14 September 1984 be declared void and that the foreclosed
properties be returned to him upon his payment of the mortgage
obligation.
The trial court rendered judgment in favor of petitioner declaring null
and void the Sheriffs foreclosure sale without prejudice to the
foreclosure of the mortgage on said properties strictly in accordance
with law; annulling the Deed of Sale of 13 February 1987 executed by
private respondent L & R in favor) of Rosario Guanzon as well as the
TCTs issued pursuant thereto; and, ordering payment of damages in
favor of petitioner.
On 19 April 1993 the Court of Appeals reversed the trial court.6 The
appellate court concluded that there was no irregularity in the conduct
of the foreclosure sale and that the spouses Cabrera could not be
considered buyers in bad faith since their act of buying the properties
direct from L & R, instead of through petitioner, did not automatically
make them so. Hence, this recourse by Godfrey Bohanan.
Petitioner contends that respondent Court of Appeals erred in
concluding that there was a valid foreclosure sale despite the fact that
(a) he was not notified of the sale; (b) the deputy sheriff who conducted
the sale did not submit a certificate of posting to prove the alleged
posting in three (3) public places required under Act No. 3135; and, (c)
the Post Office and Finance buildings where the notice of sale was
allegedly posted (in addition to the City Hall) were not public places.
The petition must be denied. We agree with respondent Court of
Appeals that the records show no irregularity in the foreclosure sale
held on 14 September 1984. First, personal notice on the mortgagor is
not required under Act No. 3135 as amended.7 All that is required is
that notice be given by posting notices of the sale for not less than
twenty (20) days in at least three (3) public places of the municipality or
city where the property is situated, and publication once a week for at
least three (3) consecutive weeks in a newspaper of general circulation
in the municipality or city, if the property is worth more than four
hundred pesos.8 Therefore, any discussion into the factual issue of
whether petitioner received a notice of foreclosure sale would be an
exercise in futility since it would not have any bearing at all on the
alleged validity or invalidity of the foreclosure sale in question. Second,
a certificate of posting is not required, much less considered
indispensable, for the validity of a foreclosure sale either under Act
3135 or under the ruling in Tambunting v. Court of Appeals9 cited by
petitioner.
Petitioner argues that the principal defect which invalidates the
questioned foreclosure sale is the non-presentation of a certificate of
posting by the deputy sheriff despite the statement in Tambunting that
the published notices and certificate of posting by the Sheriff xxx should
have been presented10 to show compliance. Petitioner then goes on to
insist that since the certificate of posting is an indispensable proof of
compliance with the law, the mere testimony of Deputy Sheriff Oscar
Domingo (presented as petitioners own witness) that he posted the
notice of sale in three (3) public places does not suffice. Hence,
reliance by respondent Court of Appeals on the presumption of
regularity in the performance of official duty to conclude that the legal
requirements for a valid foreclosure has been complied with is
misplaced.
We find the argument to be without merit. The non-presentation of a
certificate of posting does not affect the intrinsic validity of the
questioned foreclosure sale. As already stated, all that is required by
Sec. 3 of Act No. 3135 is that public notice of the place and time of the
sale be posted in three (3) public places and, where the property is
worth more than P400.00, published in a newspaper of general
circulation. Non-compliance constitutes a jurisdictional defect sufficient
to invalidate the sale.
However, a certificate of posting is not a statutory requirement. Rather,
it is significant only in the matter of proving compliance with the
required posting of notice. And although we said in Tambunting that
[t]he presumption of compliance with official duty has been rebutted by
the failure to present proof of posting and publication of the notice of
sale, this cannot be construed to mean that a certificate of posting is
indispensable without which a questioned foreclosure sale is
automatically doomed as invalid. For the fact alone that there is no
certificate of posting attached to the sheriffs records is not sufficient to
prove the lack of posting.11 In Tambunting the absence of the affidavit
of publication was considered fatal because no equally convincing and
competent proof of compliance was offered to compensate for its non-
presentation.
In the case at bench, however, although Deputy Sheriff Oscar Domingo
failed to present a certificate of posting because some records were
lost when the sheriffs office was transferred to the fifth floor of the City
Hall building, he did declare under oath (when presented as petitioners
own witness) that he posted notices of the questioned sale on the
bulletin boards of the City Hall, the Post Office and Finance Buildings.
We agree with respondent Court of Appeals that such testimony
suffices in lieu of the customary certificate of posting and can properly
be accorded the presumption of regularity of performance having come
from a public officer to whom no improper motive to testify has been
attributed.
As to the contention that the Post Office and Finance Buildings were
not public places, besides merely alleging the same (we do not even
know which post office and what finance building petitioner was
referring to), petitioner did not question the validity of the foreclosure
sale on any ground whatsoever after its termination. On the contrary,
his conduct afterwards even seems to indicate that he has no objection
whatsoever as to its validity. For petitioner even contends that he
negotiated with private respondent L & R Corporation for the return of
the property by appealing to the latters benevolence. When he could
not raise the winning bid made by L & R in the foreclosure sale,
petitioner agreed to look for a buyer who could afford the amount, with
the difference in price to be retained by him. However, upon learning
who the legal owner of the property was, respondent spouses chose to
negotiate directly with the latter to save them the difference in price. As
respondent court concluded, such act did not make the spouses in bad
faith, more so when there is no indication that they were privy to the
agreement between petitioner and L & R Corporation, even assuming
there was any.
WHEREFORE, the questioned Decision and Resolution of
respondent Court of Appeals are AFFIRMED in toto. Costs against
petitioner.
SO ORDERED.

2) G.R. No. 174581 February 4, 2015
ATTY. LEO N. CAUBANG, vs.
JESUS G. CRISOLOGO and NANETTE B. CRISOLOGO,
PERALTA, J.:
For the Court's resolution is a Petition for Review under Rule 45 of the
Rules of Court which petitioner Atty. Leo N. Caubang filed, questioning
the Decision1 of the Court of Appeals (CA), dated May 22, 2006, and its
Resolution2 dated August 16, 2006 in CA-G.R. CV. No. 68365. The CA
affirmed the Decision3 of the Regional Trial Court (RTC) of Davao City,
Branch 12, dated August 1, 2000, with modifications, in Civil Case No.
27168-99.
The facts, as gathered from the records, are as follows:
On December 17, 1993, respondents spouses Jesus and Nannette
Crisologo (the Spouses Crisologo) obtained an Express Loan in the
amount of ₱200,000.00 from PDCP Development Bank Inc. (PDCP
Bank). On January 26, 1994, the Spouses Crisologo acquired another
loan from the same bank, this time a Term Loan of ₱1,500,000.00
covered by a Loan Agreement. As security for both loans,the spouses
mortgaged their property covered by Transfer Certificate of Title (TCT)
No. T-181103. Upon release of the Term Loan, they were given two (2)
promissory notes, for the amount of ₱500,000.00 on February 9, 1994
and ₱1,000,000.00 on February 21, 1994.
Under the promissory notes, the Spouses Crisologo agreed to pay the
principal amount of the loan over a periodof three (3) years in twelve
(12) equal quarterly amortizations. Although they were able to pay the
Express Loan, starting August 22, 1994, however, or after payment of
the first few installments on the other loans, the spouses defaulted in
the amortizations. Despite several demands made by the bank,the
spouses still failed to pay.
On May 31, 1996, the spouses received a detailed breakdown of their
outstanding obligation. Finding the charges to be excessive, they wrote
a letter to the bank proposing to pay their loan in full with a request that
the interest and penalty charges be waived. The manager of PDCP
Bank, Davao Branch, advised them to deposit their ₱1,500,000.00
obligation as manifestation of their intent to pay the loan. As a counter-
offer, the spouses agreed to deposit the amount but on the condition
that the bank should first return to them the title over the mortgaged
property. The bank did not reply until July 7, 1997, where they senta
letter denying the spouses’ counteroffer and demanding payment of the
loan already amounting to ₱2,822,469.90. By October 20, 1997, the
debt had ballooned to ₱3,041,287.00. For failure to settle the account,
the Davao branch of the bank recommended the foreclosure of the
mortgage to its head office. On March 20, 1998, PDCP Bank filed a
Petition for the Extrajudicial Foreclosure of the Mortgage.
On June 8, 1998, petitioner Leo Caubang, as Notary Public, prepared
the Notices of Sale, announcing the foreclosure of the real estate
mortgage and the sale of the mortgaged property at public auction on
July 15, 1998. He caused the posting of said notices in three (3) public
places: the Barangay Hall of Matina, City Hall of Davao,and
Bangkerohan Public Market. Publication was, likewise, made in the
Oriental Daily Examiner, one of the local newspapers in Davao City.
On July 15, 1998, Caubang conducted the auction sale of the
mortgaged property, with the bank as the only bidder.1âwphi1 The bank
bidded for ₱1,331,460.00, leaving a deficiencyof ₱2,207,349.97.
Thereafter, a Certificate of Sale in favor of the bank was issued.
Later, the Spouses Crisologo were surprised to learn that their
mortgaged property had already been soldto the bank. Thus, they filed
a Complaint for Nullity of Extrajudicial Foreclosure and Auction Sale
and Damages against PDCP Bank and Caubang.
On August 1, 2000, the Davao RTC rendered a Decision nullifying the
extrajudicial foreclosure of the real estate mortgage for failure to comply
with the publication requirement, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered:
1. Declaring the Extra-Judicial Foreclosure sale of plaintiffs’
property, covered by TCT No. T-181103, null and void.
2. Ordering the Register of Deeds for the City of Davao to
cancel Entry No. 113255 on TCT No. T-181103, the entry
relative to the Certificate of Sale executed by Atty. Leo Caubang
on August 5, 1998, and if a new title has been issued to
defendant PDCP, to cancel the same, and to reinstate TCT No.
T-181103 in the name of Nannette B. Crisologo, of legal age,
Filipino, married to Jesus Crisologo, and a resident of Davao
City, Philippines.
All the other claims of the parties are disallowed.
No pronouncement as to costs.
SO ORDERED.4
The Spouses Crisologo appealed before the CA, seeking a partial
modification of the RTC Decision, insofar as their claims for moral and
exemplary damages, attorney’s fees, and costs of suit were concerned.
On May 22, 2006, the appellate court modified the decretal portion to
read:
WHEREFORE, judgment is hereby rendered:
1. Declaring the Extra-Judicial Foreclosure sale of plaintiffs’
property, covered by TCT # T-181103, null and void.
2. Ordering the Register of Deeds for the City of Davao to
cancel Entry No. T-181103, the entry relative to the Certificate of
 Sale executed by Atty. Leo Caubang on August 5, 1998, and if a
new title has been issued to defendant PDCP, to cancel the
same, and to reinstate TCT No. T-181103 in the name of
Nannette B. Crisologo, of legal age, Filipino, married to Jesus
Crisologo, and a resident of Davao City, Philippines; and
3. Atty. Caubang is ordered to pay appellants the sum of
₱41,500.00 as attorney’s fees and ₱30,248.50 as litigation
expenses.
All other claims of the parties are disallowed.
SO ORDERED.5
prevent a sacrifice of the property. Therefore, statutory provisions
governing publication of notice of mortgage foreclosure sales must be
strictly complied with and slight deviations therefrom will invalidate the
notice and render the sale, at the very least, voidable. Certainly, the
statutory requirements of posting and publication are mandated and
imbued with public policy considerations. Failure to advertise a
mortgage foreclosure sale in compliance with the statutory
requirements constitutes a jurisdictional defect, and any substantial
error in a notice of sale will render the notice insufficient and will
consequently vitiate the sale.

Caubang filed a Motion for Reconsideration, but the same was denied. Since it was Caubang who caused the improper publication of the
Hence, he filed the present petition. notices which, in turn, compelled the Spouses Crisologo to litigate and
incur expenses involving the declaration of nullity of the auction sale for
Caubang mainly assails the CA’s ruling on the publication of the notices the protection of their interest on the property, the CA aptly held that
in the Oriental Daily Examiner. He firmly contends that the CA’s finding Caubang shall be the one liable for the spouses' claim for litigation
was based on assumptions and speculations. expenses and attorney's fees.
The petition lacks merit.
WHEREFORE, the petition is DENIED. The Decision of the Court of
Under Section 3 of Act No. 3135: Appeals, dated May 22, 2006, and its Resolution dated August 16,
Section 3. Notice of sale; posting; when publication required.– 2006, in CA-G.R. CV. No. 68365, are hereby AFFIRMED.
Notice shall be given by posting notices ofthe sale for not less SO ORDERED.

than twenty days in at least three public places ofthe
municipality or city where the property is situated, and if such
property is worth more than four hundred pesos, such notices
shall also be published once a week for at least three
consecutive weeksin a newspaper of general circulation in the
municipality or city.7

Caubang never made an effort toinquire as to whether the Oriental

Daily Examinerwas indeed a newspaper of general circulation, as
required by law. It was shown that the Oriental Daily Examineris not
even on the list of newspapers accredited to publish legal notices, as
recorded in the Davao RTC’s Office of the Clerk of Court. It also has no
paying subscribers and it would only publish whenever there are
customers. Since there was no proper publication of the notice of sale,
the Spouses Crisologo, as well as the rest of the general public, were
never informed thatthe mortgaged property was about to be foreclosed
and auctioned. As a result,PDCP Bank became the sole bidder. This
allowed the bank to bid for a very low price (₱1,331,460.00) and go
after the spouses for a bigger amount as deficiency.

