FORECLOSURE

G.R. No. 187556

May 5, 2010

PLANTERS DEVELOPMENT BANK vs. JAMES NG and ANTHONY NG,

FACTS:
Respondents obtained loans from petitioner to secure which they mortgaged two parcels of land situated in San Francisco del
Monte, Quezon. Subsequently, respondents failed to settle their obligation; hence, petitioner instituted extrajudicial foreclosure of
the mortgage before Notary Public. The highest bidder at the auction sale was petitioner to which was issued a Certificate of Sale
that was registered with the Register of Deeds of Quezon City on May 19, 1999. Upon failure to redeem the mortgage, petitioner
filed an ex-parte petition for the issuance of a writ of possession but said petition was denied. In the meantime, respondents
instituted an action for Annulment of Certificate of Sale. Subsequently, the RTC issued a writ of preliminary injunction restraining
petitioner from consolidating its title to the properties and committing any act of dispossession that would defeat respondents right
of ownership.
ISSUE; Whether or not petitioner is entitled to a writ of possession of the subject property.
HELD:
Yes. Even during the period of redemption, the purchaser is entitled as of right to a writ of possession provided a bond is posted to
indemnify the debtor in case the foreclosure sale is shown to have been conducted without complying with the requirements of the
law. More so when, as in the present case, the redemption period has expired and ownership is vested in the purchaser. Since
respondents failed to redeem the mortgage within the reglementary period, entitlement to the writ of possession becomes a matter
of right and the issuance thereof is merely a ministerial function. The judge to whom an application for a writ of possession is filed
need not look into the validity of the mortgage or the manner of its foreclosure.
G.R. No. 153951. July 29, 2005
PHILIPPINE NATIONAL BANK vs. SANAO MARKETING CORPORATION
FACTS:
In July 1997, Sanao Marketing Corporation, the spouses Amado A. Sanao and Soledad F. Sanao and the spouses William (Willy) F.
Sanao and Helen Sanao (all respondents herein), as joint and solidary debtors, obtained a loan in the amount of One Hundred Fifty
Million Pesos (P150,000,000.00) from PNB secured by a real estate mortgage of several parcels of land. For failure of respondents to
fully pay the loan upon its maturity, PNB caused the extrajudicial foreclosure of the mortgage. Subsequently, , PNB filed with the RTC
of Pili, Camarines Sur, Branch 32, a petition for the issuance of a writ of possession. ON the other hand, respondents filed a
complaint with the RTC alleging that the auction and foreclosure proceedings were null and void for non-compliance of the notice of
publication of the sale.
ISSUE: WHETHER or not petitioner is entitled to a writ of possession despite questions on the regularity and validity of the sale.
HELD:
Yes. The purchaser in a foreclosure sale may apply for a writ of possession during the redemption period by filing an ex parte motion
under oath for that purpose in the corresponding registration or cadastral proceeding in the case of property covered by a Torrens
title. Upon the filing of such motion and the approval of the corresponding bond, the law also in express terms directs the court to
issue the order for a writ of possession. Any question regarding the regularity and validity of the sale, as well as the consequent
cancellation of the writ, is to be determined in a subsequent proceeding as outlined in Section 8 of Act No. 3135, as amended by Act
No. 4118. Such question is not to be raised as a justification for opposing the issuance of the writ of possession, since, under the Act,
the proceeding is ex parte. In the case at bar, PNB has sufficiently established its right to the writ of possession.

