Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

L-23764 December 26, 1967

JUAN SUMERARIZ and LUISA SUMERARIZ, plaintiffs-appellants, vs. DEVELOPMENT BANK OF THE PHILIPPINES and PHILIPPINE SURETY AND INSURANCE CO., INC., defendants- appellees. CONCEPCION, C.J.: This appeal, from a decision of the Court of First Instance of Manila, is before us upon certification by the Court of Appeals, only questions of law being involved therein. The relevant facts are: On September 15, 1948, plaintiffs herein, Juan Sumerariz, and his wife, Luisa Samerariz constituted, in favor of the Rehabilitation Finance Corporation now Development Bank of the Philippines, and hereinafter referred to as the Bank a real estate mortgage of two (2) parcels of land forming part of San Andres Subdivision, Manila and covered by Transfer Certificate of Title No. 1442, in their names, including a house to be constructed thereon, to guarantee a P15,000.00 loan granted them by the Bank, payable within ten (10) years, at a given monthly amortization. In view of plaintiffs' failure to comply with the terms and conditions of their contract, the Bank asked the sheriff of Manila to take possession of the property and sell it at public auction. After several postponements made upon plaintiffs' request, the sale was set for March 29, 1955. Upon the behest of Juan Sumerariz made the day before, the Bank agreed, however, to postpone the sale if there was a token payment of at least P100.00, before 9:00 a.m., the next day. No such payment having been made, the Bank bought the property, on March 29, for P8,000.00, as the highest bidder. Subsequently, the Bank repeatedly notified the plaintiffs that they could redeem the property within one (1) year, or not later than March 29, 1956, upon a down payment of P2,806.64, the balance payable in ten (10) years, at the rate of P166.50 per month. Instead of exercising the right of redemption, on March 26, 1956, plaintiffs instituted Civil Case No. 29306, of the Court of First Instance of Manila, against the Bank and the sheriff of Manila, to set aside the aforementioned foreclosure sale, upon the ground that the Bank had failed to comply with its agreement to postpone the auction sale scheduled to be held on March 29, 1956. On July 19, 1956, while the case was pending in the trial Court, the Bank sold the property to the Philippine Surety and Insurance Co., Inc., hereinafter referred to as the Surety Co. Subsequently, or on January 13, 1958, laid Court rendered a decision dismissing the complaint in case No. 29306, for the reason that plaintiffs had not redeemed the property within the period prescribed by law therefor and that the Bank had thereby become its absolute owner. Said decision was, on November 5, 1959, affirmed by the Court of Appeals, in CA-G.R. No. 25077-R. Plaintiffs petitioned the Supreme Court to review by certiorari the decision of the Court of Appeals; but, we denied the petition,1 on February 5, 1960. Soon later, or on March 16, 1960, plaintiffs commenced the present action, in the Court of First Instance of Manila, against the Bank and the Surety Co., to annul sale made to the latter by the Bank and to be allowed to redeem the property in question.1awphil.net In their answer, defendants herein pleaded res judicata and prescription. They, moreover, set up a counter-claim for rentals, for the use of said property, until actual delivery thereof to defendants, plus interest, attorney's fees and other expenses.

After appropriate proceedings, said Court rendered in decision dismissing plaintiff' complaint and ordering them to vacate the property in question, as well as to pay P100.00 a month to the Bank, from March 36, 1960, until said property is vacated by the plaintiffs, with costs.1awphil.net plaintiffs appealed to the Court of Appeals, which certified case to us. They maintain that the lower court erred: 1. In holding that the decision rendered in Civil Case 29306, Court of First Instance of Manila, entitled "Juan Sumerariz and Luisa Sumerariz vs. Development Bank of the Philippines and Sheriff of Manila" is a bar to the present case. 2. In holding that the filing of Civil Case No. 29306 in the Court of First Instance of Manila . . . did not suspend the period of redemption of the property in question. 3. In not allowing the appellants to redeem the properties in question in accordance with the manifestation and willingness of the appellee Development Bank of the Philippines to allow the appellants to redeem their own properties. 4. In requiring the appellants to pay rents for the properties in question to the appellee Development Bank of the Philippines from March 30, 1956 until appellants delivered the said properties to the appellee Bank. It is urged that the present case is not barred by the decision in Case No. 29306 because there is, allegedly, no identity, either of parties, or of subject-matter, or of cause of action, between the two cases. This contention inasmuch manifestly untenable.1awphil.net Although not a party in the first case, the inclusion of the Surety Co. as defendant in the case at bar does not detract from the legal identity of both cases, because, by buying the property from the Bank, the Surety Co. became merely the Bank's success.2 Neither does the absence, as party herein, of the sheriff, who was one of the defendants in the first case, negate said identity, inasmuch as the sheriff was but a formal party in said previous case, and is virtually a party in the present proceedings, although not explicitly mentioned as such therein.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 Civil Case No. 49206, cannot be invoked to nullify the effect on the former case of the dismissal-order issued in the latter proceeding. It has been ruled that where the one who is offering a judgment as an estoppel and the party against whom it is being offered were both parties to the action, in which such judgment was rendered, it is no objection that the action included some additional parties who are joined in the second case.5 Conversely, the operation of the final judgment or order in a previous case is not altered by the fact that somebody who was not a party in that first action has been impleaded in the second case. Otherwise, litigants can always renew any litigation by the mere expedient of including new parties.6 The subject-matter of both cases is, obviously, the same the property in question. There is, likewise, identity of the cause of action. In the first case, the issue was the validity of the auction sale in favor of the Bank, which sale, plaintiffs contended, had been made in violation of their agreement with the Bank. In the case at bar, plaintiffs maintain that the conveyance by the Bank to the Surety Co. is invalid, and this pretense is anchored upon the predicate that, when it took place, the property did not belong to the Bank, the sale in its favor by the sheriff having been made in violation of the alleged agreement aforementioned, which predicate had been rejected Court in the previous case. Similarly, the cause of in the first case was based upon the alleged right of the plaintiffs to the property in question, upon the ground that its sale to the Bank was illegal. This premise is, also, the cornerstone of plaintiffs' cause of action in the case at bar.7

Moreover, the same evidence would have sufficed to support and establish 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 simply this: "Would the same evidence support and establish both the present and the former cause of action?"9 Here, the answer is in the affirmative. The evidence both in the cadastral proceedings and in the present reconveyance case, is directed at the question of ownership. It was held that where the first case is one for reivindicacion and the other for partition, the title of the case is unimportant. For the same evidence would support the one and the other.10 A similar rule obtains where the former cases were reivindicatory in character and the second are land registration proceedings.11 Another example: The first case was for consolidation of title of the assignee in the land registration proceedings. This was objected to upon the ground that the deed of assignment was invalid as pactum commissorium. The court gave due effect to said document and ordered that assignor's titles be cancelled and new ones issued to the assignee. The second was an action for reformation upon the averment that the deed of assignment mentioned in the first case was an equitable mortgage. This Court declared that the issue in both suits is "whether the deed of assignment vested in Monte de Piedad the ownership of the lots," and held that the second action was barred by previous adjudication in the land registration case.12 And where, as here, fraud was alleged in the first case and the same fraud was relied upon in the second, the judgment in former case operated as res judicata.13 Again, the issue of ownership of the property in question was settled in the first case. Accordingly, it may no longer be litigated in the case at bar. Under the second assignment of error, plaintiffs maintain that the period of one (1) year to redeem the property in question was suspended by the institution of Case No. 29306, on March 26, 1956, or three (3) days before the expiration of said period. We have not found, however, any statute or decision in support of this pretense. Moreover, up to now plaintiffs have not exercised the right of redemption. Indeed, although they have intimated their wish to redeem the property in question, they have not deposited the amount necessary therefor. It may not be amiss to note that, unlike Section 30 of Rule 39 of the Rules of Court, which permits the extension of the period of redemption of mortgaged properties,14 Section 3 of Commonwealth Act No. 459, in relation to Section 9 of Republic Act No. 85, which governs the redemption of property mortgaged to the Bank, does not contain a similar provision. 15 Again this question has been definitely settled by the decision in the previous case declaring that plaintiffs' right of redemption has already been extinguished in view of their failure to exercise it within the statutory period.. The third assignment of error is predicated upon an alleged willingness of the Bank to allow the plaintiffs to make such redemption. The Bank denies, however, have agreed thereto. Besides, this question of fact was not raised by plaintiffs in the lower court. 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 first case, to have expired already. It is thus clearly devoid of merit. WHEREFORE the decision appealed from should be, as it is hereby, affirmed, with costs against plaintiffsappellants. It is so ordered. Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.

Footnotes
1

G.R. No. L-16423.

Baguinguito vs. Rivera, 56 Phil. 423; Barretto vs. Cabangis, 37 Phil. 98; Fetalino vs. Sanz, 44 Phil. 691; Clemente vs. Heacock Co., 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 the party against whom it is offered were parties to the action in which the judgment is rendered, it is no objection that the action included some additional parties who are not joined in the present action. . . ."
3

Bacaling vs. GSIS, L-20124, August 14, 1965. L-21224, September 27, 1966. Citing Aquino vs. Sanvictores, L-3397, July 27, 1951.

Citing Alzua vs. Johnson, 21 Phil. 308; Aquino vs. Sanvictores, supra; Samahang Magsasaka vs. Chua Guan, 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 Central Co. vs. Barrios, 79 Phil. 666; City of Ottumwa v. Nicholson, 143 N.W. 439, cited in 1 Moran 1963 ed., p. 91; Juan vs. Go Cotay 26 Phil. 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.

Citing Pealosa vs. Tuason, 22 Phil. 303, 322; Garcia vs. Court of Appeals, et al., L-19783, July 30, 1965; Philippine Farming Corporation, 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. Citing Kidpalos, et al. vs. Baguio Gold Mining Co., L-19940 to L- 19944, August 14, 1965. Franco, et al. vs. Monte de Piedad and Savings Bank, L-17610, April 22, 1963. San Diego, etc. vs. Cardona, et al., 70 Phil. 281, 284. Enage vs. Vda de Hijas de P. Escao, 38 Phil. 657. Nepomuceno vs. Rehabilitation Finance Corporation, L-14897, November 23, 1960.

11

12

13

14

15

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; Yu Kimteng Const. vs. MRR Co., et al., L-17027, March 3, 1967.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 109672 July 14, 1994 SPOUSES EDUARDO VACA and MA. LUISITA PILAR, petitioners, vs. THE COURT OF APPEALS and ASSOCIATED BANK, respondents. Ramon Quisumbing, Jr. Law Office for petitioners. Robles, Ricafrente & Aguirre Law Firm for private respondent. RESOLUTION

MENDOZA, J.: This is a petition for review on certiorari of the decision of the Court of Appeals, granting private respondent Associated Bank's petition for certiorari and mandamus to annul two orders of the Regional Trial Court (Branch 95) of Quezon City dated June 11 and August 25, 1992. The Facts of the case are: On February 7, 1992, private respondent Associated Bank filed with the RTC of Quezon City a petition (docketed as LRC Case No. Q-5536-92) for the issuance of a writ of possession of property covered by TCT No. 254504. The property, consisting of a 953-square meter lot and a residential house erected on it, is situated at No. 18, Lovebird Street, Green Meadows Subdivision I, Quezon City. Private respondent alleged that for failure of petitioners Eduardo Vaca and Ma. Luisita Pilar to pay their mortgage obligation to private respondent, the mortgage was extrajudicially foreclosed and the mortgaged property was sold on October 30, 1990 to private respondent as the highest bidder; that the one-year period to redeem having expired, TCT No. 254504 was cancelled and TCT No. 52593 in private respondent's name was issued in lieu thereof; and that despite demands, petitioners refused to turn over possession of the property to private respondent. Petitioner spouses filed an opposition alleging that there was a pending action (Civil Case No. Q-91-8285) in another court which the petitioners had filed for the annulment of the mortgage and its foreclosure. On June 11, 1992, the RTC denied private respondent's petition for the issuance of a writ of possession, and on August 25, 1992, denied private respondent's motion for reconsideration. On certiorari the Court of Appeals annulled the orders and ordered the RTC to issue the writ of possession. Hence this petition. Petitioners contend that the action for annulment of the mortgage (Civil Case No. Q-91-8285) constitutes a prejudicial question in LRC Case No. Q-5536-92 for issuance of a writ of possession and that it was error for the Court of Appeals to order the RTC to issue the writ of possession in favor of the mortgagee (herein private respondent). They argue further that the rule that it is a ministerial duty of the court to issue a writ of possession after the one-year period to redeem has expired is subject to certain exceptions, and this case falls within the exception.

in which it was held that the pendency of a separate civil suit questioning the validity of the mortgage cannot bar the issuance of the writ of possession, because the same is a ministerial act of the trial court after title on the property has been consolidated in the 2 mortgagee. The ruling was reiterated in Navarra v. Court of Appeals, in which we held that as a rule any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of possession.
Petitioners' contention has no merit. The question raised in this case has already been settled in Vda. de Jacob v. Court of Appeals,

Petitioners cite the cases of Cometa v. Intermediate Appellate Court, and Barican v. Intermediate Appellate Court, where we ordered the deferment of the issuance of the writ of possession notwithstanding the lapse of the one-year period of redemption. The deferment, however, was due to the peculiar circumstances of those cases. In Cometa, which actually involved execution under Rule 39, sec. 35, the properties were sold at an unusually lower price than their true value, while in Barican, the mortgagee bank took five years from the time of foreclosure on October 10, 1980 before filing the petition for the issuance of a writ of possession on August 16, 1985. Earlier the property had been sold to third parties who assumed the indebtedness of the mortgagor and took possession of the property so that at the time of the hearing on

the petition for a writ of possession, the original debtor was no longer in possession. Under these circumstances, it was held that the obligation of the court to issue the writ of possession had ceased to be ministerial. None of these equitable circumstances is present herein so as to justify making an exception to the rule that the issuance of a writ of possession to a purchaser in an extrajudicial foreclosure, after the period of redemption, is a ministerial function of the court. In this case, there is no dispute that the property was not redeemed within one year from registration of the extrajudicial foreclosure sale. Private respondent thus acquired the absolute right, as purchaser, to the issuance of a writ of possession pursuant to Act No. 3135, sec. 7. WHEREFORE, the resolution of October 18, 1993, giving due course to the petition for review on certiorari, is RECONSIDERED and RECALLED and the petition is DENIED for lack of merit for lack of showing of any reversible error committed by the Court of Appeals. 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.

