Philippine National Bank vs. Court of Appeals

A foreclosure sale conducted without strict compliance with the statutory requirement of publishing the notice of sale once a week for at least three consecutive weeks is void. The publication of notices on non-consecutive weeks, even if three total publications are made, constitutes a jurisdictional defect that invalidates the entire sale.

Epifanio de la Cruz, together with his siblings, mortgaged two parcels of land in Bulacan to the Philippine National Bank (PNB) to secure several promissory notes. Upon alleged default, PNB initiated extrajudicial foreclosure proceedings under Act No. 3135. The properties were sold at public auction on October 20, 1961, with PNB as the highest bidder. After the redemption period lapsed, ownership was consolidated in PNB's name, and the properties were later sold to third parties. De la Cruz filed a complaint for reconveyance, alleging irregularities in the foreclosure process, including defective publication of the notice of sale.

• Nature of the Action: The case originated from a complaint for reconveyance filed by private respondent Epifanio de la Cruz against petitioner PNB, seeking the return of two foreclosed properties and damages.
• The Mortgage and Default: Two parcels of land in Bunlo, Bocaue, Bulacan, were mortgaged to PNB to secure three promissory notes dated in 1958. The trial court found that the date on the third note ("June 30, 1961") was a clerical error and the correct execution date was June 30, 1958.
• The Foreclosure Proceedings: On September 6, 1961, PNB filed a petition for extrajudicial foreclosure. The auction sale occurred on October 20, 1961, with PNB as the highest bidder. A Certificate of Sale was issued on January 15, 1963, and a Final Deed of Sale was executed on March 7, 1963, and registered on March 19, 1963.
• The Publication Issue: The notices of sale were published in the "Daily Record" newspaper on March 28, April 11, and April 12, 1969. The CA found this schedule failed to comply with the "once a week for at least three consecutive weeks" requirement of Act No. 3135.
• Subsequent Sale: PNB sold the properties to Spouses Conrado and Marina de Vera on June 4, 1970, via a Deed of Conditional Sale. These spouses later intervened in the case.

• Compliance with Publication Requirement: PNB argued that the publication schedule substantially complied with the law. It contended that the first publication (March 28) started the first week, the second (April 11) was within the second week, and the third (April 12) was within the third week, thus satisfying the requirement.
• Interpretation of "Week": PNB invoked Bonnevie vs. Court of Appeals to argue that a notice need not be published for three full weeks, and that the second publication could be made on any day within the second week and the third on any day within the third week.
• Re-characterization of Admission: PNB asserted that its earlier admission in the CA about the dates of publication did not constitute an admission of non-compliance with the legal requirement.

• Strict Compliance Required: Private respondent de la Cruz argued that the period between each publication must be at least seven consecutive days. The publications on April 11 and 12, being only a day apart, violated the consecutive weekly requirement.
• Void Sale: Relying on Tambunting vs. Court of Appeals, de la Cruz maintained that failure to strictly comply with statutory publication requirements is a jurisdictional defect that renders the foreclosure sale void.
• Attorney's Fees: The CA awarded attorney's fees to de la Cruz because he was compelled to litigate to protect his property rights due to PNB's indifference to the foreclosure rules.

• Publication Requirement: Whether the publication of the notice of sale on March 28, April 11, and April 12, 1969, constituted valid compliance with the requirement of publication "once a week for at least three consecutive weeks" under Section 3 of Act No. 3135, as amended.
• Validity of Foreclosure Sale: Whether the alleged defective publication rendered the extrajudicial foreclosure sale, the final deed of sale, and the consolidation of ownership void.

• Publication Requirement: The publication schedule did not comply with the law. The first week of publication ran from March 28 to April 3, 1969. The second publication on April 11 fell on the first day of the third week (April 4-10 being the second week). The third publication on April 12 was the next day. This failed to achieve publication in three separate, consecutive weeks.
• Validity of Foreclosure Sale: Because the publication requirement was not strictly complied with, the foreclosure sale was void. The Court reiterated the settled doctrine that statutory provisions on publication of notice of mortgage foreclosure sales must be strictly complied with, and any substantial deviation invalidates the sale. Consequently, the Certificate of Sale, Final Deed of Sale, and Affidavit of Consolidation were also of no legal effect.

• Strict Compliance with Foreclosure Publication Requirements — Statutory provisions governing the publication of notice of mortgage foreclosure sales must be strictly complied with. Even slight deviations will invalidate the notice and render the sale at least voidable. This is a jurisdictional defect; a sale conducted without the prescribed notice is absolutely void and no title passes. The requirement of publication "once a week for at least three consecutive weeks" means publication must occur in three distinct weeks, with at least a seven-day interval between publications.

• "The rule is that statutory provisions governing publication of notice of mortgage foreclosure sales must be strictly complied with, and that even slight deviations therefrom will invalidate the notice and render the sale at least voidable." — This passage, cited from Tambunting vs. Court of Appeals, encapsulates the core strict-compliance doctrine applied by the Court.
• "It would have been absurd to exclude March 28, 1969 as reckoning point... for the purpose of counting the first week of publication as to the last day thereof fall on April 4, 1969 because this will have the effect of extending the first week by another day." — This illustrates the Court's rejection of PNB's proposed computation method, emphasizing a practical and logical interpretation of the weekly requirement.

• Tambunting vs. Court of Appeals, 167 SCRA 16 (1988) — Controlling precedent cited for the doctrine that failure to advertise a mortgage foreclosure sale in compliance with statutory requirements constitutes a jurisdictional defect invalidating the sale.
• Bonnevie vs. Court of Appeals, 125 SCRA 122 (1983) — Distinguished by the Court. PNB invoked it to argue for a flexible interpretation of "week," but the Court found the publication schedule in Bonnevie (June 30, July 7, July 14) complied with the consecutive weekly requirement, unlike the schedule in the present case.
• Campomanes vs. Bartolome, 38 Phil. 808 (1918) and Jalandoni vs. Ledesma, 64 Phil. 1058 (1937) — Cited as foundational authorities for the strict compliance rule.

• Section 3, Act No. 3135 (as amended by Act No. 4118) — The statute governing extrajudicial foreclosure of real estate mortgages. It requires that notices of sale be posted for not less than twenty days and, for properties worth over four hundred pesos, published once a week for at least three consecutive weeks in a newspaper of general circulation. The Court held that PNB's publication schedule failed to meet this "three consecutive weeks" mandate.

• Justice Florenz D. Regalado
• Justice Abdulwahid A. Bidin
• Justice Ricardo J. Francisco
• Justice Flerida Ruth P. Romero

N/A — The decision was unanimous.