G.R. No. 173976

February 27, 2009

METROPOLITAN BANK AND TRUST COMPANY, INC. vs. EUGENIO PEAFIEL, for himself and as Attorney-in-Fact of ERLINDA
PEAFIEL
FACTS:
Respondent Erlinda Peafiel and the late Romeo Peafiel are the registered owners of two parcels of land. On August 1, 1991, the
Peafiel spouses mortgaged their properties in favor of petitioner Metropolitan Bank and Trust Company, Inc. The spouses defaulted
in the payment of their loan obligation. Subsequently, petitioner instituted an extrajudicial foreclosure proceeding through a notary
public. The Notice of Sale was published in Maharlika Pilipinas on August 5, 12 and 19, 1999. At the auction sale, petitioner emerged
as the sole and highest bidder. Respondents questioned the validity of the sale on the contention that it did not comply with the
publication requirement, since the newspaper was not circulated in Mandaluyong City where the subject properties were located.
ISSUE:
Whether OR not THE NOTICE OF sale was published in a newspaper of general circulation in the place where the properties were
located.
HELD:
NO. For the purpose of extrajudicial foreclosure of mortgage, the party alleging non-compliance with the requisite publication has
the burden of proving the same. Nonetheless, the publishers testimony that they "do not just offer to anybody" implies that the
newspaper is not available to the public in general. This statement, taken in conjunction with the fact that there are no subscribers
in Mandaluyong City, convinces the Court that Maharlika Pilipinas is, in fact, not a newspaper of general circulation in Mandaluyong
City 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. The goal
of the notice requirement is to achieve a "reasonably wide publicity" of the auction sale. This is why publication in a newspaper of
general circulation is required. The Court has previously taken judicial notice of the "far-reaching effects" of publishing the notice of
sale in a newspaper of general circulation.
G.R. No. 180439

December 23, 2009

RESORT HOTELS CORPORATION vs. DEVELOPMENT BANK OF THE PHILIPPINES and SM INVESTMENT CORPORATION
FACTS:
Petitioner RHC, a corporation duly organized and existing in accordance with Philippine laws, was the previous owner and operator
of several hotels located outside Metro Manila. From 1969 up to 1981, RHC obtained from DBP several loans, aggregating
approximately P157 million, for the purpose of expanding hotel capacities, operations and services nationwide. To secure the
payment of these loans, RHC executed real estate mortgages in favor of DBP. Likewise, RHC executed chattel mortgages additionally
securing the loans with all the personal properties located inside its head office in Makati. Petitioner defaulted payment.
Consequently, DBP applied for the extrajudicial foreclosure of the real estate and chattel mortgages.
ISSUE:
Whether or not the extrajudicial foreclosure and the subsequent sale of the mortgaged properties are null and void for noncompliance with the notice, posting and publication requirements.
HELD:
YES. It must be emphasized that the allegation of the officers of RHC that they failed to receive notices of the foreclosure sale could
not successfully defeat the validity of the foreclosure proceedings. As held by the Supreme Court in Philippine National Bank v.
Nepomuceno Productions, Inc., personal notice to the mortgagor is not necessary for the validity of the foreclosure proceedings. 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 prevent a sacrifice of the property. Clearly, the statutory requirements of posting and publication are mandated,
not for the mortgagors benefit, but for the public or third persons. In fact, personal notice to the mortgagor in extrajudicial
foreclosure proceedings is not even necessary, unless stipulated.
G.R. No. 128567