Republic of the Philippines SUPREME 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 to TRINIDAD GREGORIO VINCOY, respondents. DE LEON, JR., J.: This is a motion for reconsideration of the resolution of this Court dated July 12, 1999 dismissing the petition for review on certiorari filed by petitioner Union Bank of the Philippines which assailed the decision of the Court of Appeals (a) upholding the validity of the real estate mortgage executed by respondents Gonzalo and Trinidad Vincoy in favor of petitioner as security for a loan in the principal amount of Two Million Pesos (P2,000,000,00.), and (b) fixing the redemption price of the property mortgaged at Three Million Two Hundred Ninety Thousand Pesos (P3,290,000.00) representing the purchase price of the said property at the foreclosure sale plus one percent (1%) monthly interest from April 19, 1991, the date of the foreclosure sale, until its redemption pursuant to Section 30, Rule 39 of the Rules of Court. The following are the factual antecedents. On March 2, 1990, respondents-spouses Gonzalo and Trinidad Vincoy mortgaged their residence in favor of petitioner to secure the payment of a loan to Delco Industries (Phils.), Incorporated1 in the amount of Two Million Pesos (P2,000,000.00). For failure of the respondents to pay the loan at its date of maturity, petitioner extrajudicially foreclosed the mortgage and scheduled the foreclosure sale on April 10, 1991. The petitioner submitted the highest bid for Three Million Two Hundred Ninety Thousand Pesos (P3,290,000.OO) at the foreclosure sale. Accordingly, a certificate of sale was issued to petitioner and duly annotated at the back of the Transfer Certificate of Title covering 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 annulment of mortgage with the lower court. In their complaint, respondents alleged that the subject property mortgaged to petitioner had in fact been constituted as a family home as early as October 27, 1989. Among the beneficiaries of the said family home are the sisters of respondent Trinidad Vincoy, namely Apolonia and Luciana De Jesus Gregorio whose consent to the mortgage was not obtained.3 Respondents thus assailed the validity of the mortgage on the ground that Article 158 of the Family Code4 prohibits the execution, forced sale, attachment or any other encumbrance of a family home without the written consent of majority of the beneficiaries thereof of legal age.5 On the other hand, petitioner maintained that the mortgaged property of the respondents could not be legally constituted as a family home because its actual value exceeded Three Hundred Thousand Pesos (P300,000.00), the maximum value for a family home in urban areas as stipulated in Article 157 of the Family Code.6 The lower court rendered judgment declaring the constitution of the family home void and the mortgage executed in favor of the petitioner valid. It held, among others, that Article 158 of the Family Code was not applicable to respondents' family home as the value of the latter at the time of its alleged constitution exceeded Three Hundred Thousand Pesos (P300,000.00).7 It also respondent Gonzalo Vincoy and/or Delco Industries (Phils.), Inc. to pay petitioner his and/or its outstanding obligation as of February 15,1993 in the amount of Four

Million Eight Hundred Sixteen Thousand One Hundred Ninety-Four Pesos and Forty Four Centavos (p4,816,194.44) including such sums that may accrue by way of interests and penalties.8 Aggrieved, respondents appealed to the Court of Appeals contending that the lower court erred in finding that their family home was not duly constituted, and that the mortgage in favor of petitioner is valid. Respondents also claimed that the correct amount sufficient for the redemption of their property as of February 15,1993 is Two Million Seven Hundred Seventy Three Thousand Seven Hundred Twelve Pesos and Eighty Seven Centavos (P2,773,712.87)9 and not Four Million Eight Hundred Sixteen Thousand One Hundred Ninety-Four Pesos and Forty-Four Centavos (P4,816,194.44) as found by the lower court. In a decision promulgated on June 4, 1997, the Court of Appeals sustained the finding of the lower court that the alleged family home of the respondents did not fall within the purview of Article 157 of the Family Code as its value at the time of its constitution was more than the maximum value of Three Hundred Thousand Pesos (P300,000.00). Hence, the Court of Appeals upheld the validity of the mortgage executed over the said property in favor of the petitioner.10 However, it found that the amount sufficient for the redemption of the foreclosed property is Three Million Two Hundred Ninety Thousand Pesos (P3,290,000.00) equivalent to the purchase price at tile foreclosure sale plus one percent (1%) monthly interest from April 19, 1991 up to the date of redemption11 pursuant to Section 30, Rule 39 of the Rules of Court.12 Dissatisfied with the ruling of the Court of Appeals, the petitioner filed a petition for review on certiorari with Court submitting the following resolution: I. The Court of Appeals resolves an issue of redemption which was not even directly raised by the parties and contrary to the evidence on record. 2. Assuming without admitting that respondents are entitled to redemption, the price set by the Court of Appeals is not based on laws.13 Petitioner contends, first of all, that in allowing the respondents to redeem the subject foreclosed property, the Court of Appeals completely ignored that fact that neither respondents' complaint before the lower court nor their brief filed before the Court of Appeals prayed for the redemption of the said property. On the contrary, respondents had consistently insisted on the nullity of the mortgage. Thus, to allow them to redeem the property would contradict that very theory of their case.14 Petitioner also contends that the respondents had already lost their right to redeem the foreclosed property when they failed to exercise their right of redemption by paying the redemption price within the period provided by law.15 In the event, however, that the Courts upholds the right of the respondents to redeem the said property, the petitioner claims that it is not Section 30, Rule 39 of the Rules of the Court that applies in determining the amount sufficient for redemption but Section 78 of the General Banking Act as amended by the Presidential Decree No. 182816 which provides: "xxx. In the event of foreclosure, whether judicially or extra judicially, of any mortgage on real estate which is security for any loan granted before the passage of this Act or under the provisions of this Act, the mortgagor or debtor whose real property has been sold 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 shall have the right, within one year after the sale of the real estate as a result of the foreclosure of the respective mortgage, to redeem the property by paying the amount fixed by the court in the order of execution, or the amount due under the mortgage deed, as the case may be, with interest thereon at the rate specified in the mortgage, and all the costs, and judicial and other expenses incurred by the bank or institution concerned by reason of the execution and sale and as a result of the custody of the said property less the income received from the property." [Italics supplied].

This Court dismissed the petition in a Resolution promulgated on July 12,1999 on the ground that the Court of Appeals did not commit any reversible error and that the petition raises mere questions of fact already amply passed upon by the appellate court.17 Hence, the instant motion for reconsideration. We are persuaded to reconsider. First of all, it is important to note that this case was decided by the lower court on the basis only the pleadings submitted by the parties. No trial was conducted, thus, no evidence other than submitted with the pleadings could be considered. A careful scrutiny of the pleadings filed by the respondents before the lower court reveals that at no time did the respondents pray that they be allowed to redeem the subject foreclosed property.18 On the other hand, respondents never wavered from the belief that the mortgage over the said property is, in the first place, void for having been executed over a duly constituted family home without the consent of the beneficiaries thereof. After upholding the validity of mortgage, the lower court ordered respondent Gonzalo Vincoy and/or Delco Industries, Inc. to pay petitioner the amount of Four Million Eight Hundred Sixteen Thousand One Hundred Ninety-Four Pesos and Forty-Four Centavos (P4,816,194.44) plus interest and penalties representing Vincoy's and/or Delco's outstanding obligation to petitioner as of February 15,1993.19 There is no mention whatsoever of respondents right to redeem the property. Respondents raised the issue of redemption for the first time only on appeal in contesting the amount ordered by the lower court to be paid by respondents to the petitioner. Thus, the actuation of the Court of Appeals in allowing the respondents to redeem the subject foreclosed property is not legally permissible. In petitions for review or appeal under Rule 45 of the Rules of Court, the appellate tribunal is limited to the determination of whether tile lower court committed reversible error.20 It is settled jurisprudence that an issue which was neither averred in the complain nor raised during the trial in the court below cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice and due process.21 On this ground alone, the Court of Appeals should have completely ignored the issue of respondents' right to redeem the subject foreclosed property. In addition, a reason just as glaringly obvious exists for declaring the respondents' right of redemption already non-existent one year after May 8,1991, the date of the registration of the sale at public auction. Pursuant to Section 78 of the General Banking Act, a mortgagor whose real property has been sold at a public auction, judicially or extrajudicially, for the full or partial payment of an obligation to any bank, shall have the right, within one year after the sale of the real estate to redeem the property. The one-year period is actually to be reckoned from the date of registration of the sale.22 Clearly therefore, respondents had only until May 8, 1992 to redeem the subject foreclosed property. Their failure to exercise the right of redemption by paying the redemption price within the period prescribed by the law effectively divested them of said right. It bears reiterating that during the one year redemption period, respondents never attempted to redeem the subject property but instead persisted in their theory that the mortgage is null and void. To allow them now to redeem the same property would, as petitioner aptly puts it, be letting them have their cake and eat it too. It cannot also be argued that the action for annulment of the mortgage filed by the respondents tolled the running of the one year period of redemption. In the case of Sumerariz v. Development Bank of the Philippines,23 petitioners therein contented that the one-year period to redeem the property foreclosed by respondent was suspended by the institution of an action to annul the foreclosure sale filed three (3) days before the expiration of the period. To this we ruled that: "We have not found, however, any statute or decision in support of this pretense. Moreover. up to now plaintiffs have not exercised the right of redemption. Indeed. although they have intimated their wish to redeem the property in question, they have not deposited the amount necessary therefor. It may be not a

miss to note that, unlike Section 30 of Rule 39 of the Rules of Court, which permits the extension of the period of redemption of mortgaged properties. Section 3 of Commonwealth Act No. 459, in relation to Section 9 of Republic Act No. 85, which governs the redemption of property of mortgaged to the Bank does no contain a similar provision. Again this question has been definitely settled by the previous case declaring the plaintiffs' right of redemption has already been extinguished in view of their failure to exercise it within the statutory period."24 Also, in the more recent case of, Vaca v. Court of Appeals,25 we declared that the pendency of an action questioning the validity of a mortgage cannot bar the issuance of the writ of possession after title to the property has been consolidated in the mortgagee.26 The implication is clear: the period of redemption is not interrupted by the filling of an action assailing the validity of the mortgage, so that at the expiration thereof, the mortgagee who acquires the property at the foreclosure sale can proceed to have the title consolidated in his name and a writ of possession issued in his favor. To rule otherwise, and allow the institution of an action questioning the validity of a mortgage to suspend the running of the one year period of redemption would constitute a dangerous precedent. A likely off shoot of such a ruling is\ the institution of frivolous suits for annulment of mortgage intended merely to give the mortgagor more time to redeem the mortgaged property.1wphi1.nt As a final word, although the issue pertaining to the correct amount for the redemption of the subject foreclosed property has been rendered moot by the foregoing, a point of clarification should perhaps be made as to applicable legal provision. Petitioner's contention that Section 78 of the General Banking Act governs the determination of the redemption price of the subject property is meritorious. In Ponce de Leon v. Rehabilitation Finance Corporation,27 this Court had occasion to rule that Section 78 of the General Banking Act had the effect of amending Section 6 of Act 313528 insofar as the redemption price is concerned when the mortgagee bank, as in this case, or a banking or credit institution.29 The apparent conflict between the provisions of Act No. 3135 and the General Banking Act was, therefore, resolved in favor of the latter, being a special and subsequent legislation. This pronouncement was reiterated in the case of.Sy v..Court of Appeals30 where we held that the amount at which the foreclosed property is redeemable is the amount due under the mortgage deed, or the outstanding obligation of the mortgagor plus interest and expense in accordance with Section 78 of the General Banking Act.31 It was therefore manifest error on the part of the Court of Appeals to apply in the case at bar the provisions of Section 30 Rule 39 of the Rules of Court in fixing the redemption price of the subject foreclosed property. WHEREFORE, the motion for reconsideration is hereby GRANTED. This Court's Resolution dated July 12, 1999 is MODIFlED insofar as respondents are found to have lost their right to redeem the subject foreclosed property. SO ORDERED. Bellosillo, Mendoza, Quizumbing, and Buena, JJ. , concur.

Footnotes
1

CA Rollo, p. 17. CA Rollo, p. 27. CA Rollo, pp. 16-17.

Art. 158. The family home may be sold, alienated, donated, assigned or encumbered by the owner or owners thereof with the written consent of the person constituting the same, the latter's spouse and a majority of the beneficiaries of legal age. In case of conflict, the court shall decide.
5

Rollo, p. 8.

Art. 157. The actual value of the family home shall not exceed, at the time of its constitution, the amount of three hundred thousand pesos in urban areas, and two hundred thousand pesos in rural areas, or such amounts as may hereafter be fixed by law. In any event, if the value of the currency changes after the adoption of this Code, the value most favorable for the constitution of a family home shall be the basis of the evaluation. For purposes of this Article, urban areas are deemed to include chartered cities and municipalities whose annual income at least equals that legally required for chartered cities. All others are deemed to be rural areas.
7

CA Rollo. p. 28. CA Rollo. pp. 29-30.

Computed as follows: P2,576,022.61, the outstanding obligation of Gonzalo Vincoy to petitioner as of February 6, 1991 less P300,000.00, total payment made plus one percent (1%) monthly interest from the date of the auction sale on April 19, 1991 up to February 15, 1993. (CA Rollo, pp. 23-24.)
10

Rollo, pp. 9-10. Rollo, p. 10.

11

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 the property from the purchaser, at any time within twelve (12) months after the sale, on paying the purchaser the amount of his purchase with one per centum per month interest thereon in addition. up to the time of redemption, together with the amount of any assessments or taxes which the purchaser may have paid thereon after purchase, and interest on such last-named amount at the same rate; xxx. [Underscoring supplied.]
13

Rollo, p. 24. Rollo, p. 25. Rollo, p. 26. Rollo, p. 28. Rollo, p. 135. In their complaint filed before the lower court, the respondents prayed that judgment be rendered: a. Annulling the mortgage executed between plaintiff GONZALO VINCOY in favor of defendant bank on March 2, 1990 described in Annex" A " of the Complaint;

14

15

16

17

18

b. During the pendency of this case and perpetually thereafter, a writ of preliminary injunction be issued after posting the required bond to prevent the defendant bank from consolidating its Certificate of Title over the property described under TCT No. 128610 of the Register of Deeds of Pasay City covering the family home of plaintiff GONZALO VINCOY and his wife TRINIDAD GREGORIO VINCOY, whose shelter plaintiff beneficiaries share; and c. Requiring the defendant bank to pay the plaintiffs jointly and severally, by way of damages, the amounts of P100,000.00 as attorney's fees and costs of litigation; and another P100,000.00 for moral and exemplary damages. Plaintiffs likewise pray for other reliefs proper under the premises. (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. Court of Appeals, et al., 268 SCRA 688, 702 (1997).
21

Roman Catholic Archbishop of Manila v. Court of Appeals, et al., 269 SCRA 145, 153 (1997); Gevero v. Intermediate Appellate Court, et al., 189 SCRA 201, 208 (1990); Matienzo v. Servidad, 107 SCRA 276, 283 (1981).
22

Regalado, Remedial Law Compendium. Volume I, 6th ed., 1997, p. 455. 21 SCRA 1374 (1967). lbid., pp. 1379-1380. 234 SCRA 146, (1994). Ibid., p. 148. 146 SCRA 862 (1970).

23

24

25

26

27

28

SEC. 6. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to, the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of sale; and such redemption shall be governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure ( now Secs. 29, 30 and 34, Rule 39, Revised Rules of Court), insofar as these are not inconsistent with the provisions of this Act.
29

See note 27, supra, p. 878. 172 SCRA 125 (1989). Ibid., p. 134.

30

31

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

G.R. No. 99308 November 13, 1992 STATE INVESTMENT HOUSE, INC., petitioner, vs. COURT OF APPEALS and SABINA VDA. DE CUENCA, respondents.

