Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=51665:gr-167500-2008&amp;catid=1510&amp;Itemid=566
Timestamp: 2019-04-21 12:08:12+00:00

Document:
K-PHIL., INC., SOO MYUNG PARK and NETWORK DEVELOPMENT HOLDING CORP., Petitioners, v. METROPOLITAN BANK & TRUST COMPANY, REGALADO E. EUSEBIO, in his capacity as Clerk of Court VI and Ex-Officio Sheriff, and REYNALDO R. CAMERINO, in his capacity as Sheriff IV, Regional Trial Court of Imus, Cavite, Respondents.
This petition1 seeks the reversal of the March 16, 2005 decision2 of the Court of Appeals (CA) in CA-G.R. CV No. 80787.
In October 1996, respondent Metropolitan Bank & Trust Company (Metrobank) extended to petitioner K-Phil., Inc. (K-Phil) various loans and credit accommodations. These loans were secured by a mortgage3 over two lots owned by petitioner Network Development Holding Corporation (Network) and occupied by K-Phil.4 In addition, K-Phil also executed a deed of chattel mortgage5 over its machineries and equipment.
In its decision,15 the CA agreed with the RTC that the failure to include the name of Network in the caption of the petition for foreclosure was not a fatal error. It was sufficient that Network was identified as the owner of the mortgaged real properties in the body of the petition (which was the controlling portion of said pleading) and that, in the notice, the name of Network was clearly stated in the caption as mortgagor.
However, the CA noted Metrobank's admission that the balance due on the principal amount was P143,335,891, subject to 6% interest, and that petitioners had in the meantime made payments on their loans.16 Therefore, the payments should have been deducted from the principal of P143,335,891. Considering this, the CA observed that the petition and notice were pegged differently at P159,026,257.49.
The CA also pronounced that, under the law and the stipulations provided in the mortgage contract, the auction sale should be held either in DasmariÃ±as, Cavite, where the mortgaged properties are located, or in Trece Martires City, the capital city of the province of Cavite, not in Imus, Cavite.
Unsatisfied with this ruling, petitioners filed this petition raising the following issues: (1) whether the petition for extrajudicial foreclosure was null and void for its failure to implead Network and to state the correct amount of indebtedness;18 (2) whether it was proper to order the issuance of a new notice with the necessary corrections and (3) whether Metrobank was liable for damages.
Petitioners contend that the CA erred when it upheld the validity of the petition despite the incorrect amount stated therein and the omission of Network as a party. They also assert that the duty to alter, modify or amend the petition rests on Metrobank, not on respondent sheriffs whose duty to issue the notice based on the petition is ministerial. Hence, it was an error for the CA to order respondent sheriffs to issue a new notice to amend the inaccuracies of the petition. Moreover, petitioners insist that they are entitled to damages and attorney's fees as they have established Metrobank's bad faith when it prematurely filed the petition against K-Phil.
As for the amount of indebtedness, Metrobank alleged the amount of P159,026,257.49 in its petition; it was only in the course of the proceedings that it agreed to the amount of P143,335,891. Consequently, the notice (which was based on the petition) also stated P159,026,257.49 as the amount of indebtedness.
While there may be a discrepancy in the amount of indebtedness stated in the notice and that actually owed by petitioners, such discrepancy tends to appreciate, rather than depreciate,29 the value of the mortgaged properties. It cannot be reasonably considered to have prevented the estimation of a fair price.
Therefore, the CA's order for the sheriff to issue, publish and serve a new notice of extrajudicial sale correcting the inaccuracies and inadequacies of the prior notice was sufficient to remedy the discrepancies.
There are no findings that support the grant of damages to petitioners. The CA and RTC did not see any taint of bad faith on the part of Metrobank. Thus, we decline to award the same.
2 Penned by Associate Justice Rodrigo V. Cosico (retired) and concurred in by Associate Justices Danilo B. Pine (retired) and Arcangelita Romilla Lontok of the Eleventh Division of the Court of Appeals; rollo, pp. 10-19.
3 Regional Trial Court Records, pp. 26-27.
4 The real properties were within the Philippine Economic Zone Authority in First Cavite Industrial Estates, DasmariÃ±as, Cavite; rollo, p. 11.
7 Later promoted to the CA where he retired in 2008. Now a Commissioner of the Commission on Elections.
8 RTC Records, pp. 77-78.
14 In an order dated January 6, 2004; id., pp. 499-500.
16 Id., pp. 16-17, citing TSN, October 7, 2003, pp. 60-63.
17 Id., p. 19, citation omitted.
18 Petitioners did not anymore argue the issue of incorrect venue before the Court. Thus, it is considered to have waived this issue.
19 Entitled "An Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real Estate Mortgages," as amended by Act 4118.
20 Republic v. Nolasco, G.R. No. 155108, 27 April 2005, 457 SCRA 400, 418, citing Heirs of Celso Amarante v. CA, G.R. No. 76386, 21 May 1990, 185 SCRA 585. It should be noted, however, that strictly speaking, an application for extrajudicial foreclosure is not a pleading.
21 See form of notice of extrajudicial sale under OCA Circular No. 7-2002 dated January 22, 2002.
22 Act 3135, as amended by Act 4118, for real estate mortgages and Act No. 1508 (An Act Providing for the Mortgaging of Personal Property and for the Registration of the Mortgages so Executed) for chattel mortgages.
23 Suico v. Philippine National Bank, G.R. No. 170215, 28 August 2007, 531 SCRA 514, 523.
24 G.R. No.107075, 1 September 1994, 236 SCRA 148.
25 Id., p. 156, citing Bacon v. Northwestern Mut. L. Ins. Co., 131 U.S. 258, 33 L. Ed 128, 9 S Ct 787; State ex rel. Raulerson v. Sloan, 134 Fla 632, 14 So 128.
26 For example, we have held that the erroneous designation of an entity as mortgagor was an immaterial error that did not affect the validity of the notice (Langkaan Realty Devt., Inc. v. UCPB, 400 Phil.1349, 1360 ).
27 An incorrect statement of the number of the transfer certificate of title of the property even if the technical description of said property was correct (San Jose v. CA, G.R. No. 106953, 19 August 1993, 225 SCRA 450, 454) and wrong date of the real estate mortgage (Metropolitan Bank v. Wong, 412 Phil. 207, 218 ) were considered substantial and fatal errors.
28 Suico v. Philippine National Bank, supra note 23, pp. 523-524.
29 Because the bid price will begin, in this case, at the higher amount of P159 million stated in the notice instead of P143 million stated in the petition.

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