The principal object of a notice of sale in a foreclosure of mortgage is

not so much to notify the mortgagor as to inform the public generally of
the nature and condition of the property to be sold, and of the time,
place, and terms of the sale. Notices are given to secure bidders and
3) G.R. NO. 144435 February 6, 2007
GUILLERMINA BALUYUT vs.
EULOGIO POBLETE, SALUD POBLETE and THE HON.COURT OF
APPEALS,
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court seeking to reverse the Decision1 of the Court of
Appeals (CA) dated December 21, 1999 and its Resolution2 of August
4, 2000 in CA-G.R. CV No. 51534. The assailed CA Decision affirmed
the Decision of the Regional Trial Court (RTC) of Pasig, Branch 167
which dismissed herein petitioner’s Complaint in Civil Case No. 52268,
while the questioned Resolution denied petitioner’s Motion for
Reconsideration.
The facts of the case are as follows:
On July 20, 1981, herein petitioner, Guillermina Baluyut (Baluyut),
loaned from the spouses Eulogio and Salud Poblete the sum of
₱850,000.00. As evidence of her indebtedness, Baluyut signed, on
even date, a promissory note for the amount borrowed3 . Under the
promissory note, the loan shall mature in one month. To secure the
payment of her obligation, she conveyed to the Poblete spouses, by
way of a real estate mortgage contract, a house and lot she owns,
covered by Transfer Certificate of Title (TCT) No. 137129 and located in
Barrio Mapuntod, then Municipality of Mandaluyong, Province of Rizal.4
Upon maturity of the loan, Baluyut failed to pay her indebtedness. The
Poblete spouses subsequently decided to extrajudicially foreclose the
real estate mortgage. On August 27, 1982, the mortgaged property was
sold on auction by the Provincial Sheriff of Rizal to the Poblete spouses
who were the highest bidders, as evidenced by a Certificate of Sale
issued pursuant thereto.5
Baluyut failed to redeem the subject property within the period required
by law prompting Eulogio Poblete to execute an Affidavit of
Consolidation of Title.6 Subsequently, TCT No. 43445 was issued in the
name of Eulogio and the heirs of Salud, who in the meantime, died.7
However, Baluyut remained in possession of the subject property and
refused to vacate the same. Hence, Eulogio and the heirs of Salud filed
a Petition for the issuance of a writ of possession with the RTC of
Pasig. The case was docketed as Case No. R-3457.
Subsequently, the trial court issued an order granting the writ of
possession. However, before Eulogio and the heirs of Salud could take
possession of the property, Baluyut filed an action for annulment of
mortgage, extrajudicial foreclosure and sale of the subject property, as
well as cancellation of the title issued in the name of Eulogio and the
heirs of Salud, plus damages. The case was docketed as Civil Case
No. 52268 and was subsequently consolidated with Case No. R-3457.
In the meantime, Eulogio died and was substituted by his heirs. After
trial on the merits, the trial court issued a Decision on September 13,
1995 dismissing Baluyut’s complaint.8
Aggrieved by the trial court’s Decision, herein petitioner filed an appeal
with the CA.
On December 21, 1999, the CA promulgated the presently assailed
Decision affirming the judgment of the trial court.9
Petitioner filed a Motion for Reconsideration but the same was denied
in a Resolution issued by the CA on August 4, 2000.10
Hence, the present petition with the following assignment of errors:
I
The decision and the resolution are both palpably infirm in holding that
no prior demand to pay is necessary for a loan to mature when there is
conflict between the date of maturity of the loan as stated in the Deed
of Real Estate Mortgage and the Promissory Note on the one hand and
the real date of its maturity on the other.
II
The decision and the resolution are both palpably infirm in holding that
the sheriff who conducted the foreclosure proceedings should be
presumed to have regularly performed his duty in conducting the
foreclosure proceedings despite the inability of the Office of the
Provincial Sheriff who had been ordered by the trial court to produce
the records of the foreclosure in question and show that there was
compliance with the required posting of notices in three public places
and with the required publication for three consecutive weeks in a
newspaper of general circulation.
III
That the Decision and Resolution are legally infirm in holding that
because the Petitioner-Appellant failed to invoke her right to be sent an
Assessment Notice by the highest bidder thirty days before the
expiration of the right of legal redemption during the trial and on appeal,
it should be deemed that she had waived her right to this benefit under
the law despite a clear showing that the said mandatory requirement
should have been strictly observed before title could be consolidated in
favor of the highest bidder as provided for in the certificate of sale
issued by the sheriff.11
In her first assigned error, petitioner contends that herein private
respondents’ witness, a certain Atty. Edwina Mendoza, is a competent
witness and that her testimony, that the maturity of the loan is one year,
is acceptable proof of the existence of collateral agreements which
were entered into by the parties who executed the Promissory Note and
the Real Estate Mortgage prior, contemporaneous and subsequent to
the execution of these documents. Petitioner also argues that the issue
of the real date of the maturity of the loan can be settled only by a
formal letter of demand indicating the sum due and the specific date of
payment which is the duty of the private respondents to give; that
absent said letter of demand, the loan may not be considered to have
matured; that, as a consequence, the property given as a collateral may
not be foreclosed and the subsequent consolidation of title over the
subject property should be annulled. Petitioner further contends that
even if the issue on the term of the loan was first brought up in
petitioner’s Addendum to the Motion for Reconsideration filed with the
CA, the appellate court may still properly consider this issue in the
interest of justice and equity considering that this is a matter of record
and has some bearing on the other issues submitted for resolution.
Anent her second assignment of error, petitioner contends that the CA
erred in relying on the rule on presumption of regularity in the sheriff’s
performance of his duties relative to the foreclosure of the questioned
property absent any evidence presented by petitioner to prove that the
sheriff failed to comply with the legal requirements in the sale of the
foreclosed properties. Petitioner argues that under the law, the sheriff is
required to submit an Affidavit of Posting of Notices to the clerk of court
and to the judge before he is allowed to schedule an auction sale.
However, per letter from the Office of the Clerk of Court, there are no
records of the foreclosure proceedings involving the subject property.
Based on this premise, petitioner concludes that since the existence of
these documents is supposed to be in the custody of the sheriff’s office
and that the private respondents are supposed to have copies of these
documents, being the ones who prosecuted the foreclosure
proceedings, petitioner’s contention that there was non-compliance with
the legal requirements for the validity of the foreclosure proceedings
partakes of a negative allegation which she need not prove. Petitioner
argues that in the absence of documents evidencing the foreclosure
proceedings over the subject property, the lower court should have
acted judiciously by annulling the foreclosure and ordering the repeat of
the proceedings.
As to her third assigned error, petitioner asserts that despite the fact
that she is entitled under the law to an Assessment Notice or Notice of
Redemption coming from the highest bidder 30 days before the
expiration of the period to redeem apprising her of the principal amount,
the interest, taxes and other lawful fees due in case she opts to
exercise her right of redemption, she did not receive any notice of this
kind. Petitioner contends that her right to this notice is not subject to
waiver and that her failure to invoke the same during trial and on appeal
does not preclude her from invoking such right in her motion for
reconsideration filed with the CA and in the present petition.
In their Motion to Dismiss, which the Court treated as their comment on
the petition, private respondents contend that the petition should be
dismissed on the ground that no question of law was raised therein.
Private respondents argue that the issue as to the supposed conflict
between the date of maturity of the loan as stated in the Deed of Real
Estate Mortgage and the Promissory Note, on one hand, and the real
date of maturity as agreed upon by the parties, on the other, as well as
the question of whether or not the sheriff who conducted the
foreclosure proceedings involving the subject property complied with
the legal requirements of posting and publication are questions of fact
which are not proper subjects of a petition for review on certiorari.
Furthermore, private respondents also assert in their Memorandum that
the questions of fact being raised by petitioner had already been ruled
upon by the RTC and the CA in favor of private respondents; that the
findings of fact of the RTC and the CA are binding on this Court.
The Court finds the petition without merit.
Petitioner admits that the issue regarding the date of maturity of the
loan which she incurred from the Poblete spouses was first brought up
only in her Addendum to the Motion for Reconsideration filed before the
CA. In an effort to clothe her argument with merit, petitioner contends
that the CA should have properly considered this issue in the interest of
justice and equity. The Court is not persuaded. It is settled that an issue
not raised during trial could not be raised for the first time on appeal as
to do so would be offensive to the basic rules of fair play, justice, and
due process.12
Contrary to petitioner’s contention, it would be the height of injustice if
the CA allowed her to raise an issue at a very late stage of the
proceedings. It would be unfair to the adverse party who would have no
opportunity to present evidence in contra to the new theory, which it
could have done had it been aware of it at the time of the hearing
before the trial court.13
It is true that this rule admits of exceptions as in cases of lack of
jurisdiction, where the lower court committed plain error, where there
are jurisprudential developments affecting the issues, or when the
issues raised present a matter of public policy.14 However, the Court
finds that none of these exceptions are present in the instant case.
In addition, the issue regarding the date of maturity of the loan is factual
and settled is the rule that only questions of law may be raised in a
petition for review on certiorari under Rule 45 of the Rules of Court, as
the Supreme Court is not a trier of facts.15
It is not the function of this Court to review, examine and evaluate or
weigh the probative value of the evidence presented.16 While there are
also exceptions to this rule such as when the factual findings of the trial
court and the CA are contradictory; when the inference made by the CA
is manifestly mistaken or absurd; when the judgment of the CA is
premised on its misapprehension of facts; and, when the CA failed to
resolve relevant facts which, if properly considered, would justify a
modification or reversal of the decision of the appellate court,17 this
Court finds that the present case does not fall under any of these
exceptions.
Even if petitioner had properly raised the issue regarding the real date
of maturity of the loan, it is a long-held cardinal rule that when the terms
of an agreement are reduced to writing, it is deemed to contain all the
terms agreed upon and no evidence of such terms can be admitted
other than the contents of the agreement itself.18 In the present case,
the promissory note and the real estate mortgage are the law between
petitioner and private respondents. It is not disputed that under the
Promissory Note dated July 20, 1981, the loan shall mature in one
month from date of the said Promissory Note.
Petitioner makes much of the testimony of Atty. Edwina Mendoza that
the maturity of the loan which petitioner incurred is one year. However,
evidence of a prior or contemporaneous verbal agreement is generally
not admissible to vary, contradict or defeat the operation of a valid
contract.19 While parol evidence is admissible to explain the meaning
of written contracts, it cannot serve the purpose of incorporating into the
contract additional contemporaneous conditions which are not
mentioned at all in writing, unless there has been fraud or mistake.20
In the instant case, aside from the testimony of Atty. Mendoza, no other
evidence was presented to prove that the real date of maturity of the
loan is one year. In fact there was not even any allegation in the
Complaint and in the Memorandum filed by petitioner with the trial court
to the effect that there has been fraud or mistake as to the date of the
loan’s maturity as contained in the Promissory Note of July 20, 1981.
Moreover, during her cross-examination, petitioner herself never
claimed that the loan shall mature in one year despite being questioned
regarding its maturity. She testified thus:
Q You said that you borrowed ₱850,000.00 to [sic] Mrs. Poblete,
is that correct?
A Yes sir.
Q In fact, you signed a Real Estate Mortgage marked as Exhibit
"B"?
A Yes sir.
Q When you signed this Deed of Real Estate Mortgage, you
also signed a Promisory [sic] Note, is that correct?
RECORD: Witness did not answer.
Q Did you sign or not a Promisory [sic] note in relation to this
Real Estate Mortgage.
A I don’t remember sir.’
Q You don’t remember. I am showing to you a Promisory Note
with your signature, did you not sign this dated July 20, 1981?
A Yes sir.
Q Now, according to this Promisory [sic] Note, the loan is for
one (1) month from July 20, 1981, did you pay for that loan on
its maturity date?
A I did not sir.
Q Up to now, you have not paid that loan?
A I have not sir.
Q What happen [sic] to the mortgage when you did not paid [sic]
that loan from one (1) month after July 20, 1981?
A None sir.21
In sum, petitioner failed to present clear and convincing evidence to
prove her allegation that the real agreement of the parties is for the loan
to mature in one year.
As to the second assigned error, the prevailing jurisprudence is that
foreclosure proceedings have in their favor the presumption of
regularity and the burden of evidence to rebut the same is on the
petitioner.22 Moreover, the Court agrees with the CA that a mortgagor
who alleges absence of a requisite has the burden of establishing that
fact.23 Petitioner failed in this respect as she did not present any
evidence to prove her allegations.
Moreover, the fact that the records of the foreclosure proceedings
involving the subject property could not be found does not necessarily
mean that the legal requirements of posting and publication had not
been complied with. Private respondents were able to present the
Affidavit of Publication24 executed by the publisher of Nuevo Horizonte,
a newspaper of general circulation, together with a clipping25 of the
published notice attached thereto, to prove that notices of the sale of
the subject property were validly published in accordance with law.
The affidavit of publication executed by the publisher of a newspaper
stating therein that said newspaper is of general circulation and that the
requisite notice of foreclosure sale was published in said paper in
accordance with law constitutes prima facie evidence of compliance
with the required publication.26
As to the alleged lack of posting of the notices of sale in at least three
public places, herein petitioner failed to discharge her burden of proving
by convincing evidence her allegation that there was actually no
compliance with the posting requirement. Hence, in the absence of
contrary evidence, the presumption prevails that the sheriff performed
his official duty of posting the notices of sale.27
The Court’s ruling in Olizon v. Court of Appeals,28 insofar as posting
and publication requirements in mortgage foreclosure sales are
concerned, is instructive:
We take judicial notice of the fact that newspaper publications
have more far-reaching effects than posting on bulletin boards
in public places. There is a greater probability that an
announcement or notice published in a newspaper of general
circulation, which is distributed nationwide, shall have a
readership of more people than that posted in a public bulletin
board, no matter how strategic its location may be, which caters
only to a limited few. Hence, the publication of the notice of
sale in [a] newspaper of general circulation alone is more
than sufficient compliance with the notice-posting
requirement of the law. By such publication, a reasonably wide
publicity had been effected such that those interested might
attend the public sale, and the purpose of the law had been
thereby subserved.
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. If these objects are attained,
immaterial errors and mistakes will not affect the sufficiency of the
notice; but if mistakes or omissions occur in the notices of sale, which
are calculated to deter or mislead bidders, to depreciate the value of
the property, or to prevent it from bringing a fair price, such mistakes or
omissions will be fatal to the validity of the notice, and also to the sale
made pursuant thereto.
In the instant case, the aforesaid objective was attained since
there was sufficient publicity of the sale through the newspaper
publication. There is completely no showing that the property was
sold for a price far below its value as to insinuate any bad faith,
nor was there any showing or even an intimation of collusion
between the sheriff who conducted the sale and respondent bank.
This being so, the alleged non-compliance with the posting
requirement, even if true, will not justify the setting aside of the
sale.29
In the present case, there was sufficient evidence to prove that notices
of the foreclosure sale of the subject property were published in
accordance with law and that there was no allegation, much less proof,
that the property was sold for a price which is considerably lower than
its value as to show collusion between the sheriff and herein private
respondents. Hence, even granting that the sheriff failed to post the
notices of foreclosure in at least three public places, such failure,
pursuant to Olizon, is not a sufficient basis in nullifying the auction sale
and the subsequent issuance of title in favor of private respondents.
As to petitioner’s argument that the sheriff in charge of the auction sale
is required to execute an affidavit of posting of notices, the Court
agrees with private respondents’ contention that petitioner’s reliance on
the provisions of Section 5, Republic Act (R.A.) No. 720, as amended
by R.A. No. 593930 , as well as on the cases of Roxas v. Court of
Appeals,31 Pulido v. Court of Appeals32 and Tambunting v. Court of
Appeals,33 is misplaced as the said provision of law refers specifically
and exclusively to the foreclosure of mortgages covering loans granted
by rural banks. In the present case, the contracts of loan and mortgage
are between private individuals. The governing law, insofar as the
extrajudicial foreclosure proceedings are concerned, is Act No. 3135,
as amended by Act No. 4118.34 Section 3 of the said law reads as
follows:
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.
Unlike in the amended provisions of Section 5, R.A. No. 720, nowhere
in the above-quoted provision of Act No. 3135, as amended, or in any
Section thereof, is it required that the sheriff must execute an affidavit
to prove that he published notices of foreclosure in accordance with the
requirements of law.
As to the last assigned error, suffice it to say that the Court agrees with
the findings of the CA that the issue regarding petitioner’s right to
receive an Assessment Notice or Notice of Redemption from private
respondents as the highest bidders during the auction sale was raised
only in her Addendum to Motion for Reconsideration of the Decision of
the CA. The Court reiterates the rule that points of law, theories, issues
and arguments not brought to the attention of the lower court need not
be, and ordinarily will not be, considered by a reviewing court, as these
cannot be raised for the first time on appeal.35
Moreover, like the issue regarding the date of maturity of the loan, the
question of whether or not petitioner received a copy of an Assessment
Notice or Notice of Redemption from private respondents is also
factual. As earlier explained, questions of fact are not proper subjects of
appeal by certiorari under Rule 45 of the Rules of Court as this mode of
appeal is confined to questions of law.36
Besides, there is nothing under Act No. 3135 which requires the highest
bidder or purchaser to furnish the mortgagor or redemptioner an
Assessment Notice or Notice of Redemption prior to the expiration of
the period of redemption. Even the pertinent provisions of Section 30,
Rule 3937 of the old Rules of Court, which are the rules applicable in
the present case, do not require that the mortgagor or redemptioner be
furnished by the purchaser notice of any assessments or taxes which
the latter may have paid after the purchase of the auctioned property,
thus:
Sec. 30. Time and manner of, and amounts payable on,
successive redemptions, notice to be given and filed. – The
judgment debtor or redemptioner may redeem the property from
the purchaser at any time within twelve (12) months after the
sale, on paying the purchaser the amount of his purchase with
one per centum per month interest thereon in addition, up to the
time of redemption, together with the amount of any
assessments or taxes which the purchaser may have paid
thereon after purchase and interest on such last named amount
at the same rate; and if the purchaser be also a creditor having
a prior lien to that of the redemptioner, other than the judgment
under which such purchase was made, and the amount of such
other lien, with interest. Property so redeemed may again be
redeemed within sixty (60) days after the last redemption upon
payment of the sum paid on the last redemption, with two per
centum thereon in addition, and the amount of any assessments
or taxes which the last redemptioner may have paid thereon
after redemption by him, with interest of such last-named
amount, and in addition, the amount of any liens held by said
last redemptioner prior to his own, with interest. The property
may be again, and as often as a redemptioner is so disposed,
redeemed from any previous redemptioner within sixty (60) days
after the last redemption, on paying the sum paid on the last
previous redemption, with two per centum thereon in addition,
and the amounts of any assessments or taxes which the last
previous redemptioner paid after the redemption thereon, with
interest thereon, and the amount of any liens held by the last
redemptioner prior to his own, with interest.
Written notice of any redemption must be given to the officer who
made the sale and a duplicate filed with the Registrar of Deeds of
the province, and if any assessment of taxes are paid by the
redemptioner or if he has or acquires any lien other than that upon
which the redemption was made, notice thereof must in like
manner be given to the officer and filed with the Registrar of
Deeds; if such notice be not filed, the property may be redeemed
without paying such assessments, taxes, or liens. (emphasis
supplied)
Hence, even granting, for the sake of argument, that private
respondents failed to comply with the directive in the Certificate of Sale
issued by the Ex-Officio Provincial Sheriff of Rizal and the Deputy
Sheriff In-Charge by giving a copy of statements of the amount of
assessments or taxes which they may have paid on account of the
purchase of the subject property, such failure would not invalidate the
auction sale and the subsequent transfer of title over the subject
property in their favor.
It bears to note that the purpose for requiring the purchaser to furnish
copies of the amounts of assessments or taxes which he may have
paid is to inform the mortgagor or redemptioner of the actual amount
which he should pay in case he chooses to exercise his right of
redemption. If no such notice is given, the only effect is that the
property may be redeemed without paying such assessments or taxes.
38
In fact, it would have been beneficial on the part of herein petitioner if
private respondents failed to submit to the office of the sheriff and
furnish her a copy of the statements of the taxes and assessments they
paid because in such a case petitioner would have been excused from
reimbursing such assessments and taxes if she redeemed the property.
The fact remains, however, that petitioner failed to redeem the subject
property.
WHEREFORE, the instant petition is DENIED and the assailed
Decision and Resolution of the Court of Appeals are AFFIRMED in toto.
Costs against petitioner.
SO ORDERED.
4) G.R. No. L-51768 September 14, 1990
PRUDENTIAL BANK, vs.
RENATO M. MARTINEZ and VIRGINIA J. MARTINEZ,
MEDIALDEA, J.:
This case is certified to Us by the Court of Appeals in its Resolution
dated August 30, 1979, for the reason that only pure questions of law
are involved.
The Court of Appeals adopted the findings of fact of the trial court as
follows:
This is a case for sum of money filed by plaintiff Prudential Bank
against defendants Renato M. Martinez and Virginia J. Martinez,
seeking to recover a deficiency of P25,775.10 with daily interest
thereon of P15.35.
The plaintiff in its complaint alleged that on January 27 and February 2,
1970 defendants obtained a loan from the plaintiff in the total sum of
P48,000.00 and in consideration thereof, the said defendants executed
on said dates promissory notes in favor of the plaintiff, promising to pay
jointly and severally, the sum of P48,000.00 on or before January 27,
1971 with interest thereon at 12% per annum, partially secured by a
real estate mortgage on the property covered by Transfer Certificate of
Title No. 97467 of the Register of Deeds of Manila; that the loan
became due and defendant defaulted despite plaintiffs demand letters;
that as a consequence, the mortgage was extra-judicially foreclosed;
that the plaintiff was the highest and lone bidder at the auction sale, for
the sum of P52,760.00; that after deducting therefrom the attorney's
fees, registration fees, sheriffs fees, and publication expense, there still
remained a balance of P25,775.10 due to plaintiff, which plaintiff now
seeks to recover plus interest and attorney's fees.
The defendants admit the allegations in the complaint, except
paragraphs 8 and 9 thereof and alleged that plaintiff has no cause of
action and therefor not entitled to recover and pray for P3,000.00
attorney's fees plus costs of litigation in the amount of P1,000.00.
When the issues were joined a pre-trial was conducted and the Court
issued the following pre-trial order, to wit:
With the admission in the answer of paragraphs 1 to 5 of the
complaint, the parties believed that there are no controversies as to the
facts. From the point of view of the defendants, they will submit the
case on the following issues: (1) Whether plaintiff can still collect the
deficiencies after the extra-judicial foreclosure of mortgage; (2) What
should be the basis of the computation of the attorney's fees? Should it
be the principal or should the 10% be based on the principal plus
interest; and (3) Whether the plaintiff can still collect attorney's fees in
its effort to recover the deficiencies. However, plaintiff, counsel believes
there is only one issue and that is whether any deficiency amount can
be collected after extra-judicial foreclosure of mortgage.
WHEREFORE, it is hereby ordered that the parties be given a
period of thirty (30) days from today within which to file their
respective memoranda simultaneously. SO ORDERED. (Rollo,
pp. 30-32)
On July 8, 1977 the lower Court rendered a decision, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendants, ordering the latter to pay
the former, jointly and severally, the amounts of P25,775.10 with
daily interest thereon of P15.85 from September 10, 1976 until
fully paid and P2,500.00 for and as attorney's fees, plus costs of
suit. (Records, p. 18)
Thereupon, defendants appealed to the Court of Appeals with these
two assignments of errors, namely —
I
THE LOWER COURT ERRED IN HOLDING THAT THE PLAINTIFF-
APPELLEE 19 ENTITLED TO RECOVER THE DEFICIENCY IN THE
SUM OF P 25,775.1 0 AFTER THE EXTRA-JUDICIAL
FORECLOSURE OF MORTGAGE TO SATISFY THE
INDEBTEDNESS, AND AFTER THE MORTGAGED PROPERTY HAD
BEEN CONVEYED TO THE PLAINTIFF- APPELLEE IN
SATISFACTION OF THE LOANS.
II
THE LOWER COURT ERRED IN AWARDING THE SUM OF P2,500.00
AS ATTORNEYS FEES TO PLAINTIFF-APPELLEE. (Appellants' Brief,
p. 9, Rollo)
Appellants argue that the Legislature never intended to grant to a
mortgagee the right to recover the deficiency arising from an
extrajudicial foreclosure of mortgage inasmuch as such recovery is not
a natural right of the mortgagee, hence, the need to expressly grant the
same in a judicial foreclosure proceedings; that consequently, an
express prohibition against such claim would be quite superfluous and
that besides, there is no need to enumerate negative remedies or
solutions in the law. Further, they aver that if mortgagees were allowed
such right, the debtors would be at the mercy of their creditors
considering the summary nature of extrajudicial foreclosure
proceedings. They, likewise, point to the limited readership of auction
sale notices which lead to the sale of mortgaged properties for much
less than their actual value notwithstanding that the mortgage value of
the said properties is higher than its fair market value.

Finally, appellants assail the award of attorney's fees in the sum of
P2,500.00 as unconscionable. They claim that the computation of the
attorney's fees should have been based on the terms of promissory
note which provided for a ten percent (10%) award of the principal
obligation; and that since the attorney's fees were already collected by
the appellee when it foreclosed the mortgage, such fees should no
longer be awarded in this case. (Appellants Brief, pp. 4-11, Rollo, p. 9)
We affirm.
We have already ruled in several cases that in extrajudicial foreclosure
of mortgage, where the proceeds of the sale are insufficient to pay the
debt, the mortgagee has the right to recover the deficiency from the
debtor (Philippine Bank of Commerce v. De Vera, L-18816, December
29, 1962, 6 SCRA 1026; Development Bank of the Philippines v. Vda.
de Moll L25802, January 31, 1972, 43 SCRA 82; Development Bank of
the Philippines v. Murang, L-29130, August 8,1975, 66 SCRA 141;
Development Bank of the Philippines v. Zaragoza, L-23493, August 23,
1978, 84 SCRA 668; and DBP v. Tomeldan, G.R. No. 51269, November
17,1980, 101 SCRA 171).
A careful scrutiny of the arguments presented in the case at bar yields
no substantial and convincing reasons for Us to depart from Our
previous ruling. Appellants' arguments merely rehashed the objections
already considered and overruled in the aforementioned cases. Thus,
in Philippine Bank of Commerce v. De Vera (supra), We declared that:
A reading of the provisions of Act No. 3135, as amended (re
extrajudicial foreclosure) discloses nothing, it is true, as to the
mortgagee's right to recover such deficiency. But neither do we
find any provision thereunder which expressly or impliedly
prohibits such recovery.
Article 2131 of the new Civil Code, on the contrary, expressly provides
that 'The form, extent and consequences of a mortgage, both as to its
constitution, modification and extinguishment, and as to other matters
not included in this Chapter, shall be governed by the provisions of the
Mortgage Law and of the Land Registration Law.' Under the Mortgage
Law, which is still in force, the mortgagee has the right to claim for the
deficiency resulting from the price obtained in the sale of the real
property at public auction and the outstanding obligation at the time of
the foreclosure proceedings. (See Soriano v. Enriquez, 24 Phil. 584;
Banco de Islas Filipinos v. Concepcion e Hijos, 53 Phil. 86; Banco
Nacional v. Barreto, 53 Phil. 101).
Under the Rules of Court (Sec. 6, Rule 70),"Upon the sale of any real
property, under an order for a sale to satisfy a mortgage or other
incumbrance thereon, if there be a balance due to the plaintiff after
applying the proceeds of the sale, the court, upon motion, should
render a judgment against the defendant for any such balance for
which, by the record of the case, he may be personally liable to the
plaintiff, ..." It is true that this refers to a judicial foreclosure, but the
underlying principle is the same, that the mortgage is but a security and
not a satisfaction of indebtedness. ...
Let it be noted that when the legislature intends to foreclose the right of
a creditor to sue for any deficiency resulting from the foreclosure of the
security given to guarantee the obligation, it so expressly provides.
Thus, in respect to pledges, Article 2115 of the new Civil Code
expressly states: ... If the price of the sale is less (than the amount of
the principal obligation) neither shall the creditor be entitled to recover
the deficiency, notwithstanding any stipulation to the contrary. "Likewise
in the event of the foreclosure of a chattel mortgage on the thing sold in
installments 'he (the vendor) shall have no further action against the
purchaser to recover any unpaid balance of the price. Any agreement to
the contrary shall be void" (Article 1484, paragraph 3, Ibid). It is then
clear that in the absence of a similar provision in Act No. 3135, as
amended, it can not be concluded that the creditor loses his right given
him under the Mortgage Law and recognized in the Rules of Court, to
take action for the recovery of any unpaid balance on the principal
obligation, simply because he has chosen to foreclose his mortgage
extra- judicially pursuant to a special power of attorney given him by the
mortgagor in the mortgage contract, (pp. 1029-1030)
Moreover, the fact that the mortgaged property is sold at an amount
less than its actual market value should not militate against the right to
such recovery. We fail to see any disadvantage going for the
mortgagor. On the contrary, a mortgagor stands to gain with a reduced
price because he possesses the right of redemption. When there is the
right to redeem, inadequacy of price should not be material, because
the judgment debtor may reacquire the property or also sell his right to
redeem and thus recover the loss he claims to have suffered by the
reason of the price obtained at the auction sale (De Leon v. Salvador,
L-30871, December 28, 1970 and Bernabe v. Cruz, et al., L-31603,
December 28, 1970; 36 SCRA 567). Generally, in forced sales, low
prices are usually offered and the mere inadequacy of the price
obtained at the sheriffs sale unless shocking to the conscience will not
be sufficient to set aside a sale if there is no showing that in the event
of a regular sale, a better price can be obtained (Ponce de Leon v.
Rehabilitation Finance Corporation, L-24571, December 18, 1970, 36
SCRA 289).
Lastly, We find that the award of attorney's fees is proper. It can not be
disputed that the proceedings in the extrajudicial foreclosure and the
deficiency suit are altogether different. The first is extrajudicial and
summary in nature while the second is a court action. Hence, the efforts
exerted by the lawyer in these two separate courses of action should be
recognized.

