Case Digest (G.R. No. 228504)
Facts:
Sps. Esmeraldo and Elizabeth Suico v. Philippine National Bank, G.R. No. 170215, August 28, 2007, Supreme Court Third Division, Chico‑Nazario, J., writing for the Court.Petitioners Spouses Esmeraldo and Elizabeth Suico obtained loans from respondent Philippine National Bank (PNB) secured by real estate mortgages on several parcels in Mandaue City. PNB instituted an extrajudicial foreclosure under ACT No. 3135 before the Mandaue City Sheriff (EJF Case No. 92‑5‑15). The petition for foreclosure, dated 10 March 1992, stated petitioners' outstanding obligation as P1,991,770.38. The sheriff conducted the foreclosure sale on 30 October 1992, at which PNB was the lone bidder and purportedly bid P8,511,000.00. A Certificate of Sale was issued in favor of PNB; PNB did not pay the bid price to the sheriff at the auction and later obtained a Certificate of Final Sale about one year later; PNB then caused transfer of some titles into its name.
The Suicos filed a complaint in the Regional Trial Court (RTC), Mandaue City, Branch 55, docketed Civil Case No. MAN‑2793, seeking declaration of nullity of the extrajudicial foreclosure, cancellation of titles transferred to PNB, reconveyance to petitioners, and damages and fees. PNB moved to dismiss on grounds of pendency of another action — Civil Case No. CEB‑15236 (PNB v. Sps. Suico) — in the RTC of Cebu City, which sought payment of any balance remaining after foreclosure proceeds; the Mandaue RTC denied the motion to dismiss and proceeded to trial.
On 2 February 1999 the RTC (Mandaue) rendered judgment declaring the extrajudicial foreclosure, the certificate of sale and final deed of sale null and void, and ordered cancellation and return of titles to petitioners; the RTC found the discrepancy between the amount in the notice of sale and PNB's bid constituted misrepresentation and a jurisdictional defect in the notice. PNB appealed to the Court of Appeals (CA), which on 12 April 2005 reversed the RTC and held the foreclosure valid, reasoning the mortgagors' post‑sale conduct (letters offering redemption) amounted to affirmation and, in any event, failure to remit surplus gives rise only to a separate action for recovery of proceeds. On motion for reconsideration the CA, by amended decision of 28 September 2005, affirmed its reversal but directed PNB to pay the deficiency in filing fees.
Petitioners elevated the case to the Supreme Court by a Petition for Review. The parties disputed two principal contentions at the Court: (1) whether the discrepancy in the Notice of Sheriff's Sale (stating a lower indebtedness) rendered the extrajudicial foreclosure void; and (2) whether PNB’s failure to pay or deliver the excess bid amount deprived the sh...(Subscriber-Only)
Issues:
- Did the discrepancy between the amount stated in the Notice of Sheriff's Sale and the actual indebtedness render the extrajudicial foreclosure void?
- Does PNB's failure to pay or deliver the excess of its bid (the surplus) to the mortgagors invalidate the extrajudicial foreclosure sale, or merely give rise to a cause of action for recovery...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)