G.R. 170215

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The petitioners, Spouses Esmeraldo and Elizabeth Suico, obtained a loan from the Philippine National Bank (PNB) secured by a real estate mortgage on real properties in the name of the former. The petitioners were unable to pay their obligation prompting the PNB to extrajudicially foreclose the mortgage over the subject properties.

Subsequently, the petitioners file a Complaint against the PNB before the RTC for Declaration of Nullity of Extrajudicial Foreclosure of Mortgage. The Complaint alleged that PNB filed a petition with the Office of Manadaue City Sheriff for extrajudicial foreclosure on the petitioner’s properties for an outstanding loan obligation amounting to P 1,991,770.38.

During the foreclosure sale, the petitioners claimed that PNB, as the lone bidder offered a bid amounting to P8, 511,000.00. By the virtue of the said bid, a Certificate of Sale of the subject properties was issued. PNB did not pay to the Sheriff who conducted the auction sale the amount of its bid which was P 8,511,000.00 or give an accounting of how said amount was applied against petitioners’ outstanding loan amounted only to P 1,991,770.38. Since the amount grossly exceeded the amount of the petitioners’ obligation, it is the legal duty of the winning bidder, PNB to deliver to the Sheriff the bid price or what was left thereof after deducting the amount of petitioners’ obligation. PNB failed to deliver the amount of their bid to the Sheriff or the amount of such bid excess.

After a year, the issuance of the Certificate of Sale, PNB secured a Certificate of Final Sale and as a result, PNB transferred registration of all the subject properties to its name.
Due to the failure of PNB to deliver to the petitioners the amount of its bid or even just the amount in excess of petitioners’ obligation, the latter averred that the extrajudicial foreclosure of the said...