MELO, J.: The Decision and Amended Decision of the Court of Appeals in CA-G.R. CV 24339, both reversing and affirming in part the Decision of Branch 90 of the Regional Trial Court of Quezon City in "Sabina Vda. de Cuenca vs. State Investment House, Inc." (Civil Case No. Q-42552), for declaration of nullity of the foreclosure sale with an alternative prayer for redemption of the foreclosed property, are assailed in the instant petition on questions of law. As may be gleaned from the pleadings of the parties, the antecedent facts are as follows: On February 13, 1979, private respondent Sabina Vda. de Cuenca (Cuenca) obtained a loan from petitioner State Investment House, Inc. (SIHI) under a promissory note for P160,000.00, secured by a mortgage on Cuenca's property at Tandang Sora, Quezon City. On November 15, 1979, Cuenca obtained another loan of P500,000.00. This loan was secured by a real estate mortgage executed by Cuenca on another property located along Timog, Quezon City, with paragraph 6 of the contract expressly giving SIHI the option of extra-judicially foreclosing the mortgaged property in the event of Cuenca's default in the payment of her indebtedness. Cuenca's unpaid balance of P120,000.00 under the first loan was deducted from the proceeds of the second loan. The mortgage on her property at Tandang Sora, Quezon City was cancelled. Because of Cuenca's failure to pay on the maturity date of the loan, her account was restructured and rolled over twelve times through the execution of various promissory notes. On November 29, 1982, the maturity date of the twelfth promissory note, SIHI claimed that Cuenca's obligations, inclusive of interest, service charges, and penalties, reached a total of P621,483.57. The loan was not anymore restructured and SIHI, on December 2 and 15, 1982, made written demands on Cuenca for the payment of her outstanding obligation. Cuenca did not heed SIHI's demands for payment. SIHI thus initiated extra-judicial foreclosure of Cuenca's mortgaged property for which the corresponding notice of sheriff's sale was issued on February 23, 1983, setting the auction sale on March 22, 1983. The scheduled foreclosure sale was, however, deferred by SIHI on account of Cuenca's request to be given time to pay the loan. Although Cuenca did make some payments, these were not enough to fully pay her outstanding obligation and as of July 28, 1983, SIHI claimed 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 for P742,181.55, Cuenca's outstanding debt at that time per SIHI's computation. The certificate of sale was registered with the Register of Deeds 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 furnished a Statement of Account "before and after the foreclosure/auction sale" for her to be able to redeem the foreclosed property from SIHI. This was followed by another letter (Exhibit 54-A; also Exhibit J, p. 20, Vol. I, Record) from Cuenca on July 17, 1984 wherein she signified her intention to redeem the property for P500,000.00, payable in the following manner: 1. P100,000.00 payable within thirty (30) days upon receipt of (SIHI's) approval of this proposal.

2. The balance of P400,000.00 shall be paid in eight (8) monthly installments. Each installment payment shall be due on the 30th day of each month, the first monthly payment to be reckoned from the date the amount 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 that she should pay her total outstanding obligation amounting at that time to P870,739.36. On August 23, 1984, Cuenca, through counsel, sent another letter to 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 full sum of P426,874.72 as the redemption price of the property. This sum of P426,874.72 is the difference between the redemption price of P870, 739.36 which you fixed in your letter of 16 August 1984, and the sum of P441,312.76 which is the aggregate of the payment which our client made to you on account of her loan of P500,000.00. . . Without, however, waiting for SIHI's reply, Cuenca, on August 24, 1984, filed a complaint with the Regional Trial Court of Quezon City seeking annulment of the foreclosure sale on the ground that she had not defaulted in the payment of her loan to SIHI. Alternatively, Cuenca prayed that the trial court fix the redemption price in the event it is found that she is still indebted to SIHI. After the expiration of the one-year redemption period, the Register of Deeds issued a new title on the foreclosed property in SIHI's name. On October 19, 1989, Judge Abraham P. Vera, presiding judge of Branch 90 of the Regional Trial Court of the National Capital Judicial Region stationed in Quezon City, promulgated his decision declaring the foreclosure sale, as well as SIHI's title obtained in such sale, null and void. In its decision, the trial court made the following essential findings: (a) that the filing of the petition for extrajudicial foreclosure was valid because as of the date of the filing thereof, Cuenca was still indebted to SIHI in the sum of P222,890.41 based on the trial court's own computation; and (b) that the foreclosure sale held on August 8, 1983 was not valid because at that time, Cuenca no longer owed any amount to SIHI, as in fact from the computations made by the trial court, Cuenca had made an overpayment to SIHI in the amount of P27,054.14. The dispositive portion of the trial court's decision stated: ACCORDINGLY, judgment is hereby rendered: (a) Declaring plaintiff to have fully paid her obligations under the promissory notes, marked Exhs. 1 and 4, and all of those deriving their being from Exh. 4; (b) Declaring the sale of the mortgaged property of plaintiff under the foreclosure proceedings and of the resultant Certificate of Sale executed and issued by the foreclosing Sheriff by reason of such foreclosure to be null and void; (c) Directing the Register of Deeds of Quezon City to cancel Transfer Certificate of Title No. 325372 (Exh. N) in the name of SIHI, and to reinstate Transfer Certificate of Title No. T-12678 (Exh. B) in the name of plaintiff; (d) Directing defendant SIHI to refund to plaintiff the sum of P27,054.14, which was the overpayment she made on account of her loans with SIHI, with interest at 12% per annum from the date of the filing of the complaint until the same is fully paid; (e) Directing the defendant SIHI to pay to plaintiff the sums of P50,000.00 as moral damages; P50,000.00 as exemplary damages; and P50,000.00, as attorney's fees; (f) Directing defendant SIHI to pay [plaintiff the sum of P62,903.18 as a refund of the penalties which it had collected from plaintiff, with interest thereon at 6% per annum from date of this decision until the same is fully paid;

(g) Directing plaintiff to pay to defendant SIHI the sum of P14,645.00, in reimbursement of SIHI's expenses in the foreclosure of the mortgaged property, which includes attorney's fees, with interest thereon at 6% per annum from date of the decision until it is fully paid, which amount shall, however, be offset by an equivalent 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 other are hereby denied and dismissed. SIHI appealed the decision to the court of Appeals in CA-G.R. CV No. 24339. In its Original Decision, the Court of Appeals (Campos [P], Lantin, Sempio-Diy, JJ) rectified several errors committed by the trial court in its computation of Cuenca's account with SIHI, but nevertheless affirmed the trial court's finding that at the time of the foreclosure sale, Cuenca had already paid in full her indebtedness so that the foreclosure sale and the transmission of title to SIHI were null and void. Both parties asked for a reconsideration of the appellate Court's ruling. SIHI's Motion for Reconsideration contended that on the basis of the computations made by the trial court and as corrected by the Court of Appeals in its decision, the net result showed that as of the date of the foreclosure sale on August 8, 1983, Cuenca was still indebted to SIHI, and such being the case, the foreclosure sale was valid. In her Motion for Reconsideration, Cuenca asked the appellate court to reconsider its finding that she had obtained a third loan from SIHI for P61,500.00. She further asked that she be credited two amounts which were disallowed by respondent court. On April 30, 1991, respondent court promulgated its Amended Decision, reversed its earlier ruling and held that in accordance with its own computations, Cuenca was still indebted to SIHI in the amount of P279,963.42 as of the date of the foreclosure sale. The dispositive 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 the sum of P279,963.42, consisting of the unpaid balance of her outstanding obligation within 30 days from receipt of this Amended Decision with payment of interest at the legal rate from date of this decision until final judgment. b) The foreclosure proceedings and the resultant Certificate of Sale executed and issued by the foreclosing sheriff by reason of such foreclosure are rendered null and void. c) Transfer Certificate of Title No. 324372 issued in the name of SIHI is declared null and void and the Register of Deeds of Quezon City is ordered to reinstate Transfer Certificate of Title No. 126578 in the name of plaintiff. d) No pronouncement as to payment of damages and attorney's fees. SO ORDERED. (p. 49, Rollo.) Dissatisfied, SIHI filed the instant petition and as clarified in pages 4 and 5 of the petition, the appeal is limited to the following aspects: (i) The original Decision in C.A.-G.R. CV No. 24339, "Sabina Vda de Cuenca, plaintiff-appellee v. State Investment House, Inc., defendant-appellant," promulgated by respondent Court on 28 February 1991, only insofar as the decision voided the foreclosure sale of the mortgaged property and SIHI's title acquired by virtue of such foreclosure sale, the challenged part of the dispositive portion reading as follows: (b) Declaring the sale of the mortgaged property of plaintiff under the foreclosure proceedings and of the resultant Certificate of Sale executed and issued by the foreclosing Sheriff by reason of such foreclosure to be null and void;

(c) Directing the Register of Deeds of Quezon City to cancel Transfer Certificate of Title No. 325372 (Exhibit N) in the name of SIHI, and to reinstate Transfer Certificate of Title No. 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 as it adjudicated as follows: (a) Plaintiff-appellee is ordered to pay defendant-appellant the sum of P279,963.42, consisting of the unpaid balance of her outstanding obligation within 30 days from receipt of this Amended Decision with payment of interest at the legal rate from date of this decision until final judgment. (b) The foreclosure proceedings and the resultant Certificate of Sale executed and issued by the foreclosing Sheriff by reason of such foreclosure are rendered null and void. (c) Transfer Certificate of Title No. 324372 issued in the name of SIHI is declared null and void and the Register of Deeds of Quezon City is ordered to reinstate Transfer Certificate of Title No. 126578 in the name of plaintiff. (b) Petitioner is not appealing the rest of the dispositive portions 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 IT REFUSED TO DECLARE THE FORECLOSURE PROCEEDINGS VALID DESPITE ITS OWN DETERMINATION THAT RESPONDENT CUENCA WAS TRULY AND GENUINELY INDEBTED TO PETITIONER WHEN THE FORECLOSURE PROCEEDINGS WERE INSTITUTED. ALTERNATIVE GROUND SHOULD THE SUPREME COURT AFFIRM THE VOIDING OF THE FORECLOSURE SALE AND OF PETITIONER'S TITLE, PETITIONER IS ENTITLED, IN LAW AND EQUITY TO THE PAYMENT OF LEGAL INTEREST ON THE PRINCIPAL SUM OF P279,963.42 (THE SUM ADJUDGED IN PETITIONER'S FAVOR BY RESPONDENT COURT) COMPUTED FROM THE DATE OF THE FORECLOSURE SALE UP TO THE DATE OF ACTUAL PAYMENT OF THE PRINCIPAL SUM. (pp. 1516, Rollo) On July 25 1991, shortly after she filed her Comment, Cuenca consigned with this Court Metro Bank Cashier's Check No. CC-17743 in the sum of P279,963.42, representing the amount ordered by the Court of Appeals (in its Amended Decision) to be paid to SIHI. Thereafter, SIHI filed its Reply on August 15, 1991, to which a Rejoinder was filed by Cuenca on August 27, 1991. As correctly formulated by SIHI, the principal issue in this case is the effect upon the validity of the extra-judicial foreclosure proceedings of a judicial determination that the debtor-mortgagor (Cuenca), at the time of the foreclosure, was still indebted and in default in the payment of the obligations to the creditor-mortgagee (SIHI). Cuenca's loan with SIHI was restructured and rolled over twelve (12) times, with the last promissory note indicating the maturity date of November 29, 1982. The recomputation (attached to the Amended Decision) of the Court of Appeals shows, however, that on the said date Cuenca still had an outstanding indebtedness of P416,188,08. SIHI, in its letters to Cuenca dated December 2 and 15, 1982 (Exhibits 36 and 36-A, pp. 435 and 436, Vol. I, Record) demanded the payment of this unpaid amount. Cuenca, however, failed to make any payments and thus, even at that point in time, was already debtor in default under Article 1168 of the New Civil Code. The extra-judicial foreclosure instituted by SIHI in February 1983 was, therefore, valid as at that time, Cuenca's loan being then already almost three (3) months overdue (Bonnevie vs. Court of Appeals, 125 SCRA 122 [1983]). Aside from the fact that Cuenca was already in default, the Real Estate Mortgage executed by the parties expressly granted SIHI the option to foreclose when it provided that:

6. In the event that the Mortgagor/Debtor herein, should fail or refuse to pay any of the sums of money secured by this mortgage, or any part thereof, in accordance with the terms and conditions herein set forth or those stipulated in the correlative promissory note(s), or should he/it fail to perform any of the conditions stipulated herein, or those in the promissory note(s), then and in such case the Mortgagee shall have the right, at its election, to foreclose this mortgage. . . SIHI, however, deferred the auction sale when Cuenca subsequently asked for more time to pay her obligation. Cuenca's account, however, was not restructured and she herself gave SIHI permission to proceed with the auction sale on August 8, 1983 should 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 be P279,963.42. It is worth noting that this computation is not challenged or questioned by either SIHI or Cuenca and We find no reason to disturb the same. The obvious implication is that, at the time of the foreclosure sale on August 8, 1983, Cuenca had defaulted in the payment of P279,963.42. Thus, SIHI had the option under the aforequoted provision of the Real Estate Mortgage, to foreclose on the mortgaged property. SIHI cannot be faulted for having chosen that option. The Court of Appeals, therefore, erred in concluding that despite Cuenca's default, the foreclosure sale and the resultant issuance of the certificate of sale by the foreclosing Sheriff were null and void. Foreclosure is valid where the debtor is in default in the payment of his obligation (Cf, Bicol Savings and Loan Association vs. Court of Appeals, 171 SCRA 630 [1989]). In a real estate mortgage when the principal obligation is not paid when due, the mortgagee has the right to foreclose the mortgage and to have the property seized and sold with the view of applying the proceeds to the payment of the obligation (Commodity Financing Co., Inc., vs. Jimenez, 91 SCRA 57 [1979]). Once the proceeds have been applied to the payment of the obligation, the debtor cannot anymore be required to pay, unless, of course, there is a deficiency between the amount of the loan and the foreclosure sale price, because the obligation has already been extinguished. We now come to the second issue posed by the parties: with the auction sale having been done on August 8, 1992 and the certificate of foreclosure sale having been validly registered with the Register of Deeds of Quezon City on August 24, 1983, was Cuenca able to redeem the property in the manner and within the period provided by law? With the aforequoted provision of the Real Estate Mortgage having expressly authorized SIHI to extra-judicially foreclose the mortgage in case of Cuenca's failure to comply with her obligation to pay, the law governing the foreclosure is Republic Act No. 3135 (An Act To Regulate The Sale of Property Under Special Powers Inserted In Or Annexed To Real Estate Mortgages), as amended by Republic Act No. 4118 ( See Luna vs. Encarnacion, 91 Phil. 531 [1952]). Section 6 of the said Act states: Sec. 6. In all cases in which an extrajudicial sale is made under the special power herein before referred to, the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of the sale . . . (Emphasis supplied.) In a long line of cases, We have consistently held that this one-year redemption period should be counted not from the date of foreclosure sale, but from the time the certificate of sale is registered 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 period should be reckoned from the time the certificate of sale was registered on August 24, 1983 (Bernardez vs. Reyes, 201 SCRA 648 [1991]). Under Article 13 of the New Civil Code, a year is understood to be of three hundred sixty-five (365) days. Thus, excluding the first day and counting from August 25, 1983 (under paragraph 3 of Article 13 of the New Civil Code), and bearing in mind that 1984 was a leap year, Cuenca had only until August 23, 1984, the 365th day after registration of the sale on August 24, 1983, within which to redeem the foreclosed property in accordance with law. It was thus already beyond the redemption period when Cuenca filed her suit below on August 24, 1984. It should be stressed in this regard that it is not proper to count, as Cuenca submits in her Rejoinder, the period on the basis of 30 days per month. The law speaks of a "one year" period within which to redeem, not twelve months as in the case of redemption by a judgment debtor under Section 30 of Rule 39. Applying Article 13 of the Civil Code, the period of one year within which to redeem in the case at bar is to count 365 days from August 24, 1983. Consequently, the last day to redeem would be and indeed fell on August 23, 1984, said year being a leap year (Cf Go vs. Dizon, et al., G.R. No. 75915-16, Sept. 18, 1992).

