THIRD DIVISION
SPS. ROGELIO MARCELO &
MILAGROS MARCELO,
Petitioners,
- versus -
PHILIPPINE COMMERCIAL INTERNATIONAL BANK (PCIB),
Respondent.
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G.R. No. 182735
Present:
CORONA, J.,
Chairperson,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA, and
PERALTA, JJ.
Promulgated:
December
4, 2009
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D E C I S I O N
CHICO-NAZARIO, J.:
Debts are nowadays like children begot
with pleasure, but brought forth in pain.
Moliere
Before this Court is a Petition for Review
on Certiorari, under Rule
45 of the Rules of Court, filed by spouses Rogelio Marcelo and Milagros Marcelo
(spouses Marcelo) assailing the Decision[1] dated 31 January 2007 and the Resolution[2] dated 29 August 2007 of the Court of Appeals
in CA-G.R. CV No. 82424, upholding the validity of the extra-judicial
foreclosure proceedings initiated by Philippine Commercial International Bank
(PCIB) and the subsequent public auction sale conducted against their
properties.
The antecedent facts of the case are as
follows:
The spouses Marcelo obtained from PCIB
several loans in staggered amounts within the period 1996-1997. In turn, they executed
promissory notes in favor of PCIB summarized as follows[3]:
Promissory
Note Number
|
Principal
Amount
|
Date
of Instrument
|
Maturity
Date
|
97-115[4]
|
2 June 1997
|
1 December
1997
|
|
97-116[5]
|
4 June 1997
|
1 December
1997
|
|
97-117[6]
|
9 June 1997
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8 December
1997
|
|
97-124[7]
|
16 June
1997
|
15 December
1997
|
|
97-138[8]
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14 July
1997
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12 January
1998
|
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97-175[9]
|
20 August
1997
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16 February
1998
|
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162/96[10]
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27 November
1996
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26 May 1997
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Each Promissory Note had a corresponding
Disclosure Statement in compliance with Republic Act No. 3765 signed by spouses
Marcelo acknowledging and conforming to the terms and conditions attached to
their credit transactions.
On 3 June 1997, to secure the payment of
their loans, including any extension or renewal of the credit and all other
obligations, whether contracted before, during or after the constitution of a
Real Estate Mortgage (REM), amounting toP3,990,000.00 representing their entire principal
obligations under PN No. 162/96, No. 97-124, No. 97-138 and No. 97-175, the
spouses Marcelo executed an REM[11] over six parcels of land all situated in
Baliuag, Bulacan with an aggregate area of 2,780 square meters and registered
in their names under Transfer Certificates of Title (TCTs) No. T-91170,[12] No. T-93936,[13] No. T-91169,[14] No. T-93935,[15] No. T-2524[16] and No. T-16803.[17]
The REM assured PCIB of the following
remedy:
In
the event the Mortgagor/Borrower defaults in the obligations hereby secured,
breaches or fails to comply with any of the terms and conditions stipulated in
this mortgage or in the separate instruments evidencing the obligations hereby
secured, or institutes suspension of payments or insolvency proceedings or to
be involuntarily declared insolvent, or if this mortgage cannot be recorded in
the Registry of Deeds (hereinafter referred to as “events of default”), the
Mortgagee may foreclose this mortgage extra-judicially in accordance with Act
No. 3135, as amended, or judicially in accordance with the Rules of Court.
