Republic of the Philippines SUPREME COURT Baguio City SECOND DIVISION G.R. No.

170241 April 19, 2010

PHILIPPINE SAVINGS BAN , Petitioner, vs SPOUSES !IONISIO GERONIMO "#$ CARI!A! GERONIMO, Respon!ents DECISION CARPIO, J.: T%& C"'& "his petition for revie#$ assails the %& 'ugust (&&) Decision( an! % Nove*ber (&&) Resolution% of the Court of 'ppeals in C'+, R CV No ---.( "he Court of 'ppeals reverse! the !ecision of Branch $($ of the Regional "rial Court of Caloocan City, National Capital Region /trial court0 by !eclaring voi! the 1uestione! e2tra3u!icial foreclosure of real estate *ortgage for non+ co*pliance #ith the statutory re1uire*ent of publication of the notice of sale T%& (")*' On 4 5ebruary $44), respon!ents Spouses Dionisio an! Cari!a! ,eroni*o /respon!ents0 obtaine! a loan fro* petitioner Philippine Savings Ban6 /petitioner0 in the a*ount of P%,&7(,&&&, secure! by a *ortgage on respon!ents8 lan! situate! in Barrio "alipapa, Caloocan City an! covere! by "ransfer Certificate of "itle No C+)&).) 9 Respon!ents !efaulte! on their loan, pro*pting petitioner to initiate the e2tra+3u!icial foreclosure of the real estate *ortgage 't the auction sale con!ucte! on (4 :arch $44-, the *ortgage! property #as sol! to petitioner,) being the highest bi!!er, for P%,&&&,&&& Conse1uently, a Certificate of Sale #as issue! in favor of petitioner Clai*ing that the e2tra3u!icial foreclosure #as voi! for non+co*pliance #ith the la#, particularly the publication re1uire*ent, respon!ents file! #ith the trial court a co*plaint for the annul*ent of the e2tra3u!icial foreclosure . "he trial court sustaine! the vali!ity of the e2tra3u!icial foreclosure, an! !ispose! of the case as follo#s; <=ERE5ORE, pre*ises consi!ere!, the instant Co*plaint for 'nnul*ent of 5oreclosure of :ortgage an! Da*ages is hereby DIS:ISSED for lac6 of *erit SO ORDERED 7

On appeal, the Court of 'ppeals hel!; <=ERE5ORE, the assaile! !ecision !ate! (- Nove*ber $444 of the Regional "rial Court of Caloocan City is REVERSED an! SE" 'SIDE "he E2tra3u!icial 5oreclosure of :ortgage con!ucte! on (4 :arch $44- is !eclare! N>?? an! VOID SO ORDERED 4 "he Court of 'ppeals !enie! petitioner8s *otion for reconsi!eration =ence, this petition T%& R+li#, o- *%& Tri"l Co+r* "he trial court hel! that @personal notice on the *ortgagor is not re1uire! un!er 'ct No %$%) @ 'll that is re1uire! is @the posting of the notices of sale for not less than (& !ays in at least three public places in the *unicipality or city #here the property is situate!, an! publication once a #ee6 for at least three consecutive #ee6s in a ne#spaper of general circulation in the *unicipality or city, if the property is #orth *ore than four hun!re! pesos @ "he trial court further rule! there #as co*pliance #ith the statutory publication re1uire*ent Since the affi!avit of publication #as e2clu!e! as petitioner8s evi!ence, the trial court relie! instea! on the positive testi*ony of Deputy Sheriff 'lberto Castillo, that he cause! the publication of the Notice of Sale, in hol!ing there #as publication of the notice of sale in a ne#spaper of general circulation In relation to this, the trial court cite! the presu*ption of regularity in the perfor*ance of official !uty "he trial court foun! that respon!ents, as plaintiffs, faile! to !ischarge their bur!en of proving petitioner8s allege! non+co*pliance #ith the re1uisite publication "he trial court state! that the testi*ony of respon!ents8 #itness, a ne#sstan! o#ner, @that he has never sol! Ang Pinoy ne#spaper can never lea! to the conclusion that such publication !oes not e2ist @ T%& R+li#, o- *%& Co+r* o- App&"l' "he Court of 'ppeals reverse! the ruling of the trial court "he Court of 'ppeals foun! no sufficient evi!ence to prove that Ang Pinoy is a ne#spaper of general circulation in Caloocan City In a Resolution !ate! ( 5ebruary (&&), the Court of 'ppeals re1uire! the then E2ecutive Au!ge of the Regional "rial Court of Caloocan City to infor* the appellate court of the follo#ing facts; $ If 'ng Pinoy ne#spaper is a ne#spaper of general circulation particularly for the years $44) an! $44-B an! ( If there #as co*pliance #ith Sec ( of P D No $&.4 #hich provi!es;

