Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=53062:gr-184252-2009&catid=1522&Itemid=566
Timestamp: 2019-04-26 12:00:45+00:00

Document:
CHINA BANKING CORPORATION, Petitioner, v. SPS. WENCESLAO & MARCELINA MARTIR, Respondents.
Assailed is the November 28, 2007 Decision1 of the Court of Appeals in CA-G.R. CV No. 00477 which reversed the April 27, 2004 Decision2 of the Regional Trial Court of General Santos City, Branch 23; invalidated the foreclosure; and ordered the cancellation of the Certificate of Sale in favor of petitioner, China Banking Corporation. Also assailed is the August 6, 2008 Resolution3 which denied the motion for reconsideration.
In 1994, respondents, spouses Wenceslao and Marcelina Martir, executed real estate mortgages in favor of petitioner China Banking Corporation over three parcels of land described under TCT No. 50485, OCT No. (P-29452) (P-11287) P-1897, and OCT No. P-2754, as security for their credit line in the amount of P1,800,000.00.4 The loan was released in tranches, and for every amount released, respondents executed the corresponding promissory note.
On September 12, 1997, respondents failed to pay the monthly interests on the promissory notes, thus a demand letter dated October 8, 19975 was sent reminding them of their obligation. Respondents still failed to pay; hence, the promissory notes and the credit line were no longer renewed by petitioner. A final demand letter dated December 29, 19976 was sent through registered mail to respondents by petitioner's counsel. At that time, respondents' total obligation amounted to P1,705,000.00.
On May 20, 1998, upon the application of petitioner, the properties subject of the real estate mortgages were extrajudicially foreclosed and sold at public auction for P2,400,000.00 with petitioner as the sole bidder. A Certificate of Sale7 was issued in favor of petitioner on May 21, 1998, and registered with the Register of Deeds on June 6, 1998.
From March to May 1999, respondents sent series of letters8 to petitioner inquiring the amount of loan availed from the credit line, as well as the amount needed to redeem the foreclosed properties. Petitioner, however, failed to respond to the inquiry. In a letter dated May 11, 1999,9 respondents formally offered to pay the amount of P1,300,000.00 to petitioner. Said amount was based on petitioner's letter dated October 8, 1997 stating that the principal obligation amounts to P1,300,000.00.
On May 17, 1999, respondents filed a complaint for nullification of the foreclosure proceedings10 alleging non-compliance with the jurisdictional requirements of publication, posting, registration, payment of filing fees and sheriff fees, and failure to report the extrajudicial foreclosure proceedings and sale to the Executive Judge. Respondents also imputed bad faith on the part of petitioner, which allegedly prevented them from redeeming their properties.
WHEREFORE, considering that the case was filed in 1999, while the requirement for the payment of docket fees, as well as the registration fees required on the petition for foreclosure of mortgage per the Supreme Court Administrative Matter 99-10-05 regarding such procedure in extra-judicial foreclosure of mortgage took effect only on January 15, 2000, the foreclosure could not be invalidated even if there was non-compliance with the Court Administrative Matter 99-10-05. However, the expiration of the period to redeem being without the plaintiff having been able to do so, was caused by the defendant bank; therefore, the plaintiff is hereby granted the alternative remedy of redeeming the properties, in accordance with law and with the mortgage contract entered into by the parties.
WHEREFORE, the appealed Decision of the Regional Trial Court of General Santos City, Branch 23 is REVERSED. The Register of Deeds of General Santos City is hereby ORDERED to cancel the registration of Certificate of Sale in favor of appellee Bank. Likewise, the appellants are ORDERED to pay the appellee Bank their loans with interest as stipulated in the contract of loan, without prejudice to the right of the appellee Bank to foreclose the real estate mortgage upon the appellants' failure to pay their obligations.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT THE EXTRA-JUDICIAL FORECLOSURE SALE WAS VOID BASED ON THE GROUND THAT THE NEWSPAPER WHERE THE NOTICE OF AUCTION SALE WAS PUBLISHED WAS NOT AN "ACCREDITED NEWSPAPER," WHICH CONTENTION IS NOT A REQUIREMENT UNDER EXISTING LAWS AND JURISPRUDENCE.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN ITS RULING WHEN IT FAILED TO APPRECIATE THE FACT THAT THERE WAS SUBSTANTIAL COMPLIANCE IN BOTH THE POSTING OF THE NOTICE OF EXTRA-JUDICIAL FORECLOSURE SALE AS WELL AS THE PUBLICATION OF THE SAME IN A NEWSPAPER OF GENERAL CIRCULATION BY THE FORECLOSING NOTARY PUBLIC.
THIS IS TO CERTIFY that SUN-STAR, General Santos published by Ang Peryodiko Dabaw, Inc. with editorial and business address at Halieus Mall, Pendatun Avenue, corner Lukban Street, General Santos City is not an accredited local newspaper insofar as this Court is concerned and therefore not qualified to publish judicial notices, court orders and summonses and all similar announcement arising from court litigation required by law to be published, as provided in Section 1 of P.D. No. 1079.
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.
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 the 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 focal issue, then, is whether the requirement of publication was complied with.
