Marcelo vs. Philippine Commercial International Bank

A judgment that has become final and executory is immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law. The posting of foreclosure sale notices on Meralco posts within public vicinities satisfies the posting requirement of Act No. 3135, and publication in a newspaper of general circulation need not have the largest circulation to be compliant.

The spouses Rogelio Marcelo and Milagros Marcelo obtained several loans from Philippine Commercial International Bank (PCIB) within the period 1996-1997, executing promissory notes in the bank's favor. To secure payment of their loans, they executed a Real Estate Mortgage (REM) over six parcels of land in Baliuag, Bulacan, which REM expressly provided that PCIB could foreclose extra-judicially in accordance with Act No. 3135, as amended, in the event of default. Each promissory note had a corresponding Disclosure Statement executed in compliance with Republic Act No. 3765, which the spouses signed acknowledging and conforming to the terms and conditions of their credit transactions.

The spouses Rogelio Marcelo and Milagros Marcelo obtained from Philippine Commercial International Bank (PCIB) several loans in staggered amounts within the period 1996-1997, executing promissory notes in the bank's favor with principal amounts ranging from ₱200,000.00 to ₱1,700,000.00. Each promissory note had a corresponding Disclosure Statement in compliance with Republic Act No. 3765, which the spouses signed acknowledging and conforming to the terms and conditions attached to their credit transactions.

On 3 June 1997, to secure payment of their loans, including any extension or renewal of the credit and all other obligations, the spouses executed a Real Estate Mortgage (REM) over six parcels of land all situated in Baliuag, Bulacan with an aggregate area of 2,780 square meters, registered under TCTs No. T-91170, No. T-93936, No. T-91169, No. T-93935, No. T-2524 and No. T-16803. The REM expressly provided that in the event of default, PCIB could foreclose the mortgage extra-judicially in accordance with Act No. 3135, as amended, and that the mortgagor would pay attorney's fees fixed at 15% of the total unpaid obligation.

The spouses defaulted on their loans, prompting PCIB to make repeated demands, including a final demand letter dated 19 June 1998 on the outstanding obligation amounting to ₱6,836,931.05 as of 30 May 1998, which mounted to ₱7,628,501.98 as of 30 April 2003. On 3 August 1998, PCIB filed a Petition for Extra-judicial Foreclosure before the RTC of Malolos, Bulacan. A Notice of Sheriff's Sale dated 7 August 1998 was issued by the Provincial Sheriff of Bulacan through Sheriff IV Junie Jovencio E. Ipac, which was posted on Meralco posts within the vicinities of Baliuag Roman Catholic Church, Baliuag Public Market and the chapel of Sabang, Baliuag, Bulacan, as evidenced by the Affidavit of Posting. The Notice was also sent by registered mail to PCIB and the spouses, though the latter denied receiving it, and was published in The Times Newsweekly, a newspaper of general circulation, as evidenced by the Affidavit of Publication and copies of publications dated 22 August 1998, 29 August 1998 and 5 September 1998.

On 15 September 1998, the Office of the Provincial Sheriff conducted a public auction sale over the six parcels of land, which were sold to PCIB, represented by Reynaldo Gatmaitan, for ₱5,616,000.00. The Certificate of Sale issued to PCIB was annotated on the TCTs of the subject lands on 10 November 1998. Shortly before the expiration of the redemption period, the spouses filed a Complaint before the RTC of Bulacan on 26 October 1999, alleging PCIB's violations of the terms and conditions of the REM contract and the promissory notes by demanding exorbitant interest rates and unnecessary bank charges without notification, and irregularities in the foreclosure proceedings for failure to comply with the posting and publication requirements of Act No. 3135. The spouses prayed for the nullification of the foreclosure proceedings and the issuance of a TRO against PCIB.

The trial court initially dismissed the complaint, but on Motion for Reconsideration reversed itself and declared the foreclosure proceedings null and void. PCIB appealed to the Court of Appeals, which reversed the trial court's Order and reinstated the original dismissal. The spouses' subsequent motions were denied, and the Court of Appeals' decision became final and executory on 26 September 2007. The spouses then filed the instant petition before the Supreme Court.