@"he e2ecutive 3u!ge of the court of first instance shall !esignate a regular #or6ing !ay an! a !efinite ti*e each #ee6 !uring #hich the sai! 3u!icial notices or a!vertise*ents shall be !istribute! personally by hi* for publication to 1ualifie! ne#spapers or perio!icals 2 2 2, #hich !istribution shall be !one by raffle @$& E2ecutive Au!ge Victoria Isabel ' Pare!es /E2ecutive Au!ge Pare!es0 co*plie! #ith the !irective by stating that; a0 'ng Pinoy ne#spaper is not an accre!ite! perio!ical in Caloocan City =ence, #e are unable to categorically state #hether it is a ne#spaper of general circulation at present or for the years $44) an! $44- /Certification *ar6e! as 'nne2 @'@0 b0 Sec (, P D No $&.4 is being observe! an! co*plie! #ith in that the raffle of 3u!icial notices for publication, is a per*anent agen!a ite* in the regular raffle #ith the R"C, Caloocan City, hol!s every :on!ay at ( o8cloc6 in the afternoon at the courtroo* of R"C, Branch $(9 /Certification *ar6e! as 'nne2 @B@0B an! c0 <e have no 6no#le!ge on #hether 'ng Pinoy #as inclu!e! in the raffles con!ucte! in $44) an! $44-, as #e !o not have the case recor! #here the infor*ation *ay be verifie! $$ "he Court of 'ppeals conclu!e! that, base! on the co*pliance of E2ecutive Au!ge Pare!es, Ang Pinoy is not a ne#spaper of general circulation in Caloocan City "herefore, the e2tra3u!icial foreclosure is voi! for non+co*pliance #ith the re1uire*ent of the publication of the notice of sale in a ne#spaper of general circulation T%& I''+& Basically, the issue in this case is #hether the e2tra+3u!icial foreclosure is voi! for non+ co*pliance #ith the publication re1uire*ent un!er 'ct No %$%) T%& R+li#, o- *%& Co+r* "he petition lac6s *erit Section % of 'ct No %$%)$( rea!s; SEC"ION % Notice shall be given by posting notices of the sale for not less than t#enty !ays in at least three public places of the *unicipality or city #here the property is situate!, an! if such property is #orth *ore than four hun!re! pesos, such notice shall also be publishe! once a #ee6 for at least three consecutive #ee6s in a ne#spaper of general circulation in the *unicipality or city /E*phasis supplie!0 Petitioner clai*s that it co*plie! #ith the above provision in foreclosing e2tra3u!icially the sub3ect real estate *ortgage "o buttress its clai*, petitioner presente! the testi*ony of Deputy Sheriff 'lberto Castillo of the trial court, the pertinent portion of #hich states;

'""C D'VIS; Do you re*e*ber having co*e across a certain property o#ne! by spouses ,eroni*o covere! by "C" No )&).- of the Register of Dee!s of Caloocan CityD 2222 ' Ces, sir '""C D'VIS; E In #hat connectionD ' In connection #ith the e2tra 3u!icial foreclosure file! by the PS Ban6, sir 2222 E <hen this #as assigne! to you #hat action !i! you ta6e thereonD ' I prepare! the notice of sale having publishe! in the ne#spaper #hich the e2ecutive 3u!ge a#ar!e! it Sent notice to the sai! parties an! poste! it to the three conspicuous places of Caloocan City, sir E Cou *entione! about your issuance of Notice of Sale I a* referring you no# to the !ocu*ent previously *ar6e! as E2hibit @- @ <hat relation is this if any to the one you have *entione!D ' "his is the Notice of Sale I have prepare!, sir E No# you also *entione! that you have cause! the publication of this Notice of Sheriff8s Sale to a ne#spaper of general circulation, !o you re*e*ber #hat ne#spaper it #asD ' 'ng Pinoy, sir E =o# co*e that this ne#spaper #as selecte! for purposes of publicationD ' It #as the e2ecutive 3u!ge #ho a#ar!e! that publication, sir E =o# !o you 6no# particularly that this notice #as publishe! in the ne#spaperD ' "hat !uring the auction sale the *ortgagee ban6 presente! affi!avit of publication, sir $% On the other han!, respon!ents !ispute the e2istence of the publication of the notice of sale 'ssu*ing that the notice of sale #as publishe!, respon!ents conten! that Ang Pinoy,

