G.R. No. 199582 - JULIE PARCON-SONG, VS. LILIA B. PARCON, JOINED BY HER HUSBAND JOAQUIN A. PARCON, MAYBANK PHILIPPINES, INC. (FORMERLY PNB REPUBLIC BANK), AND THE REGISTER OF DEEDS OF QUEZON CITY.

Ruling

accordingly take possession of the mortgaged property, for a period not exceeding five (5) years from actual possession: Provided, That in no event shall title to the property be transferred to such foreign bank. In case said bank is the winning bidder, it shall, during the said five (5)-year period, transfer its rights to a qualified Philippine national, without prejudice to a borrower's rights under applicable laws. Should the bank fail to transfer such property within the five (5)-year period, it shall be penalized one half (1/2) of one percent (1%) per annum of the price at which the property was foreclosed until it is able to transfer the property to a qualified Philippine national. [118] Thus, a foreign bank can now participate in foreclosure sales of real property mortgaged to it, and even possess it. There are limitations, namely: (a) the possession must be limited to five years; (b) the property title shall not be transferred to it; and (c) within the five-year period, it must transfer its rights to a qualified Philippine national. In case a foreign bank fails to transfer the property, it will be liable to pay half of 1% per annum of the foreclosure price until it transfers the property. Clearly, under Republic Act No. 10641, foreign banks may now foreclose and acquire mortgaged properties. However, Republic Act No. 10641, which was enacted in 2014, does not apply in this case. Here, the loans were obtained and the real estate mortgage was executed and annotated on the title in 1995. [119] The default on the loans, the foreclosure of the mortgage, and the property acquisition took place in 2001. [120] The law then in place was Republic Act No. 4882. Consequently, respondent Maybank was still a mortgagee disqualified to acquire lands in the Philippines. It may possess the mortgaged property after default and solely for foreclosure, but it cannot bid or take part in any foreclosure sale. Thus, the sale to respondent Maybank is invalid. III (B) Evidently, this case could be resolved without tackling whether a foreign bank's participation in a foreclosure sale of real property is constitutionally allowed. This Court shall follow the dictates of the constitutional policy of avoidance. Before this Court may determine the constitutionality of a government act, the requisites for judicial review must be satisfied. In In Re: Save the Supreme Court Judicial Independence and Fiscal Autonomy Movement: [121] The power of judicial review, like all powers granted by the Constitution, is subject to certain limitations. Petitioner must comply with all the requisites for judicial review before this court may take cognizance of the case. The requisites are: (1) there must be an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must have the standing to question the validity of the subject act or issuance; otherwise stated, he must have a personal and substantial interest in the case such that he has s