METROPOLITAN BANK & TRUST COMPANY, 

Petitioner,
vs.
SPOUSES EDMUNDO MIRANDA and JULIE MIRANDA, Respondents.

August 27, 1996, respondents obtained a ₱4,000,000.00 loan from Metrobank and executed a real estate mortgage 4 over a
parcel of land in Poblacion, Santiago, Isabela, covered by Transfer Certificate of Title (TCT) No. 202288. Upon respondents’
request, Metrobank increased the loan from ₱4,000,000.00 to ₱5,000,000.00. The real estate mortgage executed on August
27, 1996 was thus amended5 to increase the principal amount of loan secured by the mortgage to ₱5,000,000.00.
----Subsequently, respondents obtained additional loans from Metrobank - ₱1,000,000.00 on December 3, 1996, and
₱1,000,000.00 on May 8, 1997. The additional loans were secured by mortgage 6 over lands situated in Dubinan and Mabini,
Santiago, Isabela, covered by TCT Nos. T-202288, T-180503, T-260279, and T-272664.

Respondents encountered difficulties in paying their loans. They requested for a longer period to settle their account and
further requested for the restructuring of their loans, which requests Metrobank granted. Respondents then signed Promissory
Note (PN) No. 5997737 for ₱6,400,000.00, and PN No. 5997728 for ₱950,000.00, both payable on February 24, 2002, with
interest at 17.250% per annum.

Metrobank sent respondents a demand letter to settle their overdue. Respondents, however, failed to settle their account.
Consequently, Metrobank caused the extrajudicial foreclosure and auction sale of the mortgaged properties on
November 16, 2000. The Clerk of Court and Ex-Officio Sheriff of Santiago City sold the mortgaged properties at public
auction for the sum of ₱9,284,452.00 to Metrobank, as the highest bidder. A Certificate of Sale was issued in favor of
Metrobank on November 27, 2000, which was registered with the Registry of Deeds on November 29, 2000.

Respondents claimed that extrajudicial foreclosure was void and filed a complaint for Nullification of the Foreclosure
Proceedings and Damages with Prayer for Temporary Restraining Order/Injunction with the RTC of Santiago City. They
alleged non-compliance with the provisions of Presidential Decree No. 1079 and Act No. 3135, particularly the publication
requirement. ------Meanwhile, on December 20, 2001, Metrobank caused the cancellation of the TCTs in the name of
respondents and the issuance of new ones in its name. On December 21, 2001, the Ex-Officio Sheriff executed a Final Deed
of Sale.18

RTC rendered a decision annulling the extrajudicial foreclosure proceedings. The RTC reviewed the records of the
foreclosure proceedings and found no proof of publication of the sheriff’s notice of sale; there was no affidavit of
publication attached to the records. This fatal defect, it held, invalidated the auction sale and the entire foreclosure
proceedings. The RTC further held that, when Metrobank foreclosed the mortgaged properties, respondents’ loan
account was still outstanding for there was an overpayment of interests amounting to ₱1,529,922.00. Thus, the
foreclosure proceedings were without factual and legal basis. The RTC further noted that Metrobank consolidated its title
even before the issuance of the sheriff’s Final Deed of Sale. The trial court considered it an irregularity sufficient to invalidate
the consolidation.

Metrobank filed a motion for reconsideration, but the RTC denied it. Metrobank then appealed to the CA, faulting the RTC for
annulling the foreclosure proceedings. It insisted that the bank complied with the publication requirement. Metrobank also
disagreed with the trial court’s finding of overpayment of interests amounting to ₱1,529,922.00, claiming that the applicable
interest rates on respondents’ loans were 17% and not 12% as computed by the trial court. On June 30, 2008, the CA
resolved Metrobank’s appeal in this wise: WHEREFORE, the appeal is DISMISSED. -3022 is AFFIRMED. SO
ORDERED. Metrobank’s motion for reconsideration also suffered the same fate, as the CA denied it.

RULING
Before us, Metrobank insists on the validity of the foreclosure proceedings. Essentially, it argues that foreclosure proceedings
enjoy the presumption of regularity, and the party alleging irregularity has the burden of proving his claim. Metrobank asserts
that, in this case, the presumption of regularity was not disputed because respondents failed to prove that the notice of sale
was not published as required by law.

At the outset, it must be stated that only questions of law may be raised before this Court in a Petition for Review under Rule
45 of the Revised Rules of Civil Procedure. This Court is not a trier of facts, and it is not the function of this Court to reexamine
the evidence submitted by the parties.