Besides, the basis of the extrajudicial foreclosure proceeding was the

Deed of Real Estate Mortgage, particularly condition No. 7 thereof,
where the parties stipulated for a ten percent (10%) attorney's fees to
be collected in the event that the mortgage is foreclosed or a legal
action is taken to foreclose the mortgage (Appellee's Brief, Rollo, p. 9,
italics supplied). However, the proceeds in that sale were insufficient to
pay the debt contained in the appellant's promissory note. The appellee
was, therefore, constrained to file a deficiency suit, an eventuality not
covered by the Deed of Real Estate Mortgage. Necessarily, the basis of
this case is the promissory note executed by the appellants. We find
that the note itself shows that appellants obligated themselves to pay
the sum of ten percent as attorney's fees whether incurred or not,
exclusive of cost and other expenses of collection (Records, p. 7).
Clearly, the trial court's award of attorney's fees was not without basis.
The amount of P2,500.00 awarded as attorney's fees being less than
ten percent (10%) of the deficiency sued for is just and proper in the
premises.

ACCORDINGLY, the decision appealed from is hereby AFFIRMED.

Costs against the appellants.
SO ORDERED.

5) BPI FAMILY SAVINGS BANK, INC., vs MA. ARLYN T. AVENIDO
& PACIFICO A. AVENIDO
G.R. No. 175816 December 7, 2011
LEONARDO-DE CASTRO, J.:
This Petition for Review on Certiorari under Rule 45 of the
Rules of Court assails the Decision[1] dated March 31, 2006 of the
Court of Appeals in CA-G.R. CV No. 79008, which affirmed the
Decision[2] dated November 13, 2002 of the Regional Trial Court
(RTC), Branch 58 of Cebu City, in Civil Case No. CEB-25629. The RTC
dismissed the Complaint for Collection of Deficiency of Mortgage
Obligation with Damages filed by petitioner BPI Family Savings Bank
(BPI Family) against respondent spouses Pacifico A. Avenido and Ma.
Arlyn T. Avenido (spouses Avenido), following the extrajudicial
foreclosure of the property given by the latter as security for their loan.
The instant Petition likewise challenges the Resolution[3] dated
November 16, 2006 of the Court of Appeals in the same case denying
the Motion for Reconsideration of BPI Family.
The controversy arose from the following facts.
On September 20, 2000, BPI Family filed with the RTC a
Complaint for Collection of Deficiency of Mortgage Obligation with
Damages against the spouses Avenido, docketed as Civil Case No.
CEB-25629.
BPI Family alleged in its Complaint that pursuant to a
Mortgage Loan Agreement[4] dated April 25, 1996, the spouses
Avenido obtained from the bank a loan in the amount of P2,000,000.00,
secured by a real estate mortgage on a parcel of land situated in Bais
City, which is covered by Transfer Certificate of Title (TCT) No. T-1216
(mortgaged/foreclosed property). The spouses Avenido failed to pay
their loan obligation despite demand, prompting BPI Family to institute
before the Sheriff of Bais City extrajudicial foreclosure proceedings over
the mortgaged property, 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. At the public
auction sale held on March 8, 1999, BPI Family was the highest bidder
for the foreclosed property. The bid price of P2,142,616.00 of BPI
Family was applied as partial payment of the mortgage obligation of the
spouses Avenido, which had amounted to P2,917,381.43 on the date of
the public auction sale, thus, still leaving an unpaid amount of
P794,765.43. The Certificate of Sale dated March 8, 1999 was
registered on TCT No. T-1216 on May 25, 1999.[5]
BPI Family prayed that the RTC order the spouses Avenido to
pay the deficiency of their mortgage obligation amounting to
P794,765.43, plus legal interest thereon from the date of the filing of the
Complaint until full payment; 15% as contractual attorneys fees;
P50,000.00 as litigation expenses; and costs of the suit.[6]
The spouses Avenido filed their Answer with Special/
Affirmative Defenses and Counterclaims on September 18, 2001. The
spouses Avenido averred therein that they had already paid a
substantial amount to BPI Family, which could not be less than
P1,000,000.00, but due to the imposition by BPI Family of
unreasonable charges and penalties on their principal obligation, their
payments seemed insignificant. Per the Notice of Extrajudicial Sale
dated February 4, 1999, the spouses Avenidos indebtedness to BPI
Family only amounted to less than P2,000,000.00, and such amount
was already fully covered when the foreclosed property was sold at the
public auction for P2,142,616.00. The spouses Avenido sought the
dismissal of the Complaint for lack of merit, plus the award of
P500,000.00 as moral damages and P300,000.00 as exemplary
damages given the prejudice and unnecessary expenses they suffered
because of the unjustified suit of BPI Family.[7]
Failing to reach an amicable settlement during the pre-trial
conference, trial ensued.
BPI Family submitted the following computation in support of
its claim for deficiency mortgage obligation from the spouses Avenido:
AUCTION SALE: MARCH 8, 1999
Principal Balance P
1,918,722.4
7
Interest 266,754.66
Fire Insurance 1997-1998 6,725.00
1998-1999 6,725.00
Unpaid MRI 10,720.00
Late Charges 37,425.46
Less: Unapplied (0.18)
Sub-total 2,247,072.41
 Foreclosure Expenses lower. In a letter dated July 8, 2000, sent to the spouses Avenido
through registered mail, counsel for BPI family demanded payment of
Filing Fee P the deficiency balance of P794,766.43 on the loan obligation of said
5,719.60 spouses.[9]
Sheriffs Fee 1,500.00
Cost of Publication 5,000.00 When respondent Ma. Arlyn T. Avenido (Arlyn) took the
witness stand, she admitted that she and her husband, co-respondent
Interest on Litigation Expenses 232.17 12,451.77 Pacifico A. Avenido (Pacifico), obtained from BPI Family a Motor
Vehicle Loan in 1995 and a Home Mortgage Loan in 1996. The Home
2,259,524.18 Mortgage Loan was for P2,000,000.00, payable in 15 years through
Contractual Penalties debit memos (or automatic debit arrangement), instead of post-dated
checks. The spouses Avenido failed to make some payments in 1998.
Attorneys fees 338,928.63 The spouses Avenido subsequently deposited with their account at BPI
Family branch in Bais City, Negros Occidental, the amount of
Liquidated Damages 338,928.63 P250,000.00, which would have been sufficient to cover their arrears;
Total 2,937,381.43 as well as made arrangements with Dumaguete City Rural Bank to buy
out their loan from BPI Family. Yet, in February 1999, the spouses
Total Appraised Value as of 03/05/99 2,678,270.00 Avenido learned of the foreclosure proceedings over their mortgaged
property only from court personnel. BPI Family never communicated
80% of TAV 2,142,616.00 with the spouses Avenido about the foreclosure proceedings except
Summary: when the former sent the latter a demand letter in July 2000 for the
P700,000.00 deficiency. Counsel for the spouses Avenido answered
Total Exposure as of 03/08/99 2,937,381.43 BPI Family through a letter dated August 2, 2000, stating that the
demand of the bank for deficiency was not only surprising, but lacked
Bid Price 2,142,616.00 basis in fact and in law, for the mortgaged property was already
(lower amt. between total exposure or foreclosed and sold at the public auction for P2,142,616.00, which was
80% of TAV) more than the P1,918,722.47 loan obligation of the spouses Avenido.
Deficiency 794,765.43 Next thing the spouses Avenido knew, BPI Family had filed Civil Case
No. CEB-25629 against them. In addition, the spouses Avenido had
Portion of Principal covered by bid price to be 0.00[8]
already fully paid their Motor Vehicle Loan in 1999, but BPI Family
retained in IL
refused to release the Hi-Lux from the mortgage constituted thereon.
BPI Family attached the Hi-Lux to cover the deficiency of the spouses
Avenido on their home loan obligation. Due to the aforementioned acts
BPI Family presented as witness Alfred Rason (Rason), the of BPI Family, Arlyn suffered sleepless nights and humiliation. Hence,
Assistant Manager for Operation, who was in charge of keeping track she prayed for the award of moral and exemplary damages and
and collecting unpaid obligations of the bank. Rason testified that in the attorneys fees and the release of the Hi-Lux.[10]
Petition for Extrajudicial Foreclosure, BPI Family reported that the loan
obligation of the spouses Avenido amounted to P1,918,722.47, The RTC rendered its Decision on November 13, 2002.
inclusive of interest, penalty charges, insurance, foreclosure expenses,
and others, as of November 16, 1998. However, as of the public auction According to the RTC, the principal issue to be resolved was
sale of the foreclosed property on March 8, 1999, the total loan whether or not [BPI Family] is entitled to deficiency judgment, which
obligation of the spouses Avenido already reached P2,937,381.43. The includes a determination of the existence of the right to recover
foreclosed property was awarded to BPI Family as the highest bidder at deficiency, and how much, if any.[11]
the public auction sale for P2,142,616.00. The bid price was arrived at
by BPI Family following bank policy, i.e., total exposure of claim or 80%
of the total appraised value of the foreclosed property, whichever is
 At the outset, the RTC recognized that in an extrajudicial
foreclosure, the mortgagee has a right to recover deficiency where the
proceeds of the sale are insufficient to cover the debt:
Although Act 3135 is silent on the mortgagees right to recover
the deficiency where the proceeds of the sale is insufficient to cover the
debt, it is now well-settled that said mortgagee has the right to recover
the deficiency. (PB Com v. De Vera, 6 SCRA 1026; DBP v. Vda. de
Noel, 43 SCRA 82; DBP v. Zaragosa, 84 SCRA 668.). The reasons
advanced are 1) Although Act 3135 discusses nothing as to the
mortgagees right to recover such deficiency, neither is there any
provision thereunder which expressly or impliedly prohibits such
recovery; and 2) now Rule 68 on judicial foreclosure expressly grants to
the mortgagee the right to recover deficiency and the underlying
principle is the same for extra-judicial foreclosure that the mortgage is
but a security and not a satisfaction of indebtedness.
In the case of DBP v. Tomeldon, 101 SCRA 171, the
Supreme Court ruled that the action to
recover the deficiency prescribes after ten
(10) years from the time the right to action
accrues x x x.
Thus, in the case at bar the mortgagees right and the
period the said right is enforced are not
contested. What is essentially in controversy
is whether there is a deficiency and how
much.[12]
The RTC then determined the total amount of the loan
obligation of the spouses Avenido as follows:
In the Mortgage Loan Agreement (Exhibits A and I) the due execution
and genuineness of which are admitted by both parties, the [spouses
Avenido] obligated themselves as Borrower-Mortgagor to pay [BPI
Family] the aggregate principal amount of TWO HUNDRED TWO
MILLION PESOS (P202,000,000.00) and interest on the unpaid
balance from the date thereof until paid in full on the repayment dates.
It further provides that in case the mortgagee fails to pay any of the
sums secured, the mortgagor has the right to declare the entire
obligation due and payable and to foreclose the mortgage. Moreover,
Exhibit A-2 shows that the proceeds of sale of the mortgaged property
shall be applied as follows: a) to the payment of the expenses and cost
of foreclosure and sale, including the attorneys fees as herein provided;
b) to the satisfaction of all interest and charges accruing upon the
obligation herein and hereby secured; c) to the satisfaction of the
principal amount of the obligation herein and hereby secured; d) to the
satisfaction of all other obligation then owed to the bank or any of its
subsidiaries. The balance, if any, to be due to the mortgagor. Finally,
the attorneys fees stipulated is 15% of the total amount claimed by the
bank (Exhibit A-3). The Court, however, finds no stipulation as regards
liquidated damages.
xxx
This Court is not convinced that [spouses Avenidos]
total indebtedness should only be ONE
MILLION NINE HUNDRED EIGHTEEN
THOUSAND SEVEN HUNDRED
TWENTY[-]TWO [PESOS] AND
F O R T Y [ - ] S E V E N [ C E N TAV O S ]
(P1,918,722.47) because the Notice of
Extra-Judicial Sale (Exhibit 3) itself states x
x x to satisfy the mortgaged indebtedness
which as of November 16, 1998 amount to
ONE MILLION NINE HUNDRED
EIGHTEEN THOUSAND SEVEN
HUNDRED TWENTY[-]TWO AND
F O RT Y [ - ] S E V E N C E N TAV O S
(P1,918,722.47) plus interest and penalty
charges thereon from June 30, 1998 to date
of the foreclosure sale, attorneys fees and
necessary expenses for foreclosure x x x.
Foreclosure is not a single process and it is not
therefore correct to conclude that what is
material is the petition for extra-judicial sale
nor the date of the filing of the application.
Thus, the Court gives credence to [BPI Familys]
Exhibit C but not including the claim for
liquidated damages in the sum of THREE
HUNDRED THIRTY[-]EIGHT THOUSAND
NINE HUNDRED TWENTY PESOS AND
SIXTY[-]THREE CENTAVOS (P330,920.63)
because it has no basis whatsoever. Thus
the total amount due is TWO MILLION FIVE
HUNDRED NINETY[-]EIGHT THOUSAND
FOUR HUNDRED FIFTY[-]TWO PESOS
AND EIGHTY CENTAVOS (P2,598,452.80).
x x x.[13]
More than just reducing the total loan obligation of the
spouses Avenido to P2,598,452.80, the RTC, in the end, denied the
claim for deficiency of BPI Family based on the following ratiocination:
[T]he Court finds very significant the admission by
[BPI Familys] witness that the appraised
value of the foreclosed property is actually
TWO MILLION SIX HUNDRED
SEVENTY[-]EIGHT THOUSAND TWO
HUNDRED SEVENTY PESOS
(P2,678,270.00) but [BPI Family] bidded
only for 80% of the value as a matter of
bank policy (TSN Afredo Rason, Aug. 6,
2002, p. 17). In other words, the actual
market value of the property is more than
the amount of TWO MILLION FIVE
HUNDRED NINETY[-]EIGHT THOUSAND
FOUR HUNDRED FIFTY[-]TWO PESOS
AND EIGHTY CENTAVOS (P2,598,452.80).
Under this circumstance, it would be inequitable to still
grant the [BPI Familys] prayer for deficiency
as it will be in effect allowing it to unjustly
enrich itself at the expense of the [spouses
Avenido].[14]
Hence, the RTC decreed:
Accordingly, the [BPI Familys] complaint and [spouses
Avenidos] counterclaim are DISMISSED.
[15]
Aggrieved by the RTC judgment, BPI Family filed an appeal
before the Court of Appeals, docketed as CA-G.R. CV No. 79008, with
a lone assignment of error, to wit:
THE LOWER COURT ERRED IN NOT HOLDING [THE SPOUSES
AVENIDO] LIABLE TO [BPI FAMILY] FOR DEFICIENCY OF THE
MORTGAGE OBLIGATION.[16]
In its Decision promulgated on March 31, 2006, the Court of
Appeals ruled:
A careful scrutiny of the arguments presented in the case at bar yields
no substantial and convincing reason for us to depart from the ruling
found by the trial court x x x.
xxxx
Indubitably, mortgagors whose properties a foreclosed and are
purchased by the mortgagee as highest bidder at the auction sale are
decidedly at a great disadvantage because almost invariably,
mortgagors forfeit their properties at a great loss as they are
purchased at a nominal cost by the mortgagee himself, who ordinarily
bids in no more than his credit or the balance thereof at the auction
sale
.
More importantly, the mortgage contract is also one of adhesion as it
was prepared solely by [BPI Family] and the only participation of the
[spouses Avenido] was the affixing of their signatures or adhesion
thereto. Under such contracts, which are common in the Philippines
and elsewhere, the lending institutions are free to require borrowers to
provide assets, like real property, of much higher value than the
desired loan amount, as collateral. Being a contract of adhesion, the
mortgage is to be strictly construed against [BPI Family], the party
which prepared the agreement.
In the case at bar, the intent of [BPI Family] is manifest that the
[spouses Avenido] shall assume liability not only for the entire
obligation mentioned in the mortgage but beyond, which is improper,
as it will defeat the purpose of the foreclosure proceedings which is to MORTGAGE LAW AND NUMEROUS JURISPRUDENCE ENTITLING
answer or satisfy the principal obligation in case of default or non THE MORTGAGEE-[BPI FAMILY] TO THE SAME.
payment thereof. 

Moreover, for all intents and purposes, we hold that [spouses Avenido]
shall not be liable to pay for the deficiency of their mortgage obligation
because it will be at their great disadvantage considering that their
property was purchased at a nominal cost by [BPI Family] at the
auction sale. As a matter [of] fact, there was an admission made by
[BPI Familys] witness that the amount of the bid was only 80% of the
actual price of the property. This is unfair on the part of the [spouses
Avenido]. 
AGAINST THE LOAN OBLIGATION OF THE MORTGAGORS-
Besides, if mortgagees were allowed such right, the debtors would be
at the mercy of their creditors considering the summary nature of
extrajudicial foreclosure proceedings. It is also worthy to note the
limited readership of auction sale notices which lead to the sale. 
II
WITH ALL DUE RESPECT, THE HONORABLE COURT OF
APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT BASED
ITS FINDING THAT THERE IS NO MORE DEFICIENCY OF
MORTGAGE OBLIGATION BY COMPARING THE MARKET VALUE
OF THE FORECLOSED PROPERTY AGAINST THE LOAN
OBLIGATION OF THE MORTGAGORS-RESPONDENTS INSTEAD
OF COMPARING THE ACTUAL BID PRICE AT THE AUCTION SALE
[SPOUSES AVENIDO].[19]
The primary issue posed before us is whether or not BPI
Family is still entitled to collect the deficiency mortgage obligation from
the spouses Avenido in the amount of P455,836.80, plus interest.

