By Atty. Julius Gregory B. Delgado
THE ANTI-TERRORISM ACT OF 2020 APPLIED
ANTONIO BACLIG VS. THE RURAL BANK OF CABUGAO, INC., ET AL., G.R. NO. 230200 (JULY 3, 2023):
VALUE OF THE PROPERTY AND NOT THE AMOUNT OF LOAN DETERMINES THE NECESSITY OF
PUBLICATION OF AUCTION SALE IN COMPLIANCE WITH SECTION 3 OF ACT NO. 3135
In 1972, Antonio Baclig, et al.’s parents obtained a Php1,000.00-loan from respondent The Rural
Bank of Cabugao, Inc. (the Bank). The loan was secured by a Real Estate Mortgage covering a 1,355-
square meter parcel of corn land in Pug-os, Cabugao, Ilocos Sur and a 28-square meter house erected
thereon (“subject property”). The loan matured and Baclig, et al.’s parents were unable to pay the
obligation, causing the respondent Bank to initiate foreclosure proceedings. A Notice of Extra-Judicial
Sale of Foreclosed Properties was posted at the office of the respondent Bank, the Municipal Hall of
Cabugao, and the Office of the Provincial Sheriff. At the auction sale, the subject property was sold to
the respondent Bank, the only bidder, at the bid price of Php2,500.00. A Certificate of Sale was
subsequently issued. During the period of redemption, Baclig, et al.’s parents failed to redeem the
subject property. Hence, in 1998, the Bank executed an Affidavit of Consolidation of Ownership and a
Deed of Sale. Subsequently, Tax Declarations were issued in the name of the respondent Bank. In 2003,
respondent Bank filed a Petition for the Issuance of a Writ of Possession before the Regional Trial Court
of Cabugao, Ilocos Sur.
On the other hand, Baclig, et al.’s parents instituted a case for Annulment of Foreclosure and
Auction Sale before the same court in 2004. They alleged that the foreclosure sale was unconscionable
considering the disparity of the value of the subject property and the amount for which it was loaned,
and that the foreclosure sale was void for lack of personal notice to them. The trial court ruled in favor
of the respondent Bank which was affirmed by the Court of Appeals.
When the case reached the Supreme Court, the focus of the discussion was whether the
publication requirement of the auction sale was complied with pursuant to Section 3 of Act No. 3135
which provides that, “Notice shall be given by posting 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 if such property
is worth more than four hundred pesos, such notice shall also be published once a week for at least three
consecutive weeks in a newspaper of general circulation in the municipality or city.” In Security Bank
Corporation vs. Spouses Mercado, 834 Phil. 286 (2018), the Supreme Court underscored the importance
of publication requirement which is to give the sale a reasonably wide publicity to secure bidders and
prevent a sacrifice of the property. The Court therein categorically held that failure to publish the notice
of sale constitutes a jurisdictional defect which invalidates the sale.
In the instant case, the Supreme Court held that the Court of Appeals erred when it ruled that
there is no need to publish the auction sale since the amount of the loan did not exceed Php50,000.00.
The Court held that “it is not the value of the loan that determines the necessity of publication; rather, it
is the value of the property.” The Court held that the subject property was worth more than Php400.00
in 1986. Tax Declarations would show that the land’s market value was Php121,950.00 and the house
erected thereon was valued at Php18,360. Hence, the Court held that the Notice of Extra-Judicial Sale of
Foreclosed Properties should have been published. The Court also held that the Bank could have easily
presented an Affidavit of Publication which it did not. Hence, it confirms that the notice was not
published rendering the auction sale void. Therefore, the Court voided the Certificate of Sale, Affidavit
of Consolidation of Ownership, Deed of Sale, and Tax Declarations issued in favor of the Bank.