ANTONIO BACLIG, Petitioner, vs. THE RURAL BANK OF CABUGAO, INC.

,
FLORANTE R. RIGUNAY, MIGUEL A. FRANDO AND THE REGISTER OF DEEDS
OF ILOCOS SUR, Respondents
G.R. No. 230200 July 03, 2023
HERNANDO, J.
FACTS:
In 1972, the parents of Antonio Baclig and his siblings (Baclig et al.) obtained
a ₱1,000.00-loan from The Rural Bank of Cabugao, Inc. (the Bank), securing it with
a Real Estate Mortgage on a parcel of land and a house. Unable to repay, the Bank
initiated foreclosure proceedings, leading to the subject property's sale to the Bank at
auction at the bid price of P2,500.00 and the issuance of a Certificate of Sale. Baclig
et al.'s parents failed to redeem the property during the redemption period. Hence, in
1998, the Bank executed an Affidavit of Consolidation of Ownership and a Deed of
Sale. In 2003, it filed a Petition for Issuance of Writ of Possession. Simultaneously,
Baclig et al.'s parents initiated an Annulment of Foreclosure and Auction Sale case,
arguing unconscionability and lack of personal notice, and questioning the Bank's
compliance with Act No. 3135. The bank, in response, countered that it observed all
the requirements under the law. Baclig et al. later substituted their deceased parents
in the case.
The RTC ruled in favor of the Bank, stating that the inadequacy of price
doesn't invalidate the sale and that personal notice to the mortgagor isn't required
under Act No. 3135, and laches and estoppel had taken effect. The CA affirmed this
decision.
After the CA Decision, an Entry of Judgment was reported, stating no Motion
for Reconsideration or Supreme Court petition was filed. Baclig et al.'s counsel, Atty.
Tolentino, later filed an Urgent Motion to Set Aside Resolution and Entry of
Judgment, claiming he filed a Motion for Reconsideration via registered mail. The CA
ordered proof of receipt, but Atty. Tolentino failed to comply. He later submitted a
postal certification, but the CA found it was for a different case. The court denied
Baclig et al.'s motion, ordered Atty. Tolentino to show cause for possible contempt,
and, after his failure to comply, reiterated the directive. Upon unsuccessful service,
Baclig et al., through their new counsel Atty. Tajon, explained in a Manifestation &
Motion that Atty. Tolentino had been murdered. Atty. Tajon expressed belief in the
existence of the Motion for Reconsideration filed by Atty. Tolentino, and if there was a
mistake in enclosing the wrong pleading, it was purely an honest mistake.
The CA then issued a resolution which noted the death of Atty. Tolentino and
denied Atty. Tajon's prayer to consider the alleged motion for reconsideration,
maintaining the entry of judgment. The court granted Atty. Tajon's withdrawal from
the case and directed the Archives Section to remand the records to the trial court.
Hence, this Petition, where petitioner argues, among others, that the
resolution violated constitutional provisions; that Atty. Tolentino filed a Motion for
Reconsideration and if not, there was only an honest mistake; that Baclig et al.'s
parents did not default on the loan; that newly-discovered evidence shows that the
Bank foreclosed the wrong obligation; that the price of the subject property was
inadequate; and that courts must act in Baclig et al.'s protection pursuant to Article
24 of the Civil Code because they are indigents. The court initially ordered denial but
later reinstated the petition upon reconsideration.
ISSUE:
Did the appellate court err in issuing the assailed Resolution?
RULING:
The Petition is partly meritorious.
The petitioner contends they timely filed a Motion for Reconsideration,
preventing the CA Decision from finality. However, records indicate a Compliance for
a different case was filed within the reglementary period. Despite this, the court,
recognizing meritorious and exceptional circumstances, including a serious
irregularity in foreclosure proceedings and an honest mistake in attaching the wrong
pleading, admits the Motion for Reconsideration. The court dismisses the petitioner's
claims of violating Sec. 14, Art. VIII of the Constitution and newly-discovered
evidence, stating the former doesn't apply to resolutions on incidental matters and
the latter is inappropriate in a Rule 45 petition without showing due diligence in
discovery.
The court declares the auction sale void, citing the bank's failure to comply
with the publication requirement under Sec. 3 of Act No. 3135. Emphasizing the
strictness of the rule, the court rejects the bank's argument that publication was
unnecessary due to the loan amount not exceeding ₱50,000, clarifying that the
property value determines publication necessity. The court notes that the property's
worth was more than ₱400.00, evidenced by tax declarations, making non-
publication a jurisdictional defect, rendering the sale, Certificate of Sale, Affidavit of
Consolidation of Ownership, Deed of Sale, and Tax Declarations all void.
Baclig et al.'s arguments on personal notice, default, prescription, and the
applicability of Art. 24 of the Civil Code, as well as their prayer for damages, lack
merit. The court emphasizes that personal notice is not necessary in extrajudicial
foreclosure proceedings unless stipulated by the parties. Baclig et al. failed to prove
non-default, and the court rejects their claim that the Bank's right of action had
prescribed. The court also clarifies that Art. 24 of the Civil Code does not mandate
decisions in favor of disadvantaged parties in all cases. Despite these findings, the
court maintains its earlier conclusion that the auction sale is void due to the bank's
failure to comply with the publication requirement, emphasizing the serious and
glaring nature of this irregularity.