It has been our consistent ruling that the question of compliance or non-compliance with notice and publication
requirements of an extrajudicial foreclosure sale is a factual issue, and the resolution thereof by the trial court is
generally binding on this Court. The matter of sufficiency of posting and publication of a notice of foreclosure sale need not
be resolved by this Court, especially when the findings of the RTC were sustained by the CA. Well-established is the rule that
factual findings of the CA are conclusive on the parties and carry even more weight when the said court affirms the factual
findings of the trial court.

The unanimity of the CA and the trial court in their factual ascertainment that there was non-compliance with the
publication requirement bars us from supplanting their findings and substituting them with our own. Metrobank has
not shown that they are entitled to an exception to this rule. It has not sufficiently demonstrated any special circumstances to
justify a factual review.

Metrobank makes much ado of respondents’ failure to present proof of non-compliance with the publication requirement. It
insists that respondents failed to discharge the requisite burden of proof.
Apparently, Metrobank lost sight of our ruling in Spouses Pulido v. CA,25 Sempio v. CA,26 and, recently, in Philippine Savings
Bank v. Spouses Dionisio Geronimo and Caridad Geronimo, While it may be true that the party alleging non-compliance
with the requisite publication has the burden of proof, still negative allegations need not be proved even if essential
to one’s cause of action or defense if they constitute a denial of the existence of a document the custody of which
belongs to the other party.

It would have been a simple matter for Metrobank to rebut the allegation of non-compliance by producing the required proof of
publication. Yet, Metrobank opted not to rebut the allegation; it simply relied on the presumption of regularity in the
performance of official duty.

Unfortunately, Metrobank’s reliance on the presumption of regularity must fail because it did not present any proof of
publication of the notice of sale. As held by this Court in Spouses Pulido v. Court of Appeals:28

[P]etitioners' reliance on the presumption of regularity in the performance of official duties falls in the face of a serious
imputation on non-compliance. The presumption of compliance with official duty is rebutted by failure to present proof of
posting.

Further, in Philippine Savings Bank v. Spouses Dionisio Geronimo and Caridad Geronimo,29 this Court rejected a similar
contention, viz.: Petitioner's invocation of the presumption of regularity in the performance of official duty on the part of Sheriff
Castillo is misplaced. While posting the notice of sale is part of a sheriff's official functions, the actual publication of the notice
of sale cannot be considered as such, since this concerns the publisher's business. Simply put, the sheriff is incompetent to
prove that the notice of sale was actually published in a newspaper of general circulation.

As correctly found by the RTC and the CA, the records of the foreclosure proceedings lacked any proof of publication. This
explains why Metrobank could not present any proof of publication.

We take this occasion to reiterate that the object of a notice of sale is to inform the public of the nature and condition
of the property to be sold, and of the time, place, and terms of the sale. Notices are given for the purpose of securing
bidders and preventing a sacrifice sale of the property.

The goal of the notice requirement is to achieve a "reasonably wide publicity" of the auction sale. This is why
publication in a newspaper of general circulation is required. The Court has previously taken judicial notice of the "far-
reaching effects" of publishing the notice of sale in a newspaper of general circulation. Thus, the publication of the notice of
sale was held essential to the validity of foreclosure proceedings. 31 In this case, Metrobank failed to establish compliance with
the publication requirement. The RTC and the CA cannot, therefore, be faulted for nullifying the foreclosure proceedings.

SECOND ISSUE: Metrobank next questions the authority of the RTC and the CA to take cognizance of the records of the
foreclosure proceedings as basis for annulling the auction sale. Metrobank(It) claims that the trial court may not take judicial
notice of the records of proceedings in another case, unless the parties themselves agreed to it. Metrobank asserts that it did
not give its consent to the trial court’s examination of the records of the extrajudicial foreclosure proceedings. Further, the
RTC did not even set a hearing for the purpose of declaring its intention to take judicial notice of the records of the
extrajudicial proceedings, as required by Section 332 of Rule 129. Metrobank, thus, contends that the RTC exceeded its
authority in taking cognizance of the records of the extrajudicial proceedings.

We disagree.

As a rule, courts do not take judicial notice of the evidence presented in other proceedings, even if these have been tried or
are pending in the same court or before the same judge. This rule, however, is not absolute.

In Juaban v. Espina33 and "G" Holdings, Inc. v. National Mines and Allied Workers Union Local 103 (NAMAWU), 34 we held that,
in some instances, courts have also taken judicial notice of proceedings in other cases that are closely connected to the
matter in controversy. These cases may be so closely interwoven, or so clearly interdependent, as to invoke a rule of judicial
notice.