Section 1. All notices of auction sales in extra-judicial foreclosure of real estate mortgage under Act No. 3135 as amended, judicial notices such as notices of sale on execution of real properties, notices in special proceedings, court orders and summonses and all similar announcements arising from court litigation required by law to be published in a newspaper or periodical of general circulation in particular provinces and/or cities shall be published in newspapers or publications published, edited and circulated in the same city and/or province where the requirement of general circulation applies; Provided, That the province or city where the publication's principal office is located shall be considered the place where it is edited and published: Provided, further, That in the event there is no newspaper or periodical published in the locality, the same may be published in the newspaper or periodical published, edited and circulated in the nearest city or province: Provided, finally, That no newspaper or periodical which has not been authorized by law to publish and which has not been regularly published for at least one year before the date of publication of the notices or announcements which may be assigned to it shall be qualified to publish the said notices.
Presidential Decree 1079, however, does not require accreditation. The requirement of accreditation was imposed by the Court only in 2001, through A.M. No. 01-1-07-SC or the Guidelines in the Accreditation of Newspapers and Periodicals Seeking to Publish Judicial and Legal Notices and Other Similar Announcements and in the Raffle Thereof. This circular cannot be applied retroactively to the case at bar as it will impair petitioner's rights.
Moreover, as held in Metrobank v. PeÃ±afiel,18 the accreditation by the presiding judge is not conclusive that a newspaper is of general circulation, as each case must be decided on its own merits and evidence.
In the instant case, the Affidavit of Publication executed by the account executive of Sun Star General Santos expressly provided that the said newspaper is of general circulation and is published in the City of General Santos.20 This is prima facie proof that Sun Star General Santos is generally circulated in General Santos City, the place where the properties are located. Notably, respondents did not claim that the subject newspaper was not generally circulated in the city, but only that it was not accredited by the court. Hence, there was valid publication and consequently, the extrajudicial foreclosure and sale are valid.
We now come to the question of whether respondents can redeem their properties on the basis of the alleged bad faith of petitioner.
The Court rules in the negative.
This is with reference to my letter dated May 4, 1999 which remained unanswered up to the present.
I have been asking for the total amount of the loan with your bank so that the proper amount of redemption can be determined, as you also refuse to give us the amount of redemption.
Per my computation, the principal obligation is only P1,300,000.00 for which the redemption amount should be based. Because of your failure and refusal consider this as a formal tender of redemption in the principal amount of P1,300,000.00. This tender is made without however waiving my right to question the validity of the foreclosure proceedings.
Your reply is highly appreciated, otherwise your failure to do so within a period of two (2) days will constrain us to file the necessary action in court to protect my interest.
Moreover, jurisprudence also characterizes a valid tender of payment as one where the full redemption price is tendered.
Consequently, in this case, the offer by respondents on July 24, 1986 to redeem the foreclosed properties for P1,872,935 and the subsequent consignation in court of P1,500,000 on August 27, 1986, while made within the period of redemption, was ineffective since the amount offered and actually consigned not only did not include the interest but was in fact also way below the P2,782,554.66 paid by the highest bidder/purchaser of the properties during the auction sale.
In order to effect a redemption, the judgment debtor must pay the purchaser the redemption price composed of the following: (1) the price which the purchaser paid for the property; (2) interest of 1% per month on the purchase price; (3) the amount of any assessments or taxes which the purchaser may have paid on the property after the purchase; and (4) interest of 1% per month on such assessments and taxes x x x.
The vendor cannot avail himself of the right to repurchase without returning to the vendee the price of the sale x x x.
Even the complaint instituted by respondents cannot aid their plight because the institution of an action to annul a foreclosure sale does not suspend the running of the redemption period.
WHEREFORE, the petition is GRANTED. The November 28, 2007 Decision and the August 6, 2008 Resolution of the Court of Appeals in CA-G.R. CV No. 00477 are REVERSED AND SET ASIDE. The April 27, 2004 Decision of the Regional Trial Court of General Santos City, Branch 23 upholding the validity of the extra-judicial foreclosure sale is REINSTATED and AFFIRMED with the MODIFICATION that respondents are no longer allowed to redeem their properties.
1 Rollo, pp. 28-40; penned by Associate Justice Mario V. Lopez, and concurred in by Associate Justices Romulo V. Borja and Elihu A. YbaÃ±ez.
2 Id. at 78-85; penned by Presiding Judge Jaime V. Quitain.
5 Exhibits for the Defendants in Civil Case No. 6573, Exhibit 11.
15 Cristobal v. Court of Appeals, 384 Phil. 807, 816 (2000).
16 Olizon v. Court of Appeals, G.R. No. 107075, September 1, 1994, 236 SCRA 148, 155-156.
17 Perez v. Perez, 494 Phil. 68, 77 (2005).
18 G.R. No. 173976, February 27, 2009.
21 Banco Filipino Savings and Mortgage Bank v. Court of Appeals, G.R. No. 143896, July 8, 2005, 463 SCRA 64, 76.
23 BPI Family Savings Bank, Inc. v. Spouses Veloso, 479 Phil. 627, 632 (2004).
27 Spouses Landrito v. Court of Appeals, G.R. No. 133079, August 9, 2005, 466 SCRA 107, 118.
28 BPI Family Savings Bank, Inc. v. Spouses Veloso, supra note 23 at 634.

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