Petitioner PNB granted respondents a 4 Million Pesos (P4,000,000.00) credit line to finance the filming of the movie “Pacific Connection.” The loan was secured by mortgages on respondents’ real and personal properties, to wit: (1) a parcel of land located in Malugay Street, Makati; (2) a parcel of land in Forbes Park, Makati; and (3) several motion picture equipments. The credit line was later increased to 6 Million Pesos, and finally to 7.5 Million Pesos.
Respondents defaulted in their obligation. Petitioner sought foreclosure of the mortgaged properties.
The auction sale proceeded, with petitioner as the highest bidder.
Aggrieved, respondents filed an action for annulment of foreclosure sale and damages with injunction, contending that the foreclosure sale is null and void because: (1) the obligation is yet to mature as there were negotiations for an additional loan; (2) lack of publication; (3) the purchase price was grossly inadequate and unconscionable; and (4) the foreclosure proceedings were initiated by petitioner in bad faith.
The court a quo ordered the annulment and setting aside of the foreclosure proceedings and the auction sale on the ground that there was lack of publication of the notice of sale.
Petitioner elevated the case to the CA.
The appellate court rendered the assailed Decision, which affirmed in toto the decision of the court a quo.
Hence, herein petition for review under Rule 45 of the Rules of Court.
Whether the parties to the mortgage can validly waive the posting and publication requirements mandated by Act No. 3135.
We answer in the negative.
Act. No. 3135, as amended, governing extrajudicial foreclosure of mortgages on real property is specific with regard to the posting and publication requirements of the notice of sale, to wit:
“Sec. 3. 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.”
On this score, it is well settled that what Act No. 3135 requires is:
(1) the posting of notices of sale in three public places; and,
(2) the publication of the same in a newspaper of general circulation.
Failure to publish the notice of sale constitutes a jurisdictional defect, which invalidates the sale.
Petitioner and respondents have absolutely no right to waive the posting and publication requirements of Act No. 3135.
In People v. Donato, the Court expounded on what rights and privileges may be waived, viz.:
“. . . the doctrine of waiver extends to rights and privileges of any character, and, since the word ‘waiver’ covers every conceivable right, it is the general rule that a person may waive any matter which affects his property, and any alienable right or privilege of which he is the owner or which belongs to him or to which he is legally entitled, whether secured by contract, conferred with statute, or guaranteed by constitution, provided such rights and privileges rest in the individual, are intended for his sole benefit, do not infringe on the rights of others, and further provided the waiver of the right or privilege is not forbidden by law, and does not contravene public policy; and the principle is recognized that everyone has a right to waive, and agree to waive, the advantage of a law or role made solely for the benefit and protection of the individual in his private capacity, if it can be dispensed with and relinquished without infringing on any public right, and without detriment to the community at large . . . .
“Although the general rule is that any right or privilege conferred by statute or guaranteed by constitution may be waived, a waiver in derogation of a statutory right is not favored, and a waiver will be inoperative and void if it infringes on the rights of others, or would be against public policy or morals and the public interest may be waived.
While it is established that rights may be waived, Article 6 of the Civil Code explicitly provides that such waiver is subject to the condition that it is not contrary to law, public order, public policy, morals, or good customs, or prejudicial to a third person with a right recognized by law.