Cuenca, however, was not able to exercise her right of redemption on or before August 23, 1984. Although she wrote to SIHI twice on July 17 and August 23, 1984 and offered to redeem her property, these offers were not accompanied by simultaneous bona fide tender or delivery of the redemption price to SIHI. In Belisario 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 to redeem make manifestation of his desire to repurchase; this statement of intention must be accompanied by an actual and simultaneous tender of payment, which constitutes the legal use of exercise of the right to repurchase (Angao vs. Clavano, 17 Phil. 152). Likewise, in several 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) where the right to repurchase was held to have been properly exercised, there was definite finding of tender of payment having been made by the vendor. The tender of payment must be for the full amount of the repurchase price, otherwise the offer to redeem will be held ineffectual. (Rumbaoa vs. Arzaga, 84 Phil. 812). Bona fide redemption necessarily imports a reasonable and valid tender of the entire repurchase price. There is no cogent reason for requiring the vendee to accept payment by installments from the redemptioner, as it would ultimately result in an indefinite extension of the redemption 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 is necessary to exercise in the right of redemption finds support in civil law. Article 1616 of the Civil Code of the Philippines, in the absence of an applicable provision in Commonwealth Act No. 141, furnishes the guide, to wit: The vendor cannot avail himself of the right to repurchase without returning to the vendee the price of the 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 her letter dated August 23, 1984 does not comply with the ruling in Belisario. There is no showing whatsoever here that the redemption price was delivered to SIHI. Redemption is not a matter of intent but involves making the proper payment or tender of the price of the land within the specified period (De la Merced vs. De Guzman, 160 SCRA 87 [1988]). Neither is Cuenca correct in contending that SIHI in effect extended the redemption period when it stated in its letter dated August 16, 1984 that Cuenca had until August 24, 1984 within which to pay its outstanding account in full. In Lazo vs. Republic Surety & Insurance Co., Inc., (31 SCRA 329 [1970]). We held that it is only where, by voluntary agreement of the parties, consisting of extensions of the redemption period, followed by commitment by the debtor to pay the redemption price at a fixed date, will the concept of legal redemption be converted by the parties into one of conventional redemption such that it generates binding contracts when approved by the creditor. In the instant case, however, there is no showing that Cuenca agreed to pay the redemption price on or before August 24, 1984, as set by SIHI. On the contrary, Cuenca's filing of her complaint on August 24, 1984 principally seeking to declare the nullity of the foreclosure sale is indicative of her refusal to pay the redemption price on the deadline mistakenly set by SIHI. Cuenca's complaint filed on August 24, 1984 (the 365th day from the registration of the certificate of sale, having fallen on August 23, 1984), did not have the effect of a formal offer to redeem. In Belisario (supra), We further explained. This case is different from Uy Lee vs. Court of Appeals, supra where the action to compel redemption was filed after the lapse of the period of redemption. Thus, the Court held in said case, to wit: It is clear that the mere sending of letters by vendor Simeon expressing his desire to repurchase the property without an accompanying tender of redemption price fell short of the requirements of law. Having failed to properly exercise his right of redemption within the statutory five-year period, the right is lost and the same can no longer be revived by the filing of an action to compel redemption after the lapse of the period. The same factual antecedent obtained in Conejero, et al. vs. Court of Appeals, supra, where the complaint seeking to be declared entitled to redeem was filed after the expiration of the statutory period of redemption. What was proper for determination then in said cases was whether or not the right of redemption sans judicial action was validly exercised. In said cases, the Court applied the general rule that bona fide redemption necessarily imports a reasonable and valid tender of the entire purchase price. (at p. 109; emphasis added.) Thus, it is only when the complaint to enforce a repurchase is filed within the period of redemption will it be equivalent to an offer to redeem and have the effect of preserving the right of redemption ( Belisario, supra, citing Reoveros vs. Abel

and Sandoval, 48 O.G. 5318). Where, as in this case, the complaint for redemption was filed after the redemption period expired, the complaint is a useless exercise which can not defeat the purchaser's right to have the title of the property transferred in his name. Cuenca's reliance on the ruling in Hulganza vs. Court of Appeals (147 SCRA 77 [1987]) is without any basis. The doctrine laid down in Hulganza finds no applicability to the instant case for unlike the complaint filed by Cuenca in the case at bar, the action for redemption in Hulganza was filed within the period of redemption. Moreover, it bears noting that Cuenca sent letters (dated July 17 and August 23, 1984) to SIHI within the redemption period in which she offered to redeem her property. In her letter dated July 17, 1984, she offered to pay her indebtedness according to an installment plan which, if carefully analyzed, had the effect of extending 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 pay the amount P426,874.72 in full settlement of her obligation, althrough, as We earlier stated, this amount was never properly delivered to SIHI in accordance with law. There is thus no proof at that time that Cuenca possessed the ability to pay the redemption amount she was offering. This is especially true in the light of the fact that in her first letter she merely offered to pay in installments. If only to prove the veracity of her claim that at that time she was capable of paying SIHI the full amount of what she thought was a reasonable redemption price, the least that Cuenca could have done was to consign payment in court simultaneous with her filing of the action to redeem on August 24, 1992. In so stating, We do not here depart from our consistent ruling that a formal offer to redeem, accompanied by a bona fide tender of the redemption price, although proper, is not essential where the right to redeem is exercised through the filing of a judicial action (Tolentino vs. Court of Appeals, 106 SCRA 513 [1981]; Tioseco vs. Court of Appeals, 143 SCRA 705 [1986]; Hulganza, supra; Beliserio, supra). As earlier stated, this rule only holds where the action to redeem is filed within the redemption period. Where, as in the instant case, the action is filed after the statutory period has expired, the determination of whether the plaintiff consigned the redemption price with the court simultaneous with the filing of the action is necessary to see if the right of redemption sans judicial action was validly exercised (Beliserio, supra). Cuenca's consignation with this Court of the amount ordered by the Court of Appeals to be paid to SIHI only eight (8) years after her action to redeem was filed in 1984 is a belated move which merely shows that in 1984 she had no ability to pay SIHI the redemption price. Her filing of the action was a mere devise and scheme to buy time to raise the amount needed to redeem her property. In Conejero, et al. vs. Court of Appeals, et al. (16 SCRA 775 [1966]), We precisely stated that "a buyer can not be expected to entertain an offer of redemption without attendant evidence that the redemptioner can, and is willing to accomplish the repurchase immediately. A different rule would leave the buyer open to harassment by speculators or crackpots, as well as to unnecessary prolongation of the redemption period, contrary to the policy of the law. . . . Of course, consignation of the price would remove all controversy as to the redemptioner's ability to pay at the proper time. (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 within specified time limits: and the statutory periods would be rendered meaningless and of easy evasion unless the redemptioner is required to make an actual tender in good faith of what he believed to be the reasonable price of the land sought to be redeemed. The existence of the right of redemption operates to depress the market value of the land until the period expires, and to render that period indefinite by permitting the tenant to file a suit for redemption, with either party unable to foresee when final judgment will terminate the action, would render nugatory the period of two years fixed by the statute for making the redemption and virtually paralyze any efforts of the landowner to realize the value of his land. No buyer can be expected to acquire it without any certainty as to the amount for which it may be redeemed, so that he can recover at least his investment in case of redemption. In the meantime, the landowner's needs and obligations cannot be met. It is doubtful if any such result was intended by the statute, absent clear wording to that effect. The situation becomes worse when as shown by the evidence in this case, the redemptioner has no funds and must apply for them to the Land Authority, which, in turn, must depend on the availability of funds from the Land Bank. It then becomes practically certain that the landowner will not be able to realize the value of his property for an indefinite time beyond the two years redemption period. (at pp. 671-672.) WHEREFORE, the appealed portions of the Original Decision and the Amended Decision are REVERSED and SET ASIDE and new judgment is hereby entered:

1) Declaring valid and effective the extrajudicial foreclosure of the mortgage of respondent Sabina Vda. de Cuenca's property in Timog, Quezon City on August 8, 1983; and 2) Upholding and confirming the cancellation of Transfer Certificate of Title No. 126578 of the Register of Deeds of Quezon City in the name of Sabina Vda. de Cuenca, as well as its replacement by Transfer Certificate of Title No. 324372 in the name of State Investment House, Inc. Neither party is to recover damages or costs. SO ORDERED. Gutierrez, Jr., Bidin, Davide, Jr. and Romero, JJ., concur .

Republic of the Philippines SUPREME 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, FELIPE BELISARIO and TERESITA B. ALKUINO petitioners, vs. THE INTERMEDIATE APPELLATE COURT, LOURDES CABRERA, VICENTE CABRERA, JR., ROBERTO CABRERA, MANUEL CABRERA and PNB, Cagayan de Oro Branch, respondents. Abundio L. Okit for petitioners. Maximo G. Rodriguez and Rufus B. Rodriguez for private respondents.

MEDIALDEA, J.:
This is a petition review on orari of a decision of the Intermediate Appellate Court (now the Court of Appeals) in AC-GR No. 63407-R affirming the decision of the Court of First Instance of Bukidnon in Civil Case No. 715 entitled, "Benjamin Belisario, et al., vs. Philippine National Bank, et al", dismissing herein petitioners' complaint for Repurchase of Homestead. The undisputed facts of the case are as follows: The subject matter of this case is a piece of land originally covered by Original Certificate of Title No. 366, pursuant to Homestead Patent No. 45183 issued in the names of Rufino Belisario and Felipa Lauga located in Valencia, Bukidnon, and consisting of an area of 23, 2210 hectares. On August 3, 1948, upon the death of Rufino Belisario, the ownership of the land was extra-judicially settled among his children (petitioners herein), namely: Benjamin, Pacita, Victoria Silverio, Francisco, Anatolia Felipe and Teresita, all surnamed Belisario and his widow, Felipa Lauga and in whose names Transfer Certificate of Tittle No. T-124 was issued. Sometime in 1950, on the strenght of a special power of attorney executed by some of the petitioners in favor of petitioner, Benjamin Belisario, said land was mortgaged to the Philippine National Bank (PNB) to secure a promissory note in the sum of P1,200.00. Petitioners-mortgagors defaulted in the payment of the loan. Consequently, the mortgage was extra-judicially foreclosed and on January 31, 1963 the land was sold at public auction for P3,134.76 with respondent PNB as the highest bidder. On April 21, 1971, petitioners wrote to respondent PNB making known their "desire to redeem and/or repurchase the said property for and in the same price as the auction sale, P3,134.76," and enclosed therein a postal money order in the amount of P630.00 as partial payment, with the balance to be paid in twelve equal monthly installments. At the time petitioners offered to redeem the subject property, the Sheriff's Certificate of Sale covering the sale at public auction to the respondent PNB was not yet registered. Having been apprised of the non-registration, the respondent PNB caused the registration of the Sheriff's Certificate of Sale with the Register of Deeds of Bukidnon on July 22, 1971 and Transfer Certificate of Title No. T-6834 was later issued in the name of respondent bank.

On August 24, 1971, respondent PNB sent a reply letter to petitioners, refusing the tender of P630.00 as partial payment of the total obligations of P7,041.41 due from petitioners (which included the amount of P2,027.02 allegedly paid by respondent Vicente Cabrera to respondent PNB) and stating further that under existing regulations of the bank, payment by way of redemption must be paid in full and not by installments. It cannot, however, be determined from the records of the case why the amount of P2,027.02 was received from respondent Cabrera by respondent PNB on December 12, 1967 and why the same was included in the statement of accounts sent by respondent PNB to petitioners. On February 8, 1973, respondent PNB sold the land in question to respondent Cabrera for P5,000.00 and the corresponding TCT No. 7264 was issued in his name. On November 20, 1974, respondent Cabrera filed an action for Recovery of Possession and Damages against herein petitioners, together with their tenants, who were actual possessors of the land, with the Court of First Instance (now Regional Trial Court) of Bukidnon and docketed as Civil Case No. 708. In turn, petitioners filed on January 9, 1975, an action for Repurchase of Homestead against the respondents PNB and Cabrera with the Court of First Instance of Bukidnon and docketed as Civil Case 715. Being interrelated, the two cases were heard jointly. After pre-trial but before trial on the merits, respondent Cabrera (as defendant in Civil Case No. 715), filed a Motion to Dismiss the petitioners' action for Repurchase of Homestead, Civil Case No. 715, on two (2) grounds: 1. No tender ofpayment of the redemption price and/or consignation of the redemption was made by plaintiff. 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 repurchase the property from respondent PNB (one of the defendants in the same Civil Case) within the five-year redemption period and tendered payment which was, however, refused by the respondent PNB. Petitioners also manifested that on August 1 and 4, 1917, they consigned with the Clerk of Court of Bukidnon the amount of P5,000.00 as repurchase price. On September 15, 1977, the trial court granted the Motion to Dismiss. After their motion for reconsideration and/or new trial was denied by the trial court, petitioners appealed to the Intermediate Appellate Court (now Court of Appeals), assigning the following errors: I. The lower court erred in giving due course to the Motion to Dismiss, without receiving evidence and/or in ignoring the tender of payment made by plaintiffs to defendant bank. II. The lower court erred in declaring that because plaintiffs never bothered to attend to that letter (letter of bank addressed to the plaintiffs) for a long time it was obliged to sell the land to its codefendant Vicente Cabrera on February 8, 1973. III. The lower court erred in holding that the plaintiffs made no pretense whatever in their opposition to the motion that Vicente Cabrera disallowed the repurchase of the land and in holding that tender of payment to defendant Cabrera was necessary to preserve their right to repurchase. IV. The lower court erred in holding that the consignation of the amount of P5,000.00 was conceivably made to cure the deficiency of plaintiffs' position and was made beyond the redemption period of five years. V. The lower court erred in not considering the motion filed out of time and the conduct of the defendants especially Atty. Cabrera a waiver of their right to a preliminary hearing on the defense of lack of tender or that defendants are guilty of estoppel or bad faith. (Rollo, p. 25.) Respondent appellate court affirmed the lower court's decision in toto. Hence, the instant petition with the petitioner assigning the following errors: I. That the Honorable Intermediate Appellate Court cited in holding that appellants never bothered to tender the payment of redemption and that the filing of judicial action to redeem did not preserve appellants' right to redeem. It cited out of context the doctrine enunciated in Tolentino vs. Court of Appeals, 106 SCRA 513.