The RTC, therefore, acted well within its authority in taking cognizance of the records of the extrajudicial foreclosure
proceedings, and the CA cannot be faulted for sustaining the RTC.

Metrobank further questions the trial court’s finding of overpayment of interests. But like the issue on compliance with the
publication requirement, the issue on overpayment of interests involves the ascertainment of facts not subject of
review by this Court. We reiterate that our jurisdiction is limited to reviewing and revising errors of law imputed to the lower
court, the latter’s findings of fact being conclusive and not reviewable by this Court.35

Besides, we find nothing erroneous in this factual finding of the RTC. As explained by the RTC in its decision:

[T]he Court notes that the original promissory notes evidencing the various loans of the plaintiffs were not presented in court
by either party; they are needed to determine the stipulated interest rate. The Court is thus left to determine the same based
on the testimony of the plaintiffs that the agreed interest rate is 12% per annum; amazingly, this was not denied or refuted by
the [petitioner] bank, in which case, 12% interest rate is applied at least for the period beginning 1997 until 1999, when the
loan was renewed under the two (2) new promissory notes which indicated a higher rate of interest of 17.250% per annum. As
mentioned above, the interest payments made by the [respondents] were already admitted by [Metrobank] in its answer to the
complaint as well as in its comment to [respondents’] formal offer of evidence, and such interest payments are duly reflected
and contained in the passbook account of the [respondents], Exhibit "H," "H-1" to "H-10." But, in order to determine whether
[respondents’] account has become past due or not, as the [petitioner] bank represents, the Court deems it necessary to
undertake some mathematical computation the result of which would decisively guide the Court to arrive at a rightful
conclusion, thus:

1) Total interest payments by [respondents]

from May 7, 1997 to June 30, 1999 - ₱3,332,422.00
2) Interest due
from May 7, 1997 to June 30, 1999 - ₱1,802,500.00
computed as follows:
a) 1st year (₱7 M x 12%), from May 7, 1997 to May 28, 1998 - ₱ 840,000.00
b) 2nd year
i) from June 3, 1998 to Feb. 24, 1999 (8 mos.) - ₱ 560,000.00
ii) from March, 1999 to June 30, 1999 (4 mos.) - ₱ 402,500.00
3) Total Interest paid - ₱ 3,332,422.00
Less Interest due - ₱ 1,802,500.00
Overpaid interest - ₱ 1,529,922.00

From the foregoing, it is evident that [respondents] overpaid interests for the period of two (2) years, from May 1997 to June
1999, in the total amount of Php. 1,529,922.00. Thus, the Court is convinced that it is just and equitable that such an
overpayment be construed as advance interest payments which should be applied for the succeeding period or year of their
contract. Otherwise, [Metrobank] would unjustly enrich itself at the expense of [respondents]. In such a case, it was
premature then for [Metrobank] to declare [respondents’] account as past due, because at that juncture[,
respondents’] loan obligation was outstanding and in declaring otherwise, [Metrobank’s] action was without basis as
there was no violation of their loan contract. Consequently, it follows that the foreclosure proceedings subsequently
held on November 26, 2000 was without factual and legal basis, too. For, indeed, when the foreclosure proceedings in
question was conducted, [respondents’] loan account with [Metrobank], as it is said, was still outstanding, because
[respondents] were able to pay the interest due. Therefore, the Court is again convinced that the nullification prayed for is in
order.36

We need not say more.

In fine, the right of a bank to foreclose a mortgage upon the mortgagor's failure to pay his obligation must be exercised
according to its clear mandate, and every requirement of the law must be complied with, or the valid exercise of the right
would end. The exercise of a right ends when the right disappears, and it disappears when it is abused especially to the
prejudice of others.37

As further declared by this Court in Philippine Savings Bank v. Spouses Dionisio Geronimo and Caridad Geronimo:38

While the law recognizes the right of a bank to foreclose a mortgage upon the mortgagor's failure to pay his
obligation, it is imperative that such right be exercised according to its clear mandate. Each and every requirement of
the law must be complied with, lest, the valid exercise of the right would end. It must be remembered that the
exercise of a right ends when the right disappears, and it disappears when it is abused especially to the prejudice of
others.1avvphi1

We, therefore, affirm the CA and sustain the RTC in nullifying the extrajudicial foreclosure of real estate mortgage and sale,
including Metrobank’s title.