• Non-Extendible Motion for Reconsideration: The spouses Marcelo argued that the Court of Appeals gravely erred in ruling that the Motion for Extension of Time to file a Motion for Reconsideration is non-extendible, claiming that their motion for extension was in accordance with law.
• Non-Compliance with Posting and Publication: The spouses Marcelo argued that the Court of Appeals gravely erred in upholding the validity of the extra-judicial foreclosure sale despite non-compliance with the posting and publication requirements as mandated by Act No. 3135, specifically that posting on Meralco posts did not comply with the requirement of posting in at least three public places, and that The Times Newsweekly, being a tabloid with few stale news items and minimal readership, was insufficient to meet the publication requirement.
• Breach of Contract on Interest Rates: The spouses Marcelo argued that the Court of Appeals gravely erred in upholding the validity of the foreclosure sale despite PCIB's breach of contract by charging interests not agreed upon by the parties.

• Finality of Judgment: PCIB contended that the matters raised were fait accompli, as it had already foreclosed the properties and the one-year redemption period had lapsed, and that the complaint was empty rhetoric designed to delay its right under Section 7 of Act No. 3135 to take possession of the foreclosed property.
• Regularity of Foreclosure Proceedings: PCIB maintained that the publication of the Notice of Sale in The Times Newsweekly necessarily connoted that said publication was duly accredited by the trial court, having been allowed by the Ex-Officio Sheriff, and that the lack of personal notice to the mortgagors is not a ground to set aside the foreclosure sale.

• Finality of Judgment: Whether the Court of Appeals' decision had become final and executory, thereby barring the instant petition.
• Motion for Extension of Time: Whether the Court of Appeals gravely erred in ruling that the Motion for Extension of Time to file a Motion for Reconsideration is non-extendible.
• Posting and Publication Requirements: Whether the Court of Appeals gravely erred in upholding the validity of the extra-judicial foreclosure sale despite alleged non-compliance with the posting and publication requirements of Act No. 3135.
• Interest Rates and Charges: Whether the Court of Appeals gravely erred in upholding the validity of the foreclosure sale despite PCIB's alleged breach of contract by charging interests not agreed upon by the parties.

• Finality of Judgment: Yes. The case attained finality as of 26 September 2007 and was recorded in the Book of Entries of Judgment; once a judgment becomes final and executory, it can no longer be disturbed, altered or modified, except for clerical errors or mistakes.
• Motion for Extension of Time: No. The general rule is that no motion for extension of time to file a motion for reconsideration is allowed before lower courts; such motions may be filed only in cases pending with the Supreme Court, which may in its sound discretion either grant or deny the extension requested.
• Posting and Publication Requirements: No. The posting of the Notice of Sheriff's Sale on Meralco posts within the vicinities of Baliuag Roman Catholic Church, Baliuag Public Market and the chapel of Sabang, Baliuag, Bulacan complied with the posting requirement of Act No. 3135, and The Times Newsweekly, being a newspaper of general circulation, satisfied the publication requirement.
• Interest Rates and Charges: No. Every promissory note signed by the spouses had a corresponding Disclosure Statement wherein the interests and charges were stated, and their acknowledgment of the statement prior to the consummation of the credit transaction contradicted their claim of innocence over the matter.

• Finality of Judgment: The Court cited the long line of cases maintaining that once a judgment has become final and executory, it can no longer be disturbed, altered or modified, except for clerical errors or mistakes. Citing Dapar vs. Biascan, the Court reiterated that nothing is more settled in law than that once a judgment attains finality, it thereby becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law. The issues raised by the petitioners were the same issues already passed upon by the Court of Appeals, and reopening the case would mean a crass defiance of basic procedural rules and would deprive PCIB of executing the rights vested upon it after the case was adjudged with finality.