#here it #as publishe!, is not a ne#spaper of general circulation "o bolster their clai* of non+publication, respon!ents offere! the testi*ony of Danilo :agistra!o, a ne#sstan! o#ner, #hich pertinently states; '""C S'C'; Do you 6no# by chance the Pinoy Ne#spaperD '""C D'VIS; No basis CO>R"; Ob3ection overrule! <itness *ay ans#er ' None, sir I !o not sell Pinoy Ne#spaper, sir '""C S'C'; <hy !o you say that you !o not 6no# Pinoy Ne#spaperD ' 5ro* the ti*e I sol! ne#spapers, sir, I have not seen Pinoy Ne#spaper '""C S'C'; "hat #oul! be all, your =onor Before resolving the principal issue, #e *ust point out the re1uire*ent of accre!itation #as i*pose! by the Court only in (&&$, through ' : No &$+$+&.+SC or the ,ui!elines in the 'ccre!itation of Ne#spapers an! Perio!icals See6ing to Publish Au!icial an! ?egal Notices an! Other Si*ilar 'nnounce*ents an! in the Raffle "hereof $9 "he present case involves an e2tra3u!icial foreclosure con!ucte! in $44-B thus, there #ere no such gui!elines in effect !uring the 1uestione! foreclosure 't any rate, the accre!itation by the E2ecutive Au!ge is not !ecisive of #hether a ne#spaper is of general circulation $) It is settle! that for the purpose of e2tra3u!icial foreclosure of *ortgage, the party alleging non+ co*pliance #ith the re1uisite publication has the bur!en of proving the sa*e $- In this case, respon!ents presente! the testi*ony of a ne#sstan! o#ner to prove that Ang Pinoy is not a ne#spaper of general circulation =o#ever, this particular evi!ence is unreliable, as the sa*e #itness testifie! that he sells ne#spapers in EueFon City, not in Caloocan City, an! that he is una#are of Ang Pinoy ne#spaper si*ply because he is not selling the sa*e an! he ha! not hear! of it =is testi*ony states; E <here is this place that you tra!itionally or usually sell ne#spaperD

' Corner of ' Bonifacio an! -th 'venue E "his is in EueFon CityD ' Ces, sir E Not in CaloocanD ' In EueFon City, sir 2222 CO>R"; Clarificatory 1uestion E Cou sai! that there is no Pinoy *agaFine si*ply because you are not selling Pinoy *agaFineD ' Ces, your =onor E But you are not certain that there is really no Pinoy *agaFineD CO>R"; But have you hear! about Pinoy *agaFine or Pinoy ne#spaperD ' I have not hear!, your =onor $. Not#ithstan!ing, petitioner coul! have easily pro!uce! the affi!avit of publication an! other co*petent evi!ence /such as the publishe! notices0 to refute respon!ents8 clai* of lac6 of publication of the notice of sale In Spouses Pulido v. Court of Appeals,$7 the Court hel!; <hile it *ay be true that the party alleging non+co*pliance #ith the re1uisite publication has the bur!en of proof, still negative allegations nee! not be prove! even if essential to one8s cause of action or !efense if they constitute a !enial of the e2istence of a !ocu*ent the custo!y of #hich belongs to the other party In relation to the evi!entiary #eight of the affi!avit of publication, the Court rule! in China Banking Corporation v. Spouses Martir$4 that the affi!avit of publication e2ecute! by the account e2ecutive of the ne#spaper is pri*a facie proof that the ne#spaper is generally circulate! in the place #here the properties are locate! (& In the present case, the 'ffi!avit of Publication or E2hibit @7,@ although for*ally offere! by petitioner, #as e2clu!e! by the trial court for being hearsay ($ Petitioner never challenge! the e2clusion of the affi!avit of publication Instea!, petitioner relies solely on the testi*ony of Deputy Sheriff 'lberto Castillo to prove co*pliance #ith the publication re1uire*ent un!er Section % of 'ct No %$%) =o#ever, there is nothing in such testi*ony to clearly an!