II. The Honorable Intermediate Appellate Court erred in holding that appellants' posture that they have offered to repurchase the property from the appellee bank and tendered payment of redemption price within the redemption period is unmeritorious. III. The Honorable Intermediate Appellate Court erred in considering long inaction or laches in deciding the case, the said defense not having been raised in the answers of defendants-appellees not even in the motion to dismiss or appellees' memoranda. (Rollo, p. 9) The subject piece of land was sold at public auction to respondent PNB on January 31, 1963. However, the Sheriff's Certificate of Sale was registered only on July 22, 1971. The redemption period, for purposes of determining the time when a formal Deed of Sale may be executed or issued and the ownership of the registered land consolidated in the purchaser at an extrajudicial foreclosure sale under Act 3135, should be reckoned from the date of the registration of the Certificate of Sale in the Office of the Register of Deeds concerned and not from the date of public auction (PNB vs. CA et al., G.R. L-30831 and L-31176, Nov. 21, 1979, 94 SCRA 357, 371). In this case, under Act 3135, petitioners may redeem the property until July 22, 1972. In addition, Section 119 of Commonwealth Act 141 provides that every conveyance of land acquired under the free patent or homestead patent provisions of the Public Land Act, when proper, shall be subject to repurchase by the applicant, his widow or legal heirs, within the period of five years from the date of conveyance. The five-year period of redemption fixed in Section 119 of the Public Land Law of homestead sold at extrajudicial foreclosure begins to run from the day after the expiration of the one-year period of repurchase allowed in an extrajudicial foreclosure. (Manuel vs. PNB, et al., 101 Phil. 968). Hence, petitioners still had five (5) years from July 22, 1972 (the expiration of the redemption period under Act 3135) within which to exercise 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 redeem makes manifestation of his desire to repurchase; this statement of intention must be accompanied by an actual and simultaneous tender of payment, which constitutes the legal use or exercise of the right to repurchase (Angao vs. Clavano, 17 Phil. 152). Likewise, in several cases decided by this Court (Fructo vs. Fuentes, 15 Phil. 362; Retes vs. Suelto, 20 Phil. 394; Rosales vs. Reyes, et al., 25 Phil. 495, Canuto vs. Mariano, 37 Phil. 840; Dela Cruz, et al. vs Resurreccion, et al., 98 Phil. 975) where the right to repurchase was held to have been properly exercised, there was a definite finding of tender of payment having been made by the vendor. The tender of payment must be for the full amount of the repurchase price, otherwise the offer to redeem will be held ineffectual. (Rumbaoa vs. Arzaga, 84 Phil. 812) Bona fide redemptio necessarily imports a reasonable and valid tender of the entire repurchase price. There is no cogent reason for requiring the vendee to accept payment by installments from the redemptioner, as it would ultimately result in an indefinite extension of the redemption 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 is necessary 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 Act No. 141, fumishes the guide, to wit: "The vendor cannot avail himself of the right to repurchase without returning to the vendee the price of the sale ... " (Uy Lee vs. Court of Appeals, L-28126, November 28, 1975, 68 SCRA 196, 204). However, the filing of a complaint to enforce repurchase within the period for redemption is equivalent to an offer to redeem and has the effect of preserving the right to redemption (Reoveros vs. Abel and Sandoval, 48 O.G. 5318). In the case of Tolentino vs. Court of Appeals, L-50405- 06, August 5, 1981, 106 SCRA 513, 526'), this Court expounded: And in this connection, a formal offer to redeem, accompanied by a bona fide tender of the redemption price, although proper, is not essential where, as in the instant case, the right to redeem is exercised thru the filing of judicial action, which as noted earlier was made simultaneously with the deposit of the redemption price within the period of redemption. The formal offer to redeem, accompanied by a bona fide tender of the redemption price within the period of redemption prescribed by law, is only essential to preserve the right of redemption for future enforcement even beyond such period of redemption. The filing of the act-on itself, within the period of redemption, is equivalent to a formal offer to redeem. Should the court allow redemption, the redemptioners should then 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 the rule that the 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 their right to repurchase effectively, We have only to consider their filing of the action for Repurchase of Homestead on January 9,1975, against respondent PNB and Cabrera, which was filed well within the five-year period to repurchase. The question of timeliness of the tender of payment by petitioners on August 1 and 4, 1977 of the amount of P5,000.00 had become insignificant in view of the filing of the action for

Repurchase of Homestead which has been held equivalent to an offer to redeem and has the effect by itself of preserving their right of recovering the property. This case is different from Uy Lee vs. Court of Appeals, supra where the action to compel redemption was filed after the lapse of the period of redemption. Thus, the Court held in said case, to wit: It is clear that the mere sending of letters by vendor Simeon expressing his desire to repurchase the property without an accompanying tender of redemption price fell short of the requirements of law. Having failed to properly exercise his right of redemption within the statutory five-year period, the right is lost and the same can no longer be revived by the filing of an action to compel redemption after the lapse of the period. The same factual antecedent obtained in Conejero, et al. vs. Court of Appeals, supra where the complaint seeking to be declared entitled to redeem wag filed after the expiration of the statutory period of redemption. What was proper for determination then in said cases was whether or not the right of redemption sans judicial action was validly exercised. In said cases, the Court applied the general rule that bona fide redemption necessarily imports a reasonable and valid tender of the entire purchase price. The respondent Court of Appeals thus erred in citing Tolentino vs. Court of Appeals out of context and in applying the doctrine in Uy Lee vs. Court of Appeals, and Coneiero vs. Court of Appeals, supra where the circumstances of said cases are different from the case at bar. The respondent Court of Appeals likewise erred in holding that the action is barred by long inaction. The right of redemptiola under Commonwealth Act 141 legally began to accrue only on June 22, 1972. Certainly, an action for Repurchase of Homestead filed on January 9, 1975 cannot be held to be barred. ACCORDINGLY, the decision of the Court of Appeals in the instant case is hereby REVERSED and SET ASIDE. Judgment is hereby rendered authorizing petitioners to redeem the property subject matter hereof, within thirty (30) days from entry of judgment, and ordering private respondent Cabrera to execute a deed of absolute conveyance thereof in favor of the petitioners upon payment by the latter of the purchase price thereof at the auction sale, with 1% per month interest thereon in addition, up to the time of redemption, together with the amount of any taxes or assessments which respondent Cabrera may have paid thereon after purchase, if any, minus the P5,000.00 consigned in the court a quo. No pronouncement as to costs at this instance. SO ORDERED. Narvasa, Cruz, Gancayco and Aquino, JJ., concur.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-66597 August 29, 1986 LEONARDO TIOSECO, petitioner, vs. HONORABLE COURT OF APPEALS JOSE P. 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 the respondent Intermediate Appellate Court in AC-G.R. CV No. 68888 promulgated on December 27, 1983, as well as of the Resolution of said appellate court promulgated on February 13, 1984 denying the Motion for Reconsideration of the aforesaid decision. The facts of this case are as follows: The respondent spouses Jose P. Villanueva and Timotea P. Villanueva mortgaged to the Tarlac Branch of the Philippine National Bank three lots described in OCT No. C-542 issued by the Register of Deeds of Tarlac to secure payment of a loan of EIGHT THOUSAND SIX HUNDRED (P8,600.00) PESOS. When they failed to comply with the mortgage contract, the Philippine National Bank petitioned the Provincial Sheriff of Tarlac to foreclose upon the properties extrajudicially. The Provincial Sheriff in the public auction he conducted on March 7, 1977 sold the lots to Leonardo Tioseco, herein petitioner, as the highest bidder for the amount of EIGHTEEN THOUSAND NINE HUNDRED AND SEVENTY FIVE (P18,975.00) PESOS. The certificate of sale dated March 7, 1977 issued by the Provincial Sheriff to Tioseco was registered in the Office of the Register of Deeds of Tarlac on March 8, 1977. Tioseco's ownership over the properties was consolidated, the title of the spouses Villanueva was cancelled and TCT No. 141194 was issued to Tioseco by the Register of Deeds on March 7, 1978. It is claimed by Tioseco that sometime before March 9, 1978 respondents Villanueva visited him in his house and offered to pay the amount he had paid for the three lots auctioned off on March 7, 1977. Tioseco told them that they could redeem the three lots by paying to him the amount he paid at the auction sale plus interest. The respondents promised to return, but never did. Upon the other hand, it is claimed by the respondents that they offered to redeem the three lots within the period of redemption but Tioseco allegedly demanded TWENTY TWO THOUSAND SIX HUNDRED FORTY ONE PESOS AND EIGHT CENTAVOS (P22,641.08) as redemption price. Finding the amount demanded excessive, the respondents Villanueva filed a suit on March 7, 1978 to annul the sale in favor of Tioseco on the ground that it was irregular and to require both the Philippine National Bank and Tioseco to determine the amount they should pay to be able to redeem the three lots.

The Philippine National Bank stated in its answer that at the time of the auction sale of the three lots on March 7, 1977 the amount of EIGHTEEN THOUSAND NINE HUNDRED SEVENTY FIVE (P18,975.00) PESOS was due from the respondents. The amount included the principal of the loan, accrued interest, service charges, expenses of foreclosure, and attorney's fees. The answer also stated that the auction sale conducted by the Provincial Sheriff was in accordance with the formalities and other requirements prescribed by law. In his answer, Tioseco denied having demanded the sum of TWENTY TWO THOUSAND SIX HUNDRED FORTY ONE PESOS AND EIGHT CENTAVOS (P22,641-08) from the respondents. After trial the lower court rendered its decision, the dispositive portion of which readsWHEREFORE, the plaintiffs are allowed to redeem the properties covered by TCT No. 141194 of the Register of Deeds of Tarlac by the payment to the defendant Tioseco of the amount of EIGHTEEN THOUSAND NINE HUNDRED SEVENTY FIVE (P 18,975.00) PESOS plus 1% per month interest thereon in addition from the time of the sale on March 7, 1977 to the time of redemption, plus any assessment for taxation which defendant Tioseco may have paid thereon and the interest on such amount at the same rate and all other expenses specified in Sec. 30, Rule 39 of the Rules of Court within 30 days from the finality of this judgment, without pronouncement as to costs, On appeal by petitioner, the Intermediate Appellate Court affirmed in toto the decision of the lower court. With the denial of his motion for reconsideration, the petitioner filed this petition for review of the decision of the appellate court. Petitioner made the following assignment of errors: I THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT LEONARDO TIOSECO PUT UP AN AMOUNT BIGGER THAN WHAT WAS PROPER TO PREVENT THE PLAINTIFFS FROM EXERCISING THEIR RIGHTS OF REDEMPTION. II THE TRIAL COURT ERRED IN HOLDING THAT THE FAILURE OF THE PLAINTIFFS TO MAKE A VALID TENDER AND TO CONSIGN THE AMOUNT IN COURT ASSUMES SUBORDINATE IMPORTANCE AND THE PLAINTIFFS DESPITE SUCH FAILURE TO COMPLY BY THE STATUTORY REQUIREMENTS FOR LEGAL REDEMPTION, ARE STILL ENTITLED TO MAKE THE REDEMPTION. III THE TRIAL COURT ERRED IN ALLOWING THE PLAINTIFFS TO REDEEM THE PROPERTIES COVERED BY TCT NO. 141194 OF THE REGISTER OF DEEDS OF TARLAC AFTER TIOSECO'S OWNERSHIP TO THE PROPERTIES WAS CONSOLIDATED. (pp. 9-10, Rollo). We prescind from the assignment of errors raised and proceed directly to the question presented before this Court: Have the respondents exercised their right of redemption effectively? We answer in the affirmative.

There is no question that the respondents have the right to redeem the subject property in view of the provision of Section 25, P.D. No. 694 (Revised Charter of PNB): SEC. 25. Right of redemption of property-Right of possession during redemption period.Within one year from the registration of the foreclosure sale of real estate, the mortgagor shall have the right to redeem the property by paying all claims of the Bank against him on the date of the sale including all the costs and other expenses incurred by reason of the foreclosure sale and custody of the property, as well as charges and accrued interests. xxx xxx xxx When the respondents chose to enforce their right of redemption thru a court action on March 7, 1978 they were well within their right as the action was filed within one year from the registration of the foreclosure sale of the real estate on March 9, 1977. P.D. No. 694 is silent as to any formal tender of repurchase price as a pre-condition to a valid exercise of the right of redemption. It does not even require any previous notice to the vendee, nor a meeting between him and the redemptioner, much less a previous formal tender before any action is begun in court to enforce the right of redemption. In any case, the lack of funds which may render the right inefficacious cannot affect the existence of the right. In fact, the filing of the action itself, within the period of redemption, is equivalent to a formal offer to redeem (see Reoveros v. Abel and Sandoval, 48 O.G. 5318). And in this connection, a formal offer to redeem, accompanied by a bona fide tender of the redemption price, altho proper, is not even essential where, as in the instant case, the right to redeem is exercised thru the filing of judicial action. In the instant case, the ends of justice would be better served by affording the respondents the opportunity to redeem the subject property. This ruling is in obedience to the policy of the law to aid rather than to defeat the right of redemption. (Javellana v. Mirasol and Nunez, 40 Phil. 761). WHEREFORE, the petition for certiorari is DENIED and the judgment appealed from is AFFIRMED. Costs against the petitioner. SO ORDERED. Feria (Chairman), Fernan, Alampay and Gutierrez, Jr., JJ., concur.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. Nos. L-50405-06 August 5, 1981 VICENTA P. TOLENTINO and JOSE TOLENTINO, petitioners, vs. COURT OF APPEALS, BANK OF THE PHILIPPINE ISLANDS, CONSUELO B. DE LA CRUZ, et al., respondents.

