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After appropriate proceedings, said Court rendered in decisiondismissing plaintiff' complaint and orderingthem to vacate theproperty in question, as well as to pay P100.00 a month to theBank, from March 36, 1960,until said property is vacated by theplaintiffs, with costs. 1awphil.net plaintiffs appealed to theCourt ofAppeals, which certified case to us. They maintain that thelower court erred:
1. In holding that the decision rendered in Civil Case 29306,Court of First Instance of Manila, entitled"Juan Sumerariz andLuisa Sumerariz vs. Development Bank of the Philippines and Sheriffof Manila"is a bar to the present case.
2. In holding that the filing of Civil Case No. 29306 in theCourt of First Instance of Manila . . . did notsuspend the periodof redemption of the property in question.
3. In not allowing the appellants to redeem the properties inquestion in accordance with themanifestation and willingness of theappellee Development Bank of the Philippines to allow theappellantsto redeem their own properties.
4. In requiring the appellants to pay rents for the propertiesin question to the appellee DevelopmentBank of the Philippines fromMarch 30, 1956 until appellants delivered the said properties totheappellee Bank.
It is urged that the present case is not barred by the decisionin Case No. 29306 because there is, allegedly, noidentity, eitherof parties, or of subject-matter, or of cause of action, betweenthe two cases. This contentioninasmuch manifestly untenable.1awphil.net
Although not a party in the first case, the inclusion of theSurety Co. as defendant in the case at bar does notdetract from thelegal identity of both cases, because, by buying the property fromthe Bank, the Surety Co.
became merely the Bank's success. 2 Neither does the absence, asparty herein, of the sheriff, who was one of thedefendants in thefirst case, negate said identity, inasmuch as the sheriff was but aformal party in said previouscase, and is virtually a party in thepresent proceedings, although not explicitly mentioned as suchtherein. 3
As stated in Republic v. Planas :4
The inclusion of the surety as party defendant in Civil Case No.51080, where it is not so named in CivilCase No. 49206, cannot beinvoked to nullify the effect on the former case of thedismissal-order issuedin the latter proceeding. It has been ruledthat where the one who is offering a judgment as an estoppeland theparty against whom it is being offered were both parties to theaction, in which such judgmentwas rendered, it is no objection thatthe action included some additional parties who are joined inthesecond case. 5 Conversely, the operation of the final judgmentor order in a previous case is not altered
by the fact that somebody who was not a party in that firstaction has been impleaded in the second case.Otherwise, litigantscan always renew any litigation by the mere expedient of includingnew parties .6
The subject-matter of both cases is, obviously, the same theproperty in question. There is, likewise, identityof the cause ofaction. In the first case, the issue was the validity of theauction sale in favor of the Bank, whichsale, plaintiffs contended,had been made in violation of their agreement with the Bank. In thecase at bar,
plaintiffs maintain that the conveyance by the Bank to theSurety Co. is invalid, and this pretense is anchoredupon thepredicate that, when it took place, the property did not belong tothe Bank, the sale in its favor by thesheriff having been made inviolation of the alleged agreement aforementioned, which predicatehad beenrejected Court in the previous case. Similarly, the causeof in the first case was based upon the alleged right oftheplaintiffs to the property in question, upon the ground that itssale to the Bank was illegal. This premise is,also, the cornerstoneof plaintiffs' cause of action in the case at bar. 7
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Moreover, the same evidence would have sufficed to support andestablish the cause of action in both cases. In Abes, et al. vs.Rodil, et al .,8 it was held:
The test to determine the existence of res judicata is simplythis: "Would the same evidence support andestablish both thepresent and the former cause of action?" 9 Here, the answer is inthe affirmative. Theevidence both in the cadastral proceedings andin the present reconveyance case, is directed at thequestion ofownership. It was held that where the first case is one forreivindicacion and the other for
partition, the title of the case is unimportant. For the sameevidence would support the one and theother. 10 A similar ruleobtains where the former cases were reivindicatory in character andthe secondare land registration proceedings. 11 Another example:The first case was for consolidation of title of theassignee in theland registration proceedings. This was objected to upon the groundthat the deed ofassignment was invalid as pactum commissorium . Thecourt gave due effect to said document andordered that assignor'stitles be cancelled and new ones issued to the assignee. The secondwas an actionfor reformation upon the averment that the deed ofassignment mentioned in the first case was anequitable mortgage.This Court declared that the issue in both suits is "whether thedeed of assignmentvested in Monte de Piedad the ownership of thelots," and held that the second action was barred by
previous adjudication in the land registration case. 12 Andwhere, as here, fraud was alleged in the firstcase and the samefraud was relied upon in the second, the judgment in former caseoperated as res
judicata .13
Again, the issue of ownership of the property in question wassettled in the first case. Accordingly, it may nolonger belitigated in the case at bar.
Under the second assignment of error, plaintiffs maintain thatthe period of one (1) year to redeem the propertyin question wassuspended by the institution of Case No. 29306, on March 26, 1956,or three (3) days before theexpiration of said period. We have notfound, however, any statute or decision in support of thispretense.Moreover, up to now plaintiffs have not exercised theright of redemption. Indeed, although they have intimatedtheir wishto redeem the property in question, they have not deposited theamount necessary therefor. It may not
be amiss to note that, unlike Section 30 of Rule 39 of the Rulesof Court, which permits the extension of the period of redemptionof mortgaged properties, 14 Section 3 of Commonwealth Act No. 459,in relation to Section
9 of Republic Act No. 85, which governs the redemption ofproperty mortgaged to the Bank, does not contain asimilarprovision. 15 Again this question has been definitely settled bythe decision in the previous casedeclaring that plaintiffs' rightof redemption has already been extinguished in view of theirfailure to exercise itwithin the statutory period..
The third assignment of error is predicated upon an allegedwillingness of the Bank to allow the plaintiffs tomake suchredemption. The Bank denies, however, have agreed thereto. Besides,this question of fact was notraised by plaintiffs in the lowercourt. Hence, it cannot be entertained in this appeal. 16
The fourth assignment of error is premised on plaintiffs'alleged right of redemption, which was held, in the firstcase, tohave expired already. It is thus clearly devoid of merit.
WHEREFORE the decision appealed from should be, as it is hereby,affirmed, with costs against plaintiffs-appellants. It is soordered.
Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar,Sanchez, Castro, Angeles and Fernando, JJ., concur.
Footnotes
1 G.R. No. L-16423.
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2 Baguinguito vs. Rivera, 56 Phil. 423; Barretto vs. Cabangis,37 Phil. 98; Fetalino vs. Sanz, 44 Phil.691; Clemente vs. Heaco*ckCo., L-12786, October 29, 1959. See, also Republic vs. Planas,L-21224,September 27, 1966; Philippine Farming Corporation vs.Llanos L-21-14, August 14, 1965.
In Aguilar vs. Gamboa, L-10137, March 25, 1958, it was held:
"Where both the party offering a judgment as an estoppel and theparty against whom it isoffered were parties to the action in whichthe judgment is rendered, it is no objectionthat the actionincluded some additional parties who are not joined in the presentaction. .. ."
3 Bacaling vs. GSIS, L-20124, August 14, 1965.
4 L-21224, September 27, 1966.
5 Citing Aquino vs. Sanvictores, L-3397, July 27, 1951.
6 Citing Alzua vs. Johnson, 21 Phil. 308; Aquino vs.Sanvictores, supra ; Samahang Magsasaka vs. ChuaGuan, L-7252,February 25, 1955; Suarez vs. Giok Hong Que, L-7927, November 18,1955.
7 Chua Tan vs. Del Rosario, 57 Phil. 411; Ma-ao Sugar CentralCo. vs. Barrios, 79 Phil. 666; City ofOttumwa v. Nicholson, 143N.W. 439, cited in 1 Moran 1963 ed., p. 91; Juan vs. Go Cotay 26Phil. 328;Baquioro vs. Barrios, et al., 77 Phil. 120; Suarez vs.Municipality of Naujan, et al., L-22282, Nov. 21,1966; Angcao vs.Punzalan, L-20521, Dec. 28, 1964; Republic vs. Planas, supra ;PHHC, et al. vs.Mencias, etc., et al., L-24114, August 16, 1967;Abes, et al. vs. Rodil, et al., L-20996, July 30, 1966.
8 L-20996, July 30, 1966.
9 Citing Pealosa vs. Tuason, 22 Phil. 303, 322; Garcia vs. Courtof Appeals, et al., L-19783, July 30,1965; Philippine FarmingCorporation, Ltd., etc. vs. Llanes, et al., L-21014, August 14,1965.
10 Citing De Leon Vda. de Lontok vs. Padua, 75 Phil. 548, 552,553.
11 Citing Kidpalos, et al. vs. Baguio Gold Mining Co., L-19940to L- 19944, August 14, 1965.
12 Franco, et al. vs. Monte de Piedad and Savings Bank, L-17610,April 22, 1963.
13 San Diego, etc. vs. Cardona, et al., 70 Phil. 281, 284.
14 Enage vs. Vda de Hijas de P. Escao, 38 Phil. 657.
15 Nepomuceno vs. Rehabilitation Finance Corporation, L-14897,November 23, 1960.
16 Rule 46, Sec. 18; Toribio vs. Decasa, 55 Phil. 461;Sanagustin vs. Barrios, 68 Phil. 475; Talento vs.Makiki, 93 Phil.855; Traders Insurance & Surety Co. vs. Golangco, et al.,L-6442, Sept. 24, 1954;Subido, et al. vs. Lacson, et al., 55 Off.Gaz. 8281. See, also, Remonte vs. Bonto, L-19900, Feb. 28,1966;Vaidehueza vs. Republic, L-21032, May 19, 1966; Republic vs.Venturanza, L-20417, May 30,1966; Pipero vs. Hechanova, L-22562,Oct. 22, 1966; City of Manila v. Garcia, L-26053, Feb. 21, 1967;YuKimteng Const. vs. MRR Co., et al., L-17027, March 3, 1967.