• Motion for Extension of Time: The Court cited Section 1, Rule 37 of the Rules of Court, which provides that a motion for reconsideration of a judgment or final order should be filed within the period for appeal, which is within 15 days after notice. The 2002 Internal Rules of the Court of Appeals also states that unless an appeal or a motion for reconsideration or new trial is filed within the 15-day reglementary period, the Court of Appeals' decision becomes final. Citing Habaluyas Enterprises, Inc. vs. Maximo M. Japson, the Court restated that no motion for extension of time to file a motion for new trial or reconsideration may be filed with the Metropolitan or Municipal Trial Courts, the Regional Trial Courts, and the Intermediate Appellate Court, and such a motion may be filed only in cases pending with the Supreme Court.

• Posting and Publication Requirements: The Court cited Section 3 of Act No. 3135, as amended by Act No. 4118, which requires posting of notices of the sale for not less than twenty days in at least three public places of the municipality or city where the property is situated, and publication once a week for at least three consecutive weeks in a newspaper of general circulation if the property is worth more than four hundred pesos. The Court defined a public place as a place exposed to the public and where the public gathers together or passes to and fro, citing Black's Law Dictionary. The Meralco posts where the Notices were posted were component structures of the public place itself, and the law does not intend that notices be posted on specific bulletin boards or information areas of a public place, but rather in an area where the same is perceptible to the public. As to publication, the Court cited Presidential Decree No. 1079 and held that to be a newspaper of general circulation, it is enough that it is published for the dissemination of local news and general information, that it has a bona fide subscription list of paying subscribers, and that it is published at regular intervals, citing Basa vs. Mercado. The newspaper need not have the largest circulation, so long as it is of general circulation, citing Perez vs. Perez.

• Interest Rates and Charges: The Court found no merit in the allegation of increased interest rates and charges without consent, as every promissory note signed by the spouses had a corresponding Disclosure Statement wherein the interests and charges were stated, and their acknowledgment of the statement prior to the consummation of the credit transaction and their agreement with the terms and conditions thereof simply contradicted their self-claimed innocence over the matter.

• Immutability of Final Judgments — Once a judgment attains finality, it becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land. The Court applied this doctrine to bar the petition, as the Court of Appeals' decision had become final and executory on 26 September 2007 and was recorded in the Book of Entries of Judgment.

• Non-Extendibility of Motion for Reconsideration — No motion for extension of time to file a motion for new trial or reconsideration may be filed with the Metropolitan or Municipal Trial Courts, the Regional Trial Courts, and the Intermediate Appellate Court; such a motion may be filed only in cases pending with the Supreme Court, which may in its sound discretion either grant or deny the extension requested. The Court applied this rule to uphold the Court of Appeals' denial of the spouses' motion for extension.

• Posting Requirement under Act No. 3135 — Section 3 of Act No. 3135, as amended, requires posting of notices of the sale for not less than twenty days in at least three public places of the municipality or city where the property is situated. A public place is a place exposed to the public and where the public gathers together or passes to and fro; the law does not intend that notices be posted on specific bulletin boards or information areas of a public place, but rather in an area where the same is perceptible to the public. The Court applied this to hold that posting on Meralco posts within public vicinities complied with the requirement.

• Publication Requirement under Act No. 3135 and PD 1079 — To be a newspaper of general circulation, it is enough that it is published for the dissemination of local news and general information, that it has a bona fide subscription list of paying subscribers, and that it is published at regular intervals; the newspaper need not have the largest circulation, so long as it is of general circulation. The Court applied this to hold that The Times Newsweekly, being of general circulation in the Provinces of Bulacan, Pampanga, Bataan, Zambales, Nueva Ecija, Tarlac and other cities, satisfied the publication requirement.

• "Nothing is more settled in law than that once a judgment attains finality, it thereby becomes immutable and unalterable. It may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land." — This passage states the doctrine of immutability of final judgments, which was the primary ground for denying the petition.

• "A public place is a place exposed to the public and where the public gathers together or passes to and fro. The Meralco posts where the Notices were posted are but component structures of the public place itself. The law does not intend that notices to the public be posted on specific bulletin boards or information areas of a public place. What the law directs is for the notices to be placed in an area where the same is perceptible to the public." — This passage defines the posting requirement under Act No. 3135 and explains why posting on Meralco posts in public vicinities was compliant.

