G.R. No. 192877. March 23, 2011.
Spouses Ochoa mortgaged their real properties located in Paranaque City in favor of China Banking Corporation. The parties agree that the necessary action for the foreclosure of the mortgage shall be instituted at China Banking’s option which is in the RTC – Makati City. However, Petitioners insist that it was error for the CA to rule that the stipulated exclusive venue of Makati City is binding only on petitioners’ complaint for Annulment of Foreclosure, Sale, and Damages filed before the Regional Trial Court of Parañaque City, but not on respondent bank’s Petition for Extrajudicial Foreclosure of Mortgage, which was filed with the same court.
Whether or not the stipulated exclusive venue of Makati City is not binding on China Bank’s Petition for Extrajudicial Foreclosure of Mortgage
Yes. The extrajudicial foreclosure sale of a real estate mortgage is governed by Act No. 3135, as amended by Act No. 4118, which provides that sale cannot be made legally outside of the province in which the property sold is situated. The exclusive venue of Makati City, as stipulated by the parties cannot be made to apply to the Petition for Extrajudicial Foreclosure filed by China Bank since the provisions of Rule 4 pertain to venue of actions, which an extrajudicial foreclosure is not.
In Hagans v. Wislizenus, An action is defined as a formal demand of one’s legal rights in a court of justice in the manner prescribed by the court or by the law. x x x.” It is clear that the determinative or operative fact which converts a claim into an “action or suit” is the filing of the same with a “court of justice.” Filed elsewhere, as with some other body or office not a court of justice, the claim may not be categorized under either term. Unlike an action, an extrajudicial foreclosure of real estate mortgage is initiated by filing a petition not with any court of justice but with the office of the sheriff of the province where the sale is to be made. By no stretch of the imagination can the office of the sheriff come under the category of a court of justice. And as aptly observed by the complainant, if ever the executive judge comes into the picture, it is only because he exercises administrative supervision over the sheriff. But this administrative supervision, however, does not change the fact that extrajudicial foreclosures are not judicial proceedings, actions or suits.
Action means an ordinary suit in a court of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prevention or redress of a wrong.