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Republic of the PhilippinesSUPREME COURT
Manila
SECOND DIVISION
G.R. No. 109672 July 14, 1994
SPOUSES EDUARDO VACA and MA. LUISITA PILAR, petitioners,vs.THECOURT OF APPEALS and ASSOCIATED BANK, respondents.
Ramon Quisumbing, Jr. Law Office for petitioners.
Robles, Ricafrente & Aguirre Law Firm for privaterespondent.
R E S O L U T I O N
MENDOZA, J .:
This is a petition for review on certiorari of the decision ofthe Court of Appeals, granting private respondent Associated Bank'spetition for certiorari andmandamus to annul two orders of theRegional Trial Court (Branch 95) of Quezon City dated June 11 andAugust 25, 1992.
The Facts of the case are:
On February 7, 1992, private respondent Associated Bank filedwith the RTC of Quezon City a petition (docketed as LRC Case No.Q-5536-92) for the issuance ofa writ of possession of propertycovered by TCT No. 254504. The property, consisting of a 953-squaremeter lot and a residential house erected on it, is situated atNo.18, Lovebird Street, Green Meadows Subdivision I, Quezon City.Private respondent alleged that for failure of petitioners EduardoVaca and Ma. Luisita Pilarto pay their mortgage obligation toprivate respondent, the mortgage was extrajudicially foreclosed andthe mortgaged property was sold on October 30, 1990 toprivaterespondent as the highest bidder; that the one-year period toredeem having expired, TCT No. 254504 was cancelled and TCT No.52593 in privaterespondent's name was issued in lieu thereof; andthat despite demands, petitioners refused to turn over possessionof the property to private respondent.
Petitioner spouses filed an opposition alleging that there was apending action (Civil Case No. Q-91-8285) in another court whichthe petitioners had filed for theannulment of the mortgage and itsforeclosure.
On June 11, 1992, the RTC denied private respondent's petitionfor the issuance of a writ of possession, and on August 25, 1992,denied private respondent'smotion for reconsideration.
On certiorari the Court of Appeals annulled the orders andordered the RTC to issue the writ of possession. Hence thispetition.
Petitioners contend that the action for annulment of themortgage(Civil Case No. Q-91-8285) constitutes a prejudicialquestion in LRC CaseNo. Q-5536-92 for issuance of a writ ofpossession and that it was error for the Court of Appeals to orderthe RTC to issue the writ of possession in favor of themortgagee(herein private respondent). They argue further that the rule thatit is a ministerial duty of the court to issue a writ of possessionafter the one-yearperiod to redeem has expired is subject tocertain exceptions, and this case falls within the exception.
Petitioners' contention has no merit. The question raised inthis case has already been settled in Vda . de Jacob v . Court ofAppeals ,1 in which it was held
that the pendency of a separate civil suit questioning thevalidity of the mortgage cannot bar the issuance of the writ of
possession, because the same is a ministerial act of the trialcourt after title on the property has been consolidated inthemortgagee. The ruling was reiterated in Navarra v . Court ofAppeals , 2 in which we held that as a rule any questionregardingthe validity of the mortgage or its foreclosure cannot be a legalground for refusing the issuance of a writ ofpossession.
Petitioners cite the cases of Cometa v . Intermediate AppellateCourt , 3 and Barican v . Intermediate Appellate Court , 4 where weordered the deferment of the issuance of the writ of possessionnotwithstanding the lapse of the one-yearperiod of redemption. Thedeferment, however, was due to the peculiar circ*mstances of thosecases. In Cometa , whichactually involved execution under Rule 39,sec. 35, the properties were sold at an unusually lower price thantheir truevalue, while in Barican , the mortgagee bank took fiveyears from the time of foreclosure on October 10, 1980 beforefilingthe petition for the issuance of a writ of possession onAugust 16, 1985. Earlier the property had been sold to thirdpartieswho assumed the indebtedness of the mortgagor and tookpossession of the property so that at the time of the hearingon
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the petition for a writ of possession, the original debtor wasno longer in possession. Under these circ*mstances, it washeld thatthe obligation of the court to issue the writ of possession hadceased to be ministerial.
None of these equitable circ*mstances is present herein so as tojustify making an exception to the rule that the issuanceof a writof possession to a purchaser in an extrajudicial foreclosure, afterthe period of redemption, is a ministerialfunction of the court. Inthis case, there is no dispute that the property was not redeemedwithin one year from registrationof the extrajudicial foreclosuresale. Private respondent thus acquired the absolute right, aspurchaser, to the issuance ofa writ of possession pursuant to ActNo. 3135, sec. 7.
WHEREFORE, the resolution of October 18, 1993, giving due courseto the petition for review on certiorari , isRECONSIDERED andRECALLED and the petition is DENIED for lack of merit for lack ofshowing of any reversible errorcommitted by the Court ofAppeals.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado, Puno and Mendoza, JJ.,concur.
#Footnotes
1 G.R. Nos. 88602 and 89544, April 6, 1990, 184 SCRA 1990.
2 G.R. No. 86237, December 17, 1991, 204 SCRA 850.
3 G.R. No. 69294, June 30, 1987, 151 SCRA 563.
4 G.R. No. 79906, June 20, 1988, 162 SCRA 358.
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Republic of the PhilippinesSUPREME COURT
Manila
SECOND DIVISION
G.R. No. 134068 June 25, 2001
UNION BANK OF THE PHILIPPINES , petitioner,vs.COURT OF APPEALS,APOLONIA DE JESUS GREGORIO, GONZALO VINCOY, married toTRINIDADGREGORIO VINCOY , respondents.
DE LEON, JR., J .:
This is a motion for reconsideration of the resolution of thisCourt dated July 12, 1999 dismissing the petitionfor review oncertiorari filed by petitioner Union Bank of the Philippines whichassailed the decision of theCourt of Appeals (a) upholding thevalidity of the real estate mortgage executed by respondentsGonzalo andTrinidad Vincoy in favor of petitioner as security for aloan in the principal amount of Two Million Pesos
(P2,000,000,00.), and (b) fixing the redemption price of theproperty mortgaged at Three Million Two Hundred Ninety ThousandPesos (P3,290,000.00) representing the purchase price of the saidproperty at the foreclosuresale plus one percent (1%) monthlyinterest from April 19, 1991, the date of the foreclosure sale,until itsredemption pursuant to Section 30, Rule 39 of the Rules ofCourt.
The following are the factual antecedents.
On March 2, 1990, respondents-spouses Gonzalo and TrinidadVincoy mortgaged their residence in favor of petitioner to securethe payment of a loan to Delco Industries (Phils.), Incorporated 1in the amount of TwoMillion Pesos (P2,000,000.00). For failure ofthe respondents to pay the loan at its date of maturity,petitionerextrajudicially foreclosed the mortgage and scheduled theforeclosure sale on April 10, 1991.
The petitioner submitted the highest bid for Three Million TwoHundred Ninety Thousand Pesos(P3,290,000.OO) at the foreclosuresale. Accordingly, a certificate of sale was issued to petitionerand dulyannotated at the back of the Transfer Certificate of Titlecovering the property on May 8,1991. 2
Prior to the expiration of the redemption period on May 8,1992,the respondents filed a complaint for annulmentof mortgage with thelower court. In their complaint, respondents alleged that thesubject property mortgaged to
petitioner had in fact been constituted as a family home asearly as October 27, 1989. Among the beneficiariesof the saidfamily home are the sisters of respondent Trinidad Vincoy, namelyApolonia and Luciana De JesusGregorio whose consent to the mortgagewas not obtained. 3 Respondents thus assailed the validity ofthemortgage on the ground that Article 158 of the Family Code 4prohibits the execution, forced sale, attachment or
any other encumbrance of a family home without the writtenconsent of majority of the beneficiaries thereof oflegal age. 5 Onthe other hand, petitioner maintained that the mortgaged propertyof the respondents could not belegally constituted as a family homebecause its actual value exceeded Three Hundred ThousandPesos(P300,000.00), the maximum value for a family home in urbanareas as stipulated in Article 157 of the FamilyCode. 6
The lower court rendered judgment declaring the constitution ofthe family home void and the mortgageexecuted in favor of thepetitioner valid. It held, among others, that Article 158 of theFamily Code was notapplicable to respondents' family home as thevalue of the latter at the time of its alleged constitutionexceededThree Hundred Thousand Pesos (P300,000.00). 7 It alsorespondent Gonzalo Vincoy and/or Delco Industries(Phils.), Inc. topay petitioner his and/or its outstanding obligation as of February15,1993 in the amount of Four
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Million Eight Hundred Sixteen Thousand One Hundred Ninety-FourPesos and Forty Four Centavos(p4,816,194.44) including such sumsthat may accrue by way of interests and penalties. 8
Aggrieved, respondents appealed to the Court of Appealscontending that the lower court erred in finding thattheir familyhome was not duly constituted, and that the mortgage in favor ofpetitioner is valid. Respondentsalso claimed that the correctamount sufficient for the redemption of their property as ofFebruary 15,1993 isTwo Million Seven Hundred Seventy Three ThousandSeven Hundred Twelve Pesos and Eighty SevenCentavos (P2,773,712.87)9 and not Four Million Eight Hundred Sixteen Thousand One HundredNinety-FourPesos and Forty-Four Centavos (P4,816,194.44) as foundby the lower court.
In a decision promulgated on June 4, 1997, the Court of Appealssustained the finding of the lower court thatthe alleged familyhome of the respondents did not fall within the purview of Article157 of the Family Code asits value at the time of its constitutionwas more than the maximum value of Three Hundred ThousandPesos(P300,000.00). Hence, the Court of Appeals upheld the validityof the mortgage executed over the said propertyin favor of thepetitioner. 10 However, it found that the amount sufficient for theredemption of the foreclosed
property is Three Million Two Hundred Ninety Thousand Pesos(P3,290,000.00) equivalent to the purchase price at tileforeclosure sale plus one percent (1%) monthly interest from April19, 1991 up to the date ofredemption 11 pursuant to Section 30,Rule 39 of the Rules of Court. 12
Dissatisfied with the ruling of the Court of Appeals, thepetitioner filed a petition for review on certiorari withCourtsubmitting the following resolution:
I. The Court of Appeals resolves an issue of redemption whichwas not even directly raised by the parties and contrary to theevidence on record.