Accordingly, We upheld the ruling of the court a quo in absolving the We answer in the affirmative.
[spouses Avenido] from any liability corresponding to the amount of
deficiency of mortgage obligation as it will in effect be allowing [BPI It is settled that if the proceeds of the sale are insufficient to
Family] to unjustly enrich itself at the expense of the [spouses cover the debt in an extrajudicial foreclosure of mortgage, the
Avenido].[17]
mortgagee is entitled to claim the deficiency from the debtor. While Act
 
No. 3135, as amended, does not discuss the mortgagees right to
The dispositive of the Court of Appeals judgment reads:
recover the deficiency, neither does it contain any provision expressly
 
or impliedly prohibiting recovery. If the legislature had intended to deny
WHEREFORE, premises considered, the assailed Decision the creditor the right to sue for any deficiency resulting from the
dated November 13, 2002 of the Regional Trial Court, Cebu foreclosure of a security given to guarantee an obligation, the law would
City, 7th Judicial Region, Branch 58, in Civil Case No. expressly so provide. Absent such a provision in Act No. 3135, as
CEB-25629, is hereby AFFIRMED. No pronouncement as to amended, the creditor is not precluded from taking action to recover
costs.[18
any unpaid balance on the principal obligation simply because he
chose to extrajudicially foreclose the real estate mortgage.[20]
In its Resolution dated November 16, 2006, the Court of
Appeals denied the Motion for Reconsideration of BPI Family since the It is no longer challenged before us that the outstanding loan
arguments set forth therein were but a rehash, repetition and/or obligation of the spouses Avenido amounted to P2,598,452.80,
reinstatement of the arguments/matters already passed upon and inclusive of interests, penalties, and charges, by March 8, 1999. The
extensively discussed by the appellate court in its earlier decision. controversy herein now only revolves around the value to be attributed
to the foreclosed property, which would be applied against the
Hence, the present Petition for Review of BPI Family with the outstanding loan obligation of the spouses Avenido to BPI Family. BPI
following assignment of errors: Family insists that it should be P2,142,616.00, its winning bid price for
I the foreclosed property at the public auction sale, which, being less
WITH ALL DUE RESPECT, THE HONORABLE COURT OF than the outstanding loan obligation of the spouses Avenido, will still
APPEALS COMMITTED A REVERSIBLE ERROR IN RENDERING ITS leave a deficiency collectible by BPI Family from the spouses Avenido
DECISION (ANNEX A) AND RESOLUTION (ANNEX B) DECLARING in the amount of P455,836.80. The spouses Avenido maintain that, as
THAT [BPI FAMILY] IS NOT ENTITLED TO ITS CLAIM AGAINST THE the RTC and the Court of Appeals ruled, it should be P2,678,270.00,
[SPOUSES AVENIDO] FOR DEFICIENCY OF MORTGAGE the fair market value of the foreclosed property, which, being more
OBLIGATION DESPITE THE EXPRESS PROVISIONS OF THE
than the outstanding loan obligation of the spouses Avenido, will
already fully settle their indebtedness.
The spouses Avenido, the RTC, and the Court of Appeals
may not have said it outright, but they actually consider the winning bid
of BPI Family for the foreclosed property at the public auction sale to be
insufficient. They took exception to the fact that the winning bid of BPI
Family was equivalent to only 80% of the appraised value of the
mortgaged property. The RTC and the Court of Appeals even went as
far as to refer to the amount of the winning bid of BPI Family as nominal
and unfair and would unjustly enrich the bank at the expense of the
spouses Avenido. So the RTC and the Court of Appeals disregarded
the winning bid of BPI Family and applied instead the fair market value
of the foreclosed property against the outstanding loan obligation of the
spouses Avenido.
According to Section 4 of Act No. 3135, an extrajudicial
foreclosure sale of a mortgaged real property shall be conducted as
follows:
SEC. 4. Public Auction. - The sale
shall be made at public auction, between the
hours of nine in the morning and four in the
afternoon; and shall be under the direction
of the sheriff of the province, the justice or
auxiliary justice of the peace of the
municipality in which such sale has to be
made, or a notary public of said municipality,
who shall be entitled to collect a fee of five
pesos for each day of actual work
performed, in addition to his expenses.
Notably, the aforequoted provision does not mention any
minimum bid at the public auction sale. There is no legal basis for
requiring that the bid should at least be equal to the market value of the
foreclosed property or the outstanding obligation of the mortgage
debtor.
We have consistently held in previous cases that unlike in an
ordinary sale, inadequacy of the price at a forced sale is immaterial and
does not nullify the sale. In fact, in a forced sale, a low price is more
beneficial to the mortgage debtor for it makes redemption of the
property easier.
Section 6 of Act No. 3135 provides for the redemption of an
extrajudicially foreclosed property within a one-year period, to wit:
Sec. 6. Redemption. In all cases
in which an extrajudicial sale is made under
the special power herein before referred to,
the debtor, his successors-in-interest or any
judicial creditor or judgment creditor of said
debtor, or any person having a lien on the
property subsequent to the mortgage or
deed of trust under which the property is
sold, may redeem the same at any time
within the term of one year from and after
the date of the sale; and such redemption
shall be governed by the provisions of
sections four hundred and sixty-four to four
hundred and sixty-six, inclusive, of the Code
of Civil Procedure, in so far as these are not
inconsistent with the provisions of this
Act. (Emphasis ours.)
Republic Act No. 337, the General Banking Act, as amended,
in force at the time of the herein transactions, had a specific provision
on the redemption of property extrajudicially foreclosed by banks, which
reads:
Sec. 78. Loans against real estate
security shall not exceed seventy percent
(70%) of the appraised value of the
respective real estate security, plus seventy
percent (70%) of the appraised value of the
insured improvements, and such loans shall
not be made unless title to the real estate
shall be in the mortgagor. In the event of
foreclosure, whether judicially or
extrajudicially, of any mortgage on real
estate which is security for any loan granted
before the passage of this Act or under the
provisions of this Act, the mortgagor or
debtor whose real property has been sold at
public auction, judicially or extrajudicially, for
the full or partial payment of an obligation to
 any bank, banking or credit institution, within
the purview of this Act shall have the right,
within one year after the sale of the real
estate as a result of the foreclosure of the
respective mortgage, to redeem the property
by paying the amount fixed by the court in
order of execution, or the amount due under
the mortgage deed, as the case may be,
with interest thereon at the rate specified in
the mortgage, and all the costs, and judicial
and other expenses incurred by the bank or
institution concerned by reason of the
execution and sale and as a result of the
custody of said property less the income
received from the property. However, the
purchaser at the auction sale concerned in a
judicial foreclosure shall have the right to
enter upon and take possession of such
property immediately after the date of the
confirmation of the auction sale by the court
and administer the same in accordance with
law. (Emphasis ours.)
If the foreclosed property is registered, the mortgagor has
one year within which to redeem the property from and after registration
of sale with the Register of Deeds.[21]
We explained in Prudential Bank v. Martinez[22] that:
[T]he fact that the mortgaged property is sold at an
amount less than its actual market value
should not militate against the right to such
recovery. We fail to see any disadvantage
going for the mortgagor. On the contrary, a
mortgagor stands to gain with a reduced
price because he possesses the right of
redemption. When there is the right to
redeem, inadequacy of price should not be
material, because the judgment debtor may
reacquire the property or also sell his right to
redeem and thus recover the loss he claims
to have suffered by the reason of the price
obtained at the auction sale. Generally, in
forced sales, low prices are usually offered
and the mere inadequacy of the price
obtained at the sheriffs sale unless shocking
to the conscience will not be sufficient to set
aside a sale if there is no showing that in the
event of a regular sale, a better price can be
obtained.[23] (Citations omitted.)
We elucidated further in New Sampaguita Builders
Construction Inc. v. Philippine National Bank[24] that:
In the accessory contract of real
mortgage, in which immovable property or
real rights thereto are used as security for
the fulfillment of the principal loan obligation,
the bid price may be lower than the
propertys fair market value. In fact, the loan
value itself is only 70 percent of the
appraised value. As correctly emphasized
by the appellate court, a low bid price will
make it easier for the owner to effect
redemption by subsequently reacquiring the
property or by selling the right to redeem
and thus recover alleged losses. x x x.[25
In Hulst v. PR Builders, Inc.,[26] we reiterated that:
[G]ross inadequacy of price does not nullify an
execution sale. In an ordinary sale, for
reason of equity, a transaction may be
invalidated on the ground of inadequacy of
price, or when such inadequacy shocks
ones conscience as to justify the courts to
interfere; such does not follow when the law
gives the owner the right to redeem as when
a sale is made at public auction, upon the
theory that the lesser the price, the easier it
is for the owner to effect redemption. When
there is a right to redeem, inadequacy of
price should not be material because the
 judgment debtor may re-acquire the
property or else sell his right to redeem and
thus recover any loss he claims to have
suffered by reason of the price obtained at
the execution sale. Thus, respondent stood
to gain rather than be harmed by the low
sale value of the auctioned properties
because it possesses the right of
redemption. x x x.[27]
WHEREFORE, the Petition is hereby GRANTED. The assailed
Decision dated March 31, 2006 and Resolution dated November 16,
2006 of the Court of Appeals in CA-G.R. CV No. 79008, affirming the
Decision dated November 13, 2002 of the Regional Trial Court, Branch
58 of Cebu City, in Civil Case No. CEB-25629, is REVERSED and SET
ASIDE. Respondent spouses Ma. Arlyn T. Avenido and Pacifico A.
Avenido are ORDERED to pay petitioner BPI Family Savings Bank, Inc.
the deficiency of their mortgage obligation in the amount of
P455,836.80, plus legal interest of 12% per annum from July 17, 2000
until the finality of this Decision. Thereafter, the amount adjudged shall
be subject to legal interest of 12% per annum from the finality of this
Decision up to its satisfaction. No cost.

In line with the foregoing jurisprudence, we refuse to consider SO ORDERED.


the question of sufficiency of the winning bid price of BPI Family for the
foreclosed property; and affirm the application of said winning bid in the
amount of P2,142,616.00 against the total outstanding loan obligation
of the spouses Avenido by March 8, 1999 in the sum of P2,598,452.80,
thus, leaving a deficiency of P455,836.80. BPI Family may still collect
the said deficiency without violating the principle of unjust enrichment,
as opined by the Court of Appeals.

There is unjust enrichment when a person unjustly retains a

benefit to the loss of another, or when a person retains money or
property of another against the fundamental principles of justice, equity
and good conscience. Article 22 of the Civil Code provides that every
person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense
of the latter without just or legal ground, shall return the same to him.
The principle of unjust enrichment under Article 22 requires two
conditions: (1) that a person is benefited without a valid basis or
justification, and (2) that such benefit is derived at anothers expense or
damage.[28] There is no unjust enrichment to speak of in this case.
There is strong legal basis for the claim of BPI Family against the
spouses Avenido for the deficiency of their loan obligation.

BPI Family made an extrajudicial demand upon the spouses

Avenido for the deficiency mortgage obligation in a letter dated July 8,
2000 and received by the spouses Avenido on July 17, 2000.
Consequently, we impose the legal interest of 12% per annum on the
deficiency mortgage obligation amounting to P455,836.80 from July 17,
2000 until the finality of this Decision. Thereafter, if the amount
adjudged remains unpaid, it will be subject to interest at the rate of 12%
per annum computed from the time the judgment became final and
executory until fully satisfied.
6) SPOUSES FRANCISCO D. YAP and WHELMA S. YAP versus
SPOUSES ZOSIMO DY, SR. and NATIVIDAD CHIU DY, SPOUSES
MARCELINO MAXINO and REMEDIOS L. MAXINO, PROVINCIAL
SHERIFF OF NEGROS ORIENTAL and DUMAGUETE RURAL
BANK, INC
DUMAGUETE RURAL BANK, INC. (DRBI) herein represented by
Mr. William D.S. Dichoso versus SPOUSES ZOSIMO DY, SR. and
NATIVIDAD CHIU DY, SPOUSES MARCELINO MAXINO and
REMEDIOS MAXINO, and SPOUSES FRANCISCO D. YAP and
WHELMA S. YAP,
VILLARAMA, JR., J.:
May persons to whom several mortgaged lands were transferred
without the knowledge and consent of the creditor redeem only several
parcels if all the lands were sold together for a single price at the
foreclosure sale? This is the principal issue presented to us for
resolution in these two petitions for review on certiorari assailing the
May 17, 2005 Decision[1] and March 15, 2006 Resolution[2] of the
Court of Appeals (CA) in CA-G.R. C.V. No. 57205.
The antecedents are as follows:
The spouses Tomas Tirambulo and Salvacion Estorco (Tirambulos) are
the registered owners of several parcels of land located in Ayungon,
Negros Oriental, registered under Transfer Certificate of Title (TCT)
Nos. T-14794, T-14777, T-14780, T-14781, T-14783 and T-20301 of the
Registry of Deeds of Negros Oriental, and more particularly designated
as follows:
(1) TCT No. T-14777 Lot 1 of Plan Pcs-11728 61,371 sq.m.
(2) TCT No. T-20301 Lot 3 of Plan Psu-124376 17,373 sq.m.
(3) TCT No. T-14780 Lot 4 of Plan Pcs-11728 27,875 sq.m.
(4) TCT No. T-14794 Lot 5 of Plan Psu-124376 2,900 sq.m.
(5) TCT No. T-14781 Lot 6 of Plan Pcs-11728 16,087 sq.m.
(6) TCT No. T-14783 Lot 8 of Plan Pcs-11728 39,888 sq.m
The Tirambulos likewise own a parcel of land denominated as Lot 846,
covered by Tax Declaration No. 08109.
On December 3, 1976, the Tirambulos executed a Real Estate
Mortgage[3] over Lots 1, 4, 5, 6 and 8 in favor of the Rural Bank of
Dumaguete, Inc., predecessor of Dumaguete Rural Bank, Inc. (DRBI),
to secure a P105,000 loan extended by the latter to them. Later, the
Tirambulos obtained a second loan for P28,000 and also executed a
Real Estate Mortgage[4] over Lots 3 and 846 in favor of the same bank
on August 3, 1978.
Subsequently, on October 27, 1979, the Tirambulos sold all seven
mortgaged lots to the spouses Zosimo Dy, Sr. and Natividad Chiu (the
Dys) and the spouses Marcelino C. Maxino and Remedios Lasola (the
Maxinos) without the consent and knowledge of DRBI. This sale, which
was embodied in a Deed of Absolute Sale,[5] was followed by a default
on the part of the Tirambulos to pay their loans to DRBI. Thus, DRBI
extrajudicially foreclosed the December 3, 1976 mortgage and had Lots
1, 4, 5, 6 and 8 sold at public auction on March 31, 1982.
At the auction sale, DRBI was proclaimed the highest bidder and
bought said lots for P216,040.93. The Sheriffs Certificate of Sale[6]
stated that the sale is subject to the rights of redemption of the
mortgagor (s) or any other persons authorized by law so to do, within a
period of one (1) year from registration hereof.[7] The certificate of sale,
however, was not registered until almost a year later, or on June 24,
1983.
On July 6, 1983, or twelve (12) days after the sale was registered,
DRBI sold Lots 1, 3 and 6 to the spouses Francisco D. Yap and
Whelma D. Yap (the Yaps) under a Deed of Sale with Agreement to
Mortgage.[8] It is important to note, however, that Lot 3 was not
among the five properties foreclosed and bought by DRBI at
public auction.
On August 8, 1983, or well within the redemption period, the Yaps filed
a Motion for Writ of Possession[9] alleging that they have acquired all
the rights and interests of DRBI over the foreclosed properties and are
entitled to immediate possession of the same because the one-year
redemption period has lapsed without any redemption being made.
Said motion, however, was ordered withdrawn on August 22, 1983[10]
upon motion of the Yaps, who gave no reason therefor.[11] Three days
later, or on August 25, 1983, the Yaps again filed a Motion for Writ of
Possession.[12] This time the motion was granted, and a Writ of
Possession[13] over Lots 1, 3 and 6 was issued in favor of the Yaps on
September 5, 1983. They were placed in possession of Lots 1, 3 and 6
seven days later.
On May 22, 1984, roughly a month before the one-year redemption
period was set to expire, the Dys and the Maxinos attempted to redeem
Lots 1, 3 and 6. They tendered the amount of P40,000.00 to DRBI and
the Yaps,[14] but both refused, contending that the redemption should
be for the full amount of the winning bid of P216,040.93 plus interest for
all the foreclosed properties.
Thus, on May 28, 1984, the Dys and the Maxinos went to the Office of
the Sheriff of Negros Oriental and paid P50,625.29 (P40,000.00 for the
principal plus P10,625.29 for interests and Sheriffs Commission) to
effect the redemption.[15] Noticing that Lot 3 was not included in the
foreclosure proceedings, Benjamin V. Diputado, Clerk of Court and
Provincial Sheriff, issued a Certificate of Redemption[16] in favor of the
Dys and the Maxinos only for Lots 1 and 6, and stated in said certificate
that Lot 3 is not included in the foreclosure proceedings. By letter[17] of
even date, Atty. Diputado also duly notified the Yaps of the redemption
of Lots 1 and 6 by the Dys and the Maxinos, as well as the non-
inclusion of Lot 3 among the foreclosed properties. He advised the
Yaps to personally claim the redemption money or send a
representative to do so.
In a letter to the Provincial Sheriff on May 31, 1984, the Yaps refused to
take delivery of the redemption price arguing that one of the
characteristics of a mortgage is its indivisibility and that one cannot
redeem only some of the lots foreclosed because all the parcels were
sold for a single price at the auction sale.[18]
On June 1, 1984, the Provincial Sheriff wrote the Dys and the Maxinos
informing them of the Yaps refusal to take delivery of the redemption
money and that in view of said development, the tender of the
redemption money was being considered as a consignation.[19]
On June 15, 1984, the Dys and the Maxinos filed Civil Case No. 8426
with the Regional Trial Court of Negros Oriental for accounting,
injunction, declaration of nullity (with regard to Lot 3) of the Deed of
Sale with Agreement to Mortgage, and damages against the Yaps and
DRBI. In their complaint,[20] they prayed
a) That the Deed of Sale With Agreement to Mortgage be
declared null and void ab initio;
b) That defendant Yap[s] possession of Lot No. 3, TCT No.
T20301 based as it was on a void sale, be declared illegal from
the very beginning;
c) That defendants be ordered to render to plaintiffs a fair
accounting of the harvests and income which defendants made
from said Lot No. 3 and, in addition, be ordered to pay to
plaintiffs damages for wrongfully depriving plaintiffs of the use
and enjoyment of said property;
d) That the redemption which plaintiffs made of Lot No. 1,
TCT No. 14777, and Lot No. 6, TCT No. 14781, through the
Provincial Sheriff of Negros Oriental, be declared valid and
binding on the defendants, thereby releasing and freeing said
parcels of land from whatever liens or claims that said
defendants might have on them;
e) That defendants be likewise ordered to render to plaintiffs
full and fair accounting of all the harvests, fruits, and income
that they or either of them might have derived from said two
parcels of land starting from the time defendant Yap first took
possession thereof and harvested the coconuts in September,
1983;
f) That, after the accounting herein prayed for, defendants
be required to deliver to plaintiffs the net proceeds of the income
from the three parcels of land subject of this case, together with
interest at the legal rate;
g) That for his acts of misrepresentation and deceit in
obtaining a writ of possession over the three parcels of land
subject of this case, and for the highly irregular and anomalous
procedures and maneuvers employed by defendant Yap in
securing said writ, as well as for harvesting the coconuts even
after knowing that plaintiffs had already fully redeemed the
properties in question and, with respect to Lot No. 3, after
knowing that the same was not in fact included in the
foreclosure and, therefore, could not have been validly sold by
the bank to him, said defendant Yap be condemned to pay
plaintiffs moral damages in the amount of P200,000.00, plus
punitive and exemplary damages in the amount of P100,000.00;
h) That for falsifying the Sheriffs Certificate of Sale and
selling unlawfully Lot No. 3, TCT No. T-20301, to its co-
defendant Yap, defendant DRBI be condemned to pay to
plaintiffs actual damages in the amount of P50,000.00; moral
damages in the amount of P200,000.00; and punitive and
exemplary damages in the amount of P100,000.00;
i) That defendants be condemned to pay solidarily to
plaintiffs attorneys fees in the amount of P50,000.00; other
legitimate expenses of litigation in the amount of P30,000.00;
and the costs of suit;
j) That pending hearing of this case, a writ of preliminary
injunction be issued enjoining and restraining the defendants,
particularly defendant Yap, from disturbing and interfering the
plaintiffs possession and other rights of ownership over the land
in question;
k) That pending hearing of the petition for preliminary
injunction, a temporary restraining order be issued against the
defendants, particularly against defendant Yap, to serve the
same purpose for which the writ of preliminary injunction is
herein prayed for; and
l)        That, after hearing of the main case, said preliminary
injunction be made permanent.
Furthermore, plaintiffs pray for all other reliefs which may be just and
equitable in the premises.[21]
Thereafter, on June 19, 1984, the Dys and the Maxinos consigned to
the trial court an additional sum of P83,850.50 plus sheriffs
commission fee of P419.25 representing the remaining balance of the
purchase price that the Yaps still owed DRBI by virtue of the sale to
them by the DRBI of Lots 1, 3 and 6.[22]
Meanwhile, by letter[23] dated June 27, 1984, the Yaps told DRBI that
no redemption has been made by the Tirambulos or their successors-
in-interest and requested DRBI to consolidate its title over the
foreclosed properties by requesting the Provincial Sheriff to execute
the final deed of sale in favor of the bank so that the latter can transfer
the titles of the two foreclosed properties to them.
Civil Case No. 8426 as well as the bank and the Yap spouses
On the same date, the Yaps also wrote the Maxinos informing the latter
that during the last harvest of the lots bought from DRBI, they
excluded from the harvest Lot 3 to show their good faith. Also, they
told the Maxinos that they were formally turning over the possession of
Lot 3 to the Maxinos, without prejudice to the final determination of the
legal implications concerning Lot 3. As to Lots 1 and 6, however, the
Yaps stated that they intended to consolidate ownership over them
since there has been no redemption as contemplated by law. Included
in the letter was a liquidation of the copra proceeds harvested from
September 7, 1983 to April 30, 1984 for Lots 1, 3 and 6.[24]
Later, on July 5, 1984, the Yaps filed Civil Case No. 8439 for
consolidation of ownership, annulment of certificate of redemption,
and damages against the Dys, the Maxinos, the Provincial Sheriff of
Negros Oriental and DRBI. In their complaint,[25] the Yaps prayed
portion upon motion of DRBI, as follows:
1.      That [they] be declared the exclusive owners of Lot No. 1
covered by TCT No. T-14777 and Lot No. 6 covered by TCT No.
T-14781 for failure on the part of defendants Zosimo Dy, Sr.,
and Marcelino Maxino to redeem the properties in question
within one (1) year from the auction sale.
to execute a Final Deed of Sale of the foreclosed properties in
2.      That defendants be [declared] solidarily liable to pay
moral damages in the amount of ONE HUNDRED THOUSAND
PESOS (P100,000.00), THIRTY[-]FIVE THOUSAND PESOS
(P35,000.00) as attorneys fees and FIFTEEN THOUSAND
PESOS (P15,000.00) as exemplary damages;
Tirambulo and Estorco in favor of the Dys and Maxinos
3.      That the Provincial Sheriff be required to execute the final
Deed of Sale in favor of the bank and the bank be in turn
required to transfer the property to the plaintiffs in accordance
with the Deed of Sale with Mortgage.
exclusive owners of Lot No. 1, covered by TCT No. T-14777,
4.      That the court grant such other relief as may be deemed
just and equitable under the premises.[26]
part of the Dy and Maxino Spouses, to redeem said properties
Civil Case Nos. 8426 and 8439 were tried jointly.
auction sale;
On October 24, 1985, the Yaps, by counsel, filed a motion to withdraw
from the provincial sheriff the redemption money amounting to
P50,373.42.[27] Said motion was granted on October 28, 1985 after a
Special Power of Attorney executed by Francisco Yap in favor of his
brother Valiente Yap authorizing the latter to receive the P50,373.42
redemption money was presented in court.[28]
On February 12, 1997, the trial court rendered decision[29] in favor of
the Yaps. The fallo reads:
WHEREFORE, judgment is hereby rendered as follows:
1.      Dismissing the complaint of Dy and Maxino spouses in
counterclaim for lack of factual and legal basis;
2.      In Civil Case No. 8439:
a)      Declaring the Yap spouses, plaintiffs therein, the exclusive
owners of Lot No. 1 covered by TCT No. T-14777 and Lot No. 6
covered by TCT No. T-14781 for failure on the part of the Dy
and Maxino spouses, defendants therein, to redeem the
properties in question within one (1) year from the auction sale.
b)      Directing the Provincial Sheriff of Negros Oriental to
execute the Final Deed of Sale in favor of the bank and the
latter to transfer the subject properties to the Yap spouses in
accordance with the Deed of Sale With Mortgage. SO
ORDERED.[30]
 