DE CASTRO, J.: A petition for review by certiorari of the consolidated decision 1 of the respondent Court of Appeals in CA-G.R.
Nos. 53907-R and 54004-R promulgated on February 22, 1978, as well as the Resolution of said Court of Appeals, promulgated on March 30, 1979, denying the Motion for Reconsideration of the aforesaid consolidated decision. Ceferino de la Cruz died in Davao City on April 19, 1960 leaving as his only heirs his widow, Consuelo de la Cruz, and their children Hilario, Tarcelo, and Godofredo, all surnamed de la Cruz (hereinafter referred to as the De la Cruzes). At the time of his demise, Ceferino left a parcel of land (homestead land) containing 131,705 square meters covered by Original Certificate of Title No. P-16 in his name, issued by virtue of Homestead Patent No. V-1728. In a deed of sale executed by the De la Cruzes on April 30, 1962, the homestead land was sold to the spouses Jose Tolentino and Vicenta Tolentino (hereinafter referred to as the Tolentinos). The Tolentinos took immediate possession of the homestead land and caused the cancellation of O.C.T. No. P-16 and the issuance of T.C.T. No. T-11135 in their names. In 1963, the Tolentinos constituted a first mortgage over the homestead land, together with two other parcels of land covered by T.C.T. Nos. 11085 and 11626 in their names, in favor of the Bank of the Philippine Islands, (BPI) Davao Branch, for a loan of P40,000. Another mortgage was constituted over the said properties in 1964 in favor of Philippine Banking Corporation. The Tolentinos failed to pay their mortgage indebtedness to the BPI upon maturity in the judicial foreclosure sale that followed, conducted by the City Sheriff of Davao on July 15, 1967, BPI was the sole and highest bidder. The Sheriff's Certificate of Sale in favor of BPI was registered only on April 2, 1969 in the Registry of Deeds of Davao. Meanwhile, on February 4, 1967, the De la Cruzes filed an action with the Court of First Instance of Davao against the Tolentinos for the repurchase of the homestead land under Section 119 of the Public Land Act (CA 141), with a prayer for damages and accounting of fruits on the ground that they had tried to repurchase said land extrajudicially for several tunes already but that the Tolentinos would not heed their request, thus constraining the De la Cruzes to file a court action for the repurchase thereof. BPI and Philippine Banking Corporation were included in the action as formal party defendants, being the first and second mortgagees, respectively, of the homestead land. On June 1, 1967, the Tolentinos filed a motion for extension of ten (10) days "from and after June lst" to file their answer. This motion was granted by the lower court. On June 14, 1967, the De la Cruzes filed a petition to declare the Tolentinos in default for failure to file an answer. On that same day, the Tolentinos filed a Motion to Dismiss the repurchase case on the ground that the complaint states no cause of action, but said motion was denied by the lower court on the ground that the same was filed out of time. Subsequently, the Tolentinos were declared in default and the De la Cruzes were allowed to present their evidence ex parte. On November 24, 1967, the Tolentinos filed their answer interposing the defense that the complaint states no cause of action because from the face of T.C.T. No. T-11135 alone, only the original patentee, Ceferino, is given the right to repurchase the homestead land and not the De la Cruzes and because the complaint does not allege that there was a bona fide offer to repurchase or a valid tender of payment, as well as an allegation that the De la Cruzes intended to pay
5 2 3 4

not only the purchase price but all the other expenses of the sale which includes the necessary and useful expenses made on the thing sold, as required under Article 1616 of the new Civil Code. Upon a manifestation filed by the De la Cruzes, the lower court issued an Order dated December 8, 1967 declaring the Tolentinos as "having no standing" in the proceedings therein, to which the latter filed a motion for its reconsideration. This motion, as well as their second Motion for Reconsideration, was denied by the lower court. On March 27, 1969, the lower court rendered a decision allowing the De la Cruzes to repurchase the homestead land. Upon payment by the De la Cruzes of the amount of P16,000 representing the repurchase price to the BPI, the latter executed a deed of conveyance over the homestead land on August 25, 1969. On motion, the lower court issued a writ of possession in favor of the De la Cruzes on September 4, 1969, which was served by the City Sheriff upon the Tolentinos on September 8, 1969. Accordingly, the possession of the homestead land was delivered to the De la Cruzes on September 13,1969. On September 19, 1969, the Tolentinos filed a petition for relief from the Decision dated March 27, 1969 on the ground of excusable mistake in the counting of the reglementary period for the filing of an answer, with a prayer that the Order declaring them in default be lifted and that they be allowed to present their defense. On October 1, 1969, the Tolentinos filed a Motion to Quash the writ of possession alleging as principal grounds therefor the absence of service on their counsel of a copy of the writ of possession, as well as the decision of the lower court declaring the De la Cruzes entitled to repurchase the homestead land. The De la Cruzes filed an opposition to this Motion and prayed for the investigation of an alleged tampering of records of the case particularly the page containing the proofs of the service of a copy of the writ of possession as well as of the decision of the lower court to the Tolentinos. On October 4, 1969, the lower court denied the Motion to Quash. A motion for reconsideration was likewise denied by the lower court on December 6,1969. On October 6, 1970, the Tolentinos filed before the respondent Court of Appeals a petition for certiorari (CA-G.R. No. SP46321) against the De la Cruzes, wherein the Tolentinos raise the propriety of the issuance of the Writ of Possession alleging that it was issued improvidently because the decision of the lower court declaring them in default was not served upon them and, therefore, the judgment has not become final and executory. This petition was denied by the respondent court in a decision rendered on November 15, 1971 on the ground that the Tolentino were actually and duly served with a copy of the questioned decision. On March 5, 1973, the trial court issued an Order denying for lack of merit the petition for relief from judgment filed therein by the Tolentinos. It likewise denied a motion for reconsideration filed subsequently by the Tolentinos in its Order of July 5, 1973. Consequently, the Tolentinos appealed to the respondent Court of Appeals the above 2 Orders of the lower court, docketed therein as CA G.R. No. 54004-R, claiming that the lower court erred and abused its discretion in not lifting its Order of default and in not ordering resumption of trial for the reception of their evidence; and, in finally ordering execution of the default judgment. In the meantime, on March 2, 1970, petitioner Vicente Tolentino went to see Mr. Ramon Lopez, Branch Manager of BPI Davao Branch, carrying a letter of even date, offering to redeem the homestead property for P16,000 covered by a check. Upon being informed that she can no longer redeem the same for the reason that it was already conveyed to the De la Cruzes pursuant to the decision dated March 27, 1969, Vicenta left the office of the manager, bringing with her the letter which she later on sent to Mr. Lopez by registered mail, inclosed In another letter dated March 3, 1970, reteirating her desire to redeem the homestead land. Mr. Lopez sent said letters to the BPI's legal counsel with specific request to inform the Tolentinos that they can still redeem the two other properties covered by T.C.T. Nos. 11085 and 11626 before the expiration of the redemption period upon payment of the amount of P75,995.07 the balance remaining after deducting the amount of P16,000 paid by the De la Cruzes for the homestead property. However, instead of complying with BPI's advice, Vicente consigned with the Office of the City Sheriff of Davao a crossed PNB check for P91,995.07 drawn against the PNB Kidapawan Branch, Cotabato, on March 31, 1970, allegedly for the redemption of the 3 lots, including the homestead land. The following day, however, upon advice of their counsel, Vicente issued a stop-payment order against the said crossed check purportedly to protect her rights and to prevent BPI cashing said check without returning all the properties which BPI had foreclosed and purchased. Simultaneously with the consignation of the crossed check with the City Sheriff of Davao on March 31, 1970, the 6 Tolentinos filed a complaint (redemption case) against BPI, amended on April 15, 1970, with the Davao Court of First Instance for the redemption of their properties covered by T.C.T. Nos. 11135, 11085 and 11626, which were foreclosed by and sold to BPI, with a prayer for damages, imputing bad faith on BPI in allegedly refusing to allow them to redeem all three lots and praying that BPI be ordered to allow the Tolentinos to redeem their properties, to accept the payment

consigned by them with the City Sheriff's Office of Davao, and to pay moral and exemplary damages in the sum of P95,000 plus attorney's fees and costs of suit. BPI seasonably filed an answer with counterclaim, denying the material averments of the complaint, the truth being that the Tolentinos did not have an intention to redeem their said properties but only the homestead land. BPI counterclaimed for exemplary damages in the sum of P5,000 and attorney's fees in the sum of P4,000 plus costs. On April 10, 1973, the trial court rendered its decision dismissing the complaint of the Tolentinos, with no particular pronouncement as to attorney's fees but with costs against the Tolentinos. From that decision, both the Tolentinos and BPI appealed to the respondent Court of Appeals, docketed under CA-G.R. No. 53907- R, the Tolentinos claiming that l. The lower court erred in finding that the title to the land covered by T.C.T. No. 11135 legally passed to the heirs of Ceferino de la Cruz; 2. The lower court erred in holding that defendant-appellant (herein respondent BPI) was legally justified, in refusing plaintiffs-appellants' (Tolentinos) demand to be allowed to redeem the lands in question; and 3. The lower court erred in not granting plaintiffs-appellants' (Tolentinos) claim for damages. while BPI claims that the trial court erred in not holding the Tolentinos liable for damages and attorney's fees despite its findings that they acted in evident bad faith in a. filing the complaint in the redemption case; and b. issuing a crossed check drawn against the PNB, Kidapawan Branch, and likewise, in depositing said check with the Sheriff's Office allegedly to redeem the foreclosed properties and, thereafter, the day following the deposit in issuing a stop-payment order on said check. Acting upon a written request dated March 26, 1976 filed by the Tolentinos for the consolidation of the two appealed cases, CA-G.R. Nos. 53907-R (Civil Case No. 6830) and 54004-R (Civil Case No. 5432), the respondent Court of Appeals resolved, after considering the comment of the BPI and the opposition of the De la Cruzes, to grant the motion for consolidation by the Tolentinos. In a consolidated decision promulgated on February 22, 1978, the respondent Court of Appeals held: In the Repurchase Case (1) that "despite the order of the trial court as prayed for by appellants granting them a ten-day period of extension to file their answer which was to expire on June 12, 1967, extended by operation of law to June 13, 1967, because June 12 was a holiday, the Tolentinos failed to file their answer. Instead, on June 14, 1967, which was already late, the Tolentinos filed a motion to dismiss, which is not even a responsive pleading, followed by their answer filed more than five months after, on November 24, 1967. The Tolentinos having failed to observe the requirements of the Rules of Court, no abuse of 8 discretion could be imputed to the court a quo in ordering them in default." While "default orders are judicially frowned upon, Quirante vs. Verano (L-30207, February 27, 1971, 37 SCRA 801) explicitly admonishes that such 'is true only in meritorious cases, that is, where the failure to file answer on time was due to fraud, accident, mistake, or excusable negligence and when the existence of a good and substantial defense has been shown.' No showing was made in the case at bar, that the Tolentinos' failure to file their answer on time was due to any of these grounds. The contention and insistence of counsel for the Tolentinos that he filed through his clerk the motion to dismiss on June 13 but only stamped June 14, 1967, attributing negligence instead to the docket clerk of the lower court was not believed by the lower court, 9 and we (Court of Appeals) find no cogent reason for believing otherwise. " The Court of Appeals ruled further that "compounding the errors, is the failure of the Tolentinos and/or their counsel to appear on January 12, 1968, the date set for hearing of their petition for relief, the reason given by counsel that he was out-of-town when his clerk received the notice, and that his said clerk did not notify him nor did he note said date on their trial calendar, being clearly a case of inexcusable negligence. " (2) that the supposed existence of a good and meritorious defense relied by the Tolentinos consisting of the alleged expiration of the five-year period for the repurchase of the homestead lot under Commonwealth Act No. 141 is clearly belied by the records of the case which show that the offer to repurchase the homestead land made by the De la Cruzes was well within the 5-year period required by law; and
7

(3) that the Tolentinos' claim that the lower court ordered the execution of the default judgment before its finality due to the absence of service of the default judgment on them is not well- taken because this issue has already been settled in CA G.R. No. SP-46321 rendered on November 15, 1971, where it was found, after an investigation was conducted on the alleged disappearance of that page of the record where the receipts by the respective parties were indicated, that the Tolentinos through their counsel were duly served with a copy of the default judgment. In the Redemption Case (1) in dismissing the Tolentinos' appeal, the respondent court reasoned that although there is no quarrel that the Tolentinos had 12 months within which to redeem the properties sold at the Sheriff's sale counted from the time it was registered on April 2, 1969, the problem, however, lies in the manner of the tender of payment made by them, granting they made one, "since consignation by crossed check does not satisfy the requirements set forth in Article 1249 of the New Civil Code governing the payment of debts in money, which 'shall be made in the Currency stipulate and if it is not possible to deliver such currency, then in the currency which is legal tender in the Philippines.' Admittedly, a check, even if good when offered, does not satisfy the requirements of a legal tender, and for that very reason, BPI was not legally bound to accept such tender of payment." Hence, no error was committed by the court a quo in dismissing the Tolentinos' complaint for redemption with damages. (2) in dismissing BPI's appeal, the respondent Court stated that "no bad faith should be attributed to the Tolentinos for filing the instant case for redemption, in the absence of a proven motive to harass the BPI considering that in so filing these cases, the Tolentinos acted in the belief that they are exercising certain rights under the law, and considering further that they, too, had to spend in prosecuting their claims, no matter how unfounded they may have proven to be." On April 24, 1978, the Tolentinos filed a Motion for Reconsideration in the Court of Appeals of the decision rendered in CA-G.R. No. 53907-R on the ground that "the right to redeem is not an obligation or debt but rather a privilege, hence, the provisions of Article 1249 N.C.C. governing payment of debts in money" do not apply in this case; and, of the decision rendered in CA-G.R. No. 54004-R on the ground that the respondent court erred in not considering that the trial court abused its discretion in declaring the Tolentinos in default, and that the period within which the De la Cruzes can repurchase the homestead land had already expired, This Motion for Reconsideration was denied by the respondent court for lack of merit in a Resolution dated March 30, 1979. Hence, the instant petition for review from the foregoing consolidated Decision and Resolution raising the following issues: I WHETHER OR NOT ARTICLE 1249 OF THE NEW CIVIL CODE APPLIES IN THE CASE AT BAR; II WHETHER OR NOT THE TENDER OF PAYMENT AND CONSIGNATION MADE BY THE TOLENTINOS BEFORE THE CITY SHERIFF OF DAVAO WERE VALID; and III WHETHER THE DEFAULT JUDGMENT AGAINST THE TOLENTINOS IN CIVIL CASE NO. 5432 (CAG.R. No. 54004-R) HAS BECOME FINAL AND EXECUTORY. It is worthwhile to remember that Article 1249 of the new Civil Code deals with a mode of extinction of an obligation and expressly provides for the medium in the "payment of debts." Thus, it provides that: The payment of debts in money shall be made in the currency stipulated, and if it is not possible to deliver such currency, then in the currency which is legal tender in the Philippines. The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired. In the meantime, the action derived from the original obligation shall be held in abeyance.
10