2. Assuming without admitting that respondents are entitled toredemption, the price set by the Court ofAppeals is not based onlaws. 13
Petitioner contends, first of all, that in allowing therespondents to redeem the subject foreclosed property, theCourt ofAppeals completely ignored that fact that neither respondents'complaint before the lower court nor
their brief filed before the Court of Appeals prayed for theredemption of the said property. On the contrary,respondents hadconsistently insisted on the nullity of the mortgage. Thus, toallow them to redeem the propertywould contradict that very theoryof their case. 14
Petitioner also contends that the respondents had already losttheir right to redeem the foreclosed property whenthey failed toexercise their right of redemption by paying the redemption pricewithin the period provided bylaw. 15 In the event, however, thatthe Courts upholds the right of the respondents to redeem the saidproperty,the petitioner claims that it is not Section 30, Rule 39of the Rules of the Court that applies in determining theamountsufficient for redemption but Section 78 of the General Banking Actas amended by the PresidentialDecree No. 1828 16 whichprovides:
"xxx. In the event of foreclosure, whether judicially or extrajudicially, of any mortgage on real estatewhich is security for anyloan granted before the passage of this Act or under the provisionsof this Act,the mortgagor or debtor whose real property has beensold at public auction, judicially or extrajudicially,
for the full or partial payment of an obligation to any bank,banking or credit institution, within the purview of this Act shallhave the right, within one year after the sale of the real estateas a result of the foreclosure of the respective mortgage, toredeem the property by paying the amount fixed by the courtin theorder of execution, or the amount due under the mortgage deed, asthe case may be, with interestthereon at the rate specified in themortgage, and all the costs, and judicial and other expensesincurred
by the bank or institution concerned by reason of the executionand sale and as a result of the custody ofthe said property lessthe income received from the property." [Italics supplied].
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This Court dismissed the petition in a Resolution promulgated onJuly 12,1999 on the ground that the Court ofAppeals did not commitany reversible error and that the petition raises mere questions offact already amply
passed upon by the appellate court. 17 Hence, the instant motionfor reconsideration.
We are persuaded to reconsider.
First of all, it is important to note that this case was decidedby the lower court on the basis only the pleadingssubmitted by theparties. No trial was conducted, thus, no evidence other thansubmitted with the pleadingscould be considered.
A careful scrutiny of the pleadings filed by the respondentsbefore the lower court reveals that at no time did therespondentspray that they be allowed to redeem the subject foreclosedproperty. 18 On the other hand,respondents never wavered from thebelief that the mortgage over the said property is, in the firstplace, void forhaving been executed over a duly constituted familyhome without the consent of the beneficiaries thereof.Afterupholding the validity of mortgage, the lower court orderedrespondent Gonzalo Vincoy and/or DelcoIndustries, Inc. to paypetitioner the amount of Four Million Eight Hundred SixteenThousand One Hundred
Ninety-Four Pesos and Forty-Four Centavos (P4,816,194.44) plusinterest and penalties representing Vincoy'sand/or Delco'soutstanding obligation to petitioner as of February 15,1993. 19There is no mention whatsoever ofrespondents right to redeem theproperty.
Respondents raised the issue of redemption for the first timeonly on appeal in contesting the amount ordered bythe lower courtto be paid by respondents to the petitioner. Thus, the actuation ofthe Court of Appeals inallowing the respondents to redeem thesubject foreclosed property is not legally permissible. Inpetitions forreview or appeal under Rule 45 of the Rules of Court,the appellate tribunal is limited to the determination ofwhethertile lower court committed reversible error. 20
It is settled jurisprudence that an issue which was neitheraverred in the complain nor raised during the trial inthe courtbelow cannot be raised for the first time on appeal as it would beoffensive to the basic rules of fair
play, justice and due process. 21 On this ground alone, theCourt of Appeals should have completely ignored theissue ofrespondents' right to redeem the subject foreclosed property. Inaddition, a reason just as glaringly
obvious exists for declaring the respondents' right ofredemption already non-existent one year after May8,1991, the dateof the registration of the sale at public auction.
Pursuant to Section 78 of the General Banking Act, a mortgagorwhose real property has been sold at a publicauction, judicially orextrajudicially, for the full or partial payment of an obligationto any bank, shall have theright, within one year after the sale ofthe real estate to redeem the property. The one-year period isactually to
be reckoned from the date of registration of the sale. 22Clearly therefore, respondents had only until May 8,1992 to redeemthe subject foreclosed property. Their failure to exercise theright of redemption by paying theredemption price within the periodprescribed by the law effectively divested them of said right. Itbearsreiterating that during the one year redemption period,respondents never attempted to redeem the subject
property but instead persisted in their theory that the mortgageis null and void. To allow them now to redeem
the same property would, as petitioner aptly puts it, be lettingthem have their cake and eat it too.
It cannot also be argued that the action for annulment of themortgage filed by the respondents tolled therunning of the one yearperiod of redemption. In the case of Sumerariz v. Development Bankof the
Philippines, 23 petitioners therein contented that the one-yearperiod to redeem the property foreclosed byrespondent was suspendedby the institution of an action to annul the foreclosure sale filedthree (3) days beforethe expiration of the period. To this we ruledthat:
"We have not found, however, any statute or decision in supportof this pretense. Moreover. up to now plaintiffs have not exercisedthe right of redemption. Indeed. although they have intimated theirwish toredeem the property in question, they have not deposited theamount necessary therefor. It may be not a
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miss to note that, unlike Section 30 of Rule 39 of the Rules ofCourt, which permits the extension of the period of redemption ofmortgaged properties. Section 3 of Commonwealth Act No. 459, inrelation toSection 9 of Republic Act No. 85, which governs theredemption of property of mortgaged to the Bankdoes no contain asimilar provision. Again this question has been definitely settledby the previous casedeclaring the plaintiffs' right of redemptionhas already been extinguished in view of their failure toexerciseit within the statutory period." 24
Also, in the more recent case of, Vaca v. Court of Appeals, 25we declared that the pendency of an actionquestioning the validityof a mortgage cannot bar the issuance of the writ of possessionafter title to the propertyhas been consolidated in the mortgagee.26 The implication is clear: the period of redemption is notinterrupted
by the filling of an action assailing the validity of themortgage, so that at the expiration thereof, the mortgageewhoacquires the property at the foreclosure sale can proceed to havethe title consolidated in his name and awrit of possession issuedin his favor.
To rule otherwise, and allow the institution of an actionquestioning the validity of a mortgage to suspend therunning of theone year period of redemption would constitute a dangerousprecedent. A likely off shoot of sucha ruling is\ the institutionof frivolous suits for annulment of mortgage intended merely togive the mortgagormore time to redeem the mortgaged property.1wphi1.nt
As a final word, although the issue pertaining to the correctamount for the redemption of the subject foreclosed property hasbeen rendered moot by the foregoing, a point of clarificationshould perhaps be made as toapplicable legal provision.Petitioner's contention that Section 78 of the General Banking Actgoverns thedetermination of the redemption price of the subjectproperty is meritorious. In Ponce de Leon v. Rehabilitation
Finance Corporation, 27 this Court had occasion to rule thatSection 78 of the General Banking Act had theeffect of amendingSection 6 of Act 3135 28 insofar as the redemption price isconcerned when the mortgagee
bank, as in this case, or a banking or credit institution. 29The apparent conflict between the provisions of Act No. 3135 andthe General Banking Act was, therefore, resolved in favor of thelatter, being a special andsubsequent legislation. Thispronouncement was reiterated in the case of.Sy v..Court of Appeals30 where we heldthat the amount at which the foreclosed property isredeemable is the amount due under the mortgage deed, ortheoutstanding obligation of the mortgagor plus interest and expensein accordance with Section 78 of the
General Banking Act.31
It was therefore manifest error on the part of the Court ofAppeals to apply in the case at bar the provisions of Section 30Rule 39 of the Rules of Court in fixing the redemption price of thesubjectforeclosed property.
WHEREFORE , the motion for reconsideration is hereby GRANTED .This Court's Resolution dated July 12,1999 is MODIFlED insofar asrespondents are found to have lost their right to redeem thesubject foreclosed
property.
SO ORDERED.
Bellosillo, Mendoza, Quizumbing, and Buena, JJ. , concur.
Footnotes
1 CA Rollo, p. 17.
2 CA Rollo, p. 27.
3 CA Rollo, pp. 16-17.
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4 Art. 158. The family home may be sold, alienated, donated,assigned or encumbered by the owner orowners thereof with thewritten consent of the person constituting the same, the latter'sspouse and amajority of the beneficiaries of legal age. In case ofconflict, the court shall decide.
5 Rollo, p. 8.
6 Art. 157. The actual value of the family home shall notexceed, at the time of its constitution, theamount of three hundredthousand pesos in urban areas, and two hundred thousand pesos inrural areas,or such amounts as may hereafter be fixed by law.
In any event, if the value of the currency changes after theadoption of this Code, the value mostfavorable for the constitutionof a family home shall be the basis of the evaluation.
For purposes of this Article, urban areas are deemed to includechartered cities and municipalities whoseannual income at leastequals that legally required for chartered cities. All others aredeemed to be ruralareas.
7 CA Rollo. p. 28.
8 CA Rollo. pp. 29-30.
9 Computed as follows: P2,576,022.61, the outstanding obligationof Gonzalo Vincoy to petitioner as ofFebruary 6, 1991 lessP300,000.00, total payment made plus one percent (1%) monthlyinterest from thedate of the auction sale on April 19, 1991 up toFebruary 15, 1993. (CA Rollo, pp. 23-24.)