Should the Mortgagee be compelled to foreclose this mortgage or to take any
other legal action to protect its interest, the Mortgagor/Borrower shall pay attorney’s
fees which are hereby fixed at 15% of the total obligation that is unpaid
exclusive of all costs and fees allowed by law.[18]
The spouses Marcelo defaulted on the
payment of their outstanding loans, prompting PCIB to make repeated demands for
its payment as evidenced by PCIB’s final demand letter[19] dated 19
June 1998 on the outstanding
obligation of the spouses amounting to P6,836,931.05
as of 30 May 1998. The unpaid obligation mounted up
to P7,628,501.98 as of 30 April 2003.[20]
On 3
August 1998, PCIB file a Petition for Extra-judicial Foreclosure over the
mortgaged properties before the Regional Trial Court (RTC) of Malolos, Bulacan.[21]
A Notice of Sheriff’s Sale[22] dated 7
August 1998 was issued by the
Provincial Sheriff of Bulacan thru Sheriff IV Junie Jovencio E. Ipac (Sheriff
Ipac). The said Notice was
posted on the Meralco posts within the vicinities of Baliuag Roman Catholic
Church, Baliuag Public Market and the chapel of Sabang, Baliuag, Bulacan as
evidenced by the Affidavit of Posting[23] executed by Sheriff Ipac dated 7 August
1998.[24]
The Notice was also sent by registered
mail to PCIB and spouses Marcelo,[25] but the latter denied receiving the same.[26]
The Notice of the Sheriff’s Sale was,
likewise, published in The
Times Newsweekly, a newspaper of general circulation as evidenced by the
Affidavit of Publication[27] dated 5
September 1998 and copies of
publications dated 22 August
1998,[28]29 August 1998[29] and 5
September 1998.[30]
On 15
September 1998, the Office of the Provincial Sheriff of Bulacan conducted a
public auction sale over the six parcels of land, and the same were sold to
PCIB represented by Reynaldo Gatmaitan for P5,616,000.00.[31] The Certificate of Sale[32] issued to PCIB dated 28 October 2008 was then annotated on the TCTs of the
subject lands on 10 November
1998.[33]
Shortly before the expiration of the
redemption period, spouses Marcelo filed a Complaint[34] before RTC Bulacan on 26 October 1999,
alleging (1) PCIB’s violations of the terms and conditions of the REM contract
and the Promissory Notes by demanding exorbitant interest rates and unnecessary
bank charges without them being notified; and (2) irregularities in the
foreclosure proceedings for failure to comply with the posting and publication
requirements as mandated by Act No. 3135. The
spouses Marcelo prayed for the nullification of the foreclosure proceedings and
the issuance of a Temporary Restraining Order (TRO) against PCIB to prevent the
latter from taking possession of the foreclosed properties.
On 5
November 1999, the trial court issued an Order[35] denying the spouses Marcelo’s application
for a TRO for want of merit and directed further proceedings on the case. The trial court maintained that
the publication of the Notice of Sale inThe Times Newsweekly necessarily connoted that said publication
was duly accredited by the trial court, having been allowed by the Ex-Officio
Sheriff.
Quoting Olizon
v. Court of Appeals,[36] the trial court declared that the lack of
personal notice to the mortgagors is not a ground to set aside the foreclosure
sale. Notices are given for the purpose of securing bidders and preventing a
sacrifice of the property. If
these objects are attained, immaterial errors and mistakes will not affect the
sufficiency of the notice.
PCIB, in its Motion to Dismiss[37] filed on 3
January 2000, contended that the Complaint filed was empty rhetoric designed to
delay its right under Section 7[38] of Act No. 3135, as amended by Act 4118,
to take possession of the foreclosed property even during the redemption period
of one year. It added that
the matters are now fait
accompli, for it had already
foreclosed the properties and the one-year redemption period had already
lapsed.
The spouses Marcelo opposed the above
Motion by emphasizing the need for a full-blown trial as necessitated by the
trial court in its Order dated 5
November 1999. They,
likewise, reiterated the alleged irregularity in the foreclosure of their
properties not offered as collaterals and the non-compliance with the posting,
publication and raffle requirements, making the foreclosure proceedings
invalid.[39]
In its Reply[40] filed on 21
January 2000, PCIB merely restated its averments in its Motion to Dismiss.
On 24
March 2000, the trial court issued an Order[41] denying the Motion to Dismiss filed by
the PCIB. It declared that there remained the imperative need of ascertaining
the actual amount of the indebtedness outstanding and due for the court to
determine whether the foreclosure proceedings were valid or not. It ordered the PCIB to submit
its answer to the Complaint.
PCIB, in its Answer[42] filed on 13 April 2000, put up a compulsory
counterclaim for damages and attorney’s fees in addition to its averments in
its Motion to Dismiss and Reply.
In their Reply[43] filed on 12 May 2000, the spouses Marcelo
prayed that the status quo be maintained and the foreclosure sale
be declared null and void for not complying with the jurisdictional requirement
of posting, publication and raffle.
In its Decision[44] dated 12 December 2003, the trial court,
sustaining the legal presumption of regularity in the performance of Sheriff
Ipac’s official duty in the foreclosure proceedings, cited this Court in Philippine National Bank v.
International Corporate Bank,[45] reiterating that the law does not
require that a personal notice of the auction sale be given to the mortgagor.