We are of the considered view that the aforequoted Article should not be applied in the instant case, hereinafter explained, together with the exposition on the resolution of the second issue raised in this petition, the first two issues raised hinging ultimately on whether the Tolentinos may redeem the properties in suit. To start with, the Tolentinos are not indebted to BPI their mortgage indebtedness having been extinguished with the foreclosure and sale of the mortgaged properties. After said foreclosure and sale, what remains is the right vested by law in favor of the Tolentinos to redeem the properties within the prescribed period. This right of redemption is an absolute privilege, the exercise of which is entirely dependent upon the will and discretion of the redemptioners. There is, thus, no 11 legal obligation to exercise the right of redemption. Said right, can in no sense, be considered an obligation, for the Tolentinos are under no compulsion to exercise the same. Should they choose not to exercise it, nobody can compel them to do so nor win such choice give rise to a cause of action in favor of the purchaser at the auction sale. In fact, the 12 relationship between said purchaser and the redemptioners is not even that of creditor and debtor. On the other hand, if the redemptioners choose to exercise their right of redemption, it is the policy of the law to aid rather 13 than to defeat the right of redemption. It stands to reason therefore, that redemptions should be looked upon with favor and where no injury is to follow, a liberal construction will be given to our redemption laws as well as to the exercise of the right of redemption. In the instant case, the ends of justice would be better served by affording the Tolentinos the opportunity to redeem the properties in question other than the homestead land, in line with the policy aforesaid, to which We adhere fully notwithstanding the reason advanced by the Court of Appeals in its Resolution, denying a reconsideration of its decision, which reads: We agree that the act of redeeming of a property mortgaged is not an obligation but a privilege, in the sense that the mortgagor may or may not redeem his property. That of course is a privilege. He may choose to give up the property and have the mortgage foreclosed, or redeem the property with the obligation of course to pay the loan or indebtedness. But where he elects to redeem the property and he has to pay the loan for which the mortgage was constituted, then Art. 1249 of the Civil Code applies because it involves now the 'payment of debts.' It is only the act of redeeming or not that is considered a privilege, but not the act of paying the obligation once the mortgagor has elected to redeem the property, in which case the check issued or drawn shall produce the effect of payment only when it has been 14 cashed. Under existing jurisprudence, what the redemptioner should pay, is not the amount of the "loan for which the mortgage was constituted" as stated by the Court of Appeals, but the auction purchase price plus 1 % interest per month on the said amount up to the time of redemption, together with the taxes or assessment paid by the purchaser after the purchase, if 15 any. And in this connection, a formal offer to redeem, accompanied by a bona fide tender of the redemption price, although proper, is not essential where, as in the instant case, the right to redeem is exercised thru the filing of judicial action, which as noted earlier was made simultaneously with the deposit of the redemption price with the Sheriff, within the period of redemption. The formal offer to redeem, accompanied by a bona fide tender of the redemption price within the period of redemption prescribed by law, is only essential to preserve the right of redemption for future enforcement even beyond such period of redemption. The filing of the action itself, within the period of redemption, is equivalent to a 16 formal offer to redeem. Should the court allow redemption, the redemptioners should then pay the amount already adverted to. Moreover, when the action to redeem was filed, a simultaneous deposit of the redemption money was tendered to the Sheriff and under the last sentence of Section 31, Rule 39 of the Rules of Court, it is expressly provided that the tender of 17 the redemption money may be made to the Sheriff who made the sale. And the redemption is not rendered in valid by the fact that the said officer accepted a check for the amount necessary to make the redemption instead of requiring payment in money. It goes without saying that if he had seen fit to do so, the officer could have required payment to be made in lawful money, and he undoubtedly, in accepting a check, placed himself in a position where he could be liable to the purchaser at the public auction if any damage had been suffered by the latter as a result of the medium in which payment was made. But this cannot affect the validity of the payment. The check as a medium of payment in commercial 18 transactions is too firmly established by usage to permit of any doubt upon this point at the present day. No importance may thus be attached to the circumstance that a stop-payment order was issued against said check the day following the deposit, for the same will not militate against the right of the Tolentinos to redeem, in the same manner that a withdrawal of the redemption money being deposited cannot be deemed to have forfeited the right to redeem, such redemption being 19 optional and not compulsory. Withal, it is not clearly shown that said stop payment order was made in bad faith. But while we uphold the right of redemption of the Tolentinos, the same does not apply to the homestead land, for the reason that shall be indicated in the discussion of the third issue. It is a matter beyond dispute that We can review decisions of the Court of Appeals only on errors of law, its findings 6f fact being generally conclusive. BPI argued that the default judgment in Civil Case No. 5432 (CA-G.R. No. 54004-R) had

already become final and executory; that the lower court found, after an investigation was conducted on the matter, that petitioners were duly served with the default judgment; that this finding was affirmed by the Court of Appeals in CA G.R. No. SP-46321 rendered on November 15, 1971, which decision G.R. No. SP-46321 rendered on November 15, 1971, which decision had already been final and, therefore, the question of whether or not petitioners were duly served with a 20 copy of said judgment should now be considered closed, said question being factual. As may be expected, the Tolentinos maintain that said question is one of law; that they did not in fact receive a copy of the default judgment; and that the only reason for the finding of the lower court that there was a valid service of default judgment was the sole testimony of BPI's counsel, who cannot even recall the date when the alleged service was made, 21 and there is no evidence as to the mode of such service. In resolving their diametrically opposed propositions, it should be remembered that for a question to be one of law, it must 22 involve no examination of the probative value of the evidence presented by the litigants or any of them. The query here presented, necessarily invites calibration of the evidence to determine whether or not there was really such service. As such, the question must be deemed to be factual in character and content, and as correctly pointed out by BPI, the 23 jurisprudence on the matter is that findings of facts of the lower court are accorded the highest degree of respect. It is not the function of this Court to analyze or weight the evidence all over again, its jurisdiction being limited to reviewing 24 errors of law that might have been committed by the lower court. And as already intimated earlier, appreciation of evidence is within the domain of the respondent Court of Appeals 25 because its findings of facts, as a general rule, are not reviewable by the Supreme Court. This has been the oftrepeated and well-established rule which has been reiterated in a long line of cases enumerated in Chan v. Court of 26 27 28 Appeals and Tapas v. Court of Appeals, and in the more recent cases of Baptista v. Carillo and Vda. de Catindig v. 29 Heirs of Catalino Roque, and We find no circumstance existing in this case, to justify a departure from the said rule, More importantly, the petitioners not having appealed therefrom, the decision had already attained the character of finality. The question of service cannot now be reopened or raised again in this proceedings for otherwise, there will be no end to a litigation. Public policy and sound practice demand that judgment of courts should become final at some definite date 30 fixed by law. Finally, We find no abuse of discretion, much less a grave abuse thereof, committed by the lower court in issuing an order, which was affirmed by respondent Court of Appeals, denying the Tolentinos' petition for relief from judgment for lack of merit, the same being supported by substantial evidence. IN VIEW OF THE FOREGOING CONSIDERATIONS, the appealed consolidated decision and resolution of the Court of Appeals are hereby MODIFIED and judgment is hereby rendered authorizing the petitioners to redeem the properties subject matter hereof, other than the homestead land, within thirty (30) days from entry of judgment, and ordering private respondent BPI to execute a deed of absolute conveyance thereof in favor of the petitioners upon payment by the latter of the purchase price thereof, with 1% per month interest thereon in addition, up to the time of redemption, together with the amount of any taxes or assessments which BPI may have paid thereon after purchase, if any. In all other respects, the aforesaid consolidated decision and resolution of the Court of Appeals are hereby AFFIRMED. No pronouncement as to costs at this instance. SO ORDERED. Barredo, (Chairman), Aquino, Concepcion, Jr. and Abad Santos, JJ., concur.

Footnotes
1 pp. 1-12, CA decision, Annex "A" to Petition, pp. 24-35, rollo. 2 Entitled "Vicenta P. Tolentino and Jose Tolentino, Plaintiffs- Appellants and Appellees. versus, Bank of the Philippine Islands, DefendantAppellant and Appellee." 3 Entitled "Consuelo B. de la Cruz, et all Plaintiffs-Appellees, versus, Vicente Tolentino, et al., Defendants-Appellants. 4 Annex "D" to Petition, pp. 61-63, rollo. 5 Civil Case No. 5432 entitled "Consuelo B. de la Cruz, et all v. Vicente Tolentino, et al.," Record of Appeal, Annex "H" to Petition; p. 67, rollo.

6 Civil Case No. 6830 entitled "Vicenta P. Tolentino, et all v. Bank of the Philippine Islands," Joint Record on Appeal, Annex "F" to Petition, p. 65, rollo. 7 CA decision, supra. 8 pp. 12-13, Ibid. 9 pp. 13-14, Ibid. 10 Annex "B" to Petition, p. 44, rollo. 11 cf. Golez v. Camara, 101 Phil. 363. 12 Reyes v. Tolentino, 42 SCRA 365. 13 Javellana v. Mirasol and Nuez, 40 Phil. 761. 14 p. 2, Resolution of the Court of Appeals, Annex "D" to Petition, supra. 15 Rosario v.Tayug Rural Bank, 22 SCRA1220, citing Castillo v. Nagtalon, L-17079, 29 January 1962. 16 see Reoveros v. Abel and Sandoval, 48 O.G. 5318. 17 Reyes v. Tolentino, supra; Reyes-Gregorio v. Reyes, 27 SCRA 427; Reyes v. Chavoso, 27 SCRA 1253. 18 Javellana v. Mirasol and Nuez, supra. 19 De Jesus v. Court of Appeals, 46 SCRA 76. 20 Memorandum for respondent BPI, p. 118, rollo. 21 Memorandum for petitioners, p. 102, rollo. 22 Vda. de Arroyo v. El Beaterio del Santissimo Rosario de Molo, 23 SCRA 525. 23 People v. Padiernos, 69 SCRA 484. 24 Evangelista & Co. v. Abad Santos, 51 SCRA 416. 25 Gonzalez v. Court of Appeals, 90 SCRA 183 (1979). 26 33 SCRA 737 (1970). 27 69 SCRA 393 (1976). 28 72 SCRA 214 (1976). 29 74 SCRA 83 (1976). 30 King v. Joe, 20 SCRA 1117.

THIRD DIVISION [ G.R. No. 138978, September 12, 2002 ]

HI-YIELD REALTY, INC., PETITIONER, VS. COURT OF APPEALS, HONORABLE MAURICIO RIVERA AS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, ANTIPOLO CITY, BRANCH 73 AND NOLI FRANCISCO, RESPONDENTS. DECISION
CORONA, J.: For review is the decision dated November 18, 1998 of the Court of Appeals, the dispositive part of which reads: WHEREFORE, foregoing considered, the petition to declare the Orders dated 31 January 1994, 15 March 1994, 13 June 1994 and 16 July 1997 of the Regional Trial Court of Antipolo, Rizal, Branch 23, in Civil Case No. 93-2813 is DENIED. Accordingly, the assailed Orders are SUSTAINED. The trial court is hereby directed to make a final determination of the REDEMPTION PRICE. HI-YIELD REALTY, INC. is directed to allow NOLI S. FRANCISCO to redeem the subject property for the amount as determined by the trial court. SO ORDERED.[1] THE FACTS On August 10, 1987, private respondent Noli Francisco, as attorney-in-fact of spouses Servulo Carawatan and Felicidad Leyva, and petitioner Hi-Yield Realty, Inc. entered into a Deed of Real Estate Mortgage with Francisco as mortgagor and Hi-Yield Realty, Inc. as mortgagee. The property subject of the mortgage, which was owned by the spouses Carawatan, was situated at Lumang Dayap, Cainta, Rizal and covered by Transfer Certificate of Title No. 297171. It was mortgaged as security for the loan of P100,000 which was payable in three (3) months. Private respondent failed to pay and settle the amount loaned despite repeated demands by petitioner. Hence, on February 27, 1992, petitioner extrajudicially foreclosed the mortgage on the property. The property was sold for P285,000 with petitioner as the highest bidder. Subsequently, a Certificate of Sale[2] was issued in favor of petitioner. This was registered on August 13, 1992. Under the law, private respondent thus had a twelve-month redemption period expiring on August 13, 1993. On August 13, 1993, however, private respondent, claiming that he offered to redeem the property twice prior to the expiration of the said redemption period but that petitioner allegedly refused to accept the offer and instead demanded more than P1,500,000 as redemption price, filed a petition with the Regional Trial Court, Branch 23 of Antipolo, Rizal, with the following prayer: 1. ordering the respondent to have the subject real property be redeemed by the petitioner after paying the amount of P285,000.00, plus 1% per month interest therein and other amount which the purchaser may have paid thereon after purchase; 2. Notifying the Register of Deeds for the Province of Rizal of the instant petition and hence, title to the aforesaid real property not be consolidated to and in favor of the respondent foreclosure sale/buyer.

And in the meantime, Petitioner further prays before the Honorable Court, that he be allowed to consign/deposit the amount of P285,000.00 plus interest of 1% per month beginning August 12, 1992 in favor of respondent, to show his good faith in paying the redemption price.[3] On January 31, 1994, the trial court declared that the issue as manifested by the parties in the pre-trial conference was merely to determine the amount of the capital gains tax and documentary stamps as computed by the Marikina BIR office. Thus, it ordered private respondent to pay the corresponding amount of taxes within thirty (30) days or on March 15, 1994. On March 15, 1994, the trial court issued an order directing petitioner to submit within two (2) days an updated statement of account which was to be the basis for the payment of the redemption price by private respondent. In the same order, private respondent was also directed to pay the redemption price within fifteen (15) days from receipt of the order. In compliance with the order, petitioner submitted to the trial court a detailed computation of the total redemption price as of March 17, 1994. Private respondent received his copy on March 24, 1994 and therefore had until April 8, 1994 to pay the redemption price in full. He, however, failed to pay it by that date. Instead, on April 8, 1994, private respondent filed an Urgent Motion for Extension of Time[4] with the trial court asking for an extra time of forty-five (45) days within which to pay the redemption price. He reasoned that his debtor was not able to pay him the amount he needed to augment his cash on hand and that he was then waiting for a bank loan for P150,000. Simply put, private respondent did not have sufficient money to tender. The trial court denied private respondents motion in its order dated May 4, 1994, recognizing the right of petitioner to consolidate the property in its name.[5] The order stated: Acting on the motion for extension of time filed by the petitioner in this case praying that they be granted a period of 45 days from April 8, 1994 within which to pay the redemption price to the respondent and considering that since April 8, 1994 up to the present, a period of 26 days have elapsed without any pleading filed by the petitioner that they are ready and willing to pay the redemption price and considering the opposition filed by the respondent/oppositor, the motion is found to be without merit and, therefore, the Court denies the motion. Wherefore, the respondent has the right to consolidate the property in its name. Subsequently, petitioner filed a motion to compel private respondent to deliver the original owners copy of title (TCT No. 297171). On May 26, 1994, private respondent moved to reconsider, offering to pay the amount of P510,000 in managers check and P38, 872.93 in personal check. In a surprising turn-around, the trial court issued an order on June 13, 1994 directly contradicting its May 4, 1994 order: it now allowed private respondent to pay petitioner the redemption price in the amount of P548, 872.93 plus 1% per month from April 8, 1994 to June 30, 1994 within five (5) days from receipt of the order. Not only that. Petitioner was also ordered to accept the payment offered by respondent as the full redemption price. When petitioner refused to accept private respondents tender of payment, private respondent, on June 28, 1994, filed a motion[6] with the trial court to consign the amount of P561, 247.61 as the full and final redemption price.

