Notice to mortgagor in extrajudicial foreclosure proceeding not necessary


Dear PAO,
My land was mortgaged to a lending corporation in connection with our loan agreement way back in 2007. I was not able to pay for the loan within the period agreed upon. In 2012, I went to the lending corporation to ask for a loan balance statement to be able to ask for the reconstruction of my loan so that I can pay for it. Unfortunately, I was informed that my property was already sold by the sheriff in 2010. Can I still get my property considering that I was not notified of any sale by the sheriff?
Mrs. Santos

Dear Mrs. Santos,
The payment of a loan may be guaranteed by either real estate mortgage or pledge. Where mortgage has been constituted over a real estate property, the said property may be alienated for the payment of the creditor (Article 2087, Civil Code) through the process of extrajudicial foreclosure where the same shall be sold at public auction under the direction of the sheriff or notary public (Act. 3153, as amended, entitled “ An Act to Regulate the Sale of Property Under Special Power Inserted in or Annexed to Real Estate Mortgages”). Before the public auction, it is necessary that the notice requirement under Act. 3135, as amended, is complied with. Accordingly, notice shall be given by posting notices of the sale for not less than twenty (20) days in at least three (3) public places of the municipality or city where the property is situated, and if such property is worth more than four hundred pesos (P400.00), such notice shall also be published once a week for at least three (3) consecutive weeks in a newspaper of general circulation in the municipality or city (Section 3, Act No. 3135, as amended).

Based on the foregoing, personal notice to the mortgagor in extrajudicial foreclosure proceeding is not necessary as Section 3 of Act 3135 requires only posting of the notice of sale in three (3) public places and the publication of that notice in a newspaper of general circulation. However, lack of personal notice to the mortgagor may render a foreclosure sale null and void if said personal notice was additionally required by the parties in their contract following Article 1306 of the Civil Code which provides that “the parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good custom, public order or public policy” (Global Holiday Ownership Corporation v. Metropolitan Bank & Trust Company, G.R. No. 184081, 19 June 2009, 590 SCRA 188). By reason of this, it would still be best to speak personally with a lawyer for him to assess your problem.

Finally, we wish to remind you that the above legal opinion is solely based on our appreciation of the problem that you have stated. The opinion may vary when other facts are elaborated therein.


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