On March 7, 1997, the trial court amended the above dispositive
Wherefore, judgment is hereby rendered as follows:
1.      The Certificate of Redemption issued by the Provincial
Sheriff (Exh. M) is hereby declared null and void;
2.      The Provincial Sheriff of Negros Oriental is hereby ordered
favor of the defendant Dumaguete Rural Bank, Inc., subject to
the rights of the Yap spouses acquired in accordance with the
Deed of Sale with Mortgage;
3.      The Deed of Sale dated [October] 27, 1979, made by
covering all the seven (7) parcels of land in question, is hereby
declared null and void;
4.      In Civil Case No. 8439, declaring the Yap Spouses, the
and Lot No. 6, covered by TCT No. T-14781, for failure on the
within one (1) year from the date of the registration of the

 5.      All other claims and counterclaims are hereby dismissed
for lack of merit. SO ORDERED.[31]
The trial court held that the Dys and the Maxinos failed to formally offer
their evidence; hence, the court could not consider the same. It also
upheld the Deed of Sale with Agreement to Mortgage between the
Yaps and DRBI, ruling that its genuineness and due execution has
been admitted by the Dys and the Maxinos and that it is not contrary
to law, morals, good customs, public policy or public order. Thus,
ownership of Lots 1, 3 and 6 was transferred to the Yaps.
Sheriff and was not included in the certificate of sale issued by
The trial court further held that the Dys and the Maxinos failed to
exercise their rights of redemption properly and timely. They merely
deposited the amount of P50,625.29 with the Sheriff, whereas the
6)      not holding that defendants Yap have no cause of action
to quiet title as they had no title or possession of the parcels of
land in question and in declaring defendants Yap spouses the
exclusive owners of Lot No. 1 covered by TCT No. T-14777 and
Lot No. 6 covered by TCT No. T-14781 and in directing the
Provincial Sheriff to execute the final deed of sale in favor of the
bank and the latter to transfer the subject properties to the Yap
spouses in accordance with the Deed of Sale with Mortgage
which included Lot No. 3 which was not foreclosed by the
him and despite their acceptance, ratification, and confirmation
of the redemption as well as acknowledgment of possession of
the parcels of land by plaintiffs;

amount due on the mortgage deed is P216,040.93.

7)      issuing an amended decision after perfection of plaintiffs
Aggrieved by the above ruling, the Dys and the Maxinos elevated the appeal and without waiting for their comment (declaring the
case to the CA. They argued that the trial court erred in:
Certificate of Redemption issued by the Provincial Sheriff (Exh.
1)      ... failing to consider plaintiffs evidence [testimonial, M) null and void; ordering the Provincial Sheriff of Negros
including the testimony of the Provincial Sheriff of Negros Oriental to execute a Final Deed of Sale of the foreclosed
Oriental (Attorney Benjamin V. Diputado) and plaintiff Attorney properties in favor of the defendant Dumaguete Rural Bank,
Marcelino C. Maxino] and documentary [Exhibits A through TT Inc., subject to the rights of the Yap spouses acquired in
(admitted under Order of 3 March 1995)];
accordance with the Deed of Sale with Mortgage (Exh. B-
2)      failing to declare void or annul the purported contract of Maxino and Dy; Exh. 1 Yap); declaring null and void the Deed of
sale by Dumaguete Rural Bank, Inc. to Francisco D. Yap and Sale dated Oct[ober] 27, 1979, made by Tirambulo and Estorco
Whelma S. Yap of Lots 1, 3, and 6, during the redemption in favor of the Dys and Maxinos covering all the seven (7)
period [the purported seller (bank) not being the owner thereof, parcels of land in question; in Civil Case No. 8439, declaring
and Lot 3 not being included in the foreclosure/auction sale and the Yap spouses, the exclusive owners of Lot No. 1, covered by
could not have been acquired by the Bank thereat];
TCT No. T-14777, and Lot No. 6, covered by TCT No. T-14781,
3)      not holding that the parcels of land had been properly and for failure on the part of the Dy and Maxino spouses, to redeem
validly redeemed in good faith, defendant Yap, the Provincial said properties within (1) year from the date of registration of
Sheriff, the Clerk of Court, and Mr. Mario Dy, having accepted the auction sale) after plaintiffs had perfected appeal of the 12
redemption/consignation (or, in not fixing the redemption price February 1997 decision, without hearing or awaiting plaintiffs
and allowing redemption);
comment, and in the face of the records showing that the
4)      not holding that by withdrawing the redemption money issues were never raised, much less litigated, insofar as
consigned/deposited by plaintiffs to the Court, and turning over Tirambulo, as well in the face of the foregoing circumstances,
possession of the parcels of land to plaintiffs, defendants Yap especially dismissal of defendants claims and counterclaims
accepted, ratified, and confirmed redemption by plaintiffs of the and acquisition of ownership and possession of the parcels of
parcels of land acquired at foreclosure/auction sale by the Bank land by plaintiffs as well as disposition and/or loss of
and purportedly sold by it to and purchased by Yap;
defendants rights and interests and cause of action in respect
5)      not finding and holding that all the parcels of land covered thereof and/or settlement, waiver, and/or extinguishment of
by the foreclosed mortgage held by Dumaguete Rural Bank had their claims, and merger in plaintiffs-appellants, and without
been acquired by and are in the possession of plaintiffs as stating clearly the facts and the law upon which it is based[;
owners and that defendants bank and Yap had disposed of and]

and/or lost their rights and interests and/or any cause of action 8)      not finding, holding and ruling that defendants acted in
and their claims had been extinguished and mooted or bad faith and in an abusive and oppressive manner, if not
otherwise settled, waived and/or merged in plaintiffs- contrary to law; and in not awarding plaintiffs damages.[32]

appellants;


On May 17, 2005, the CA rendered a decision reversing the March 7,
1997 amended decision of the trial court. The dispositive portion of the
assailed CA decision reads:
formers acceptance of the redemption money and their delivery of the
IN LIGHT OF THE FOREGOING, this appeal is GRANTED. The
decision as well as the amended decision of the Regional Trial Court is
REVERSED AND SET ASIDE. In lieu thereof[,] judgment is hereby
rendered as follows:
Redemption Money from the Provincial Sheriff and withdrew the
1. Declaring the sale made by Dumaguete Rural Bank Inc. to
Sps. Francisco and Whelma Yap with respect to Lot No. 3 under
TCT No. T-20301 as null and void;
2. Declaring the redemption made by Spouses Dy and
Spouses Maxino with regards to Lot No. 6 under TCT No.
T-14781 and Lot No. 1 under TCT No. [T-]14777 as valid;
3. Ordering defendants, Sps. Yap, to deliver the possession
and ownership thereof to Sps. Dy and Sps. Maxino; to give a
fair accounting of the proceeds of these three parcels of land
and to tender and deliver the corresponding amount of income
from October 24, 1985 until the finality of this judgment[; and]
4. Condemning the defendant bank to pay damages to
Spouses Dy and Spouses Maxino the amount of P20,000.00 as
moral damages and P200,000.00 as exemplary damages and
attorneys fees in the amount of P50,000.00.
All other claims are dismissed. Costs against
the appellees. SO
ORDERED.[33]
The CA held that the trial court erred in ruling that it could not consider
the evidence for the Dys and the Maxinos allegedly because they failed
to formally offer the same. The CA noted that although the testimonies
of Attys. Marcelino C. Maxino and Benjamin V. Diputado were not
formally offered, the procedural lapse was cured when the opposing
counsel cross-examined said witnesses. Also, while the original TSNs
of the witnesses for the plaintiffs in Civil Case No. 8426 were burned,
the latters counsel who had copies thereof, furnished the Yaps copies
for their scrutiny and comment.
decision.
The CA further noted that the trial court also admitted all the
documentary exhibits of the Dys and the Maxinos on March 3, 1995.
Unfortunately, however, the trial court simply failed to locate the
pertinent documents in the voluminous records of the cases.
the auction sale is P216,040.93. They also argue that a valid tender of
On the merits, the CA ruled that the Dys and the Maxinos had proven
their cause of action sufficiently. The CA noted that their claim that Lot
3 was not among the properties foreclosed was duly corroborated by
Atty. Diputado, the Provincial Sheriff who conducted the foreclosure
sale. The Yaps also failed to rebut their contention regarding the
possession of the three parcels of land to the Dys and the Maxinos.
The CA also noted that not only did the Yaps deliver possession of Lot
3 to the Dys and the Maxinos, they also filed a Motion to Withdraw the
redemption money.
As to the question whether the redemption was valid or not, the CA
found no need to discuss the issue. It found that the bank was in bad
faith and therefore cannot insist on the protection of the law regarding
the need for compliance with all the requirements for a valid
redemption while estoppel and unjust enrichment operate against the
Yaps who had already withdrawn the redemption money.
Upon motion for reconsideration of the Yaps, however, the CA
amended its decision on March 15, 2006 as follows:
IN LIGHT OF THE FOREGOING, this appeal is GRANTED. The
decision as well as the amended decision of the Regional Trial
Court is REVERSED AND SET ASIDE. In lieu thereof[,] judgment
is hereby rendered as follows:
1.Declaring the sale made by Dumaguete Rural Bank Inc. to
Sps. Francisco and Whelma Yap with respect to Lot No. 3
under TCT No. T-20301 null and void;
2.Declaring the redemption made by Spouses Dy and Spouses
Maxino with regards to Lot No. 6 under TCT No. T-14781 and
Lot No. 1 under TCT No. [T-]14777 as valid;
3. Condemning the defendant bank to pay damages to
Spouses Dy and Spouses Maxino the amount of P20,000.00 as
moral damages and P200,000.00 as exemplary damages and
attorneys fees in the amount of P50,000.00.
 
All other claims are dismissed.
Costs against the appellees.
SO ORDERED.[34]
Hence, the consolidated petitions assailing the appellate courts
The Yaps argue in the main that there is no valid redemption of the
properties extrajudicially foreclosed. They contend that the P40,000.00
cannot be considered a valid tender of redemption since the amount of
payment for redemption can only be made to DRBI since at that time,
their rights were subordinate to the final consolidation of ownership by
the bank.
application for foreclosure of real estate mortgage[36] shows that it
DRBI, aside from insisting that all seven mortgaged properties (which
thus includes Lot 3) were validly foreclosed, argues, for its part, that
the appellate court erred in sustaining the redemption made by the Dys
and Maxinos. It anchors its argument on the fact that the sale of the
Tirambulos to the Dys and Maxinos was without the banks consent.
The Dys and Maxinos therefore could not have assumed the character
of debtors because a novation of the contract of mortgage between
the Tirambulos and DRBI did not take place as such a novation is
proscribed by Article 1293 of the Civil Code. And there being no valid
redemption within the contemplation of law and DRBI being the
highest bidder during the auction sale, DRBI has become the absolute
owner of the properties mortgaged when the redemption period
expired.
As to the second issue regarding the question as to whom payment of
DRBI further argues that it was unfair and unjust for them to be held
liable for damages for supposedly wrongfully foreclosing on Lot 3,
depriving the Dys and the Maxinos of the use of the land, and
registering the Certificate of Sale which included Lot 3 when it should
have excluded the same. DRBI argues that as a juridical person, it only
authorized and consented, through its Board of Directors, to lawful
processes. The unlawful acts of the Sheriff, who is considered as an
agent of the bank in the foreclosure proceedings, cannot bind DRBI.
Moreover, DRBI cannot be liable for damages on the basis of an
affidavit that was submitted only before the CA as the bank had no
chance to cross-examine the affiant and determine the veracity and
propriety of the statements narrated in said affidavit.
acknowledgments of conveyances of real property. Such
Thus, the issues to be resolved in the instant case are essentially as
follows: (1) Is Lot 3 among the foreclosed properties? (2) To whom
should the payment of redemption money be made? (3) Did the Dys
and Maxinos validly redeem Lots 1 and 6? and (4) Is DRBI liable for
damages?
sections may be made to the purchaser or redemptioner, or
As to the first issue, we find that the CA correctly ruled that the Dys
and Maxinos were able to prove their claim that Lot 3 was not among
the properties foreclosed and that it was merely inserted by the bank in
the Sheriffs Certificate of Sale. As Atty. Diputado, the Provincial Sheriff,
testified, the application for foreclosure was only for five parcels of
land, namely, Lots 1, 4, 5, 6 and 8. Accordingly, only said five parcels
of land were included in the publication and sold at the foreclosure
sale. When he was shown a copy of the Sheriffs Certificate of Sale
consisting of three pages, he testified that it was altered because Lot 3
and Lot 846 were included beyond the xxx that marked the end of the
enumeration of the lots foreclosed.[35] Also, a perusal of DRBIs
explicitly refers to only one deed of mortgage to settle the Tirambulos
indebtedness amounting to P216,040.93. This is consistent with the
Notice of Extrajudicial Sale of Mortgaged Property, published in the
Dumaguete Star Informer on February 18, 25 and March 4, 1982,[37]
announcing the sale of Lots 1, 4, 5, 6 and 8 for the satisfaction of the
indebtedness amounting to P216,040.93. It is also consistent with the
fact that Lots 1, 4, 5, 6 and 8 are covered by only one real estate
mortgage, the Real Estate Mortgage[38] dated December 3, 1976.
Indeed, that the foreclosure sale refers only to Lots 1, 4, 5, 6 and 8 is
clear from the fact that Lots 1, 4, 5, 6 and 8 and Lot 3 are covered by
two separate real estate mortgages. DRBI failed to refute these pieces
of evidence against it.
the redemption money should be made, Section 31,[39] Rule 39 of the
Rules of Court then applicable provides:
SEC. 31. Effect of redemption by judgment debtor, and a
certificate to be delivered and recorded thereupon. To whom
payments on redemption made.If the judgment debtor redeem,
he must make the same payments as are required to effect a
redemption by a redemptioner, whereupon the effect of the sale
is terminated and he is restored to his estate, and the person to
whom the payment is made must execute and deliver to him a
certificate of redemption acknowledged or approved before a
notary public or other officer authorized to take
certificate must be filed and recorded in the office of the
registrar of deeds of the province in which the property is
situated, and the registrar of deeds must note the record
thereof on the margin of the record of the certificate of sale.
The payments mentioned in this and the last preceding
for him to the officer who made the sale. (Emphasis
supplied.)
Here, the Dys and the Maxinos complied with the above-quoted
provision. Well within the redemption period, they initially attempted to
pay the redemption money not only to the purchaser, DRBI, but also to
the Yaps. Both DRBI and the Yaps however refused, insisting that the
Dys and Maxinos should pay the whole purchase price at which all the
foreclosed properties were sold during the foreclosure sale. Because
of said refusal, the Dys and Maxinos correctly availed of the alternative
remedy by going to the sheriff who made the sale. As held in Natino v.
Intermediate Appellate Court,[40] the tender of the redemption money
may be made to the purchaser of the land or to the sheriff. If made to
the sheriff, it is his duty to accept the tender and execute the
certificate of redemption.
But were the Dys and Maxinos entitled to redeem Lots 1 and 6 in the
first place? We rule in the affirmative.
The requisites for a valid redemption are: (1) the redemption must be
The Dys and the Maxinos have legal personality to redeem the
subject properties.
Contrary to petitioners contention, the Dys and Maxinos have legal
personality to redeem the subject properties despite the fact that the
sale to the Dys and Maxinos was without DRBIs consent. In Litonjua v.
L & R Corporation,[41] this Court declared valid the sale by the
mortgagor of mortgaged property to a third person notwithstanding the
lack of written consent by the mortgagee, and likewise recognized the
third persons right to redeem the foreclosed property, to wit:
Coming now to the issue of whether the redemption offered by PWHAS
on account of the spouses Litonjua is valid, we rule in the affirmative.
The sale by the spouses Litonjua of the mortgaged properties to
PWHAS is valid. Therefore, PWHAS stepped into the shoes of the
spouses Litonjua on account of such sale and was in effect, their
successor-in-interest. As such, it had the right to redeem the property
foreclosed by L & R Corporation. Again, Tambunting, supra, clarifies
that
x x x. The acquisition by the Hernandezes of the Escuetas rights over
the property carried with it the assumption of the obligations burdening
the property, as recorded in the Registry of Property, i.e., the mortgage
debts in favor of the RFC (DBP) and the Tambuntings. The
Hernandezes, by stepping into the Escuetas shoes as assignees, had
the obligation to pay the mortgage debts, otherwise, these debts would
and could be enforced against the property subject of the assignment.
Stated otherwise, the Hernandezes, by the assignment, obtained the
right to remove the burdens on the property subject thereof by paying
the obligations thereby secured; that is to say, they had the right of
redemption as regards the first mortgage, to be exercised within the
time and in the manner prescribed by law and the mortgage deed; and
as regards the second mortgage, sought to be judicially foreclosed but
yet unforeclosed, they had the so-called equity of redemption.
The right of PWHAS to redeem the subject properties finds support in
Section 6 of Act 3135 itself which gives not only the mortgagor-debtor
the right to redeem, but also his successors-in-interest. As vendee of
the subject properties, PWHAS qualifies as such a successor-in-
interest of the spouses Litonjua.[42]
Likewise, we rule that the Dys and the Maxinos validly redeemed Lots 1
and 6.
The requisites of a valid redemption are present
made within twelve (12) months from the time of the registration of the
sale in the Office of the Register of Deeds; (2) payment of the purchase
price of the property involved, plus 1% interest per month thereon in
addition, up to the time of redemption, together with the amount of any
assessments or taxes which the purchaser may have paid thereon after
the purchase, also with 1% interest on such last named amount; and
(3) written notice of the redemption must be served on the officer who
made the sale and a duplicate filed with the Register of Deeds of the
province.[43]
There is no issue as to the first and third requisites. It is undisputed that
the Dys and the Maxinos made the redemption within the 12-month
period from the registration of the sale. The Dys and Maxinos effected
the redemption on May 24, 1984, when they deposited P50,373.42 with
the Provincial Sheriff, and on June 19, 1984, when they deposited an
additional P83,850.50. Both dates were well within the one-year
redemption period reckoned from the June 24, 1983 date of registration
of the foreclosure sale. Likewise, the Provincial Sheriff who made the
sale was properly notified of the redemption since the Dys and Maxinos
deposited with him the redemption money after both DRBI and the
Yaps refused to accept it.
The second requisite, the proper redemption price, is the main subject
of contention of the opposing parties.
The Yaps argue that P40,000.00 cannot be a valid tender of redemption
since the amount of the auction sale was P216,040.93. They further
contend that the mortgage is indivisible so in order for the tender to be
valid and effectual, it must be for the entire auction price plus legal
interest.
We cannot subscribe to the Yaps argument on the indivisibility of the
mortgage. As held in the case of Philippine National Bank v. De los
Reyes,[44] the doctrine of indivisibility of mortgage does not apply once
the mortgage is extinguished by a complete foreclosure thereof as in
the instant case. The Court held:
The parties were accordingly embroiled in a hermeneutic
disparity on their aforesaid contending positions. Yet, the rule
on the indivisibility of mortgage finds no application to the case
at bar. The particular provision of the Civil Code referred to
provides:

