THE Supreme Court (SC) voided the sale of a foreclosed property to Maybank Philippines, Inc. (Maybank), citing the prohibition on foreign entities from owning land.
In a 28-page decision dated March 13 and made public on Oct. 25, the tribunal said Maybank Philippines, a unit of the Malaysian universal bank, was limited to holding foreclosed property for a limited period, but cannot be involved in the property’s sale.
Maybank Philippines had issued a loan in 1999 to 4E Steel Builders Corp. (4E Steel), secured by the property, which it subsequently foreclosed on.’’
“(Maybank) may possess the mortgaged properties after default and solely for foreclosure, but it cannot take part in any foreclosure sale. Hence, the sale to Maybank of the foreclosed property was void,” Associate Justice Jhosep Y. Lopez said in the ruling.
It affirmed the Court of Appeals’ annulment of the foreclosure sale and cancellation of the registration of parcels of land, but ordered 4E Steel to pay back the loan to Maybank Philippines.
The mortgage had been secured by five parcels of land.
Under the Constitution, only Filipino citizens or 60% Filipino-owned corporation may acquire public land.
The High Court ruled that corporations disqualified from acquiring public land are also barred from acquiring private land.
Republic Act No. 4882 allows a mortgage lender barred from owning land to hold foreclosed property for five years after the loan default. — Beatriz Marie D. Cruz