10 Rollo, pp. 9-10.
11 Rollo, p. 10.
12 SEC. 30. Time and manner of, and amounts payable on,successive redemptions. Notice to be given
and filed. The judgment debtor, or redemptioner, may redeem theproperty from the purchaser, at anytime within twelve (12) monthsafter the sale, on paying the purchaser the amount of his purchasewithone per centum per month interest thereon in addition. up tothe time of redemption, together with theamount of any assessmentsor taxes which the purchaser may have paid thereon after purchase,andinterest on such last-named amount at the same rate; xxx.[Underscoring supplied.]
13 Rollo, p. 24.
14 Rollo, p. 25.
15 Rollo, p. 26.
16 Rollo, p. 28.
17 Rollo, p. 135.
18 In their complaint filed before the lower court, therespondents prayed that judgment be rendered:
a. Annulling the mortgage executed between plaintiff GONZALOVINCOY in favor ofdefendant bank on March 2, 1990 described inAnnex" A " of the Complaint;
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b. During the pendency of this case and perpetually thereafter,a writ of preliminary injunction beissued after posting therequired bond to prevent the defendant bank from consolidatingitsCertificate of Title over the property described under TCT No.128610 of the Register of Deedsof Pasay City covering the familyhome of plaintiff GONZALO VINCOY and his wifeTRINIDAD GREGORIOVINCOY, whose shelter plaintiff beneficiaries share; and
c. Requiring the defendant bank to pay the plaintiffs jointlyand severally, by way of damages,the amounts of P100,000.00 asattorney's fees and costs of litigation; and another P100,000.00formoral and exemplary damages.
Plaintiffs likewise pray for other reliefs proper under thepremises. (Records, p. 6.)
19 CA Rollo, p. 30.
20 Mendoza v. Court of Appeals, et al., 274 SCRA 527,539 (1997);Remman Enterprises, Inc. v. Courtof Appeals, et al., 268 SCRA 688,702 (1997).
21 Roman Catholic Archbishop of Manila v. Court of Appeals, etal., 269 SCRA 145, 153 (1997);Gevero v. Intermediate AppellateCourt, et al., 189 SCRA 201, 208 (1990); Matienzo v. Servidad,107
SCRA 276, 283 (1981).
22 Regalado, Remedial Law Compendium. Volume I, 6 th ed., 1997,p. 455.
23 21 SCRA 1374 (1967).
24 lbid., pp. 1379-1380.
25 234 SCRA 146, (1994).
26 Ibid., p. 148.
27 146 SCRA 862 (1970).
28 SEC. 6. In all cases in which an extrajudicial sale is madeunder the special power hereinbeforereferred to, the debtor, hissuccessors in interest or any judicial creditor or judgmentcreditor of saiddebtor, or any person having a lien on the propertysubsequent to the mortgage or deed of trust underwhich the propertyis sold, may redeem the same at any time within the term of oneyear from and afterthe date of sale; and such redemption shall begoverned by the provisions of sections four hundred andsixty-fourto four hundred and sixty-six, inclusive, of the Code of CivilProcedure ( now Secs. 29, 30and 34, Rule 39, Revised Rules ofCourt), insofar as these are not inconsistent with the provisionsof thisAct.
29 See note 27, supra, p. 878.
30 172 SCRA 125 (1989).
31 Ibid., p. 134.
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Republic of the PhilippinesSUPREME COURT
Manila
THIRD DIVISION
G.R. No. 99308 November 13, 1992
STATE INVESTMENT HOUSE, INC., petitioner,vs.COURT OF APPEALS andSABINA VDA. DE CUENCA, respondents.
MELO, J .:
The Decision and Amended Decision of the Court of Appeals inCA-G.R. CV 24339, both reversing and affirming in partthe Decisionof Branch 90 of the Regional Trial Court of Quezon City in "SabinaVda. de Cuenca vs. State InvestmentHouse, Inc." (Civil Case No.Q-42552), for declaration of nullity of the foreclosure sale withan alternative prayer forredemption of the foreclosed property, areassailed in the instant petition on questions of law.
As may be gleaned from the pleadings of the parties, theantecedent facts are as follows:
On February 13, 1979, private respondent Sabina Vda. de Cuenca(Cuenca) obtained a loan from petitioner StateInvestment House,Inc. (SIHI) under a promissory note for P160,000.00, secured by amortgage on Cuenca's property atTandang Sora, Quezon City.
On November 15, 1979, Cuenca obtained another loan ofP500,000.00. This loan was secured by a real estatemortgageexecuted by Cuenca on another property located along Timog,Quezon City, with paragraph 6 of the contract expresslygiving SIHIthe option of extra-judicially foreclosing the mortgaged propertyin the event of Cuenca's default in thepayment of her indebtedness.Cuenca's unpaid balance of P120,000.00 under the first loan wasdeducted from theproceeds of the second loan. The mortgage on herproperty at Tandang Sora, Quezon City was cancelled.
Because of Cuenca's failure to pay on the maturity date of theloan, her account was restructured and rolled over twelvetimesthrough the execution of various promissory notes. On November 29,1982, the maturity date of the twelfthpromissory note, SIHI claimedthat Cuenca's obligations, inclusive of interest, service charges,and penalties, reached atotal of P621,483.57. The loan was notanymore restructured and SIHI, on December 2 and 15, 1982, madewrittendemands on Cuenca for the payment of her outstandingobligation.
Cuenca did not heed SIHI's demands for payment. SIHI thusinitiated extra-judicial foreclosure of Cuenca's mortgagedpropertyfor which the corresponding notice of sheriff's sale was issued onFebruary 23, 1983, setting the auction sale onMarch 22, 1983. Thescheduled foreclosure sale was, however, deferred by SIHI onaccount of Cuenca's request to begiven time to pay the loan.Although Cuenca did make some payments, these were not enough tofully pay heroutstanding obligation and as of July 28, 1983, SIHIclaimed that Cuenca's outstanding loan amounted to P637,793.86.
Consequently, SIHI proceeded with the auction sale on August 8,1983 where it was declared the highest bidder forP742,181.55,Cuenca's outstanding debt at that time per SIHI's computation.
The certificate of sale was registered with the Register ofDeeds of Quezon City on August 24, 1983.
On July 10, 1984, SIHI received a letter (Exhibit 54, p. 18,Vol. I, Record) from Cuenca requesting that she be furnishedaStatement of Account "before and after the foreclosure/auctionsale" for her to be able to redeem the foreclosed propertyfromSIHI. This was followed by another letter (Exhibit 54-A; alsoExhibit J, p. 20, Vol. I, Record) from Cuenca on July 17,1984wherein she signified her intention to redeem the property forP500,000.00, payable in the following manner:
1. P100,000.00 payable within thirty (30) days upon receipt of(SIHI's) approval of this proposal.
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2. The balance of P400,000.00 shall be paid in eight (8) monthlyinstallments. Each installment paymentshall be due on the 30th dayof each month, the first monthly payment to be reckoned from thedate theamount stated in No. 1 has been paid.
In a letter dated August 16, 1984 (Exhibit K, p. 22 Vol. I,Record), SIHI rejected Cuenca's offer to redeem, reasoning thatsheshould pay her total outstanding obligation amounting at that timeto P870,739.36.
On August 23, 1984, Cuenca, through counsel, sent another letterto SIHI (Exhibit 54-B; also Exhibit L, pp. 23-24, Vol. I,Record)and reiterated her offer to redeem the property by stating:
. . . we are now finally offering and tendering to you the fullsum of P426,874.72 as the redemption priceof the property. This sumof P426,874.72 is the difference between the redemption price ofP870, 739.36which you fixed in your letter of 16 August 1984, andthe sum of P441,312.76 which is the aggregate ofthe payment whichour client made to you on account of her loan of P500,000.00. ..
Without, however, waiting for SIHI's reply, Cuenca, on August24, 1984, filed a complaint with the Regional Trial Court ofQuezonCity seeking annulment of the foreclosure sale on the ground thatshe had not defaulted in the payment of herloan to SIHI.Alternatively, Cuenca prayed that the trial court fix theredemption price in the event it is found that she is stillindebtedto SIHI.
After the expiration of the one-year redemption period, theRegister of Deeds issued a new t itle on the foreclosed propertyinSIHI's name.
On October 19, 1989, Judge Abraham P. Vera, presiding judge ofBranch 90 of the Regional Trial Court of the NationalCapitalJudicial Region stationed in Quezon City, promulgated his decisiondeclaring the foreclosure sale, as well asSIHI's title obtained insuch sale, null and void.
In its decision, the trial court made the following essentialfindings: (a) that the filing of the petition forextrajudicialforeclosure was valid because as of the date of thefiling thereof, Cuenca was still indebted to SIHI in the sumofP222,890.41 based on the trial court's own computation; and (b)that the foreclosure sale held on August 8, 1983 was notvalidbecause at that time, Cuenca no longer owed any amount to SIHI, asin fact from the computations made by the trialcourt, Cuenca hadmade an overpayment to SIHI in the amount of P27,054.14.
The dispositive portion of the trial court's decisionstated:
ACCORDINGLY, judgment is hereby rendered:
(a) Declaring plaintiff to have fully paid her obligations underthe promissory notes, marked Exhs. 1 and 4,and all of thosederiving their being from Exh. 4;
(b) Declaring the sale of the mortgaged property of plaintiffunder the foreclosure proceedings and of theresultant Certificateof Sale executed and issued by the foreclosing Sheriff by reason ofsuch foreclosureto be null and void;
(c) Directing the Register of Deeds of Quezon City to cancelTransfer Certificate of Title No. 325372 (Exh.N) in the name ofSIHI, and to reinstate Transfer Certificate of Title No. T-12678(Exh. B) in the name ofplaintiff;
(d) Directing defendant SIHI to refund to plaintiff the sum ofP27,054.14, which was the overpayment shemade on account of herloans with SIHI, with interest at 12% per annum from the date ofthe filing of thecomplaint until the same is fully paid;
(e) Directing the defendant SIHI to pay to plaintiff the sums ofP50,000.00 as moral damages; P50,000.00as exemplary damages; andP50,000.00, as attorney's fees;
(f) Directing defendant SIHI to pay [plaintiff the sum ofP62,903.18 as a refund of the penalties which ithad collected fromplaintiff, with interest thereon at 6% per annum from date of thisdecision until thesame is fully paid;
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(g) Directing plaintiff to pay to defendant SIHI the sum ofP14,645.00, in reimbursem*nt of SIHI'sexpenses in the foreclosureof the mortgaged property, which includes attorney's fees, withinterestthereon at 6% per annum from date of the decision until itis fully paid, which amount shall, however, beoffset by anequivalent amount for the amounts due from SIHI to plaintiff;and
(h) Directing defendant SIHI to pay the costs of this suit.
