G.R. No.

115068 November 28, 1996

FORTUNE MOTORS (PHILS.) INC. petitioner,

vs.
METROPOLITAN BANK AND TRUST COMPANY, and THE COURT OF
APPEALS, respondents.

HERMOSISIMA, JR., J.:

Private respondent extended various loans to petitioner for a total sum of P34,150,000.00(including the
interest P1,650,000))
· Due to financial difficulties, and economic recession, the petitioner was not able to pay the loan which
became due;
· The respondent bank initiated extrajudicial foreclosure proceedings, the mortgaged property was sold
at public auction where respondent was the highest bidder;
· 3 days before the expiration of the redemption period, petitioner filed a complaint for the annulment of
the extrajudicial foreclosure sale at the RTC of Manila, alleging that:
the foreclosure was premature because its obligation to the Bank was not yet due,
the publication of the notice of sale was incomplete, there was no public auction,
· Respondent filed a motion to dismiss the complaint on the ground that the venue of the action was
improperly laid in Manila for the realty covered by the real estate mortgages is situated in Makati,
therefore the action to annul the foreclosure sale should be filed in the RTC of Makati;
· Petitioner argued that its action is a personal action and that the issue is the validity of the extrajudicial
foreclosure proceedings so that it may have a new one year period to redeem the same.
Lower court rulings:
RTC: reserved the resolution of the Bank’s motion to dismiss until after the trial on the merits

CA: on petition for certiorari and prohibition, granted the petitions and dismissed the case without
prejudice to the filing of the case before the proper courts

*Reconsideration was denied, hence the petition before the SC

Issue: Whether or not the publication requirement of the notice of extrajudicial foreclosure was
satisfied?

Ruling:

Yes, (1) In the case at bench, there was sufficient compliance with the requirements of the law
regarding publication of the notice in a newspaper of general circulation. This is evidenced by the
affidavit of publication executed by the New Record's publisher, Teddy F. Borres, which stated that it
is a newspaper edited in Manila and Quezon City and of general circulation in the cities of Manila,
Quezon City et. al., and in the Provinces of Rizal . . . , published every Saturday by the Daily Record,
Inc. This was affirmed by Pedro Deyto, who was the executive editor of the said newspaper and who
was a witness for petitioner. Deyto testified: a) that the New Record contains news; b) that it has
subscribers from Metro Manila and from all over the Philippines; c) that it is published once a week or
four times a month; and d) that he had been connected with the said paper since 1958, an indication
that the said newspaper had been in existence even before that year.

(2)Another contention posited by petitioner is that the New Record is published and edited in Quezon
City and not in Makati where the foreclosed property is situated, and that, when New Record's
publisher enumerated the places where said newspaper is being circulated, Makati was not
mentioned.This contention of petitioner is untenable. In 1984, when the publisher's affidavit relied
upon by petitioner was executed, Makati, Mandaluyong, San Juan, Parañaque et. al., were still part of
the province of Rizal. Apparently, this is the reason why in the New Record's affidavit of publication
executed by its publisher, the enumeration of the places where it was being circulated, only the cities of
Manila, Quezon, Caloocan, Pasay, Tagaytay et. al., were named. Furthermore, as aptly ratiocinated by
the Court of Appeals:

The application given by the trial court to the provisions of P.D. No. 1079 is, to our mind, too narrow
and restricted and could not have been the intention of the said law. Were the interpretation of the trial
court (sic) to be followed, even the leading dailies in the country like the "Manila Bulletin," the
"Philippine Daily Inquirer," or "The Philippine Star" which all enjoy a wide circulation throughout the
country, cannot publish legal notices that would be honored outside the place of their publication. But
this is not the interpretation given by the courts. For what is important is that a paper should be in
general circulation in the place where the properties to be foreclosed are located in order that
publication may serve the purpose for which it was intended.

(3)Petitioner also claims that the New Record is not a daily newspaper because it is published only
once a week.

A perusal of Presidential Decree (P.D.) No. 1079 and Act 3135 shows that the said laws do not require
that the newspaper which publishes judicial notices should be a daily newspaper. Under P.D. 1079, for
a newspaper to qualify, it is enough that it be a "newspaper or periodical which is authorized by law to
publish and which is regularly published for at least one (1) year before the date of publication" which
requirement was satisfied by New Record. Nor is there a requirement, as stated in the said law, that the
newspaper should have the largest circulation in the place of publication.

(4) There was substantial compliance with the requirements when it was the Executive Judge of the
Regional Trial Court of Makati who caused the publication of the said notice by the newspaper selected
by means of raffle.
(5) Settled is the rule that personal notice to the mortgagor in extrajudicial foreclosure proceedings is
not necessary it requires only the posting of the notice of sale in three public places and the publication
of that notice in a newspaper of general circulation. It is pristine clear from the above provision that the
lack of personal notice to the mortgagor, herein petitioner, is not a ground to set aside the foreclosure
sale.

(6)third assigned error, petitioner assails the posting of the notices of sale by the Sheriff in the Office of
the Sheriff, Office of the Assessor and the Register of Deeds as these are not the conspicuous public
places required by law. Furthermore, it also questions the non-posting of the notice of sale on the
property itself which was to be sold.

Apparently, this assigned error of petitioner is tantamount to a last ditch effort to extricate itself from
the quagmire it is in. Act 3135 does not require posting of the notice of sale on the mortgaged property.
Section 3 of the said law merely requires that the notice of the sale be posted for not less than twenty
days in at least three public places of the municipality or city where the property is situated. The
aforementioned places, to wit: the Sheriff's Office, the Assessor's Office and the Register of Deeds are
certainly the public places contemplated by law, as these are places where people interested in
purchasing real estate congregate.

WHEREFORE, the petition is DENIED and the decision rendered in CA-G.R CV No. 38340 is hereby
AFFIRMED.

SO ORDERED.

Padilla, Bellosillo, Vitug and Kapunan, JJ., concur.