On July 8, 1994, petitioner moved to reconsider the June 13, 1994 order arguing that the period of redemption could not be extended as it is fixed by law. But the trial court, on July 16, 1997, not only denied petitioners motion for reconsideration but also granted private respondents motion for consignation. Aggrieved, petitioner filed a petition for certiorari at the Court of Appeals, alleging that the orders of the trial court dated January 31, 1994, March 15, 1994, June 13, 1994 and July 16, 1997 were issued in excess of the trial courts jurisdiction. Petitioner argued that the trial court in effect extended the twelve-month period of redemption of a duly foreclosed property by almost four years. The Court of Appeals, however, did not find merit in the petition on the basis of the following: x x x the one-year redemption period should be reckoned from 13 August 1992. In this regard, NOLI was able to effectively exercise his right of redemption on 13 August 1993. The records show that on two occasions, within the redemption period, NOLI offered to redeem the subject property. Failing to afford the redemption price stated by HYRI, he filed an action before the trial court with the purpose of determining the subject property. To show his good faith in paying the redemption price, NOLI offered to consign/deposit the amount of P285,000.00 plus 1% interest per month beginning 12 August 1992 in favor of HYRI. NOLIs petition filed on 13 August 1993 had the effect of a formal offer to redeem. As stated in Belisario vs. Intermediate Appellate Court, the filing of a complaint to enforce repurchase within the period of redemption is equivalent to an offer to redeem and has the effect of preserving the right to redemption. To explain, a formal offer to redeem, accompanied by a bona fide tender of the redemption price, although proper, is not essential where x x x the right to redeem is exercised thru the filing of judicial action. Where the action is filed after the statutory period has expired, the determination of whether the plaintiff consigned the redemption price with the court simultaneous with the filing of the action is necessary to see if the right of redemption sans judicial action was validly exercised. Thus, to reiterate, the filing of the action itself within the redemption period is equivalent to a formal offer to redeem. (Underscoring provided) In view thereof, the petition filed before the trial court was timely made and was rightfully acted on. xxx xxx xxx

In the instant case, the assailed Orders were issued merely to determine the amount of capital gains tax and documentary stamps, as computed by BIR Marikina and to consider the granting of NOLIs right to redeem the subject property. x x x In view thereof, there was no extension of the redemption period. As heretofore stated, the period of redemption expired on 13 August 1993. And within the said period, NOLI has effectively exercised his right of redemption. Having so established the same, the contention of extending the redemption period finds no support in the records of the instant case.[7] Frustrated in its attempt to stymie private respondents efforts to redeem the subject property on a petition to the Court of Appeals, petitioner now seeks a review of the respondent courts decision under the following ASSIGNMENT OF ERRORS A. THE HONORABLE COURT OF APPEALS ERRED IN SUSTAINING THE ORDERS OF THE TRIAL COURT EXTENDING THE PERIOD OF REDEMPTION AND GRANTING A RELIEF IN EQUITY WHERE THE APPLICABLE LAW AND JURISPRUDENCE SPECIFICALLY PROVIDES OTHERWISE.

B. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE ORDERS OF THE TRIAL COURT WHICH ERRED IN ITS APPLICATION AND INTERPRETATION OF SECTION 28, RULE 39 OF THE 1997 RULES OF CIVIL PROCEDURE. C. THE HONORABLE COURT OF APPEALS ERRED IN APPLYING THE RULINGS IN THE BELISARIO CASE IN THE CASE AT BAR.[8] THE ISSUES In a nutshell, petitioner argues that the trial court erred in allowing redemption after April 8, 1994, the date when private respondent lost all his redemptive rights. Stated otherwise, the trial court should not have allowed private respondent forty-five (45) more days beyond April 8, 1994 within which to redeem the foreclosed property. Petitioner contends that the motions dated May 26, 1994 and June 28, 1994 filed by private respondent to consign and tender the payment of the redemption price were merely designed to stretch the time for redemption of the subject property. Private respondent did not have the ability to redeem the subject property as he had no money at the outset. The redemption price he initially offered was woefully inadequate because it did not include the taxes, interest and other expenses petitioner incurred during the foreclosure proceedings. Petitioner therefore felt it was justified in refusing to accept private respondents initial offer to redeem. Hence, private respondents action in the Antipolo RTC, filed on August 13, 1993 (the original expiration date of the period of redemption), was merely a subterfuge to forestall the running of the redemption period. Furthermore, according to petitioner, even if private respondent had been legally allowed to redeem the property until April 8, 1994 (as authorized by the March 15, 1994 order of the trial court), the latter never made any actual tender or consignation of payment and therefore no redemption was ever made. Thus, private respondent had already lost all his redemptive rights as of that date and the order dated June 13, 1994 granting a further forty-five (45) day extension to redeem after April 8, 1994 was completely beyond the trial courts power to give. THE QUESTIONED ORDERS Petitioner challenged before the respondent Court of Appeals the authority of the trial court to issue the following orders (a) dated January 31, 1994 which defined the issue involved in the case as merely determining the amount of taxes and which mandated private respondent to pay the corresponding amount of taxes within thirty (30) days; (b) dated March 15, 1994 which directed petitioner to submit an updated statement of account and private respondent to pay the redemption price (the updated statement of account as basis therefor) within fifteen (15) days from receipt of the order; (c) dated June 13, 1994 which allowed private respondent to redeem upon payment to petitioner of the redemption price of P548,872.93 and (d) dated July 16, 1997 which denied petitioners motion for reconsideration of the June 13, 1994 order and which granted private respondents motion for consignation. Petitioner now seeks to correct in this Court the error of the Court of Appeals in sustaining the four abovementioned orders of the trial court.

THIS COURTS RULING Section 28, Rule 39 of the Rules of Court provides: SEC. 28. Time and manner of, and amounts payable on, successive redemptions; notice to be given and filed. The judgment obligor, or redemptioner, may redeem the property from the purchaser, at any time within one (1) year from the date of the registration of the certificate of sale, by paying the purchaser the amount of his purchase, with one per centum per month interest thereon in addition, up to the time of redemption, together with the amount of any assessments or taxes which the purchaser may have paid thereon after purchase, and interest on such last named amount of the same rate; and if the purchaser be also a creditor having a prior lien to that of the redemptioner, other than the judgment under which such purchase was made, the amount of such other lien, with interest. Pursuant to the abovementioned rule, the right of redemption should be exercised within the specified time limit, which is one year from the date of registration of the certificate of sale. Moreover, the redemptioner should make an actual tender in good faith of the full amount of the purchase price as provided above, which means the auction price of the property plus the creditors other legitimate expenses like taxes, registration fees, etc. The rule works well if both parties agree on the amount to be tendered on or before the end of the redemption period. In this case, however, the parties could not agree on the amount as in fact the private respondent claimed he twice tried to redeem the property but the petitioner refused because they could not agree on the redemption price. What is the redemptioners option therefore when the redemption period is about to expire and the redemption cannot take place on account of disagreement over the redemption price? According to jurisprudence,[9] the redemptioner faced with such a problem may preserve his right of redemption through judicial action which in every case must be filed within the one-year period of redemption. The filing of the court action to enforce redemption, being equivalent to a formal offer to redeem, would have the effect of preserving his redemptive rights and freezing the expiration of the one-year period. This is a fair interpretation provided the action is filed on time and in good faith, the redemption price is finally determined and paid within a reasonable time, and the rights of the parties are respected. Stated otherwise, the foregoing interpretation, as applied to the case at bar, has three critical dimensions: (1) timely redemption or redemption by expiration date (or, as what happened in this case, the redemptioner was forced to resort to judicial action to freeze the expiration of the redemption period); (2) good faith as always, meaning, the filing of the private respondents action on August 13, 1993 must have been for the sole purpose of determining the redemption price and not to stretch the redemptive period indefinitely; and (3) once the redemption price is determined within a reasonable time, the redemptioner must make prompt payment in full. Conversely, if private respondent had to resort to judicial action to stall the expiration of the redemptive period on August 13, 1993 because he and the petitioner could not agree on the redemption price which still had to be determined, private respondent could not thereby be expected to tender payment simultaneously with the filing of the action on said date. Accordingly, the trial court did not err when it resolved to allow private respondent to redeem the property through its orders dated January 31, 1994 and March 15, 1994. The order dated March 15, 1994 thus preserved private respondents right to redeem pending the computation of the taxes to be added to the total amount of the redemption price.

Private respondent could not be reproached, at least initially, for offering to pay less than the full amount of the redemption price as the amount of taxes and expenses, at that point, was not yet clearly determined. Proof of this is the fact that petitioner had to be required by the March 15, 1994 order of the trial court to submit an updated account of the total capital gains tax and interest added to the purchase price. Petitioner did not oppose the said order. Instead, on March 17, 1994, it promptly complied with the directive of the trial court. Which could have only meant that petitioner itself recognized that the redemption price was uncertain and could not therefore be settled yet at that point. However, after petitioner, pursuant to the trial court order on March 15, 1994, furnished private respondent the updated statement of account on March 24, 1994, the latter should have redeemed the foreclosed property within 15 days, that is, on or before April 8, 1994. The private respondent should have promptly tendered by then the complete and updated redemption price as computed. Should the amount allow redemption, the redemptioner should then pay the amount already adverted to.[10] But on April 8, 1994, the deadline set by the trial court, private respondent did not tender any payment. Instead, he asked for an extension of 45 days because his money was not enough. The trial court was therefore correct when it denied, on May 4, 1994,[11] private respondents plea for a 45-day extension for payment. It was also correct in declaring, in the same order, the right of petitioner to consolidate the property in its name on account of private respondents failure to redeem the property on or before April 8, 1994. Strangely, however, the trial court had a sudden change of heart and reversed itself after private respondent filed a motion for reconsideration on May 26, 1994. This is where we draw the line between the judicious and injudicious use of discretion by the trial court. On June 13, 1994 and July 16, 1997, it issued two orders which effectively allowed an extension of the redemptive period and consignation of the redemption price. We raise a quizzical eyebrow, to say the least. The trial court resolved to allow private respondent to redeem and pay the redemption price of the property in the interest of justice and on the ground of equity way beyond what was reasonable and contemplated by the law. We cannot upbraid the trial court for sympathizing with private respondent but this exercise of discretion cannot be allowed to trample upon the other partys rights. The pendency of the right of redemption depresses the market value of the land until the period expires. Permitting private respondent to file a suit for redemption, with either party unable to foresee when final judgment will come, renders meaningless the period fixed by the statute for effecting the redemption. It makes the redemptive period indefinite and cripples any effort of the landowner to realize the value of his land. In the same way, the buyer cannot immediately recover his investment.[12] Thus, unless and until the redemption is resolved with finality, both the landowners and buyers needs cannot be met. Petitioner and private respondent herein were thus basically posed on similar footing before redemption. But whoever of them stands to be irreparably injured in the long run deserves the Courts equitable protection.[13] Thus we have held that: Equity has been defined as justice outside law, being ethical rather than jural and belonging to the sphere of morals than of law. It is grounded on the precepts of conscience and not on any sanction of positive law.[14] Private respondent may have elicited the sympathy of the trial court. We cannot, however, be blind to the rights of petitioner. It was serious error to make the final redemption of the foreclosed property dependent on the financial condition of private respondent. It may have been difficult for private respondent to raise the money to redeem the property but financial hardship is not a ground to extend the period of redemption.[15] Thus, this Court cannot apply the same leniency as it did in Belisario vs. IAC.[16] The Belisario case is not on all fours with the instant case. For one, in Belisario, the petitioners therein manifested their desire to redeem the property through a letter addressed to PNB. Enclosed in the letter was a postal money order in the amount of

P630 as partial payment, with the balance to be paid in 12 equal monthly installments. There was a definite tender of payment by petitioners therein although at the outset the amount tendered was incomplete and made with a proposal to pay on installment. This Court held that (t)here (was) no cogent reason for requiring the vendee to accept payment by installments from the redemptioner as it would ultimately result in an indefinite extension of the redemption period. In the instant case, however, there was no definite tender of payment to petitioner when private respondent allegedly offered to redeem the property on August 13, 1993. Had private respondents act of filing a suit for redemption really been in good faith, private respondent could have at least consigned or deposited what he thought to be the correct amount simultaneously with the filing of the action to redeem on August 13, 1993 - to show not only good faith but also his intention and capability of paying in full what he believed to be the reasonable price. But even as he petitioned the court for the consignation of the redemption price, no actual consignation was made. He instead sought a 45-day extension of the period to pay the redemption price. This was downright reflective of private respondents financial inability to redeem from the very start. For another, the controversy in the Belisario case involved the determination of the proper reckoning of the period of redemption. This Court held there that (t)he redemption period, for purposes of determining the time when a final Deed of Sale may be executed or issued and the ownership of the registered land consolidated in the purchaser at an extrajudicial foreclosure sale under Act 3135, should be reckoned from the date of the registration of the Certificate of Sale in the Office of the Register of Deeds concerned and not from the date of public auction. In the instant case, however, the fact that private respondent made a formal offer to redeem before the expiration of the period to redeem was not squarely at issue. The focal issue here is whether or not the extension of the redemptive period by the trial court was well within private respondents preserved right to redeem. The circumstances clearly show it was not. The Court of Appeals thus cited the Belisario case out of context because the incidents of said case are different from those of the case at bar. Precedents are helpful in deciding cases when they are on all fours or at least substantially identical with previous litigations. Argumentum a simili valet in lege. x x x Except when there is a need to reverse them because of an emergent viewpoint or an altered situation x x x.[17] The opportunity to redeem the subject property was never denied to private respondent. His timely formal offer through judicial action to redeem was likewise recognized. But that is where it ends. We cannot sanction and grant every succeeding motion or petition specially if frivolous or unreasonable filed by him because this would manifestly and unreasonably delay the final resolution of ownership of the subject property. And we cannot be clearer on this point: as a result of the trial courts grant of a 45-day extended period to redeem, almost nine (9) years have elapsed with both parties claims over the property dangling in limbo, to the serious impairment of petitioners rights. We cannot thus help but call the trial courts attention to the prejudice it has wittingly or unwittingly caused the petitioner. It was really all too simple. The trial court should have seen, as in fact it had already initially seen, that the 45-day extension sought by private respondent on April 8, 1994 was just a play to cover up his lack of funds to redeem the foreclosed property. WHEREFORE, the petition is PARTLY GRANTED. The decision of the Court of Appeals under review is hereby MODIFIED as follows: (1) the orders dated January 31, 1994 and March 15, 1994 of the trial court are hereby SUSTAINED; (2) the orders dated June 13, 1994 and July 16, 1997 of the trial court are hereby SET

ASIDE and NULLIFIED. Consequently, for failure of private respondent to redeem the property within the period set by the trial court in its order dated March 15, 1994, the petitioner is hereby allowed to consolidate the title to the subject property in its name. SO ORDERED. Puno, (Chairman), Panganiban, and Carpio-Morales, JJ., concur. Sandoval-Gutierrez, J., on leave.

[1]

Justice Demetrio G. Demetria, ponente, concurred in by Justices Arturo B. Buena and Ramon A. Barcelona, First Division, Rollo, p. 17.
[2]

Annex H; rollo, 69. Annex I; rollo, 70. Annex K; rollo, 78. Annex L; rollo, 82. Annex O; rollo, 81 Rollo, 15-16. Ibid., 26.

[3]

[4]

[5]

[6]

[7]

[8]

[9]

State Investment House, Inc. vs. Court of Appeals, 215 SCRA 734 (1992)l; Belisario vs. Intermediate Appellate Court, 165 SCRA 101 (1988); Tioseco vs. Court of Appeals, 143 SCRA 705 (1986); Tolentino vs. Court of Appeals, 106 SCRA 513 (1981).
[10]

Tolentino vs. Court of Appeals, supra. Supra. Basbas vs. Entena, 28 SCRA 665 (1969) Rodriguez vs. Hon. Andres Reyes, 36 SCRA 502 (1970). Manning International Corporation vs. National Labor Relations Commission, 195 SCRA 155 (1991). Barrozo vs. Macaraeg, 85 Phil. 378 (1949). Supra Rosales vs. Court of First Instance, 154 SCRA 153 (1987).

[11]

[12]

[13]

[14]

[15]

[16]

[17]