All other claims which the parties may have against each otherare hereby denied and dismissed.
SIHI appealed the decision to the court of Appeals in CA-G.R. CVNo. 24339. In its Original Decision, the Court of Appeals (Campos[P], Lantin, Sempio-Diy, JJ ) rectified several errors committed bythe trial court in its computation ofCuenca's account with SIHI,but nevertheless affirmed the trial court's finding that at thetime of the foreclosure sale,Cuenca had already paid in full herindebtedness so that the foreclosure sale and the transmission oftitle to SIHI werenull and void.
Both parties asked for a reconsideration of the appellateCourt's ruling.
SIHI's Motion for Reconsideration contended that on the basis ofthe computations made by the trial court and ascorrected by theCourt of Appeals in its decision, the net result showed that as ofthe date of the foreclosure sale on
August 8, 1983, Cuenca was still indebted to SIHI, and suchbeing the case, the foreclosure sale was valid.
In her Motion for Reconsideration, Cuenca asked the appellatecourt to reconsider its finding that she had obtained a thirdloanfrom SIHI for P61,500.00. She further asked that she be creditedtwo amounts which were disallowed by respondentcourt.
On April 30, 1991, respondent court promulgated its AmendedDecision, reversed its earlier ruling and held that inaccordancewith its own computations, Cuenca was still indebted to SIHI in theamount of P279,963.42 as of the date ofthe foreclosure sale. Thedispositive portion of this Amended Decision reads:
The decision of this court is hereby modified as follows:
a) Plaintiff-appellee is ordered to pay defendant-appellant thesum of P279,963.42, consisting of theunpaid balance of heroutstanding obligation within 30 days from receipt of this AmendedDecision withpayment of interest at the legal rate from date ofthis decision until final judgment.
b) The foreclosure proceedings and the resultant Certificate ofSale executed and issued by theforeclosing sheriff by reason ofsuch foreclosure are rendered null and void.
c) Transfer Certificate of Title No. 324372 issued in the nameof SIHI is declared null and void and theRegister of Deeds ofQuezon City is ordered to reinstate Transfer Certificate of TitleNo. 126578 in thename of plaintiff.
d) No pronouncement as to payment of damages and attorney'sfees.
SO ORDERED. (p. 49, Rollo .)
Dissatisfied, SIHI filed the instant petition and as clarifiedin pages 4 and 5 of the petition, the appeal is limited tothefollowing aspects:
(i) The original Decision in C.A.-G.R. CV No. 24339, "Sabina Vdade Cuenca, plaintiff-appellee v. StateInvestment House, Inc.,defendant-appellant," promulgated by respondent Court on 28February 1991,only insofar as the decision voided the foreclosuresale of the mortgaged property and SIHI's titleacquired by virtueof such foreclosure sale, the challenged part of the dispositiveportion reading asfollows:
(b) Declaring the sale of the mortgaged property of plaintiffunder the foreclosureproceedings and of the resultant Certificateof Sale executed and issued by theforeclosing Sheriff by reason ofsuch foreclosure to be null and void;
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(c) Directing the Register of Deeds of Quezon City to cancelTransfer Certificate of TitleNo. 325372 (Exhibit N) in the name ofSIHI, and to reinstate Transfer Certificate of TitleNo. T-12678(Exhibit B) in the name of the plaintiff.
(ii) And the Amended Decision in the same appealed case,promulgated on 30 April 1991, only insofar asit adjudicated asfollows:
(a) Plaintiff-appellee is ordered to pay defendant-appellant thesum of P279,963.42,consisting of the unpaid balance of heroutstanding obligation within 30 days from receipt
of this Amended Decision with payment of interest at the legalrate from date of thisdecision until final judgment.
(b) The foreclosure proceedings and the resultant Certificate ofSale executed and issuedby the foreclosing Sheriff by reason ofsuch foreclosure are rendered null and void.
(c) Transfer Certificate of Title No. 324372 issued in the nameof SIHI is declared null andvoid and the Register of Deeds ofQuezon City is ordered to reinstate Transfer Certificateof TitleNo. 126578 in the name of plaintiff.
(b) Petitioner is not appealing the rest of the dispositiveportions of the Decision and Amended Decision.
SIHI presents the following as grounds for its petition:
MAIN GROUND OF THE PETITION
RESPONDENT COURT MANIFESTLY ERRED AND MISAPPLIED THE LAW WHEN ITREFUSED TODECLARE THE FORECLOSURE PROCEEDINGS VALID DESPITE ITS OWNDETERMINATION THATRESPONDENT CUENCA WAS TRULY AND GENUINELYINDEBTED TO PETITIONER WHEN THEFORECLOSURE PROCEEDINGS WEREINSTITUTED.
ALTERNATIVE GROUND
SHOULD THE SUPREME COURT AFFIRM THE VOIDING OF THE FORECLOSURESALE AND OFPETITIONER'S TITLE, PETITIONER IS ENTITLED, IN LAW ANDEQUITY TO THE PAYMENT OF
LEGAL INTEREST ON THE PRINCIPAL SUM OF P279,963.42 (THE SUMADJUDGED INPETITIONER'S FAVOR BY RESPONDENT COURT) COMPUTED FROMTHE DATE OF THEFORECLOSURE SALE UP TO THE DATE OF ACTUAL PAYMENT OFTHE PRINCIPAL SUM. (pp. 15-16, Rollo )
On July 25 1991, shortly after she filed her Comment, Cuencaconsigned with this Court Metro Bank Cashier's Check No.CC-17743 inthe sum of P279,963.42, representing the amount ordered by theCourt of Appeals (in its AmendedDecision) to be paid to SIHI.Thereafter, SIHI filed its Reply on August 15, 1991, to which aRejoinder was filed by Cuencaon August 27, 1991.
As correctly formulated by SIHI, the principal issue in thiscase is the effect upon the validity of theextra-judicialforeclosure proceedings of a judicial determinationthat the debtor-mortgagor (Cuenca), at the time of the foreclosure,wasstill indebted and in default in the payment of the obligationsto the creditor-mortgagee (SIHI).
Cuenca's loan with SIHI was restructured and rolled over twelve(12) times, with the last promissory note indicating thematuritydate of November 29, 1982. The recomputation (attached to theAmended Decision) of the Court of Appealsshows, however, that onthe said date Cuenca still had an outstanding indebtedness ofP416,188,08. SIHI, in its letters toCuenca dated December 2 and 15,1982 (Exhibits 36 and 36-A, pp. 435 and 436, Vol. I, Record)demanded the paymentof this unpaid amount. Cuenca, however, failedto make any payments and thus, even at that point in time, wasalreadydebtor in default under Article 1168 of the New CivilCode.
The extra-judicial foreclosure instituted by SIHI in February1983 was, therefore, valid as at that time, Cuenca's loan beingthenalready almost three (3) months overdue (Bonnevie vs. Court ofAppeals, 125 SCRA 122 [1983]). Aside from the factthat Cuenca wasalready in default, the Real Estate Mortgage executed by theparties expressly granted SIHI the optionto foreclose when itprovided that:
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6. In the event that the Mortgagor/Debtor herein, should fail orrefuse to pay any of the sums of moneysecured by this mortgage, orany part thereof, in accordance with the terms and conditionsherein setforth or those stipulated in the correlative promissorynote(s), or should he/it fail to perform any of theconditionsstipulated herein, or those in the promissory note(s), then and insuch case the Mortgageeshall have the right, at its election, toforeclose this mortgage. . .
SIHI, however, deferred the auction sale when Cuencasubsequently asked for more time to pay her obligation.Cuenca'saccount, however, was not restructured and she herself gaveSIHI permission to proceed with the auction sale on August8, 1983should she not be able to pay her account by then (Exhibit 47, p.457 Vol. I, Record). As of that date, the Court of
Appeals computed Cuenca's unpaid account with SIHI to beP279,963.42. It is worth noting that this computation isnotchallenged or questioned by either SIHI or Cuenca and We find noreason to disturb the same.
The obvious implication is that, at the time of the foreclosuresale on August 8, 1983, Cuenca had defaulted in thepayment ofP279,963.42. Thus, SIHI had the option under the aforequotedprovision of the Real Estate Mortgage, toforeclose on the mortgagedproperty. SIHI cannot be faulted for having chosen that option.
The Court of Appeals, therefore, erred in concluding thatdespite Cuenca's default, the foreclosure sale and theresultantissuance of the certificate of sale by the foreclosingSheriff were null and void. Foreclosure is valid where the debtoris indefault in the payment of his obligation (Cf, Bicol Savingsand Loan Association vs. Court of Appeals, 171 SCRA 630[1989]). Ina real estate mortgage when the principal obligation is not paidwhen due, the mortgagee has the right toforeclose the mortgage andto have the property seized and sold with the view of applying theproceeds to the payment ofthe obligation (Commodity Financing Co.,Inc., vs. Jimenez , 91 SCRA 57 [1979]). Once the proceeds have beenapplied
to the payment of the obligation, the debtor cannot anymore berequired to pay, unless, of course, there is a deficiencybetweenthe amount of the loan and the foreclosure sale price, because theobligation has already been extinguished.
We now come to the second issue posed by the parties: with theauction sale having been done on August 8, 1992 andthe certificateof foreclosure sale having been validly registered with theRegister of Deeds of Quezon City on August 24,1983 , was Cuencaable to redeem the property in the manner and within the periodprovided by law?