The RTC affirmed, as well, PCIB’s
allegation of laches against spouses Marcelo, stating, among other things, that
the action was but a much-delayed afterthought following the spouses Marcelo’s
neglect to seek an accurate accounting of their loan obligation and their
omission to redeem their properties within the period prescribed by law. Hence, it decreed:
WHEREFORE,
premises considered, judgment is hereby rendered DISMISSING the above-entitled
complaint for insufficiency of evidence to warrant the reliefs prayed for
therein as well as the pecuniary counterclaim of defendant Philippine
Commercial International Bank.[46]
Acting on the spouses Marcelo’s Motion for
Reconsideration,[47] the trial court issued an Order[48] dated 10 March 2004 reversing itself and rendering the
extra-judicial foreclosure proceedings null and void for being violative of Act
No. 3135.
The trial court, in granting the Motion,
submissively agreed with the spouses Marcelo’s suppositions, thus:
All
told, the Court agrees with the argument of [Sps. Marcelo] that the provision
of law requiring the posting of the notices of sale of a property subject of
extra-judicial foreclosure have not been faithfully complied with in the
proceedings complained of in the case at bar. By such token, the aforestated
extra-judicial foreclosure proceedings must be nullified for having been
violative of the law on the matter. If for that reason alone, the Court
withdraws its application in the assailed decision of “the legal presumption
that the public functionaries involved in the foreclosure proceedings,
particularly the sheriff concerned, ‘regularly performed’ their official duties
in that specific respect. [par. (m), Sec. 3, Rule 131 of the Revised Rules of
Court].[49]
In pronouncing non-compliance with the
publication requirement as necessitated by Act No. 3135, the trial court
decreed that the publication of the Notice of Sheriff’s Sale in The Times Newsweekly, being a
tabloid with few stale news items, was insufficient to meet the publication
requirement of the law, the same having commanded very minimal readership. Hence:
WHEREFORE,
premises considered, the aforementioned Motion for Reconsideration submitted by
[the spouses Marcelo] vis-à-vis the decision dated 12 December 2003 is hereby GRANTED. Accordingly, the
aforesaid decision, particularly its dispositive portion, is hereby set aside
and, in lieu thereof, another judgment is hereby rendered declaring null and
void the extra-judicial foreclosure proceedings initiated by [respondent]
Philippine Commercial International Bank against the properties mortgaged in
its favor by spouses Rogelio Marcelo and Milagros Marcelo and all the incidents
appurtenant thereto, including the public auction sale conducted, the
certificate of sale issued pursuant thereto and the annotation thereof in [the
spouses Marcelo] transfer certificates of title.[50]
Aggrieved, PCIB appealed the above Order
to the Court of Appeals on 31
March 2004.[51]
The Court of Appeals, in its Decision[52] dated 31 January 2007, overturned the
appealed Order. The
appellate court held that the publication of the Notice of Sheriff’s Sale at The Times Newsweekly, as
recognized by the Executive Judge of the trial court, was in compliance with
the publication requirement for the foreclosure sale.
The appellate court, defining public place as any location that the local state or
national government maintains for the use of the public such as highway, park
or public building, maintained that the posting of the said notices at the
Meralco posts satisfies the mandates of Act. No. 3135 as to posting
requirement, for what is material is the accessibility of the said posted
notices to the general public. Finding
refuge in case law, it added that supposed there was really a defect in
posting, still the publication of the notice in a newspaper of general
circulation in the city or municipality where the mortgaged property was
situated cured the infirmity. Therefore,
it ruled:
WHEREFORE, premises
considered, the appealed Order dated March
10, 2004 is REVERSED and SET
ASIDE. In lieu thereof, another is entered ordering the REINSTATEMENT of the trial court’s December 12, 2003 Decision.[53]
The Court of Appeals, in its Resolution[54] dated 29 August 2007, denied the
petitioners’ Motion for Extension of Time to file Motion for Reconsideration of
its 31 January 2007 Decision, on the ground that the time
for filing the same was non-extendible; Petitioners’ Motion for Reconsideration
was denied for being filed 11 days late on 12
March 2007.
On 31
October 2007, the Court of Appeals resolved to deny the spouses Marcelo’s
Motion for Reconsideration filed on 19
September 2007 for being a second
motion for reconsideration that was proscribed under Section 2, Rule 52 of the
Rules of Court.[55]
Signed by Court of Appeals Executive Clerk
of Court III, Vilma S. Ayala-Dasal on 10
April 2008, the appellate court made an Entry of Judgment of its 31 January 2007 Decision; said decision became final
and executory on 26 September
2007, and was recorded in the Book of Entries of Judgment.