 Art. 2089. A pledge or mortgage is indivisible, even though the
debt may be divided among the successors in interest of the
debtor or of the creditor.
decided by this Court, the right of the mortgagor or redemptioner to
Therefore, the debtors heir who has paid a part of the debt cannot ask
for the proportionate extinguishment of the pledge or mortgage as long
as the debt is not completely satisfied.
sold at public auction. Nagtalon, who owned three of the ten parcels of
Neither can the creditors heir who received his share of the debt return
the pledge or cancel the mortgage, to the prejudice of the other heirs
who have not been paid.
the Court held that the tender of payment was made timely and in
From these provisions is excepted the case in which, there being
several things given in mortgage or pledge, each one of these
guarantees only a determinate portion of the credit.
The debtor, in this case, shall have a right to the extinguishment of the
pledge or mortgage as the portion of the debt for which each thing is
specially answerable is satisfied.
the trial court declared the piecemeal redemption of Dulay as void.
From the foregoing, it is apparent that what the law proscribes is the
foreclosure of only a portion of the property or a number of the several
properties mortgaged corresponding to the unpaid portion of the debt
where before foreclosure proceedings partial payment was made by
the debtor on his total outstanding loan or obligation. This also means
that the debtor cannot ask for the release of any portion of the
mortgaged property or of one or some of the several lots mortgaged
unless and until the loan thus, secured has been fully paid,
notwithstanding the fact that there has been a partial fulfillment of the
obligation. Hence, it is provided that the debtor who has paid a part of
the debt cannot ask for the proportionate extinguishment of the
mortgage as long as the debt is not completely satisfied.
valued?
That the situation obtaining in the case at bar is not within the purview
of the aforesaid rule on indivisibility is obvious since the aggregate
number of the lots which comprise the collaterals for the mortgage had
already been foreclosed and sold at public auction.
(P50,373.42 paid on May 28, 1984 plus P83,850.50 paid on June 19,
There is no partial payment nor partial extinguishment of the obligation
to speak of. The aforesaid doctrine, which is actually intended for the
protection of the mortgagee, specifically refers to the release of the
mortgage which secures the satisfaction of the indebtedness and
naturally presupposes that the mortgage is existing. Once the
mortgage is extinguished by a complete foreclosure thereof, said
doctrine of indivisibility ceases to apply since, with the full
payment of the debt, there is nothing more to secure.[45]
(Emphasis supplied.)
Nothing in the law prohibits the piecemeal redemption of properties
sold at one foreclosure proceeding. In fact, in several early cases
redeem one or some of the foreclosed properties was recognized.
In the 1962 case of Castillo v. Nagtalon,[46] ten parcels of land were
land sold, wanted to redeem her properties. Though the amount she
tendered was found as insufficient to effectively release her properties,
good faith and thus, in the interest of justice, Nagtalon was given the
opportunity to complete the redemption purchase of three of the ten
parcels of land foreclosed.
Also, in the later case of Dulay v. Carriaga,[47] wherein Dulay
redeemed eight of the seventeen parcels of land sold at public auction,
Said order, however, was annulled and set aside by the Court on
certiorari and the Court upheld the redemption of the eight parcels of
land sold at public auction.
Clearly, the Dys and Maxinos can effect the redemption of even only
two of the five properties foreclosed. And since they can effect a
partial redemption, they are not required to pay the P216,040.93
considering that it is the purchase price for all the five properties
foreclosed.
So what amount should the Dys and Maxinos pay in order for their
redemption of the two properties be deemed valid considering that
when the five properties were auctioned, they were not separately
Contrary to the Yaps contention, the amount paid by the Dys and
Maxinos within the redemption period for the redemption of just two
parcels of land was not only P40,000.00 but totaled to P134,223.92
1984). That is more than 60% of the purchase price for the five
foreclosed properties, to think the Dys and Maxinos were only
redeeming two properties. We find that it can be considered a
sufficient amount if we were to base the proper purchase price on the
proportion of the size of Lots 1 and 6 with the total size of the five
foreclosed properties, which had the following respective sizes:
Lot 1 61,371 square meters
Lot 6 16,087 square meters
Lot 5 2,900 square meters
 Lot 4 27,875 square meters
Lot 8 39,888 square meters
TOTAL 148,121 square
meters
The two subject properties to be redeemed, Lots 1 and 6, have a total
area of 77,458 square meters or roughly 52% of the total area of the
foreclosed properties. Even with this rough approximation, we rule that
there is no reason to invalidate the redemption of the Dys and Maxinos
since they tendered 60% of the total purchase price for properties
constituting only 52% of the total area. However, there is a need to
remand the case for computation of the pro-rata value of Lots 1 and 6
the public auction conducted. It cannot be overemphasized that being
a lending institution, prudence dictates that it should employ good
faith and due diligence with the properties entrusted to it. It was the
bank which submitted the properties ought to be foreclosed to the
sheriff. It only submitted five (5) properties for foreclosure. Yet, it
caused the registration of the Certificate of Sale under public auction
which listed more properties than what was foreclosed. On this aspect,
exemplary damages in the amount of P200,000.00 are in order.[49]
There being an award of exemplary damages, the award of attorneys
fees is likewise proper as provided in paragraph 1, Article 2208 of the
Civil Code.

based on their true values at that time of redemption for the purposes
of determining if there is any deficiency or overpayment on the part of WHEREFORE, the petitions for review on certiorari are
the Dys and Maxinos.
DENIED for lack of merit. The Decision dated May 17, 2005 and
Resolution dated March 15, 2006 of the Court of Appeals in CA-G.R.
As to the award of damages in favor of the Dys and Maxinos, we agree C.V. No. 57205 are hereby AFFIRMED with the MODIFICATION that
with the appellate court for granting the same.
the case is REMANDED to the Regional Trial Court of Negros Oriental,
The CA correctly observed that the act of DRBI in falsifying the Sheriffs Branch 44, Dumaguete City, for the computation of the pro-rata value of
Certificate of Sale to include Lots 3 and 846, even if said additional lots properties covered by TCT No. T-14777 (Lot 1) and TCT No. T-14781
were not among the properties foreclosed, was the proximate cause of (Lot 6) of the Registry of Deeds of Negros Oriental at the time of
the pecuniary loss suffered by the Dys and Maxinos in the form of lost redemption to determine if there is a deficiency to be settled by or
income from Lot 3.
overpayment to be refunded to respondent Spouses Zosimo Dy, Sr.
and Natividad Chiu and Spouses Marcelino C. Maxino and Remedios
Likewise, the CA also correctly awarded moral damages. Paragraph Lasola with regard to the redemption money they paid.
10, Article 2219 of the Civil Code provides that moral damages may be With costs against the petitioners.
recovered in case of acts and actions referred to in Article 21 of the SO ORDERED.

same Code. Article 21 reads:

ART. 21 Any person who willfully causes loss or injury to

another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damage.

As previously discussed, DRBIs act of maliciously including two

additional properties in the Sheriffs Certificate of Sale even if they were
not included in the foreclosed properties caused the Dys and Maxinos
pecuniary loss. Hence, DRBI is liable to pay moral damages.

The award of exemplary damages is similarly proper. Exemplary or

corrective damages are imposed, by way of example or correction for
the public good, in addition to the moral, temperate, liquidated or
compensatory damages.[48] We cannot agree more with the following
ratio of the appellate court in granting the same:

Additionally, what is alarming to the sensibilities of the Court is the

deception employed by the bank in adding other properties in the
certificate of sale under public auction without them being included in
7) SPOUSES JOSE O. GATUSLAO AND ERMILA LEONILA
LIMSIACO-GATUSLAO VERSUS LEO RAY V. YANSON;
G.R. No. 191540 January 21, 2015
DEL CASTILLO, J.:
Petitioners spouses Jose O. Gatuslao and Ermila Leonila Limsiaco-
Gatuslao (petitioners) are assailing the December 8, 2009[1] Order of
the Regional Trial Court (RTC) of Bacolod City, Branch 49 in Cad. Case
No. 09-2802 which granted respondent Leo Ray[2] Yanson’s
(respondent) Ex Parte Motion for the Issuance of Writ of Possession
over the properties being occupied by petitioners, as well as the
February 26, 2010 RTC Order[3] denying petitioners’ motion for
reconsideration thereto.
Factual Antecedents
Petitioner Ermila Leonila Limsiaco-Gatuslao is the daughter of the late
Felicisimo Limsiaco (Limsiaco) who died intestate on February 7, 1989.
Limsiaco was the registered owner of two parcels of land with
improvements in the City of Bacolod described as Lots 10 and 11,
Block 8 of the subdivision plan Psd-38577 and covered by Transfer
Certificates of Title (TCT) Nos. T-33429[4] and T-24331.[5]
Limsiaco mortgaged the said lots along with the house standing
thereon to Philippine National Bank (PNB). Upon Limsiaco’s failure to
pay, PNB extrajudicially foreclosed on the mortgage and caused the
properties’ sale at a public auction on June 24, 1991 where it emerged
as the highest bidder. When the one-year redemption period expired
without Limsiaco’s estate redeeming the properties, PNB caused the
consolidation of titles in its name. Ultimately, the Registry of Deeds of
Bacolod City cancelled TCT Nos. T-33429 and T-24331 and in lieu
thereof issued TCT Nos. T-308818[6] and T-308819[7] in PNB’s name
on October 25, 2006.
On November 10, 2006, a Deed of Absolute Sale[8] was executed by
PNB conveying the subject properties in favor of respondent. As a
consequence thereof, the Registry of Deeds of Bacolod City issued
TCT Nos. T-311125[9] and T-311126[10] in respondent’s name in lieu of
PNB’s titles.
Then, as a registered owner in fee simple of the contested properties,
respondent filed with the RTC an Ex-ParteMotion for Writ of
Possession[11] pursuant to Section 7 of Act No. 3135,[12] as amended
by Act No. 4118 (Act No. 3135, as amended),[13] docketed as Cad.
Case No. 09-2802.
In their Opposition,[14] petitioners argued that the respondent is not
entitled to the issuance of an ex-parte writ of possession under Section
7 of Act No. 3135 since he was not the buyer of the subject properties
at the public auction sale and only purchased the same through a
subsequent sale made by PNB. Not being the purchaser at the public
auction sale, respondent cannot file and be granted an ex parte motion
for a writ of possession. Petitioners also asserted that the intestate
estate of Limsiaco has already instituted an action for annulment of
foreclosure of mortgage and auction sale affecting the contested
properties.[15] They argued that the existence of the said civil suit bars
the issuance of the writ of possession and that whatever rights and
interests respondent may have acquired from PNB by virtue of the sale
are still subject to the outcome of the said case.
Ruling of the Regional Trial Court
The RTC granted the issuance of the writ of possession in an
Order[16] dated December 8, 2009. It cited the Court’s pronouncement
in China Banking Corporation v. Lozada,[17] viz:
The Court recognizes the rights acquired by the purchaser of
the foreclosed property at the public auction sale upon the
consolidation of his title when no timely redemption of the
property was made, x x x.
It is thus settled that the buyer in a foreclosure sale becomes
the absolute owner of the property purchased if it is not
redeemed during the period of one year after the registration of
the sale. As such, he is entitled to the possession of the said
property and can demand it at any time following the
consolidation of ownership in his name and the issuance to him
of a new transfer certificate of title. x x x Possession of the land
then becomes an absolute right of the purchaser as confirmed
owner. Upon proper application and proof of title, the issuance
of the writ of possession becomes a ministerial duty of the court.
The purchaser, therefore, in the public auction sale of a
foreclosed property is entitled to a writ of possession x x x.[18]
PNB, therefore, as the absolute owner of the properties is entitled to a
writ of possession. And since respondent purchased the properties
from PNB, the former has necessarily stepped into the shoes of the
latter. Otherwise stated, respondent, by subrogation, has the right to
pursue PNB’s claims against petitioners as though they were his own.
The dispositive portion of the above Order reads:
WHEREFORE, premises considered, the Court hereby issues a
writ of possession in favor of movant Leo Ray V. Yanson
ordering Spouses Jose and Mila Gatuslao, their heirs, assigns,
successors-in-interest, agents, representatives and/or any and
all other occupants or persons claiming any interest or title of
 the subject property to deliver the possession of said property to
the herein movant/ petitioner.
SO ORDERED.[19]
Petitioners moved for reconsideration[20] which was denied in
an Order[21] dated February 26, 2010, thus:
WHEREFORE, the Motion for Reconsideration filed by
Oppositors is hereby DENIED. Thus, the Order dated December
8, 2009 stands.
SO ORDERED.[22]
Respondent on March 19, 2010 moved to execute the possessory
writ[23] while petitioners on April 15, 2010 filed with this Court the
present Petition for Review on Certiorari.
On September 30, 2010, the RTC issued an Order[24] directing the
implementation of the writ. And per Sheriff’s Return of Service,[25] the
same was fully implemented on March 14, 2011.
Issues
1. According to petitioners, the pending action for annulment of
foreclosure of mortgage and the corresponding sale at public
auction of the subject properties operates as a bar to the
issuance of a writ of possession;
2. Claiming violation of their right to due process, petitioners
likewise assert that as they were not parties to the foreclosure
and are, thus, strangers or third parties thereto, they may not be
evicted by a mere ex parte writ of possession; and
3. Lastly, petitioners argue that respondent, a mere purchaser of the
contested properties by way of a negotiated sale between him
and PNB, may not avail of a writ of possession pursuant to
Section 7 of Act No. 3135, as amended, as he is not the
purchaser at the public auction sale. Petitioners further contend
that respondent has no right to avail of the writ even by way of
subrogation.
Our Ruling
Preliminarily, we note that petitioners’ direct resort to this Court from the
assailed Orders of the RTC violates the rule on hierarchy of courts.
Their remedy lies with the Court of Appeals. Considering however the
length of time this case has been pending and in view of our January
26, 2011 Resolution[26] giving due course to the Petition, we deem it
proper to adjudicate the case on its merits.
The Petition is denied.
It is settled that the issuance of a Writ of

Possession may not be stayed by a pending

action for annulment of mortgage or the

foreclosure itself.
It is petitioners’ stand that the pending action for annulment of
foreclosure of mortgage and of the corresponding sale at public auction
of the subject properties operates as a bar to the issuance of a writ of
possession.
The Court rules in the negative. BPI Family Savings Bank, Inc. v.
Golden Power Diesel Sales Center, Inc.[27]reiterates the long-standing
rule that:
[I]t is settled that a pending action for annulment of mortgage or
foreclosure sale does not stay the issuance of the writ of possession.
The trial court, where the application for a writ of possession is filed,
does not need to look into the validity of the mortgage or the manner of
its foreclosure. The purchaser is entitled to a writ of possession without
prejudice to the outcome of the pending annulment case.
This is in line with the ministerial character of the possessory writ. Thus,
in Bank of the Philippine Islands v. Tarampi,[28] it was held:
To stress the ministerial character of the writ of possession, the
Court has disallowed injunction to prohibit its issuance, just as it has
held that its issuance may not be stayed by a pending action for
annulment of mortgage or the foreclosure itself.
Clearly then, until the foreclosure sale of the property in question
is annulled by a court of competent jurisdiction, the issuance of a
writ of possession remains the ministerial duty of the trial court.
The same is true with its implementation; otherwise, the writ will
be a useless paper judgment – a result inimical to the mandate of
Act No. 3135 to vest possession in the purchaser immediately.
[29] (Emphases supplied)
Clearly, petitioners’ argument is devoid of merit.
Petitioners are not strangers or third

parties to the foreclosure sale; they

were not deprived of due process.
Section 7 of Act No. 3135, as amended, sets forth the following
procedure in the availment of and issuance of a writ of possession in
cases of extrajudicial foreclosures, viz:
SECTION 7. In any sale made under the provisions of this Act,
the purchaser may petition the Court of First Instance (Regional
Trial Court) of the province or place where the property or any
part thereof is situated, to give him possession thereof during
the redemption period, furnishing bond in an amount equivalent
to the use of the property for a period of twelve months, to
 indemnify the debtor in case it be shown that the sale was made
without violating the mortgage or without complying with the
requirements of this Act.
Such petition shall be made under oath and filed in form of an ex parte
motion in the registration or cadastral proceedings if the property is
registered, or in special proceedings in the case of property registered
under the Mortgage Law or under section one hundred and ninety-four
of the Administrative Code, or of any other real property encumbered
with a mortgage duly registered in the office of any register of deeds in
accordance with any existing law, and in each case the clerk of the
court shall, upon the filing of such petition, collect the fees specified in
paragraph eleven of section one hundred and fourteen of Act
Numbered Four hundred and ninety-six, as amended by Act Numbered
Twenty-eight hundred and sixty-six, and the court shall, upon approval
of the bond, order that a writ of possession issue, addressed to the
sheriff of the province in which the property is situated, who shall
execute said order immediately.
Although the above provision clearly pertains to a writ of possession
availed of and issued within the redemption period of the foreclosure
sale, the same procedure also applies to a situation where a purchaser
is seeking possession of the foreclosed property bought at the public
auction sale after the redemption period has expired without
redemption having been made.[30] The only difference is that in the
latter case, no bond is required therefor, as held in China Banking
Corporation v. Lozada,[31] thus:
It is thus settled that the buyer in a foreclosure sale becomes the
absolute owner of the property purchased if it is not redeemed during
the period of one year after the registration of the sale. As such, he is
entitled to the possession of the said property and can demand it at any
time following the consolidation of ownership in his name and the
issuance to him of a new transfer certificate of title. The buyer can in
fact demand possession of the land even during the redemption
period except that he has to post a bond in accordance with
Section 7 of Act No. 3135, as amended. No such bond is required
after the redemption period if the property is not redeemed. x x
x[32] (Emphasis supplied)
Upon the expiration of the period to redeem and no redemption was
made, the purchaser, as confirmed owner, has the absolute right to
possess the land and the issuance of the writ of possession becomes a
ministerial duty of the court upon proper application and proof of title.
[33]
Nevertheless, where the extrajudicially foreclosed real property is in the
possession of a third party who is holding the same adversely to the
judgment debtor or mortgagor, the RTC’s duty to issue a writ of
possession in favor of the purchaser of said real property ceases to be
ministerial and, as such, may no longer proceed ex parte.[34] In such a
case, the trial court must order a hearing to determine the nature of the
adverse possession.[35] For this exception to apply, however, it is not
enough that the property is in the possession of a third party, the
property must also be held by the third party adversely to the judgment
debtor or mortgagor,[36] such as a co-owner, agricultural tenant or
usufructuary.[37]
In this case, petitioners do not fall under any of the above examples of
such a third party holding the subject properties adversely to the
mortgagor; nor is their claim to their right of possession analogous to
the foregoing situations. Admittedly, they are the mortgagor Limsiaco’s
heirs. It was precisely because of Limsiaco’s death that petitioners
obtained the right to possess the subject properties and, as such, are
considered transferees or successors-in-interest of the right of
possession of the latter. As Limsiaco’s successors-in-interest,
petitioners merely stepped into his shoes and are, thus, compelled not
only to acknowledge but, more importantly, to respect the mortgage he
had earlier executed in favor of respondent.[38] They cannot effectively
assert that their right of possession is adverse to that of Limsiaco as
they do not have an independent right of possession other than what
they acquired from him.[39] Not being third parties who have a right
contrary to that of the mortgagor, the trial court was thus justified in
issuing the writ and in ordering its implementation.
Petitioners’ claim that their right to due process was violated by the
mere issuance of the writ of possession must likewise fail. As
explained, petitioners were not occupying the properties adversely to
the mortgagor, hence, a writ of possession may be issued ex parte.
And precisely because of this ex parte nature of the proceedings no
notice is needed to be served[40] upon them. It has been stressed time
and again that “the ex parte nature of the proceeding does not deny
due process to the petitioners because the issuance of the writ of
possession does not prevent a separate case for annulment of
mortgage and foreclosure sale.”[41] Consequently, the RTC may grant
the petition even without petitioners’ participation. Nevertheless, even if
the proceedings in this case was supposed to be ex parte, the records
of the case would show that petitioners’ side on this controversy was
actually heard as evidenced by the numerous pleadings[42] filed by
them in the lower court. In fact, in its July 27, 2009 Order,[43] the RTC
expressly directed respondent, “in observance of equity and fair play x
x x to furnish [petitioners] with a copy of his motion/petition and to show
x x x proof of compliance thereof x x x.”[44] Then and now, the Court
holds that a party cannot invoke denial of due process when he was
given an opportunity to present his side.[45]
Respondent is entitled to the
 the lifetime of the lease, respondent learned that petitioner mortgaged
issuance of writ of possession.
Petitioners insist that respondent is not entitled to the issuance of the
writ of possession under Section 7 of Act No. 3135 as he is only a
buyer of the subject properties in a contract of sale subsequently
executed in his favor by the actual purchaser, PNB. To them, it is only
the actual purchaser of a property at the public auction sale who can
ask the court and be granted a writ of possession.
This argument is not tenable. Respondent, as a transferee or
successor-in-interest of PNB by virtue of the contract of sale between
them, is considered to have stepped into the shoes of PNB. As such, he
is necessarily entitled to avail of the provisions of Section 7 of Act No.
3135, as amended, as if he is PNB. This is apparent in the Deed of
Absolute Sale[46] between the two, viz:
1. The Vendor hereby sells, transfer[s] and convey[s] unto[,
and] in favor of the Vendee, and the latter’s assigns and
successors-in-interest, all of the former’s rights and title to,
interests and participation in the Property on an “AS IS,
WHERE IS” basis. It is thus understood that the Vendee has
inspected the Property and has ascertained its condition.
xxxx
3. The Vendor is selling only whatever rights and title to,
interests and participation it has acquired over the Property,
and the Vendee hereby acknowledges full knowledge of the
nature and extent of the Vendor’s rights and title to, [and]
interests and participation in the Property.
4. x x x The Vendee further agrees to undertake, at its/his/her
expense, the ejectment of any occupant of the Property.[47]
(Emphases in the original)
Verily, one of the rights that PNB acquired as purchaser of the subject
properties at the public auction sale, which it could validly convey by
way of its subsequent sale of the same to respondent, is the availment
of a writ of possession. This can be deduced from the above-quoted
stipulation that “[t]he [v]endee further agrees to undertake, at xxx his
expense, the ejectment of any occupant of the [p]roperty.” Accordingly,
respondent filed the contentious ex parte motion for a writ of
possession to eject petitioners therefrom and take possession of the
subject properties.
Further, respondent may rightfully take possession of the subject
properties through a writ of possession, even if he was not the actual
buyer thereof at the public auction sale, in consonance with our ruling
in Ermitaño v. Paglas.[48] In the said case, therein respondent was
petitioner’s lessee in a residential property owned by the latter. During
the subject property in favor of Charlie Yap (Yap) who eventually
foreclosed the same. Yap was the purchaser thereof in an extrajudicial
foreclosure sale. Respondent ultimately bought the property from Yap.
However, it was stipulated in the deed of sale that the property was still
subject to petitioner’s right of redemption. Subsequently and despite
written demands to pay the amounts corresponding to her monthly
rental of the subject property, respondent did not anymore pay rents.
Meanwhile, petitioner’s period to redeem the foreclosed property
expired on February 23, 2001. Several months after, petitioner filed a
case for unlawful detainer against respondent. When the case reached
this Court, it ruled that therein respondent’s basis for denying
petitioner’s claim for rent was insufficient as the latter, during the period
for which payment of rent was being demanded, was still the owner of
the foreclosed property. This is because at that time, the period of
redemption has not yet expired. Thus, petitioner was still entitled to the
physical possession thereof subject, however, to the purchaser’s right
to petition the court to give him possession and to file a bond pursuant
to the provisions of Section 7 of Act No. 3135, as amended. However,
after the expiration of the redemption period without redemption having
been made by petitioner, respondent became the owner thereof and
consolidation of title becomes a right. Being already then the owner,
respondent became entitled to possession. Consequently, petitioner’s
ejectment suit was held to have been rendered moot by the expiration
of the period of redemption without petitioner redeeming the properties.
This is considering that petitioner already lost his possessory right over
the property after the expiration of the said period.
Although the main issue in Ermitaño was whether respondent was
correct in refusing to pay rent to petitioner on the basis of her having
bought the latter’s foreclosed property from whom it was mortgaged,
the case is enlightening as it acknowledged respondent’s right, as a
subsequent buyer of the properties from the actual purchaser of the
same in the public auction sale, to possess the property after the
expiration of the period to redeem sans any redemption.
Verily, Ermitaño demonstrates the applicability of the provisions of
Section 7 of Act No. 3135 to such a subsequent purchaser like
respondent in the present case.
All told, the Court affirms the RTC’s issuance of the Writ of Possession
in favor of respondent.
WHEREFORE, the Petition is hereby DENIED. The December 8, 2009
and February 26, 2010 Orders of the Regional Trial Court of Bacolod
City, Branch 49 in Cad. Case No. 09-2802 are AFFIRMED.
SO ORDERED.