With the aforequoted provision of the Real Estate Mortgagehaving expressly authorized SIHI to extra-judicially foreclosethemortgage in case of Cuenca's failure to comply with her obligationto pay, the law governing the foreclosure isRepublic Act No. 3135(An Act To Regulate The Sale of Property Under Special PowersInserted In Or Annexed To RealEstate Mortgages), as amended byRepublic Act No. 4118 ( See Luna vs. Encarnacion, 91 Phil. 531[1952]). Section 6 ofthe said Act states:
Sec. 6. In all cases in which an extrajudicial sale is madeunder the special power herein before referredto, the debtor, hissuccessors in interest or any judicial creditor or judgmentcreditor of said debtor, or anyperson having a lien on the propertysubsequent to the mortgage or deed of trust under which thepropertyis sold, may redeem the same at any time within the term of oneyear from and after the date ofthe sale . . . (Emphasissupplied.)
In a long line of cases, We have consistently held that thisone-year redemption period should be counted not from thedate offoreclosure sale, but from the time the certificate of sale isregistered with the Register of Deeds (Agbulos vs.
Alberto , 5 SCRA 790 [1962]; Salazar vs. Meneses , 8 SCRA 495[1963]; Reyes vs. Noblejas , 21 SCRA 1027 [1970];Quimson vs.Philippine National Bank , 36 SCRA 26 [1970]). In this case,therefore, the one-year redemption periodshould be reckoned fromthe time the certificate of sale was registered on August 24, 1983(Bernardez vs. Reyes , 201SCRA 648 [1991]).
Under Article 13 of the New Civil Code, a year is understood tobe of three hundred sixty-five (365) days. Thus, excludingthe firstday and counting from August 25, 1983 (under paragraph 3 of Article13 of the New Civil Code), and bearing inmind that 1984 was a leapyear, Cuenca had only until August 23, 1984, the 365th day afterregistration of the sale on
August 24, 1983, within which to redeem the foreclosed propertyin accordance with law. It was thus already beyond theredemptionperiod when Cuenca filed her suit below on August 24, 1984 .
It should be stressed in this regard that it is not proper tocount, as Cuenca submits in her Rejoinder, the period on thebasisof 30 days per month. The law speaks of a "one year" period withinwhich to redeem, not twelve months as in thecase of redemption by ajudgment debtor under Section 30 of Rule 39. Applying Article 13 ofthe Civil Code, the period ofone year within which to redeem in thecase at bar is to count 365 days from August 24, 1983.Consequently, the last dayto redeem would be and indeed fell onAugust 23, 1984, said year being a leap year (Cf Go vs. Dizon, etal., G.R. No.75915-16, Sept. 18, 1992).
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Cuenca, however, was not able to exercise her right ofredemption on or before August 23, 1984. Although she wrote toSIHItwice on July 17 and August 23, 1984 and offered to redeem herproperty, these offers were not accompanied bysimultaneous bonafide tender or delivery of the redemption price to SIHI. InBelisario vs. Intermediate Appellate Court(165 SCRA 101 [1988]),this Court, through Justice Medialdea, held:
The general rule in redemption is that in making a repurchase,it is not sufficient that a person offering toredeem makemanifestation of his desire to repurchase; this statement ofintention must be accompaniedby an actual and simultaneous tenderof payment, which constitutes the legal use of exercise of therightto repurchase (Angao vs. Clavano, 17 Phil. 152). Likewise, inseveral cases decided by this Court (Fructo
vs. Fuentes, 15 Phil. 362; Retes vs. Suelto, 20 Phil. 394;Rosales vs. Reyes, et al., 98 Phil. 975) wherethe right torepurchase was held to have been properly exercised, there wasdefinite finding of tender ofpayment having been made by thevendor. The tender of payment must be for the full amount oftherepurchase price, otherwise the offer to redeem will be heldineffectual. (Rumbaoa vs. Arzaga, 84 Phil.812). Bona fideredemption necessarily imports a reasonable and valid tender of theentire repurchaseprice. There is no cogent reason for requiring thevendee to accept payment by installments from theredemptioner, asit would ultimately result in an indefinite extension of theredemption period (Conejero,et al. vs. Court of Appeals, et al.,L-21812, April 29, 1966, 16 SCRA 775, 780).
The rule that tender of payment of the repurchase price isnecessary to exercise in the right of redemptionfinds support incivil law. Article 1616 of the Civil Code of the Philippines, inthe absence of an applicableprovision in Commonwealth Act No. 141,furnishes the guide, to wit: The vendor cannot avail himself oftheright to repurchase without returning to the vendee the price ofthe sale . . . (Uy Lee vs. Court of
Appeals, L-28126, November 28, 1975, 68 SCRA 196, 204). (at pp.107-108.)
Cuenca's use of the phrase "offering and tendering" in herletter dated August 23, 1984 does not comply with the rulinginBelisario. There is no showing whatsoever here that theredemption price was delivered to SIHI. Redemption is not amatterof intent but involves making the proper payment or tender of theprice of the land within the specified period (De laMerced vs. DeGuzman , 160 SCRA 87 [1988]).
Neither is Cuenca correct in contending that SIHI in effectextended the redemption period when it stated in its letter datedAugust 16, 1984 that Cuenca had until August 24, 1984 within whichto pay its outstanding account in full. In Lazo vs.Republic Surety& Insurance Co., Inc., (31 SCRA 329 [1970]). We held that it isonly where, by voluntary agreement of theparties, consisting ofextensions of the redemption period, followed by commitment by thedebtor to pay the redemptionprice at a fixed date, will the conceptof legal redemption be converted by the parties into one ofconventional redemptionsuch that it generates binding contractswhen approved by the creditor. In the instant case, however, thereis no showing
that Cuenca agreed to pay the redemption price on or beforeAugust 24, 1984, as set by SIHI. On the contrary, Cuenca'sfiling ofher complaint on August 24, 1984 principally seeking to declare thenullity of the foreclosure sale is indicative ofher refusal to paythe redemption price on the deadline mistakenly set by SIHI.
Cuenca's complaint filed on August 24, 1984 (the 365th day fromthe registration of the certificate of sale, having fallen onAugust 23, 1984 ), did not have the effect of a formal offer toredeem. In Belisario (supra ), We further explained.
This case is different from Uy Lee vs. Court of Appeals, suprawhere the action to compel redemption wasfiled after the lapse ofthe period of redemption. Thus, the Court held in said case, towit:
It is clear that the mere sending of letters by vendor Simeonexpressing his desire torepurchase the property without anaccompanying tender of redemption price fell short oftherequirements of law. Having failed to properly exercise his rightof redemption within
the statutory five-year period, the right is lost and the samecan no longer be revived bythe filing of an action to compelredemption after the lapse of the period .
The same factual antecedent obtained in Conejero, et al. vs.Court of Appeals, supra, where thecomplaint seeking to be declaredentitled to redeem was filed after the expiration of the statutoryperiod ofredemption. What was proper for determination then in saidcases was whether or not the right ofredemption sans judicialaction was validly exercised. In said cases, the Court applied thegeneral rulethat bona fide redemption necessarily imports areasonable and valid tender of the entire purchase price.(at p.109; emphasis added.)
Thus, it is only when the complaint to enforce a repurchase isfiled within the period of redemption will it be equivalent toanoffer to redeem and have the effect of preserving the right ofredemption ( Belisario, supra, citing Reoveros vs. Abel
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and Sandoval , 48 O.G. 5318). Where, as in this case, thecomplaint for redemption was filed after the redemptionperiodexpired, the complaint is a useless exercise which can notdefeat the purchaser's right to have the title of thepropertytransferred in his name. Cuenca's reliance on the ruling inHulganza vs. Court of Appeals (147 SCRA 77 [1987]) is withoutanybasis. The doctrine laid down in Hulganza finds no applicability tothe instant case for unlike the complaint filed byCuenca in thecase at bar, the action for redemption in Hulganza was filed withinthe period of redemption.
Moreover, it bears noting that Cuenca sent letters (dated July17 and August 23, 1984) to SIHI within the redemptionperiod inwhich she offered to redeem her property. In her letter dated July17, 1984, she offered to pay her indebtednessaccording to aninstallment plan which, if carefully analyzed, had the effect ofextending the period of redemption beyond
one year contrary to the policy of the law ( Belisario, supra ).In her other letter dated August 23, 1984, she offered to paytheamount P426,874.72 in full settlement of her obligation, althrough,as We earlier stated, this amount was neverproperly delivered toSIHI in accordance with law. There is thus no proof at that timethat Cuenca possessed the ability topay the redemption amount shewas offering. This is especially true in the light of the fact thatin her first letter she merelyoffered to pay in installments.
If only to prove the veracity of her claim that at that time shewas capable of paying SIHI the full amount of what shethought was areasonable redemption price, the least that Cuenca could have donewas to consign payment in courtsimultaneous with her filing of theaction to redeem on August 24, 1992. In so stating, We do not heredepart from ourconsistent ruling that a formal offer to redeem,accompanied by a bona fide tender of the redemption price,althoughproper, is not essential where the right to redeem isexercised through the filing of a judicial action (Tolentino vs.Court of
Appeals, 106 SCRA 513 [1981]; Tioseco vs. Court of Appeals, 143SCRA 705 [1986]; Hulganza, supra; Beliserio, supra ). As earlierstated, this rule only holds where the action to redeem is filedwithin the redemption period. Where, as in theinstant case, theaction is filed after the statutory period has expired, thedetermination of whether the plaintiff consignedthe redemptionprice with the court simultaneous with the filing of the action isnecessary to see if the right of redemptionsans judicial action wasvalidly exercised ( Beliserio, supra ).