Hence, this petition[56] filed on 21 May 2008, wherein the spouses
Marcelo point out the following errors:
I. That
the Court of Appeals gravely erred in ruling that the Motion for Extension of
Time to file Motion for Reconsideration is non-extendible.
II. That
the Court of Appeals gravely erred in upholding the validity of the
extra-judicial foreclosure sale despite of non-compliance with the posting and
publication requirements as mandated by Act No. 3135.
III. That
the Court of Appeals gravely erred in upholding the validity of the foreclosure
sale despite of PCIB’s breach of contract by charging interests not agreed upon
by the parties.
This petition has no merit.
Revisiting the records of this case would
reveal that the case attained its finality as of 26 September 2007, and the same has
already been recorded in the Book of Entries of Judgment. This Court, in a long line of
cases, has maintained that once the judgment has become final and executory, it
can no longer be disturbed, altered or modified.[57] Except for clerical errors or
mistakes, all the issues between the parties are deemed resolved and laid to
rest.[58]
In Dapar
v. Biascan,[59] this Court reiterates that nothing is
more settled in law than that once a judgment attains finality, it thereby
becomes immutable and unalterable. It
may no longer be modified in any respect, even if the modification is meant to
correct what is perceived to be an erroneous conclusion of fact or law, and
regardless of whether the modification is attempted to be made by the court
rendering it or by the highest court of the land. Just as the losing party has the
right to file an appeal within the prescribed period, the winning party has the
correlative right to enjoy the finality of the resolution of his case.
The instant Petition offers no cogent
reason that would sway this Court to make a radical departure from its
hesitancy to reopen a case that has attained finality. The issues raised in the main by
the petitioners are but the same issues that were already passed upon by the
Court of Appeals in its Decision dated 31
January 2007. To reopen
this case would mean a crass defiance of our basic procedural rules. Consequently, it will run
contrary to the dictates of due process, as it would deprive PCIB from
executing the rights vested upon it after the case has been adjudged with
finality. The effective and
efficient administration of justice requires that once a judgment has become
final, the prevailing party should not be deprived of the fruits of the verdict
by subsequent suits on the same issues filed by the same parties.[60]
Through the ages, courts have been
duty-bound to put an end to controversies. Any attempt to prolong, resurrect or
juggle them should be firmly struck down. The system of judicial review should
not be misused and abused to evade the operation of final and executory judgments.[61]
Nevertheless, even if we probe into the
merits of this case, still, the petition is unmeritorious.
In their first assigned error, the petitioners
claimed that the Motion for Extension of Time to File Motion for
Reconsideration is in accordance with law.
We disagree.
This Court provides in Section 1, Rule 37
of the Rules of Court that a motion for reconsideration of a judgment or a
final order should be filed within the period for appeal, which is within 15
days after notice to the appellant of the judgment or final order appealed
from. The 2002 Internal
Rules of the Court of Appeals also states that unless an appeal or a motion for
reconsideration or new trial is filed within the 15-day reglementary period,
the Court of Appeals’ decision becomes final.[62] Hence, the general rule is that no
motion for extension of time to file a motion for reconsideration is allowed.
The rule as to the non-extension of time
to file a motion for reconsideration is, however, not absolute. As early as
1986 in Habaluyas Enterprises,
Inc. v. Maximo M. Japson,[63] this Court has pronounced:
After considering the able arguments of counsels for
petitioners and respondents, the Court resolved that the interest of justice
would be better served if the ruling in the original decision were applied
prospectively from the time herein stated. The reason is that it would be
unfair to deprive parties of their right to appeal simply because they availed
themselves of a procedure which was not expressly prohibited or allowed by the
law or the Rules. On the other hand, a motion for new trial or reconsideration
is not a pre-requisite to an appeal, a petition for review or a petition for
review on certiorari, and since the purpose of the amendments above referred to
is to expedite the final disposition of cases, a strict but prospective
application of the said ruling is in order. Hence, for the guidance of Bench
and Bar, the Court restates and clarifies the rules on this point, as follows:
1.) Beginning one month after the
promulgation of this Resolution, the rule shall be strictly enforced that no motion for extension of time to
file a motion for new trial or reconsideration may be filed with the Metropolitan
or Municipal Trial Courts, the Regional Trial Courts, and the Intermediate
Appellate Court. Such a motion
may be filed only in cases pending with the Supreme Court as the court of last resort, which
may in its sound discretion either grant or deny the extension requested. (Emphasis ours.)
