CASE No.

METROPOLITAN BANK AND TRUST COMPANY VS. EUGENIO PEÑAFIEL

G.R. No. 173976
February 27, 2009

FACTS:
Respondent Erlinda Peñafiel and the late Romeo Peñafiel were the registered owners of
two packs of lands in Mandaluyong City, which later on have been mortgaged to the Metrobank.
When the spouses defaulted their loan payment, Metrobank initiated extrajudicial foreclosure
proceedings through Diego Alleña Jr., a notary public. Peñafiel received Notice of Sale indicating
the date, time, and the place of the public auction. The Notice of Sale was published in Maharlika
Pilipinas on three different dates as attested by its publisher in his Affidavit of Publication.
Additionally, the copies of the said notice were posted in three noticeable places in Mandaluyong
City. Eventually, herein the petitioner as the sole and highest bidder won the subject lots however,
the respondents filed a complaint against the petitioner and claims the latter failed to comply with
the publication requirements for an extrajudicial foreclosure sale under Act 3135 but the lower
court dismissed the case for insufficiency of evidence, hence led to the appeal of the respondents
to the Court of Appeals (C.A). Court of Appeals agreed with the respondents on the ground that
the petitioner did not comply with the publication requirements because Maharlika Pilipinas is a
newspaper not circulated in Mandaluyong City where the subject properties where located,
resulted in the reversal of the decision of the lower court.

ISSUE:
Whether the Metrobank complied with the publication requirements for an extrajudicial
foreclosure sale under Act 3135.

RULING:
The court held that there is no distinction as to the publication requirement in extrajudicial
foreclosure sales conducted by a sheriff or a notary public. The key element is general circulation
of the newspaper in the place where property is located. The purpose of notice of sale is to inform
the public of nature and condition of the property to be sold, and of the time, place and terms of
sale. Notices were given to secure bidders and to prevent a sacrifice of property.
The petition is DENIED.