8) [G.R. No. 141365. November 27, 2002]
SPOUSES FELIPE YULIENCO and FLORA YULIENCO, petitioners,
vs. HON. COURT OF APPEALS (4TH DIVISION); HON. LUCAS P.
BERSAMIN in his official capacity as Presiding Judge of the
Regional Trial Court, Branch 96, NCJR, Quezon City; DEPUTY
SHERIFF JOSE G. MARTINEZ of Branch 96, RTC, Quezon City; and
ADVANCE CAPITAL CORPORATION, respondents.
QUISUMBING, J.:
Petitioners seek to annul and set aside the decision[1] dated December
20, 1999 of the Court of Appeals, which (1) affirmed the order of the
Regional Trial Court of Quezon City, Branch 96, in Land Registration
Case No. Q-11564 (99) granting a writ of possession to private
respondent Advance Capital Corporation; and (2) lifted the temporary
restraining order issued by the CA on September 17, 1999.
The records show that petitioner spouses Felipe and Flora Yulienco
were the owners of a residential house and lot located at Nos. 136-138
Biak-na-Bato Street, Sta. Mesa Heights, Quezon City, covered by
Transfer Certificate of Title No. RT-2572 (57609).[2] On June 29, 1990,
petitioners obtained a loan of P20,000,000 from private respondent
Advance Capital Corporation (ACC) with interest at 24 percent per
annum and evidenced by a promissory note. To secure the loan, deeds
of real estate mortgage were executed on their properties in Makati
City, Benguet, and Quezon City. When petitioners failed to pay the loan
in full, ACC filed on July 2, 1993 a petition for extrajudicial foreclosures
of the properties with the Ex-Officio Sheriff of Quezon City, pursuant to
the authority provided in the deed of real estate mortgage. Auction sale
of the properties was scheduled on July 30, 1993 and notice of the sale
was published in the Times Record on July 7, 14, and 21, 1993.[3]
To forestall the foreclosure of their properties, petitioners filed on July
26, 1993 a petition for injunction, reformation, and damages with prayer
for temporary restraining order and/or preliminary injunction against
ACC with the Regional Trial Court of Makati City, Branch 61. In their
complaint, petitioners questioned the validity of the promissory notes
and real estate mortgages. They alleged that their true agreement with
ACC was to pay the loan from the proceeds of the sale of their shares
of stock in PHESCO which were then subject of a pending case in the
Securities and Exchange Commission. They also assailed the Notice of
Sheriffs Sale in Makati and Quezon City because it was not published
in newspapers of general circulation in Metro Manila.
On July 28, 1993, or two days before the scheduled sale, the Makati
RTC issued an order[4] enjoining private respondent and the sheriffs of
Makati, Quezon City, and Benguet from proceeding with the foreclosure
of petitioners properties. The auction sale of petitioners Quezon City
property scheduled on July 30, 1993 was likewise cancelled.
On August 30, 1993, ACC filed with the Office of the Clerk of Court and
Ex-Officio Sheriff of Quezon City a letter-request to proceed with the
auction sale of petitioners Quezon City property since, by that time, the
20-day effectivity period of the temporary restraining order issued by
the Makati RTC had expired[5] and, therefore, there was no more legal
impediment to the sale. On the same day, the Sheriff of Quezon City
prepared and issued a Second Notice of Sheriffs Sale of the Quezon
City property, scheduling the sale on September 27, 1993. The notice
was published in the Times Record on September 1, 8, and 15 1993.[6]
In the meantime, the RTC of Makati issued on September 20, 1993 an
order granting petitioners prayer for preliminary injunction as to the
foreclosure of their property in Makati City, but not as to the Quezon
City and Benguet properties since under Section 21 of Batas
Pambansa Bilang 129, the court does not have jurisdiction to enforce a
writ of preliminary injunction outside its territorial jurisdiction.
The public auction was held on September 27, 1993 and petitioners
Quezon City property was sold to ACC as the highest bidder.[7] On the
same date, the Sheriffs Certificate of Sale was annotated on the TCT.
[8] A year later, petitioners filed a second amended and supplemental
petition in the case pending before the RTC of Makati. On September
26, 1994, the RTC issued a temporary restraining order enjoining ACC
from exercising its right of consolidation of ownership of the foreclosed
property in Quezon City.[9] Then on October 13, 1994, the RTC, again
citing Section 21 of Batas Pambansa Bilang 129, finally denied
petitioners prayer for preliminary injunction to enjoin ACC from
consolidating title.[10]
Thereafter, when petitioners failed to redeem the foreclosed property,
ACC caused the consolidation of its ownership and paid the necessary
taxes with the Bureau of Internal Revenue to effect transfer of the title
to its name.[11] Accordingly, the Register of Deeds of Quezon City
cancelled TCT No. RT-2572 (57609) and issued TCT No. 119740 in
ACCs name.[12] Tax declarations over the subject property were
likewise transferred in the name of ACC after it paid real estate taxes.
[13] From then on, private respondent ACC has been paying real taxes
on the property.[14]
Petitioners continued to occupy the house and lot over the property so,
in a letter dated May 3, 1999, ACC made a formal and final demand on
petitioners to vacate the subject house and lot within five days from
receipt of the letter. ACC also demanded P1,080,000 corresponding to
rental arrearages from October 1994 to the date of the letter, at
P20,000 per month.[15] ACC likewise filed with the RTC of Quezon
City, Branch 96, a petition for the issuance of a writ of possession over
the subject property. The case was docketed as Land Registration
Case No. Q-11564 (99).[16]
At the hearing of June 25, 1999, public respondent Hon. Lucas
Bersamin, the presiding judge of the RTC of Quezon City, Branch 96,
allowed ACC to present its evidence ex parte without prejudice to any
comment that may be filed by petitioners.
In their comment below, petitioners alleged, among others, that it would
be improper for the court to issue a writ of possession pending the
outcome of Special Civil Case No. 93-2521 before Branch 61 of the
Makati RTC for injunction, reformation, and damages assailing the
validity of the loan and the mortgage.[17]
On September 3, 1999, the RTC of Quezon City granted the petition for
writ of possession, disposing as follows:
ACCORDINGLY, premises considered, the instant petition is
hereby GRANTED. Let a writ of possession be issued over the
property covered by Transfer Certificate of Title No. 119740 of
the Registry of Deeds of Quezon City and located at 136-138
Biak-na-Bato, Sta. Mesa Heights, Quezon City.
SO ORDERED.[18]
Petitioners motion for reconsideration was denied. To annul the trial
courts decision dated September 3, 1999, petitioners elevated the case
to the Court of Appeals via certiorari and prohibition with a prayer for
temporary restraining order and/or writ of preliminary injunction.[19] In a
resolution dated September 17, 1999, the CA issued a temporary
restraining order enjoining the implementation of the writ of possession
issued by the RTC of Quezon City.[20] Then on December 20, 1999,
respondent Court of Appeals denied the petition for certiorari.[21] The
appellate court confined its discussion to the validity of the trial courts
issuance of the writ of possession, finding the same neither a
capricious nor a whimsical exercise of judgment that could amount to
grave abuse of discretion. In the same decision, the CA likewise lifted
the temporary restraining order it issued on September 17, 1999.[22]
Hence, the instant petition under Rule 45 of the Rules of Court,
anchored on the following averments:
A.
THE RESPONDENT COURT HAS RENDERED THE DECISION
DATED DECEMBER 20, 1999 (ANNEX B) IN DISREGARD OF THE
FRAUD COMMITTED BY RESPONDENT ACC PROVEN BY FACTS
NOT DENIED BY RESPONDENT ACC WHICH CLEARLY VIOLATE
THE CONSTITUTIONAL RIGHT TO DUE PROCESS OF
PETITIONERS AND WILL FRAUDULENTLY ENRICH RESPONDENT
ACC THRU ACTUAL AND ILLEGAL CONFISCATION OF THE
PROPERTIES OF PETITIONERS IN AN ILLEGAL AND FRAUDULENT
MANNER, THUS CONSTITUTING A DEPARTURE FROM THE
ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS OR
SO FAR SANCTIONED SUCH DEPARTURE BY A LOWER COURT,
AS TO CALL FOR AN EXERCISE OF THE POWER OF
SUPERVISION OF THIS HONORABLE COURT; and
B.
THE RESPONDENT JUDGE COURT HAS DECIDED IN ITS
DECISION DATED DEC. 20, 1999 (ANNEX B) QUESTIONS OF
SUBSTANCE NOT THERETOFORE DETERMINED BY THIS
HONORABLE COURT, OR HAS DECIDED IT IN A WAY NOT IN
ACCORD WITH LAW AND LOGIC AND/OR WITH THE APPLICABLE
DECISIONS OF THIS HONORABLE COURT.[23]
At issue is whether the Court of Appeals committed reversible error in
affirming the RTC decision granting the writ of possession to
respondent corporation. To resolve this issue, we must also inquire
whether prohibition lies to enjoin the Regional Trial Court of Quezon
City from issuing to ACC the writ of possession over the property
covered by TCT No. 119740 of the Quezon City Register of Deeds.
Petitioners assail the jurisdiction of the Quezon City RTC in taking
cognizance of the present case on the ground that there is a pending
case in the Makati RTC for injunction, reformation, and damages
impugning the validity of the promissory notes and mortgage contracts
used as basis for the foreclosure sale. They likewise lament that the
grant of the writ and the displacement of petitioners from their
residence on the basis of fraud smacks of deprivation of property
without due process of law.
Petitioners contention cannot stand judicial muster. Act 3135, otherwise
known as An Act to Regulate the Sale of Property under Special
Powers Inserted in or Annexed to Real Estate Mortgages, mandates
that jurisdiction over a petition for a writ of possession lies in the court
of the province, city, or municipality where the property subject thereof
is situated. Section 7 of the said Act is clear on this matter, thus:
SEC. 7. In any sale made under the provisions of this Act, the
purchaser may petition the Court of First Instance [now
Regional Trial Court] of the province or place where the property
or any part thereof is situated, to give him possession thereof
during the redemption period, furnishing bond in an amount
equivalent to the use of the property for a period of twelve
months, to indemnify the debtor in case it be shown that the
sale was made without violating the mortgage or without
complying with the requirements of this Act.

Since the land subject of the controversy is located in Quezon City, the
citys RTC should rightly take cognizance of the case, to the exclusion
of other courts.
Neither can this Court consider the pendency of Special Civil Case No.
93-2521 before Branch 61 of the Makati RTC a procedural obstacle.
Said action for injunction, reformation, and damages does not raise an
issue that constitutes a prejudicial question in relation to the present
case.
A prejudicial question is one that arises in a case the resolution of
which is a logical antecedent of the issue involved therein, and the
cognizance of which pertains to another tribunal.[24] It generally comes
into play in a situation where a civil action and a criminal action are both
pending and there exists in the former an issue that must be
preemptively resolved before the criminal action may proceed, because
howsoever the issue raised in the civil action is resolved would be
determinative juris et de jure of the guilt or innocence of the accused in
the criminal case.[25] The rationale behind the principle of prejudicial
question is to avoid two conflicting decisions.[26]
Here, Special Civil Case No. 93-2521 and the present one are both civil
in nature and, therefore, no prejudicial question can arise from the
existence of the two actions. It taxes our imagination how the questions
raised in Special Civil Case No. 93-2521 would be determinative of
Land Registration Case No. Q-11564 (99). The basic issue in the
former is whether the promissory note and mortgage agreement
executed between petitioners and private respondent ACC are valid. In
the latter case, the issue is whether respondent, armed with a TCT in
its name, is entitled to a writ of possession. Clearly, the two cases can
proceed separately and take their own direction independently of each
other.
In the present case, petitioners cannot anchor their case on the
purported interest they have, as owners, over the land and the
improvements thereon. They have been stripped of their rights over the
property when, as mortgagors, they failed to redeem it after foreclosure
took place. A mortgagor has only one year after registration of sale with
the Register of Deeds within which to redeem the foreclosed real
estate.[27] After that one-year period, he loses all his interests over it.
This is in consonance with Section 78 of Republic Act 337, otherwise
known as the General Banking Act, which provides:
SEC. 78. In the event of foreclosure, whether judicially or
extrajudicially, of any mortgage on real estate which is security
for any loan granted before the passage of this Act or under the
provisions of this Act, the mortgagor or debtor whose real
property has been sold at public auction, judicially or
extrajudicially, for the full or partial payment of an obligation to
any bank, banking, or credit institution, within the purview of this
Act, shall have the right, within one year after the sale of the
real estate as a result of the foreclosure of the respective
mortgage, to redeem the property by paying the amount fixed
by the court in the order of execution (Emphasis supplied.)
Likewise, Section 6 of Act 3135 states:
SEC. 6. In all cases in which an extrajudicial sale is made under
the special power hereinbefore referred to, the debtor, his
successors in interest or any judicial creditor or judgment
creditor of said debtor, or any person having a lien on the
property subsequent to the mortgage or deed of trust under
which the property is sold, may redeem the same at any time
within the term of one year from and after the date of the
sale; (Emphasis supplied.)
Well established is the rule that after the consolidation of title in the
buyers name, for failure of the mortgagor to redeem, the writ of
possession becomes a matter of right.[28] Its issuance to a
purchaser in an extrajudicial foreclosure is merely a ministerial
function.[29] The writ of possession issues as a matter of course upon
the filing of the proper motion and the approval of the corresponding
bond. The judge issuing the writ following these express provisions of
law neither exercises his official discretion nor judgment.[30] As such,
the court granting the writ cannot be charged with having acted without
jurisdiction or with grave abuse of discretion.
Petitioners cite the 1987 case of Cometa vs. IAC,[31] to bolster their
argument that a writ of possession should not be granted in the light of
a pending case for annulment of the foreclosure sale wherein the
properties were sold at an unusually low price. We note that petitioners
reliance thereon is as flawed as their citation thereof.[32] In said case,
there was a pending action where the validity of the levy and sale of the
properties in question were directly put in issue, which is not the case
here. Special Civil Case No. 93-2521 pending before the Makati RTC
for reformation of instrument is not the pending case as contemplated
in Cometa because (1) the sale and levy of the property are not directly
put in issue, and (2) the Makati RTC could not have taken cognizance
of the foreclosure proceedings of the Quezon City property for lack of
jurisdiction. A direct action for annulment of the foreclosure sale of the
subject property should have been filed in the RTC of Quezon City
where the property is located.
More instructive is the 1997 case of Arcega vs. CA,[33] where we held
that the purchaser in a foreclosure sale is entitled to possession of the
property:
Respondent banks right to possess the property is clear and is
based on its right of ownership as a purchaser of the properties
in the foreclosure sale to whom title has been conveyed. Under
Section 7 of Act No. 3135 and Section 35 [now Section 33] of
Rule 39, the purchaser in a foreclosure sale is entitled to
possession of the property. The bank in this case has a
better right to possess the subject property because of its
title over the same. (Emphasis supplied.)

If only to stress the writs ministerial character, we have, in a case more

recent than Cometa, disallowed injunction prohibiting its issuance,[34]
just as we have held that its issuance may not be stayed by a pending
action for annulment of mortgage or the foreclosure itself.[35]

Guided by the foregoing principles, until the foreclosure sale of the

property in question is annulled by a court of competent jurisdiction,
petitioners are bereft of valid title and right to prevent the issuance of a
writ of possession to respondent corporation. Until then, it is the trial
courts ministerial function to grant the possessory writ to said
corporation. No error could be attributed to the respondent appellate
court for affirming the trial courts order in favor of private respondent,
Advance Capital Corporation.

WHEREFORE, the instant petition is DENIED for lack of merit.

The challenged decision of the Court of Appeals dated December 20,
1999 in CA-G.R. SP No. 54949 is AFFIRMED. Costs against
petitioners.
SO ORDERED.