Cuenca's consignation with this Court of the amount ordered bythe Court of Appeals to be paid to SIHI only eight (8)years afterher action to redeem was filed in 1984 is a belated move whichmerely shows that in 1984 she had no ability topay SIHI theredemption price. Her filing of the action was a mere devise andscheme to buy time to raise the amountneeded to redeem herproperty. In Conejero, et al. vs. Court of Appeals, et al. (16 SCRA775 [1966]), We precisely statedthat "a buyer can not be expectedto entertain an offer of redemption without attendant evidence thatthe redemptionercan, and is willing to accomplish the repurchaseimmediately. A different rule would leave the buyer open toharassmentby speculators or crackpots, as well as to unnecessaryprolongation of the redemption period, contrary to the policy ofthelaw. . . . Of course, consignation of the price would remove allcontroversy as to the redemptioner's ability to pay at thepropertime. (at pp. 781-782.)"
We further stated in Basbas vs. Entena (28 SCRA 665, 671 [1969])that:
. . . the right of legal redemption must be exercised withinspecified time limits: and the statutory periodswould be renderedmeaningless and of easy evasion unless the redemptioner is requiredto make anactual tender in good faith of what he believed to be thereasonable price of the land sought to beredeemed. The existence ofthe right of redemption operates to depress the market value of theland untilthe period expires, and to render that period indefiniteby permitting the tenant to file a suit forredemption, with eitherparty unable to foresee when final judgment will terminate theaction, wouldrender nugatory the period of two years fixed by thestatute for making the redemption and virtuallyparalyze any effortsof the landowner to realize the value of his land. No buyer can beexpected toacquire it without any certainty as to the amount forwhich it may be redeemed, so that he can recover atleast hisinvestment in case of redemption. In the meantime, the landowner'sneeds and obligations
cannot be met. It is doubtful if any such result was intended bythe statute, absent clear wording to thateffect.
The situation becomes worse when as shown by the evidence inthis case, the redemptioner has nofunds and must apply for them tothe Land Authority, which, in turn, must depend on the availabilityoffunds from the Land Bank. It then becomes practically certainthat the landowner will not be able torealize the value of hisproperty for an indefinite time beyond the two years redemptionperiod. (at pp.671-672.)
WHEREFORE, the appealed portions of the Original Decision andthe Amended Decision are REVERSED and SET ASIDE and new judgment ishereby entered:
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1) Declaring valid and effective the extrajudicial foreclosureof the mortgage of respondent Sabina Vda. de Cuenca'sproperty inTimog, Quezon City on August 8, 1983; and
2) Upholding and confirming the cancellation of TransferCertificate of Title No. 126578 of the Register of Deeds ofQuezonCity in the name of Sabina Vda. de Cuenca, as well as itsreplacement by Transfer Certificate of Title No. 324372in the nameof State Investment House, Inc.
Neither party is to recover damages or costs.
SO ORDERED.
Gutierrez, Jr., Bidin, Davide, Jr. and Romero, JJ., concur .
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Republic of the PhilippinesSUPREME COURT
Manila
FIRST DIVISION
G.R. No. 73503 August 30, 1988
BENJAMIN BELISARIO, PACITA B. PINAR, VICTORIA BELISARIO,SILVERIO BELISARIO,FRANCISCO BELISARIO, ANATOLIA B. JACULAN, FELIPEBELISARIO and TERESITA B.ALKUINO petitioners,vs.THE INTERMEDIATEAPPELLATE COURT, LOURDES CABRERA, VICENTE CABRERA, JR.,ROBERTOCABRERA, MANUEL CABRERA and PNB, Cagayan de Oro Branch,respondents.
Abundio L. Okit for petitioners.
Maximo G. Rodriguez and Rufus B. Rodriguez for privaterespondents.
MEDIALDEA, J .:
This is a petition review on orari of a decision of theIntermediate Appellate Court (now the Court of Appeals) in AC-GRNo.63407-R affirming the decision of the Court of First Instance ofBukidnon in Civil Case No. 715 entitled, "BenjaminBelisario, etal., vs. Philippine National Bank, et al", dismissing hereinpetitioners' complaint for Repurchase ofHomestead.
The undisputed facts of the case are as follows:
The subject matter of this case is a piece of land originallycovered by Original Certificate of Title No. 366, pursuant to
Homestead Patent No. 45183 issued in the names of RufinoBelisario and Felipa Lauga located in Valencia, Bukidnon,andconsisting of an area of 23, 2210 hectares.
On August 3, 1948, upon the death of Rufino Belisario, theownership of the land was extra-judicially settled amonghischildren (petitioners herein), namely: Benjamin, Pacita,Victoria Silverio, Francisco, Anatolia Felipe and Teresita,allsurnamed Belisario and his widow, Felipa Lauga and in whosenames Transfer Certificate of Tittle No. T-124 was issued.
Sometime in 1950, on the strenght of a special power of attorneyexecuted by some of the petitioners in favor ofpetitioner, BenjaminBelisario, said land was mortgaged to the Philippine National Bank(PNB) to secure a promissorynote in the sum of P1,200.00.
Petitioners-mortgagors defaulted in the payment of the loan.Consequently, the mortgage was extra-judicially foreclosedand onJanuary 31, 1963 the land was sold at public auction for P3,134.76with respondent PNB as the highest bidder.
On April 21, 1971, petitioners wrote to respondent PNB makingknown their "desire to redeem and/or repurchase the saidpropertyfor and in the same price as the auction sale, P3,134.76," andenclosed therein a postal money order in theamount of P630.00 aspartial payment, with the balance to be paid in twelve equalmonthly installments. At the timepetitioners offered to redeem thesubject property, the Sheriff's Certificate of Sale covering thesale at public auction to therespondent PNB was not yetregistered.
Having been apprised of the non-registration, the respondent PNBcaused the registration of the Sheriff's Certificate ofSale withthe Register of Deeds of Bukidnon on July 22, 1971 and TransferCertificate of Title No. T-6834 was later issuedin the name ofrespondent bank.
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On August 24, 1971, respondent PNB sent a reply letter topetitioners, refusing the tender of P630.00 as partial paymentofthe total obligations of P7,041.41 due from petitioners (whichincluded the amount of P2,027.02 allegedly paid byrespondentVicente Cabrera to respondent PNB) and stating further that underexisting regulations of the bank, paymentby way of redemption mustbe paid in full and not by installments. It cannot, however, bedetermined from the records ofthe case why the amount of P2,027.02was received from respondent Cabrera by respondent PNB on December12,1967 and why the same was included in the statement of accountssent by respondent PNB to petitioners.
On February 8, 1973, respondent PNB sold the land in question torespondent Cabrera for P5,000.00 and thecorresponding TCT No. 7264was issued in his name.
On November 20, 1974, respondent Cabrera filed an action forRecovery of Possession and Damages against hereinpetitioners,together with their tenants, who were actual possessors of theland, with the Court of First Instance (nowRegional Trial Court) ofBukidnon and docketed as Civil Case No. 708. In turn, petitionersfiled on January 9, 1975, anaction for Repurchase of Homesteadagainst the respondents PNB and Cabrera with the Court of FirstInstance ofBukidnon and docketed as Civil Case 715. Beinginterrelated, the two cases were heard jointly.
After pre-trial but before trial on the merits, respondentCabrera (as defendant in Civil Case No. 715), filed a MotiontoDismiss the petitioners' action for Repurchase of Homestead,Civil Case No. 715, on two (2) grounds:
1. No tender ofpayment of the redemption price and/orconsignation of the redemption was made byplaintiff.
2. Complaint states no cause of action.
The petitioners herein (as plaintiffs in Civil Case No. 715)opposed the motion contending that they offered to repurchasetheproperty from respondent PNB (one of the defendants in the sameCivil Case) within the five-year redemption periodand tenderedpayment which was, however, refused by the respondent PNB.Petitioners also manifested that on August 1and 4, 1917, theyconsigned with the Clerk of Court of Bukidnon the amount ofP5,000.00 as repurchase price.
On September 15, 1977, the trial court granted the Motion toDismiss. After their motion for reconsideration and/or newtrial wasdenied by the trial court, petitioners appealed to the IntermediateAppellate Court (now Court of Appeals),assigning the followingerrors:
I. The lower court erred in giving due course to the Motion toDismiss, without receiving evidence and/orin ignoring the tender ofpayment made by plaintiffs to defendant bank.
II. The lower court erred in declaring that because plaintiffsnever bothered to attend to that letter (letter ofbank addressed tothe plaintiffs) for a long time it was obliged to sell the land toits codefendant VicenteCabrera on February 8, 1973.
III. The lower court erred in holding that the plaintiffs madeno pretense whatever in their opposition to themotion that VicenteCabrera disallowed the repurchase of the land and in holding thattender of paymentto defendant Cabrera was necessary to preservetheir right to repurchase.
IV. The lower court erred in holding that the consignation ofthe amount of P5,000.00 was conceivablymade to cure the deficiencyof plaintiffs' position and was made beyond the redemption periodof fiveyears.
V. The lower court erred in not considering the motion filed outof time and the conduct of the defendantsespecially Atty. Cabrera awaiver of their right to a preliminary hearing on the defense oflack of tender orthat defendants are guilty of estoppel or badfaith. (Rollo, p. 25.)
Respondent appellate court affirmed the lower court's decisionin toto . Hence, the instant petition with the petitionerassigningthe following errors:
I. That the Honorable Intermediate Appellate Court cited inholding that appellants never bothered totender the payment ofredemption and that the filing of judicial action to redeem did notpreserveappellants' right to redeem. It cited out of context thedoctrine enunciated in Tolentino vs. Court of
Appeals, 106 SCRA 513.
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II. The Honorable Intermediate Appellate Court erred in holdingthat appellants' posture that they haveoffered to repurchase theproperty from the appellee bank and tendered payment of redemptionpricewithin the redemption period is unmeritorious.
