Case Summary (G.R. No. L-2548)
Procedural Background
The case originated when Blanca Roxas filed a complaint for the cancellation of the mortgage foreclosure and annulment of the auction sale against the Rural Bank of Dumalag, asserting that she was not properly notified about the loan or the foreclosure proceedings. The Regional Trial Court (RTC) ruled in her favor on January 20, 1989, declaring the auction sale void and allowing her to redeem the property. The Court of Appeals, however, reversed this decision on May 23, 1991, leading to the current petition for review on certiorari.
Factual Background of the Loan and Foreclosure
In 1969, Blanca executed a special power of attorney granting her brother, Manuel, the authority to secure an agricultural loan from the Rural Bank of Dumalag, with the property serving as collateral. Following the loan's maturity and subsequent non-payment, the bank foreclosed the mortgage, subsequently selling the property at public auction and consolidating ownership due to the lapse of the redemption period.
Petitioner’s Claims
Roxas contended that she was unaware of the loan and the subsequent foreclosure due to lack of communication from her brother and the bank. She asserted that the bank failed to provide her with proper notice of foreclosure and claimed that her rights as the principal remained unprotected throughout the proceedings.
Respondent’s Defense
In contrast, the Rural Bank of Dumalag posited that notice served to Manuel Roxas, as her attorney-in-fact, constituted notice to Blanca herself. They argued that proper notices of foreclosure were filed according to the law, stating that her negligence contributed to her failure to redeem the property.
Trial Court’s Ruling
The RTC ruled in favor of Blanca Roxas, declaring the auction sale null and void due to the bank's failure to comply with statutory notification requirements as outlined in Section 5 of Republic Act No. 720, which specifies the posting of foreclosure notices in the appropriate localities.
Court of Appeals' Reversal
The Court of Appeals reversed the trial court's decision, concluding that there was substantial compliance with the legal requirements for foreclosure notifications, and that personal notification to the mortgagor was not mandated by law.
Legal Issues Raised by Petitioner
In her petition, Roxas raised three key issues: whether (1) the Court of Appeals erred in finding substantial compliance with posting requirements; (2) she should have been allowed to redeem the property; and (3) the court failed to address the issue of gross inadequacy of the auction price.
Supreme Court’s Analysis
Referencing clear precedents, the Supreme Court emphasized that failure to comply with statutory notice provisions constitutes a jurisdictional defect, rendering the auction sale void. The Court noted the necessity of strict compliance, specifically regarding the posting of notices and the requisite affidavit to validate the foreclosure process.
Court
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Case Overview
- This case involves a petition for review on certiorari filed by petitioner Blanca Consuelo Roxas against the Court of Appeals and the Rural Bank of Dumalag, seeking to reverse a decision made by the appellate court.
- The case number is G.R. No. 100480, and the decision was rendered on May 11, 1993, by the Second Division of the Supreme Court, penned by Justice Nocon.
Background Facts
- Petitioner Blanca Consuelo Roxas owns a parcel of land (Lot No. 3108) in Tanza Norte, Panay, Capiz, with an area of 14.7238 hectares, covered by Tax Declaration No. 5129.
- On December 22, 1969, she granted a special power of attorney to her brother, Manuel Roxas, to secure an agricultural loan from the Rural Bank of Dumalag, Inc.
- The loan amount was P2,000.00, which was secured by a real estate mortgage on the subject land.
- The loan matured, and due to non-payment, the bank foreclosed the mortgage on October 24, 1973, and the property was sold at a public auction on January 7, 1974, to the bank for P3,009.37.
- Petitioner claims she was unaware of the loan approval, maturity, and foreclosure, only learning about the auction sale from a third party in 1974.
Trial Court Proceedings
- Petitioner filed a complaint on September 2, 1981, for the cancellation of the foreclosure and the annulment of the auction sale against the Rural Bank of Dumalag.
- She argued that she received no demand for payment and that the