Accordingly, motions for extension of time
to file a motion for new trial or reconsideration may be filed only in
connection with cases pending before this Court, which may in its sound
discretion either grant or deny the extension requested. No such motion may be filed
before any lower courts.[64] In opting for the liberal application
of the rules in the interest of equity and justice, we cannot look with favor
on a course of action which would place the administration of justice in a
straight jacket for then the result would be a poor kind of justice if there
would be justice at all.[65]
We likewise disagree with the petitioners’
allegation that the Court of Appeals gravely erred in upholding the validity of
the extra-judicial foreclosure sale despite non-compliance with the posting and
publication requirements as mandated by Act No. 3135.
The requirement on the posting of notices
is found in Section 3 of Act No. 3135, as amended by Act No. 4118, viz:
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.
The petitioners argue that the posting of
the Notice of Sheriff’s Sale on Meralco posts did not comply with
Act No. 3135 requiring the posting of the same in at least three public places.
A public
place is a place exposed to
the public and where the public gathers together or passes to and fro.[66] As can be gleaned from Sheriff
Ipac’s Affidavit of Posting, the Notices were posted on the Meralco posts
within the vicinities of Baliuag Roman Catholic Church, Baliuag Public Market
and near the chapel of Sabang, Baliuag, Bulacan. The aforementioned vicinities
where the Meralco posts were erected are public places, to which the general
public has a right to resort. The
Meralco posts where the Notices were posted are but component structures of the
public place itself. The
law does not intend that notices to the public be posted on specific bulletin
boards or information areas of a public place. What the law directs is for the
notices to be placed in an area where the same is perceptible to the public.
As regards publication, Presidential
Decree No. 1079, effective 24 May
1977 provides:
SECTION.
1. All notices of auction sales in extrajudicial 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.
SEC.
2. The executive judge of the court of first instance shall designate a
regular working day and a definite time each week during which the said
judicial notices or advertisements shall be distributed personally by him for
publication to qualified newspapers or periodicals as defined in the preceding
section, which distribution shall be done by raffle: Provided, That should the
circumstances require that another day be set for the purpose, he shall notify
in writing the editors and publishers concerned at least three (3) days in
advance of the designated date: Provided,
further, That the distribution of the said notices by raffle shall be
dispensed with in case only one newspaper or periodical is in operation in a
particular province or city.
The trial court’s opinion, that The Times Newsweekly’s minimal readership made it
insufficient to meet the publication requirement is, to our minds, too narrow
and limiting as to strip the newspaper of its privilege as one of the authorized
publications for the notices of auction sale in Bulacan. As this Court held in many
cases, to be a newspaper of general circulation, it is enough that it is
published for the dissemination of local news and general information; that it
has a bona fide subscription list of paying subscribers; and that it is
published at regular intervals.[67] The newspaper need not have the
largest circulation, so long as it is of general circulation.[68]
As evidenced by the Affidavit of
Publication executed by The
Times Newsweekly’s publisher, Teddy F. Borres, the said newspaper is of
general circulation in the Provinces of Bulacan, Pampanga, Bataan, Zambales, Nueva Ecija, Tarlac
and other cities. The same
is published every Saturday by The
Daily Record, Inc.
As to the last assigned error, the spouses
Marcelo claim nullity of the foreclosure sale due to the alleged increase of
interest rates and charges without their consent.
Again, we find no merit in said
allegation.
Every promissory note signed by the
plaintiffs has its corresponding Disclosure Statement wherein the interests and
charges are stated. The
acknowledgment by the plaintiffs of the statement prior to the consummation of
the credit transaction and their agreement with the terms and conditions
thereof simply contradict their self-claimed innocence over the
matter.
IN VIEW WHEREOF, the Petition is DENIED. The Decision dated 31 January 2007 and the Resolution dated 29 August 2007 of the Court of Appeals in CA-G.R. CV
No. 82424, upholding the validity of the extra-judicial foreclosure proceedings
initiated by Philippine Commercial International Bank (PCIB) and the subsequent
public auction sale conducted, are hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
MINITA V. CHICO-NAZARIO
Associate
Justice
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