9) GREEN ASIA CONSTRUCTION AND DEVELOPMENT
CORPORATION AND SPS. RENATO AND DELIA LEGASPI versus
THE HONORABLE COURT OF APPEALS AND PCI LEASING AND
FINANCE, INC.
G.R. No. 163735 November 24, 2006
QUISUMBING, J.:
This special civil action for certiorari impugns the Decision[1]
and Resolution[2] of the Court of Appeals, dated March 18, 2004 and
May 26, 2004, respectively, in CA-G.R. CV No. 78117, for alleged grave
abuse of discretion amounting to lack or excess of jurisdiction when it
affirmed the Orders[3] of the Regional Trial Court of Angeles City,
Branch 57 in LRC Case No. A-124-1088.
The facts are as follows:
On June 8, 1995, petitioner Green Asia Construction and Development
Corporation (GACDC), represented by its president, petitioner Renato
Legaspi, obtained a loan of P2,600,000[4] from private respondent PCI
Leasing and Finance, Inc. (PCILFI).
As security, GACDC, represented by petitioner spouses Renato and
Delia Legaspi, executed a real estate mortgage[5] for P450,000 in favor
of PCILFI. The mortgage covered three parcels of land located in Barrio
Balibago, Angeles City, under TCT Nos. 100362, 100363, and 100364.
[6]
When GACDC failed to pay the loan on maturity, the mortgage was
foreclosed extrajudicially. PCILFI was the highest bidder at the
foreclosure sale. A certificate of sale[7] dated February 3, 1998 was
accordingly issued to PCILFI and duly registered with the Registry of
Deeds of Angeles City.
On April 12, 2000, PCILFI filed a petition for the issuance of a writ of
possession[8] with the Regional Trial Court of Angeles City, Branch 57,
docketed as LRC Case No. A-124-1088.
The trial court granted PCILFIs petition, thus:
WHEREFORE, let a writ of possession be issued in
favor of petitioner PCI Leasing and Finance,
Inc. directing the Sheriff of this Court to eject
the Green Asia Construction and
Development Corporation and all persons
presently staying therein and claiming rights
over the premises previously covered by
TCT Nos. 100362, 100363, and 100364 of
the Registry of Deeds of Angeles City, and
to place the petitioner in possession thereof.
SO ORDERED.[9]
On May 8 and May 30, 2002, GACDC filed an urgent
omnibus motion[10] and a supplement to the urgent omnibus motion,
[11] respectively, praying for the setting aside of the certificate of sale,
cancellation of the writ of possession, and the suspension of the
implementation of the said writ of possession.
On September 2, 2002, the trial court issued the first assailed order
denying for lack of merit the aforesaid motion. GACDCs motion for
reconsideration was denied in the second assailed order of October 14,
2002.
GACDC elevated the case to the Court of Appeals, which affirmed the
assailed orders of the trial court, to wit:
WHEREFORE, finding no cogent reason to disturb the assailed Orders,
the instant appeal is DENIED. The assailed orders dated September 2,
2002 and October 14, 2002 of the Regional Trial Court (RTC) of
Angeles City, Branch 57 in LRC Case No. A-124-1088 are AFFIRMED.
SO ORDERED.[12]
Hence, the instant petition raising the following as issues:
1. WHETHER OR NOT THE PETITION IN LRC CASE NO.
A-124-1088 IS PROPER IN FORM AND IN SUBSTANCE
CONSIDERING THAT THE SIGNATORY OF THE VERIFICATION AND
CERTIFICATION AGAINST FORUM SHOPPING, FLORECITA R.
GONZALES, IS NOT DULY AUTHORIZED AS SUCH BY PCI LEASING
AND/OR THERE WAS A FAILURE TO SHOW PROOF OF SUCH
AUTHORITY.
2. WHETHER APPEAL IS AN APPROPRIATE REMEDY IN
ACTIONS FOR THE ISSUANCE OF WRIT OF POSSESSION
PURSUANT TO THE PROVISIONS OF ACT 3135, AS AMENDED.[13]
Petitioners contend that the petition for the issuance of writ of
possession is not proper in form and substance because the verification
and certification on non-forum shopping was not signed by PCILFI or its
duly authorized representative. Further, petitioners argue that Section 8
of Act No. 3135[14] clearly provides that appeal in the proceedings in
which possession was requested is the appropriate remedy.
Private respondent, however, counters that the finding of the
trial court that the questioned petition was sufficient in form and
substance is binding on this Court. It stresses that there is no specific
requirement in the Rules of Court to include the Secretarys Certificate
in the certification on non-forum shopping. Private respondent also
argues that the assailed Orders of the trial court are not appealable
since they are not in the nature of a judgment on the merits.
After serious consideration of the arguments raised by the
parties, we find the petition without merit.
Anent the first issue, it bears stressing that a certification on
non-forum shopping is required only in a complaint or a petition which is
an initiatory pleading. In this case, the subject petition for the issuance
of a writ of possession filed by private respondent is not an initiatory
pleading. Although private respondent denominated its pleading as a
petition, it is more properly a motion. What distinguishes a motion from
a petition or other pleading is not its form or the title given by the party
executing it, but its purpose. The purpose of a motion is not to initiate
litigation, but to bring up a matter arising in the progress of the case
where the motion is filed.[15]
Indeed, an original action is not necessary to acquire
possession in favor of the purchaser at an extrajudicial foreclosure of
real property. The right to possession is based simply on the
purchasers ownership of the property. Thus, the mere filing of an ex
parte motion for the issuance of a writ of possession would suffice. No
verification and certification on non-forum shopping need be attached to
the motion at all.
Hence, it is immaterial that the verification and certification on
non-forum shopping in private respondents questioned petition was
signed by its lawyer. Such insignificant lapse does not render the said
petition defective in form.
As to the second issue, Section 8 of Act No. 3135 states:
SEC. 8. The debtor may, in the proceedings in which
possession was requested, but not later than thirty days after the
purchaser was given possession, petition that the sale be set aside
and the writ of possession cancelled, specifying the damages
suffered by him, because the mortgage was not violated or the sale
was not made in accordance with the provisions hereof, and the
court shall take cognizance of this petition in accordance with the
summary procedure provided for in section one hundred and twelve of
Act Numbered Four hundred and ninety-six; and if it finds the complaint
of the debtor justified, it shall dispose in his favor of all or part of the
bond furnished by the person who obtained possession. Either of the
parties may appeal from the order of the judge in accordance with
section fourteen of Act Numbered Four hundred and ninety-six; but the
order of possession shall continue in effect during the pendency of the
appeal. (Emphasis supplied.)
Clearly, the remedy of petitioners from the assailed Orders of
the trial court was to file a petition to set aside the sale and cancel the
writ of possession. Under the aforequoted provision, the aggrieved
party may thereafter appeal from any disposition by the court on the
matter.[16]
We note, however, that what petitioners filed with the trial
court were an urgent omnibus motion and a supplement to the urgent
omnibus motion to set aside the sale and cancel the writ of possession.
In the said motions, petitioners alleged there was no basis for the
extrajudicial foreclosure because the mortgage was void.
Note that the nullity of the mortgage is not covered by the
remedy outlined under Section 8 of Act No. 3135. The said provision
specifically lists the following exclusive grounds for a petition to set
aside the sale and cancel the writ of possession: (1) that the mortgage
was not violated; and (2) that the sale was not made in accordance with
the provisions of Act No. 3135.
Any question regarding the validity of the mortgage or its
foreclosure cannot be a legal ground for refusing the issuance of a writ
of possession. Indeed, regardless of whether or not there is a pending
suit for annulment of the mortgage or the foreclosure itself, the
purchaser is entitled to a writ of possession.[17]
Petitioners should have filed a separate and independent
action for annulment of the mortgage or the foreclosure. The remedy
under Section 8 of Act No. 3135 is inapplicable in this case. The trial
court thus correctly denied petitioners motions to set aside the sale and
cancel the writ of possession on the ground of nullity of the mortgage.
Hence, in our view, the Court of Appeals did not err, nor did it
commit grave abuse of discretion amounting to lack or excess of
jurisdiction, in affirming the assailed Orders of the trial court.
WHEREFORE, the petition is DISMISSED. The impugned Decision
dated March 18, 2004 and Resolution dated May 26, 2004, of the Court
of Appeals in CA-G.R. CV No. 78117 are AFFIRMED.
Costs against petitioners. SO ORDERED.

10) G.R. No. 147820. March 18, 2005
SPOUSES RUBEN SANTIAGO and INOCENCIA SANTIAGO,
petitioners, vs. MERCHANTS RURAL BANK OF TALAVERA, INC.,
respondent.
CALLEJO, SR., J.:
On April 12, 2000, respondent Merchants Rural Bank of
Talavera, Inc. filed an Ex Parte Petition with the Regional Trial Court
(RTC) of Cabanatuan City, for the issuance of a writ of possession over
the two parcels of land covered by Transfer Certificate of Title (TCT)
Nos. NT-196197 and NT-187791 located in San Mariano, Sta. Rosa,
Nueva Ecija. The respondent alleged therein, inter alia, that petitioner
spouses Ruben and Inocencia Santiago executed a Deed of Real
Estate Mortgage, in its favor, over the said properties and all the
improvements thereon, as security for the payment of the separate
loans of P500,000.00 and P120,000.00, respectively. It averred that
when the petitioner spouses failed to pay their loan, it foreclosed the
real estate mortgage extrajudicially. At the sale at public auction of the
property on February 16, 1998, the respondent was the highest bidder.
The sheriff executed separate certificates of sale over the properties in
the name of the respondent. These certificates were registered with the
Register of Deeds on March 6, 1998 and October 28, 1998,
respectively. When the petitioner spouses failed to redeem the property
within the prescribed period, the titles over the property were then
consolidated in its favor. The respondent bank prayed that:
WHEREFORE, premises considered, it is respectfully prayed of
this Honorable Court, that a writ of possession be issued,
commanding the Ex-Officio Sheriff of this Court and/or of his
deputies to place the petitioner and/or its authorized
representative in possession of that parcels of land covered by
TCT No. NT-196197 with an area of 337 square meters, more or
less, of the Registry of Deeds for the Province of Nueva Ecija,
and TCT No. NT-187791 with an area of 345 square meters,
more or less, the Registry of Deeds for the Province of Nueva
Ecija, including all the improvements erected thereon and eject
therefrom all adverse occupants, more particularly Sps. Ruben
& Inocencia Santiago and their privies and/or other persons
claiming under him/her upon the filing of [the] prescribed fees or
such other amounts that may be deemed reasonable by this
Court.
Petitioner prays for such other remedies just and equitable under the
premises.[1]
Although aware of the said petition, the petitioner spouses failed to file
their comment thereon. Instead, they requested the respondent to give
them more time to repurchase their properties.
During the hearing of the petition on July 18, 2000, the petitioner
spouses, through counsel, appeared and prayed for more time to raise
the money for the repurchase of the property. The respondents counsel
manifested that it was open to negotiation, but insisted that the petition
be submitted for the courts resolution since a considerable amount of
time had already lapsed from the time the petition was filed. The
petitioners counsel agreed to this proposition. The RTC forthwith
declared that the petition was submitted for its resolution.[2] However,
the petitioner spouses failed to repurchase the property.
On September 1, 2000, the trial court issued an Order[3]
granting the petition and ordered the clerk of court to issue a writ of
possession in favor of the respondent. The clerk of court complied and
issued a Writ of Possession on September 4, 2000. Hence, the sheriff
requested the petitioner spouses to vacate the property within three (3)
days from notice thereof, but the latter refused to do so. Instead, they
filed a petition for a writ of certiorari with the Court of Appeals (CA) to
nullify the Order of the RTC and the Writ of Possession issued by the
clerk of court, with prayer for injunctive relief. The petitioner spouses
alleged therein that:
[T]he court a quo committed grave abuse of discretion when it
issued the Order dated 01 September 2000 granting respondent
Rural Banks petition for the issuance of writ of possession
without any evidence being marked and formally offered in
support of the petition.[4]
On February 5, 2001, the CA rendered judgment[5] dismissing the
petition for lack of merit. It, likewise, denied the petitioners motion for
reconsideration of the decision on April 6, 2001.
Hence, the petitioners filed their petition for review on certiorari in this
Court, claiming that:
NOTWITHSTANDING ITS FINDING THAT THERE WAS
INDEED NO EVIDENCE (WHETHER TESTIMONIAL OR
DOCUMENTARY) SUBMITTED, MARKED, AND OFFERED BY
PRIVATE RESPONDENT TO SUPPORT ITS PETITION IN THE
COURT A QUO, [THE] COURT OF APPEALS UPHELD THE
VALIDITY OF THE ASSAILED ORDERS.[6]
The petitioners aver that the respondent failed to formally offer any
documentary and testimonial evidence to support its petition for a writ
of possession; hence, the RTC committed grave abuse of its discretion
amounting to excess or lack of jurisdiction in granting the same. The
petitioners assert that, unless documentary and testimonial evidence
are offered in evidence and admitted by the trial court, the same should
not be considered by it in resolving the petition. Besides, the assailed
Order of the RTC does not conform to Section 1, Rule 36 of the
Revised Rules of Court which requires that a final order must state
clearly and distinctly the facts and the law on which it is based.
In its comment on the petition, the respondent averred that:
Furthermore, foreclosure proceedings has in its favor the presumption
of regularity, it is for the petitioners to offer evidence to dispute that
presumption to nullify the right created by the said foreclosure
proceedings. Contrary to the claim of petitioners, a petition for issuance
of writ of possession is not an action to deprive a person of his property,
instead, it is an action wherein the Court intervenes primarily to aid in
effecting the delivery of a property to its rightful owner. As correctly
pointed out by the Court of Appeals in its assailed Decision, there is no
law or procedure making the practice of making and formally offering
documentary evidence in a petition for issuance of writ mandatory. The
ex parte nature of the petition makes said practice unnecessary. In fact,
it had been repeatedly held by the Honorable Supreme Court that
issuance of writ of possession to a purchaser in an extrajudicial
foreclosure is merely a ministerial function of the Court which lead us to
the inference that issuance of writ of possession in such cases does not
constitute exercise of discretion. Therefore, the same not being subject
to courts discretion, there can be no grave abuse of discretion to speak
of.[7]
The petition is denied for lack of merit.
We note that the CA took cognizance of the petition for certiorari with a
plea for injunctive relief filed by the petitioners assailing the Order of the
RTC dated September 1, 2000. The appellate court erred in acting on
the petition. This is so because under Section 8 of Act No. 3135, the
remedy of the petitioners from the assailed order of the RTC was to file
a petition to set aside the sale and the cancellation of the writ of
possession. The aggrieved party may thereafter appeal from any
disposition by the court on the matter.[8] Although the petitioners
alleged in their petition that the RTC acted with grave abuse of
discretion amounting to excess or lack of jurisdiction in issuing the
assailed order, they nevertheless failed to establish their claim.
The petitioners recourse to Rule 65 of the Revised Rules of Court in the
CA was inappropriate even though the Sheriff had demanded that they
vacate the property. Section 8 of Act No. 3135 mandates that even if an
appeal is interposed from an order granting a petition for a writ of
possession, such order shall continue to be in effect during the
pendency of an appeal.
Sec. 8. Setting aside of sale and writ of possession. The debtor
may, in the proceedings in which possession was requested, but
not later than thirty days after the purchaser was given
possession, petition that the sale be set aside and the writ of
possession cancelled, specifying the damages suffered by him,
because the mortgage was not violated or the sale was not
made in accordance with the provisions hereof, and the court
shall take cognizance of this petition in accordance with the
summary procedure provided for in section one hundred and
twelve of Act numbered Four hundred and ninety-six; and if it
finds the complaint of the debtor justified, it shall dispose in his
favor of all or part of the bond furnished by the person who
obtained possession. Either of the parties may appeal from the
order of the judge in accordance with section fourteen of Act
Numbered Four hundred and ninety-six; but the order of
possession shall continue in effect during the pendency of the
appeal.[9]
The general rule is that for a writ of certiorari to issue, the petitioners
must establish that they had no remedy of appeal or any plain,
adequate and speedy remedy in the ordinary course of law. Appeal and
certiorari are mutually exclusive. In the present case, the petitioners
had the right to file a petition to set aside the sale and writ of
possession issued by the court and to appeal from an adverse ruling.
The petitioners failed to file the said petition and opted to file their
petition for certiorari in the CA. Hence, they were barred from filing a
petition for certiorari from the assailed order of the trial court and the
writ of possession issued by it.
We reject the petitioners contention that they were deprived of their
right to due process when the trial court granted the respondents
petition for a writ of possession despite the latters failure to adduce
documentary and testimonial evidence in support thereof.
The proceeding in a petition for a writ of possession is ex parte and
summary in nature. It is a judicial proceeding brought for the benefit of
one party only and without notice by the court to any person adverse of
interest.[10] It is a proceeding wherein relief is granted without an
opportunity for the person against whom the relief is sought to be
heard.[11] Hence, the RTC may grant the petition in the absence of the
mortgagor, in this case, the petitioners.
The petitioners have not cited any law or rule requiring that
documentary and testimonial evidence be first adduced in support of a
petition for a writ of possession before the trial court may act upon and
grant the same.
The petitioners contend that a petition for a writ of possession may be
granted only if the respondent offers in evidence a new TCT in its
name. In support of this, the petitioners rely on the statement of the
Court in F. David Enterprises, Inc. v. Insular Bank of Asia and America,
[12] that [u]pon proper application and proof of title, the issuance of a
writ of possession becomes a ministerial duty of the court. The
petitioners reliance on the said statement, however, is misplaced.
Section 7 of Act No. 3135 merely requires that a petition for the
issuance of a writ of possession shall be in the form of an ex parte
motion. Upon the filing of the said petition, the payment of the requisite
fees therefor, and the approval of the trial court if such petition is filed
during the period for the redemption of the property, the court shall
order that a writ of possession be issued.
Sec. 7. Possession during redemption period. In any sale made
under the provisions of this Act, the purchaser may petition the
Court of First Instance of the province or place where the
property or any part thereof is situated, to give him possession
thereof during the redemption period, furnishing bond in an
amount equivalent to the use of the property for a period of
twelve months, to indemnify the debtor in case it be shown that
the sale was made without violating the mortgage or without
complying with the requirements of this Act. Such petition shall
be made under oath and filed in [the] form of an ex parte motion
in the registration or cadastral proceedings if the property is
registered, or in special proceedings in the case of property
registered under the Mortgage Law or under section one
hundred and ninety-four of the Administrative Code, or of any
other real property encumbered with a mortgage duly registered
in the office of any register of deeds in accordance with any
existing law, and in each case the clerk of court shall, upon the
filing of such petition, collect the fees specified in paragraph
eleven of section one hundred and fourteen of Act Numbered
Four hundred and ninety-six, as amended by Act Numbered
Twenty-eight hundred and sixty-six, and the court shall, upon
approval of the bond, order that a writ of possession issue,
addressed to the sheriff of the province in which the property is
situated, who shall execute said order immediately.
The law does not require that a petition for a writ of possession may be
granted only after documentary and testimonial evidence shall have
been offered to and admitted by the court. As long as the verified
petition states the facts sufficient to entitle the petitioner to the relief
requested, the court shall issue the writ prayed for.[13] The petitioners
need not offer any documentary and testimonial evidence for the court
to grant the petition.
In the present case, the respondent averred in its petition that it
purchased the properties subject of the real estate mortgage at public
auction following the extrajudicial foreclosure of said mortgage.
Thereafter, the Sheriff executed Certificates of Sale over the properties
which were registered with the Register of Deeds on March 28 and
October 28, 1998, respectively. The petitioners as mortgagors, failed to
redeem the properties within the period therefor; hence, the respondent
consolidated its ownership over the properties in its favor. Indeed, the
Register of Deeds had issued TCT Nos. NT-272739 and NT-27240, on
December 29, 1999, in the name of the respondent.
Moreover, the record shows that the petitioners were present during the
hearing of the petition on July 18, 2000. They failed to assail the
petition in form and substance, or even to question the respondents title
over the property. Indeed, the petitioners already knew that titles had
been issued to the respondent over the property. In fact, they pleaded
for time to raise the money to repurchase the properties. When the
respondents counsel insisted on the resolution of the petition, the
petitioners herein did not even offer any objection. Indeed, they
informed the court that they were submitting the petition for the
resolution of the court.
ATTY. ORTALEZA:
For the Petitioner, Your Honor, we are ready.
ATTY. PUNZALAN:
For the Spouses Ruben and Inocencia Santiago, Your Honor.
ATTY. ORTALEZA:
Your Honor, this petition had been set for several times, and we are
praying that said petition being an ex parte be given due course by the
Honorable Court since it was filed several months ago, and nothing was
done since then.
ATTY. PUNZALAN:
Your Honor, we are requesting the Honorable Court that the Spouses
Santiago be given ample time to raise the money for the re-purchase of
the property. May we be given a period of two months, Your Honor.
ATTY. ORTALEZA:
Your Honor, we request that the ex parte petition be submitted for
resolution considering that it is almost three months since the filing of
this petition. The bank is open for negotiation, Your Honor. The
Spouses could talk with the bank so that the said property [may] be
redeemed by them with, of course, the bank['s] terms.
ATTY. PUNZALAN:
With that, Your Honor, we will submit to the Courts ruling.
COURT:
Alright.
The ex parte petition for the issuance of the writ of possession is
submitted for the resolution of this Court.[14] IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for
lack of merit. Costs against the petitioners.
The petitioners reneged on their promise and failed to repurchase the SO ORDERED.
properties despite the lapse of two months. Thus, on September 1,
2000, the trial court resolved the petition and granted the same.
In F. David Enterprises, Inc.,[15] the Court did not rule that a petition for
a writ of possession shall be granted only after the trial court admits in
evidence a Torrens title over the property subject of the petition in the
name of the respondent. The Court merely held that the respondent
therein was issued a new certificate of title in its name on August 23,
1982, and on January 31, 1985, the petition was granted and the writ
prayed for was issued. Evidently, the lower court granted the petition for
a writ of possession because it was of record that a new certificate of
title had already been issued to the respondent.

The petitioners insistence that the September 1, 2000 Order of the

lower court is null and void for its failure to state therein the facts and
the law on which it is based is a mere afterthought. The matter was not
raised in the court a quo and in the CA; it was only in this Court that the
petitioners raised the issue for the first time. Besides granting the
respondents petition for a writ of possession on its finding that it was
sufficient in form and substance, the court thereby incorporated by
reference the material allegations of the petition as part of said Order.
This, in effect, amounted to substantial compliance with Rule 36,
Section 1 of the Rules of Court.

Case law has it that after the consolidation of title in the name of the
respondent as the buyer of the property, upon failure of the mortgagor
to redeem the property, the writ of possession becomes a matter of
right. Its issuance to the purchaser is merely a ministerial function. As
such, the court neither exercises its discretion nor judgment.[16]
Indeed, in an avuncular case,[17] we held that:
The right of the petitioner to the possession of the property is
clearly unassailable. It is founded on its right of ownership. As
the purchaser of the properties in the foreclosure sale, and to
which the respective titles thereto have already been issued,
petitioners right over the property has become absolute, vesting
upon him the right of possession over an enjoyment of the
property which the Court must aid in effecting its delivery. After
such delivery, the purchaser becomes the absolute owner of the
property. As We said in Tan Soo Huat vs. Ongwico, the deed of
conveyance entitled the purchaser to have and to hold the
purchased property. This means, that the purchaser is entitled to
go immediately upon the real property, and that it is the Sheriffs
inescapable duty to place him in such possession.[18]