G.R. No. 37673 - People vs. Taneo

Respondents Erlinda PeAafiel (and, prior to her demise, Romeo PeAafiel) are the registered owners of two parcels of land covered by Transfer Certificate of Title (TCT) Nos. (350937) 6195 and TCT No. 0085, respectively, issued by the Register of Deeds of Mandaluyong City.
On August 1, 1991, the PeAafiel spouses mortgaged these properties in favor of petitioner Metropolitan Bank and Trust Company, Inc. The mortgage deed was later amended multiple times as the loan amount increased.

The PeAafiel spouses defaulted on their loan obligations, leading petitioner to institute an extrajudicial foreclosure proceeding on July 14, 1999 under Act No. 3135.
Diego A. AlleAa, Jr., a notary public, conducted the foreclosure sale procedure. The notice of sale, detailing the public auction set for September 7, 1999 at the City Hall of Mandaluyong City, was published in the Maharlika Pilipinas newspaper on August 5, 12, and 19, 1999, and posted in three conspicuous places in Mandaluyong City.
At the auction sale, petitioner emerged as the sole and highest bidder, acquiring the subject lots for P6,144,000.00, and a certificate of sale was issued in its favor.

On August 8, 2000, respondent Erlinda PeAafiel (through her attorney-in-fact, Eugenio PeAafiel) filed a complaint seeking:

Declaration that the extrajudicial foreclosure sale be nullified.
An injunction against petitioner and the Register of Deeds from consolidating ownership and taking possession of the properties.
Payment of attorney’s fees.

The Regional Trial Court (RTC) rendered a decision on June 30, 2003, ruling in favor of petitioner by declaring the foreclosure sale valid and dismissing respondents’ counterclaims for insufficiency of evidence.
Respondents appealed the RTC decision to the Court of Appeals (CA), contesting, among other issues, the publication requirement for the extrajudicial foreclosure sale.

The CA found that the notice of sale did not comply with the statutory requirement because it was published in a newspaper that was not of general circulation in the municipality (Mandaluyong City) where the properties are located.
The CA based its conclusion on:

Testimony from the publisher of Maharlika Pilipinas, which, although attested in an affidavit, did not establish circulation in Mandaluyong City.
Documentary evidence, including a Certification from the Mandaluyong City Business Permit and Licensing Office and a list of subscribers, showing absence of subscribers from Mandaluyong City.
Testimony of Mr. Raymundo Alvarez, the publisher, indicating that the paper’s circulation was confined to areas such as Rizal and Cavite, and that its distribution was limited to select persons and not generally available to the public.

Petitioner filed a motion for reconsideration before the CA, which was denied on July 31, 2006.
Petitioner then elevated the case through a petition for review on certiorari, raising issues regarding the applicability of the publication requirements and the classification of Maharlika Pilipinas as a newspaper of general circulation, in light of statutory provisions and analogous cases.

Whether petitioner complied with the publication requirement under Section 3 of Act No. 3135 for extrajudicial foreclosure sales by publishing the notice in a newspaper of general circulation in the municipality where the property is located.
Whether Maharlika Pilipinas qualifies as a newspaper of general circulation in Mandaluyong City, given that its primary publication centers are in Quezon City and Marikina City and its subscriber list lacks residents from Mandaluyong.
Whether the Court of Appeals erred in applying the provisions governing the publication of judicial notices (as seen in P.D. No. 1079) to a foreclosure sale conducted by a notary public, as opposed to a sheriff.