III. The Honorable Intermediate Appellate Court erred inconsidering long inaction or laches in decidingthe case, the saiddefense not having been raised in the answers ofdefendants-appellees not even in themotion to dismiss or appellees'memoranda. (Rollo, p. 9)
The subject piece of land was sold at public auction torespondent PNB on January 31, 1963. However, the Sheriff's
Certificate of Sale was registered only on July 22, 1971. Theredemption period, for purposes of determining the timewhen aformal Deed of Sale may be executed or issued and the ownership ofthe registered land consolidated in thepurchaser at anextrajudicial foreclosure sale under Act 3135, should be reckonedfrom the date of the registration of theCertificate of Sale in theOffice of the Register of Deeds concerned and not from the date ofpublic auction (PNB vs. CA etal., G.R. L-30831 and L-31176, Nov.21, 1979, 94 SCRA 357, 371). In this case, under Act 3135,petitioners may redeemthe property until July 22, 1972. Inaddition, Section 119 of Commonwealth Act 141 provides that everyconveyance ofland acquired under the free patent or homesteadpatent provisions of the Public Land Act, when proper, shall besubjectto repurchase by the applicant, his widow or legal heirs,within the period of five years from the date of conveyance.Thefive-year period of redemption fixed in Section 119 of thePublic Land Law of homestead sold at extrajudicialforeclosurebegins to run from the day after the expiration of theone-year period of repurchase allowed in an extrajudicialforeclosure.(Manuel vs. PNB, et al., 101 Phil. 968). Hence,petitioners still had five (5) years from July 22, 1972 (theexpiration of theredemption period under Act 3135) within which toexercise their right to repurchase under the Public Land Act.
The general rule in redemption is that in making a repurchase,it is not sufficient that a person offering to redeemmakesmanifestation of his desire to repurchase; this statement ofintention must be accompanied by an actual and simultaneoustenderof payment, which constitutes the legal use or exercise of theright to repurchase (Angao vs. Clavano, 17 Phil.152). Likewise, inseveral cases decided by this Court (Fructo vs. Fuentes, 15 Phil.362; Retes vs. Suelto, 20 Phil. 394;Rosales vs. Reyes, et al., 25Phil. 495, Canuto vs. Mariano, 37 Phil. 840; Dela Cruz, et al. vsResurreccion, et al., 98 Phil.975) where the right to repurchasewas held to have been properly exercised, there was a definitefinding of tender ofpayment having been made by the vendor. Thetender of payment must be for the full amount of the repurchaseprice,otherwise the offer to redeem will be held ineffectual.(Rumbaoa vs. Arzaga, 84 Phil. 812) Bona fide redemptionecessarilyimports a reasonable and valid tender of the entirerepurchase price. There is no cogent reason for requiring thevendeeto accept payment by installments from the redemptioner, asit would ultimately result in an indefinite extension oftheredemption period (Conejero, et al. vs. Court of Appeals, etal., L-21812, April 29, 1966, 16 SCRA 775, 780).
The rule that tender of payment of the repurchase price isnecessary to exercise the right of redemption finds support is
civil law. Articles 1616 of the Civil Code of the Philippines,in the absence of an applicable provision in Commonwealth ActNo.141, fumishes the guide, to wit: "The vendor cannot avail himselfof the right to repurchase without returning to thevendee the priceof the sale ... " (Uy Lee vs. Court of Appeals, L-28126, November28, 1975, 68 SCRA 196, 204).
However, the filing of a complaint to enforce repurchase withinthe period for redemption is equivalent to an offer toredeem andhas the effect of preserving the right to redemption (Reoveros vs.Abel and Sandoval, 48 O.G. 5318). In thecase of Tolentino vs. Courtof Appeals, L-50405- 06, August 5, 1981, 106 SCRA 513, 526'), thisCourt expounded:
And in this connection, a formal offer to redeem, accompanied bya bona fide tender of the redemptionprice, although proper, is notessential where, as in the instant case, the right to redeem isexercised thruthe filing of judicial action, which as noted earlierwas made simultaneously with the deposit of theredemption pricewithin the period of redemption. The formal offer to redeem,accompanied by a bonafide tender of the redemption price within theperiod of redemption prescribed by law, is only essential to
preserve the right of redemption for future enforcement evenbeyond such period of redemption. The filingof the act-on itself,within the period of redemption, is equivalent to a formal offer toredeem. Should thecourt allow redemption, the redemptioners shouldthen pay the amount already adverted to.
In a later case, Tioseco vs. Court of Appeals, (G.R.-66597,August 29, 1986, 143 SCRA 705), this Court reiterated therule thatthe filing of the action itself, within the period of redemption,is equivalent to a formal offer to redeem.
For purposes of determining whether petitioners exercised theirright to repurchase effectively, We have only to considertheirfiling of the action for Repurchase of Homestead on January 9,1975,against respondent PNB and Cabrera, whichwas filed well within thefive-year period to repurchase. The question of timeliness of thetender of payment by petitionerson August 1 and 4, 1977 of theamount of P5,000.00 had become insignificant in view of the filingof the action for
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Repurchase of Homestead which has been held equivalent to anoffer to redeem and has the effect by itself of preservingtheirright of recovering the property.
This case is different from Uy Lee vs. Court of Appeals, suprawhere the action to compel redemption was filed after thelapse ofthe period of redemption. Thus, the Court held in said case, towit:
It is clear that the mere sending of letters by vendor Simeonexpressing his desire to repurchase theproperty without anaccompanying tender of redemption price fell short of therequirements of law. Havingfailed to properly exercise his right ofredemption within the statutory five-year period, the right is lostand
the same can no longer be revived by the filing of an action tocompel redemption after the lapse of theperiod.
The same factual antecedent obtained in Conejero, et al. vs.Court of Appeals, supra where the complaint seeking to bedeclaredentitled to redeem wag filed after the expiration of the statutoryperiod of redemption. What was proper fordetermination then in saidcases was whether or not the right of redemption sans judicialaction was validly exercised. Insaid cases, the Court applied thegeneral rule that bona fide redemption necessarily imports areasonable and validtender of the entire purchase price. Therespondent Court of Appeals thus erred in citing Tolentino vs.Court of Appeals out of context and in applying the doctrine in UyLee vs. Court of Appeals , and Coneiero vs. Court of Appeals ,suprawhere the circ*mstances of said cases are different from thecase at bar. The respondent Court of Appeals likewise erredinholding that the action is barred by long inaction. The right ofredemptiola under Commonwealth Act 141 legally beganto accrue onlyon June 22, 1972. Certainly, an action for Repurchase of Homesteadfiled on January 9, 1975 cannot beheld to be barred.
ACCORDINGLY, the decision of the Court of Appeals in the instantcase is hereby REVERSED and SET ASIDE.Judgment is hereby renderedauthorizing petitioners to redeem the property subject matterhereof, within thirty (30) daysfrom entry of judgment, and orderingprivate respondent Cabrera to execute a deed of absolute conveyancethereof infavor of the petitioners upon payment by the latter ofthe purchase price thereof at the auction sale, with 1% permonthinterest thereon in addition, up to the time of redemption,together with the amount of any taxes or assessmentswhichrespondent Cabrera may have paid thereon after purchase, ifany, minus the P5,000.00 consigned in the court a quo .Nopronouncement as to costs at this instance.
SO ORDERED.
Narvasa, Cruz, Gancayco and Aquino, JJ., concur.
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Republic of the PhilippinesSUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-66597 August 29, 1986
LEONARDO TIOSECO, petitioner,vs.HONORABLE COURT OF APPEALS JOSEP. VILLANUEVA and TIMOTEA P. VILLANUEVA,respondents.
Jose T. Sumat for petitioner.
Amado F. Nera for respondents.
PARAS, J .:
A petition for review by certiorari of the decision of therespondent Intermediate Appellate Court in AC-G.R. CV No. 68888promulgated on December 27, 1983, as well as of the Resolution ofsaidappellate court promulgated on February 13, 1984 denying theMotion for Reconsideration of theaforesaid decision.
The facts of this case are as follows: The respondent spousesJose P. Villanueva and Timotea P.Villanueva mortgaged to the TarlacBranch of the Philippine National Bank three lots described inOCTNo. C-542 issued by the Register of Deeds of Tarlac to securepayment of a loan of EIGHTTHOUSAND SIX HUNDRED (P8,600.00) PESOS.When they failed to comply with the mortgagecontract, thePhilippine National Bank petitioned the Provincial Sheriff ofTarlac to foreclose upon theproperties extrajudicially. TheProvincial Sheriff in the public auction he conducted on March 7,1977sold the lots to Leonardo Tioseco, herein petitioner, as thehighest bidder for the amount ofEIGHTEEN THOUSAND NINE HUNDRED ANDSEVENTY FIVE (P18,975.00) PESOS.
The certificate of sale dated March 7, 1977 issued by theProvincial Sheriff to Tioseco was registeredin the Office of theRegister of Deeds of Tarlac on March 8, 1977. Tioseco's ownershipover theproperties was consolidated, the title of the spousesVillanueva was cancelled and TCT No. 141194was issued to Tioseco bythe Register of Deeds on March 7, 1978.
It is claimed by Tioseco that sometime before March 9, 1978respondents Villanueva visited him in
his house and offered to pay the amount he had paid for thethree lots auctioned off on March 7,1977. Tioseco told them thatthey could redeem the three lots by paying to him the amount hepaid atthe auction sale plus interest. The respondents promised toreturn, but never did.
Upon the other hand, it is claimed by the respondents that theyoffered to redeem the three lots withinthe period of redemption butTioseco allegedly demanded TWENTY TWO THOUSAND SIXHUNDRED FORTY ONEPESOS AND EIGHT CENTAVOS (P22,641.08) as redemption price.Findingthe amount demanded excessive, the respondents Villanueva filed asuit on March 7, 1978 toannul the sale in favor of Tioseco on theground that it was irregular and to require both thePhilippineNational Bank and Tioseco to determine the amount theyshould pay to be able to redeem the threelots.
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The Philippine National Bank stated in its answer that at thetime of the auction sale of the three lotson March 7, 1977 theamount of EIGHTEEN THOUSAND NINE HUNDRED SEVENTY FIVE(P18,975.00)PESOS was due from the respondents. The amount included theprincipal of the loan,accrued interest, service charges, expensesof foreclosure, and attorney's fees. The answer alsostated tha
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