• "To be a newspaper of general circulation, it is enough that it is published for the dissemination of local news and general information; that it has a bona fide subscription list of paying subscribers; and that it is published at regular intervals. The newspaper need not have the largest circulation, so long as it is of general circulation." — This passage defines the standard for a newspaper of general circulation under the publication requirement, which the Court applied to uphold the validity of the publication in The Times Newsweekly.

• Dapar vs. Biascan, 482 Phil. 385 (2004) — Cited as controlling precedent for the doctrine that once a judgment attains finality, it becomes immutable and unalterable and may no longer be modified in any respect.
• Habaluyas Enterprises, Inc. vs. Maximo M. Japson, 226 Phil. 144 (1986) — Cited as controlling precedent for the rule that no motion for extension of time to file a motion for new trial or reconsideration may be filed with lower courts, and such motions may be filed only in cases pending with the Supreme Court.
• Olizon vs. Court of Appeals, G.R. No. 107075, 1 September 1994, 236 SCRA 148 — Cited by the trial court for the proposition that the lack of personal notice to the mortgagors is not a ground to set aside the foreclosure sale.
• Philippine National Bank vs. International Corporate Bank, G.R. No. 86679, 23 July 1991, 199 SCRA 508 — Cited by the trial court for the proposition that the law does not require that a personal notice of the auction sale be given to the mortgagor.
• Basa vs. Mercado, 61 Phil. 632 (1935) — Cited as controlling precedent for the definition of a newspaper of general circulation.
• Perez vs. Perez, 494 Phil. 68 (2005) — Cited for the proposition that the newspaper need not have the largest circulation, so long as it is of general circulation.
• Fernandez vs. Court of Appeals, G.R. No. 131094, 16 May 2005, 458 SCRA 454 — Cited in support of the rule that motions for extension of time to file a motion for reconsideration may be filed only in cases pending before the Supreme Court.

• Section 3, Act No. 3135, as amended by Act No. 4118 — Requires posting of notices of the sale for not less than twenty days in at least three public places of the municipality or city where the property is situated, and publication once a week for at least three consecutive weeks in a newspaper of general circulation if the property is worth more than four hundred pesos. The Court applied this provision to determine compliance with the posting and publication requirements.
• Section 7, Act No. 3135, as amended by Act 4118 — Allows the purchaser at a foreclosure sale to petition the court for possession of the property during the redemption period, furnishing a bond. PCIB invoked this provision in its Motion to Dismiss.
• Section 1, Rule 37, Rules of Court — Provides that a motion for reconsideration of a judgment or final order should be filed within the period for appeal, which is within 15 days after notice. The Court applied this to uphold the denial of the spouses' motion for extension.
• Section 2, Rule 52, Rules of Court — Proscribes a second motion for reconsideration. The Court of Appeals applied this in denying the spouses' second motion for reconsideration.
• Presidential Decree No. 1079 — Requires that notices of auction sales in extrajudicial foreclosure of real estate mortgage under Act No. 3135 be published in newspapers or publications published, edited and circulated in the same city and/or province where the requirement of general circulation applies, and that no newspaper or periodical which has not been regularly published for at least one year before the date of publication shall be qualified to publish the said notices. The Court applied this to determine the validity of the publication in The Times Newsweekly.
• Republic Act No. 3765 — Requires a Disclosure Statement in credit transactions. The Court noted that each promissory note had a corresponding Disclosure Statement signed by the spouses acknowledging the terms and conditions of their credit transactions.
• Section 1, Rule VII, 2002 Internal Rules of the Court of Appeals — Provides that unless a motion for reconsideration or new trial is filed or an appeal taken to the Supreme Court, judgments and final resolutions of the Court shall be entered upon expiration of fifteen days from notice to the parties. The Court cited this to support the finality of the Court of Appeals' decision.

• Corona, J. (Chairperson)
• Velasco, Jr., J.
• Nachura, J.
• Peralta, J.