convincingly prove that petitioner co*plie! #ith the *an!atory re1uire*ent of publication <hen Sheriff Castillo #as as6e! ho# he 6ne# that the notice of sale #as publishe!, he si*ply replie! that @!uring the auction sale the *ortgagee ban6 presente! the affi!avit of publication @(( Evi!ently, such an ans#er !oes not suffice to establish petitioner8s clai* of co*pliance #ith the statutory re1uire*ent of publication On the contrary, Sheriff Castillo8s testi*ony reveals that he ha! no personal 6no#le!ge of the actual publication of the notice of sale, *uch less the e2tent of the circulation of Ang Pinoy :oreover, the Court notes that Ang Pinoy is a ne#spaper of general circulation printe! an! publishe! in :anila, not in Caloocan City #here the *ortgage! property is locate!, as in!icate! in the e2clu!e! 'ffi!avit of Publication "his is contrary to the re1uire*ent un!er Section % of 'ct No %$%) pertaining to the publication of the notice of sale in a ne#spaper of general circulation in the city #here the property is situate! =ence, even if the 'ffi!avit of Publication #as a!*itte! as part of petitioner8s evi!ence, it #oul! not support petitioner8s case as it !oes not clearly prove petitioner8s co*pliance #ith the publication re1uire*ent Petitioner8s invocation of the presu*ption of regularity in the perfor*ance of official !uty on the part of Sheriff Castillo is *isplace! <hile posting the notice of sale is part of a sheriff8s official functions,(% the actual publication of the notice of sale cannot be consi!ere! as such, since this concerns the publisher8s business Si*ply put, the sheriff is inco*petent to prove that the notice of sale #as actually publishe! in a ne#spaper of general circulation "he Court further notes that the Notice of E2tra+Au!icial Sale,(9 prepare! an! poste! by Sheriff Castillo, !oes not in!icate the ne#spaper #here such notice #oul! be publishe! "he space provi!e! #here the na*e of the ne#spaper shoul! be #as left blan6, #ith only the !ates of publication clearly #ritten "his o*ission raises serious !oubts as to #hether there #as in!ee! publication of the notice of sale 1avvphi1 Once again, the Court stresses the i*portance of the notice re1uire*ent, as enunciate! in :etropolitan Ban6 an! "rust Co*pany, Inc v PeGafiel,() thus; "he ob3ect of a notice of sale is to infor* the public of the nature an! con!ition of the property to be sol!, an! of the ti*e, place an! ter*s of the sale Notices are given for the purpose of securing bi!!ers an! to prevent a sacrifice HsaleI of the property "he goal of the notice re1uire*ent is to achieve a @reasonably #i!e publicity@ of the auction sale "his is #hy publication in a ne#spaper of general circulation is re1uire! "he Court has previously ta6en 3u!icial notice of the @far+reaching effects@ of publishing the notice of sale in a ne#spaper of general circulation In a!!ition, the Court re*in!s *ortgagees of their !uty to co*ply faithfully #ith the statutory re1uire*ents of foreclosure In Metropolitan Bank v. Wong,(- the Court !eclare!; <hile the la# recogniFes the right of a ban6 to foreclose a *ortgage upon the *ortgagor8s failure to pay his obligation, it is i*perative that such right be e2ercise! accor!ing to its clear *an!ate Each an! every re1uire*ent of the la# *ust be co*plie! #ith, lest, the vali! e2ercise

of the right #oul! en! It *ust be re*e*bere! that the e2ercise of a right en!s #hen the right !isappears, an! it !isappears #hen it is abuse! especially to the pre3u!ice of others In su*, petitioner faile! to establish its co*pliance #ith the publication re1uire*ent un!er Section % of 'ct No %$%) Conse1uently, the 1uestione! e2tra3u!icial foreclosure of real estate *ortgage an! sale are voi! (. .HERE(ORE, #e !EN/ the petition <e A((IRM the %& 'ugust (&&) Decision an! % Nove*ber (&&) Resolution of the Court of 'ppeals in C'+, R CV No ---.( SO ORDERED ANTONIO T. CARPIO 'ssociate Austice <E CONC>R; ARTURO !. BRION 'ssociate Austice MARIANO C. !EL CASTILLO 'ssociate Austice ROBERTO A. ABA! 'ssociate Austice

