Sps. Baysa vs. Sps Plantilla
Sps. Baysa vs. Sps Plantilla
*
SPOUSES BENITO BAYSA and VICTORIA BAYSA,
petitioners, vs. SPOUSES FIDEL PLANTILLA and
SUSAN PLANTILLA, REGISTER OF DEEDS OF
QUEZON CITY, and THE SHERIFF OF QUEZON CITY,
respondents.
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* FIRST DIVISION.
434
435
BERSAMIN, J.:
The petitioners seek the reversal and setting aside of the
decision promulgated on December 20, 2002,1 whereby the
Court of Appeals (CA) declared the extrajudicial foreclosure
of their mortgaged property valid.2
Antecedents
The case involves a real estate mortgage (REM) entered
into by the petitioners involving their parcel of land in
Cubao,
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436
437
438
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439
Furthermore, the RTC allowed the additional interest of
8%, observing that:
Judgment of the CA
Aggrieved, the petitioners appealed, submitting the
following issues for the resolution of the CA, namely:
6 Id., at p. 89.
7 Id., at p. 90.
8 Id., at p. 41.
440
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9 Id.
441
Upon denial of the petitioners’ motion for
reconsideration, as well as of the respondent spouses’
partial motion for reconsideration through the resolution
promulgated on July 24, 2003,11 the petitioner has come to
the Court for a further review.
Issues
The issues raised by the petitioners can be narrowed
down to:
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442
Accordingly, to enable the extrajudicial foreclosure of
the REM of the petitioners, the special power to sell should
have been either inserted in the REM itself or embodied in
a separate instrument attached to the REM. But it is not
disputed that no special power to sell was either inserted in
the REM or attached to the REM. Hence, the respondent
spouses as the foreclosing mortgagees could not initiate the
extrajudicial foreclosure, but must resort to judicial
foreclosure pursuant to the procedure set forth in Rule 68
of the Rules of Court. The omission of the special power to
sell the property subject of the mortgage was fatal to the
validity and efficacy of the extrajudicial foreclosure, and
warranted the invalidation of the entire proceedings
conducted by the sheriff.
443
It held to be enough that the REM thereby empowered
the respondent spouses as the mortgagees to extrajudicially
foreclose the property inasmuch as such agreement by the
petitioners (as the mortgagors) carried with it by necessary
implication the grant of the power to sell the property at
the public auction. It relied on the ruling in Centeno v.
Court of Appeals.14
We cannot subscribe to the opinion of the CA.
Based on the text of paragraph 13, supra, the petitioners
evidently agreed only to the holding of the extrajudicial
foreclosure should they default in their obligations. Their
agreement was a mere expression of their amenability to
extrajudicial foreclosure as the means of foreclosing the
mortgage, and did not constitute the special power or
authority to sell the mortgaged property to enable the
mortgagees to recover the unpaid obligations. What was
necessary was the special power or authority to sell —
whether inserted in the REM itself, or annexed thereto —
that authorized the respondent spouses to sell in the public
auction their mortgaged property.
The requirement for the special power or authority to
sell finds support in the civil law. To begin with, because
the sale of the property by virtue of the extrajudicial
foreclosure would be made through the sheriff by the
respondent spouses as the mortgagees acting as the agents
of the petitioners as the
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13 Id., at p. 89.
14 No. L-40105, November 11, 1985, 139 SCRA 545.
444
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445
II
Anent the third issue, the petitioners contend that after
declaring the 8% compounded interest invalid and
unwarranted, the CA should have further declared the
interest of 2.5%/month illegal and usurious; that with
nullity of the stipulation of interest, the result should be as
if the loan agreement contained no stipulation on interest;
and that, consequently, the P1,032,599.88 paid as interest
should be deducted from the principal loan of P2.3 Million
for being illegal and usurious.
The contention of the petitioners is bereft of merit.
To start with, the petitioners are now estopped from
assailing the validity of the monthly interest payments
made. They expressly consented to be liable to pay
2.5%/month on the principal loan of P2.3 Million, and
actually made several payments of interest at that rate.
Secondly, they did not assail the rate of 2.5%/month as
interest in the lower courts, doing so only in this appeal.
Hence, they cannot be permitted to bring the issue for the
first time in this Court, for that would be unfair not only to
the adverse parties but also to the lower courts by
depriving the latter of the opportunity to pass upon the
issue. And thirdly, the invalidation by the CA of the 8%
compounded interest does not justify deleting the
stipulation on the 2.5%/month interest that was really
separate and distinct from the former.
III
Having found and declared the extrajudicial foreclosure
of the REM and the foreclosure sale of the mortgaged
property of the petitioner void for want of the special power
to sell, we deem it unnecessary to consider and determine
the final issue on whether or not the petitioners had lost
their right to redeem. In other words, there is no right of
redemption to speak of if the foreclosure was void.
446