September 1, 2000

HUERTA ALBA RESORT INC. vs. COURT OF APPEALS and SYNDICATED MANAGEMENT GROUP INC., respondents
FACTS:
Private respondent instituted Civil Case No. 89-5424 as mortgagee-assignee of a loan amounting to P8.5 million obtained by
petitioner from Intercon, in whose favor petitioner mortgaged the aforesaid parcels of land as security for the said loan. At bar is a
petition assailing the Decision, dated November 14, 1996, and Resolution, dated March 11, 1997, of the Court of Appeals in CA-G.R.
No. 38747, which set aside the Order, dated July 21, 1995 and Order, dated September 4, 1997, of the Regional Trial Court of Makati
City, in Civil Case No. 89-5424. The aforesaid orders of the trial court held that petitioner had the right to redeem subject pieces of
property within the one-year period prescribed by Section 78 of Republic Act No. 337 otherwise known as the General Banking Act.
ISSUE:
Whether or not the petitioner has the one-year right of redemption of subject properties under Section 78 of the General Banking
Act.
Held:
NO. No such right of redemption exists in case of judicial foreclosure of a mortgage if the mortgagee is not the PNB or a bank or
banking institution. In such a case, the foreclosure sale, 'when confirmed by an order of the court. . . shall operate to divest the
rights of all the parties to the action and to vest their rights in the purchaser.' There then exists only what is known as the equity of
redemption. This is simply the right of the defendant mortgagor to extinguish the mortgage and retain ownership of the property by
paying the secured debt within the 90-day period after the judgment becomes final, in accordance with Rule 68, or even after the
foreclosure sale but prior to its confirmation.
Where the foreclosure is judicially effected, however, no equivalent right of redemption exists. The law declares that a judicial
foreclosure sale 'when confirmed be an order of the court. . . . shall operate to divest the rights of all the parties to the action and to
vest their rights in the purchaser, subject to such rights of redemption as may be allowed by law.' Such rights exceptionally 'allowed
by law' (i.e., even after confirmation by an order of the court) are those granted by the charter of the Philippine National Bank (Acts
No. 2747 and 2938), and the General Banking Act (R.A. 337). These laws confer on the mortgagor, his successors in interest or any
judgment creditor of the mortgagor, the right to redeem the property sold on foreclosure after confirmation by the court of the
foreclosure sale which right may be exercised within a period of one (1) year, counted from the date of registration of the
certificate of sale in the Registry of Property.
The right of redemption in relation to a mortgage understood in the sense of a prerogative to re-acquire mortgaged property after
registration of the foreclosure sale exists only in the case of the extrajudicial foreclosure of the mortgage. No such right is
recognized in a judicial foreclosure except only where the mortgagee is the Philippine National Bank or a bank or banking institution.
Where a mortgage is foreclosed extrajudicially, Act 3135 grants to the mortgagor the right of redemption within one (1) year from
the registration of the sheriff's certificate of foreclosure sale.
G.R. No. 170241

April 19, 2010

PHILIPPINE SAVINGS BANK, Petitioner, vs. SPOUSES DIONISIO GERONIMO and CARIDAD GERONIMO, Respondents
Facts:
Pespondents Spouses Dionisio and Caridad Geronimo (respondents) obtained a loan from petitioner Philippine Savings Bank
(petitioner) in the amount of P3,082,000, secured by a mortgage on respondents land situated in Barrio Talipapa, Caloocan City.
Respondents defaulted on their loan, prompting petitioner to initiate the extra-judicial foreclosure of the real estate mortgage. At
the auction sale conducted on 29 March 1996, the mortgaged property was sold to petitioner, being the highest bidder,

for P3,000,000. Consequently, a Certificate of Sale was issued in favor of petitioner. Claiming that the extrajudicial foreclosure was
void for non-compliance with the law, particularly the publication requirement, respondents filed with the trial court a complaint for
the annulment of the extrajudicial foreclosure.
ISSUE: Whether the extra-judicial foreclosure is void for non-compliance with the publication requirement under Act No. 3135.
HELD:
YES. It is settled that for the purpose of extrajudicial foreclosure of mortgage, the party alleging non-compliance with the requisite
publication has the burden of proving the same. In this case, respondents presented the testimony of a newsstand owner to prove
that Ang Pinoy is not a newspaper of general circulation. However, this particular evidence is unreliable, as the same witness
testified that he sells newspapers in Quezon City, not in Caloocan City, and that he is unaware of Ang Pinoy newspaper simply
because he is not selling the same and he had not heard of it.
Moreover, the Court notes that Ang Pinoy is a newspaper of general circulation printed and published in Manila, not in Caloocan City
where the mortgaged property is located, as indicated in the excluded Affidavit of Publication. This is contrary to the requirement
under Section 3 of Act No. 3135 pertaining to the publication of the notice of sale in a newspaper of general circulation in the city
where the property is situated. Hence, even if the Affidavit of Publication was admitted as part of petitioners evidence, it would not
support petitioners case as it does not clearly prove petitioners compliance with the publication requirement. In sum, petitioner
failed to establish its compliance with the publication requirement under Section 3 of Act No. 3135. Consequently, the questioned
extrajudicial foreclosure of real estate mortgage and sale are void.