TOMMY REYES AND ANDREA C. REYES, PETITIONERS, VS. COURT OF APPEALS, NICANOR G. SALAYSAY, AS PROVINCIAL SHERIFF OF RIZAL, AND CONCHITA P. DIONISIO, RESPONDENTS.

Reyes versus Court of Appeals

The Case

This is a petition for review brought by the spouses Tommy Reyes and Andrea C. Reyes against the Court of Appeals, the Provincial Sheriff of Rizal, and Conchita P. Dionisio. The petitioners sought to annul an extrajudicial foreclosure sale of a mortgaged lot and house in Mandaluyong and to compel the mortgagee to accept what they claimed was the redemption price. The case matters because it fixes two working rules every practitioner must know: who bears the burden of proving compliance with the posting and publication requirements of Act Number 3135, and why findings of fact by the Court of Appeals are beyond the reach of this Court under Rule 45.

Procedural History

The Reyes spouses filed an action in the Court of First Instance of Rizal, Pasig Branch 6, to annul the foreclosure sale and to compel the acceptance of nine thousand two hundred pesos, later amending the complaint to pray for cancellation of Conchita's title. After trial, the lower court dismissed the complaint, declared the foreclosure sale valid, and regarded Conchita as the rightful owner and possessor of the property. The Court of Appeals affirmed that judgment. The Reyes spouses then appealed to the Supreme Court, which treated the appeal as a petition for review raising questions of fact and law.

Facts

On December 15, 1964, the spouses Carlos Ramirez and Emilia G. Ramirez and Teodora P. Geronilla executed in favor of Conchita P. Dionisio a second mortgage over a registered lot of 461 square meters, with a two-story house and a two-door apartment, located at 705 Boni Avenue, Barranca, Mandaluyong. The mortgage secured a loan of five thousand pesos. The Government Service Insurance System, as first mortgagee, consented, and the mortgage was duly registered. An additional loan of three thousand six hundred pesos was given on September 2, 1966, also secured by the same second mortgage.

On January 30, 1968, the Ramirez spouses sold the mortgaged property to Jaime Y. Reyes and Tommy Y. Reyes for sixty-three thousand pesos. The vendees agreed to assume the mortgage debts of thirty-four thousand fifty-nine pesos and eighty-nine centavos to the GSIS and six thousand eight hundred fifty pesos to Conchita. The GSIS did not consent to the sale, and it was not registered. In an affidavit of adverse claim dated January 9, 1969, Conchita alleged that the additional loan was eight thousand six hundred pesos, not three thousand six hundred, and that the total secured obligation was thirteen thousand six hundred pesos.

Because the debt was unpaid, Conchita extrajudicially foreclosed the mortgage. The sheriff scheduled the sale at ten o'clock in the morning of March 2, 1970, posted the notice in three public places in Mandaluyong, and published it for three consecutive weeks in the Bayanihan Weekly News, a periodical registered with the Philippine Council for Print Media and authorized to publish legal notices. At the auction, Conchita bid sixteen thousand five hundred eighty-one pesos and forty-five centavos, credited to the full satisfaction of the debt. The certificate of sale stated that the redemption period would expire one year from registration, and it was registered on March 6, 1970. On December 28, 1970, Jaime assigned his interest to Tommy for ten thousand pesos. On February 24, 1971, ten days before the redemption period expired, Tommy tendered nine thousand two hundred pesos to the sheriff, who rejected it. The sheriff later issued a final certificate of sale to Conchita, who registered it and obtained a new title in her name.

Issues

• Whether or not there was compliance with the notice and publication requirements prescribed in Section 3 of Act Number 3135.
• Whether or not the tender of nine thousand two hundred pesos was a sufficient redemption price.

Applicable Provisions

Section 3 of Act Number 3135, the provision on notice and publication of the sheriff's sale, provides:

Section 3. Notice shall be given by posting the notice of sale in three public places in the municipality or city where the property is situated and also by publishing said notice in a newspaper of general circulation published in the municipality or city where the property is situated, if there be any, otherwise in the newspaper of general circulation published in the province where the property is situated.

The petitioners invoked this provision to attack the validity of the foreclosure, and the Court measured the sheriff's posting and publication against it.

Rule 45 of the Rules of Court, the provision governing appeals by certiorari to the Supreme Court, provides:

Rule 45. Appeal by certiorari to the Supreme Court. A party may appeal from a judgment or final order of the Court of Appeals by filing with the Supreme Court a verified petition for review on certiorari within fifteen days from notice of the judgment or final order, and the petition shall raise only questions of law which must be distinctly set forth.

This provision bars the petitioners from raising the factual questions of publication and redemption price before the Supreme Court.

Ruling

On the first issue, the Court held that the contention cannot be entertained because it is a factual issue. The Court of Appeals found as a fact that there was public posting of the notice of sale and publication in a newspaper of general circulation. The Court acknowledged that the appellate court's statement about a presumption of compliance was not altogether correct, but held that this did not justify reversal, because compliance was a proven fact and not a matter of presumption. What the appellate court meant was that Conchita sustained the burden of proof through her documentary evidence, after which the burden of evidence shifted to the Reyes spouses, who presented no countervailing evidence. The Court laid down the rule:

The rule is that if the mortgagor alleges that there was no proper publication of the notice of the sheriff's sale, he has the burden of proving that factum probandum.

On the second issue, the Court held that the finding that the redemption price was sixteen thousand five hundred eighty-one pesos and forty-five centavos, and that nine thousand two hundred pesos was insufficient, is conclusive on this Court. The petitioners' theory that the price should be nine thousand two hundred pesos, being the principal of five thousand pesos plus twelve percent interest, is a factual issue that cannot as a rule be raised under Rule 45, and it is not well taken.

Doctrine

First, the mortgagor who alleges that there was no proper publication of the notice of the sheriff's sale bears the burden of proving that fact. Once the mortgagee presents documentary evidence of posting and publication, the burden of evidence shifts to the mortgagor, who must present countervailing evidence. Second, findings of fact of the Court of Appeals, including compliance with the posting and publication requirements of Section 3 of Act Number 3135 and the amount of the redemption price, are conclusive on the Supreme Court and cannot be raised in a petition for review under Rule 45, which permits only questions of law.

Disposition

The Supreme Court affirmed the decision of the Court of Appeals, with costs against the petitioners, the Reyes spouses.

Remember This

Memorize this line: the mortgagor who alleges that there was no proper publication of the notice of the sheriff's sale has the burden of proving that fact. Examiners use this case to test the burden of proof in extrajudicial foreclosure under Act Number 3135 and the rule that factual findings of the Court of Appeals are conclusive on the Supreme Court under Rule 45.