0OSE PORTUGAL PERE1 'ssociate Austice '""ES"'"ION I attest that the conclusions in the above Decision ha! been reache! in consultation before the case #as assigne! to the #riter of the opinion of the Court8s Division ANTONIO T. CARPIO 'ssociate Austice Chairperson CER"I5IC'"ION Pursuant to Section $%, 'rticle VIII of the Constitution, an! the Division Chairperson8s 'ttestation, I certify that the conclusions in the above Decision ha! been reache! in consultation before the case #as assigne! to the #riter of the opinion of the Court8s Division RE/NATO S. PUNO Chief Austice

(oo*#o*&'
$

>n!er Rule 9) of the Rules of Court

Rollo, pp .+$- Penne! by 'ssociate Austice Vicente S E Veloso #ith 'ssociate Austices Roberto ' Barrios an! '*elita , "olentino, concurring
%

I! at $7 Recor!s, pp (&&+(&$ I! at (&$ I! Doc6ete! as Civil Case No C+$7&$9 Recor!s, p %97 Penne! by Au!ge '!oracion , 'ngeles Rollo, p $) C' rollo, p 7I! at $&(

$&

$$

$(

'C" NO %$%) + 'N 'C" "O RE,>?'"E "=E S'?E O5 PROPER"C >NDER SPECI'? PO<ERS INSER"ED IN OR 'NNEJED "O RE'?+ES"'"E :OR",',ES
$%

"SN, % Aune $444, pp %+)

$9

China Banking Corporation v. Martir, , R No $79()(, $$ Septe*ber (&&4, )44 SCR' -.(, -7(
$)

:etropolitan Ban6 an! "rust Co*pany, Inc v PeGafiel, , R No $.%4.-, (. 5ebruary (&&4, )7& SCR' %)(, %).
$-

I! "SN, 9 Nove*ber $447, pp )+-, 4+$& %($ Phil $&-9, $&-4 /$44)0 Supra note $( at -7%

$.

$7

$4

(&

See also Spouses Marcelo v. Philippine Co ercial !nternational Bank "PC!B#, , R No $7(.%), 9 Dece*ber (&&4B Baluyut v. Po$lete, , R No $999%), - 5ebruary (&&., )$9 SCR' %.&, %7(+ %7%B %ortune Motors "Phils.#, !nc. v. Metropolitan Bank and &rust Co pany, %%( Phil 799, 794 /$44-0, citing Bonnevie v. Court of Appeals, ($& Phil $&&, $$$ /$47%0
($

Recor!s, pp (.) an! %&% In its ) October $444 Or!er, the trial court rule! that; 'nent the 'ffi!avit of Publication con!itionally *ar6e! as E2hibit @7,@ the Court sees no reason to reconsi!er the e2clusion of the !ocu*ent as e2hibit on the groun! that the affiant #as not presente! to affir* the contents of her affi!avit, hence, the !ocu*ent re*ains to be plain hearsay

((

"SN, % Aune $444, p )

(%

Bohanan v. Court of Appeals, %(- Phil %.), %7$ /$44-0, #here the Court rule! that the testi*ony of the sheriff suffices in lieu of the custo*ary certificate of posting an! can properly be accor!e! the presu*ption of regularity of perfor*ance
(9

E2hibits @-@ an! @-+' @ Supra note $) 9$( Phil (&., ((& /(&&$0

()

(-

(.

Philippine 'ational Bank v. Maraya, , R No $-9$&9, $$ Septe*ber (&&4, )44 SCR' %49, 9&&B (evelop ent Bank of the Philippines v. Court of Appeals, 9)$ Phil )-%, ).4B :etropolitan Ban6 an! "rust Co*pany, Inc v Penafiel, supra note $)