SPOUSES JESUS RUIZ AND AMPARO SAMBENITO RUIZ, PETITIONERS-APPELLANTS, VS. SHERIFF OF MANILA AND THE BANK OF THE PHILIPPINE ISLANDS, RESPONDENTS-APPELLEES.

This appeal from the decision of the Court of First Instance of
Manila was taken originally to the Court of Appeals but was subsequently
certified to this Court, there being no question of fact involved.

On
January 18, 1961 the spouses Jesus Ruiz and Amparo Sambenito Ruiz executed in favor of the Bank of the
Philippine Islands a real estate mortgage covering a parcel of land situated in
Sta. Ana, Manila, as security for a loan of P15,000.00 which they obtained from said bank.  The mortgage contract provided, among other
things, the following:

“WHEREAS, the parties of the FIRST PART, jointly and
severally, has/have applied for and jointly and severally obtained from the
party of the SECOND PART, a loan in the sum of FIFTEEN THOUSAND PESOS (P15,000.00), Philippine
currency, to be amortized at the rate of not less than P300.00, including
interest on unpaid balance, at the rate of 8% per annum, said in­terest and
capital amortization to be effected at the end of each month.  Failure to pay two successive monthly amortizations
will cause this loan to be automatically due and payable in its entirety.  Notwithstanding the foregoing, this loan
shall not run for, more than 5 years.”

In view of the default of the mortgagors in the pay­ment of twelve (12) successive monthly amortizations
(December 1961 up to and including November 1962) notwithstanding several
demands made on them, the mortgage asked the Sheriff of Manila to foreclose the
mortgage extra judicially.  Accordingly,
the Sheriff set the auction sale of the mortgaged property for February 7, 1963
and notice thereof was published in the “Daily Record’.  Upon receipt of a copy of the notice of sale the
mortgagors requested the mortgage to cause the postponement of the auction sale
and to give them tithe until March 15, 1963 within which to pay their
obligation, as well as the cost of the new publication of the sheriff’s notice
of sale, if any.  Granting the request,
the mortgage in turn made representations with the Sheriff to postpone the
sale, whereupon a new, notice was issued, resetting it for March 18, 1963 at
10:00 o’clock in the morning.  Said notice was again
published in the “Daily Record”.

Upon
failure of the mortgagors to comply with their promise to pay, the Sheriff proceeded to sell the mortgaged
property on March 18, 1963, as scheduled, with the mortgage as the
highest bidder.  Since the mortgage’s bid of P15,173.74
represented the total mortgage indebted­ness, the Sheriff did not
collect cash but merely applied the same to the amount of bid.

On March 30, 1963 the mortgagors filed with the lower court an amended petition for
certiorari, injunction, and/or
prohibition seeking, as principal relief, the annulment of the foreclosure sale.  After proper hearing the trial court rendered its decision dismissing the case for being
“devoid of any merit”. 
Thereupon, the appellants instituted the instant appeal.

In seeking the reversal of the decision of the lower court the
appellants assign two errors, namely: 
(1) in not declaring the foreclosure of the real estate mortgage pre­mature
and therefore illegal; and (2) in not declaring the said foreclosure sale null
and void for failure to comply with the requirements prescribed by law.

With
respect to the first assigned error, the appellants lay stress on the following
last two sentences of the provision of the mortgage contract quoted above, to
wit:

x x x.  Failure to pay two successive monthly
amortizations will cause this loan to be automatically due and payable in its
entirety.  Notwithstanding the foregoing,
this loan shall not run for more than 5 years.”

Interpreting the above stipulation, the appellants claim that
despite the acceleration clause they had five years from January 18, 1961
within which to pay their mortgage debt because of the phrase
“notwithstanding the
foregoing” in the last sentence. 
Since the five year period had not yet expired when the mortgage was
foreclosed, said foreclosure, they point out, was premature.

The appellant’s interpretation is totally without merit.  To ascertain the meaning of the provision of
the mortgage contract relied upon by the appellants, its entirety must be taken
into account and not merely its last two sentences.  A reading of the entire provision will
readily show that while the appellants were allowed to amortize their loan at
the rate of not less than P300.00 a month, they were under obligation to
liquidate the same within a period of not more than five (5) years from the
date of the execution of the contract; but if they should fail to pay two
successive monthly amortizations, then the entire loan would be due and
payable.  It is obvious that the phrase
“notwithstanding the foregoing” does not refer to the acceleration
clause but to the stipulation that the loan had to be “amortized at the
rate of not less than P300.00, including interest on unpaid balance, at the
rate of 8% per annum, said interest and capital amortization to be effected at
the end of each month”.  There is
nothing inconsistent between the acceleration clause and the last
sentence.  All that the parties meant is
that while monthly amortizations could be as little as P300.00 the loan should
anyway be paid within 5 years; and that failure to pay two successive
amortizations would render the entire loan due and payable.  Consequently, default having been committed
for twelve months, the foreclosure of the mortgage was not premature.

Under the second assignment of error, the appellants challenge
the validity of the foreclosure sale on two grounds, namely:  (1) that the “Daily Record” wherein
the notice of sheriff’s sale was published was not a newspaper of general
circulation; and (2) that the appellee bank should
have paid cash for its bid since Section 5 of Act No. 3135 expressly requires
that the creditors must bid “under the same condition as any other
bidder.”

Neither of the grounds is meritorious.  For purposes of extra judicial foreclosure of
mortgage the party alleging non-compliance with the requisite publication has
the burden of proving the same.  In the
instant case the appellants did not present evidence to show that the
“Daily Record” was not a newspaper of general circulation.  As correctly stated by the lower court:

x x x.  But, the presumption is that the sheriff had
complied with his official duty according to law and this presumption includes
the presumption that the sheriff had caused the notice of sale to be published
in a newspaper of general circulation so that, if the ‘Daily Record’ is not a
newspaper of general
circulation as petitioners claim, it is incumbent upon them to prove such fact,
which they failed to do.”

As to the second ground, it was not necessary for the appellee, as the highest bidder, to pay cash to the
sheriff, since
the amount of its bid represented the total mortgage debt.  It would serve no purpose for the sheriff “to
go through the ceremony of receiving the money and paying it back to the
creditor”.  Certainly the law-making
body did not contemplate such a senseless application of the law in requiring
that the creditor must bid “under the same condition as any other
bidder.”

WHEREFORE, the decision appealed from is hereby
affirmed, with costs against the appellants.

Concepcion, C.J., Reyes, J.B.L., Dizon, Zaldivar, Castro,
Fernando, Teehankee, Barredo,
and Villamor, JJ., concur.