Close  
Property rules

Way passed the deadline

On April 29, 1980, spouses Dencio and Susan obtained a loan from LD Bank. As security, Dencio and Susan executed a deed of real estate mortgage over a parcel of land registered in their names in favor of the bank.

Dencio and Susan defaulted on their payments. Expectantly, LD Bank caused the subject land to be sold at a public auction by the Office of the Provincial Sheriff. The Bank and the Sheriff are of the mindset that the sale occurred on May 15, 1984, while the spouses claim that it happened on May 14, 1984.

ADVERTISEMENT

LD Bank was the highest bidder. On May 31, 1984, the certificate of sale issued in favor of the bank was registered with the Registry of Deeds.

The one-year redemption period expired on May 31, 1985, without the spouses exercising their right of redemption. Hence, on June 25, 1985, more than one year after the certificate of sale was registered, a new transfer certificate was issued in favor of the LD Bank.

FEATURED STORIES

On November 29, 1990, the bank sold the subject land to spouses Nilo and Zeny. A new title was issued in their names.

Sometime in the first week of December 1990, Dencio and Susan went to LD Bank and offered to redeem the subject land. The bank informed them that the property had already been sold to Nilo and Zeny and accordingly rejected the offer made by Dencio and Susan.

Q: Can Dencio and Susan validly assail foreclosure sale?

A: No. The Sheriff’s Certificate of Sale attests to the fact that the required 20-day written notice of the time, place and purpose of the sale was posted in three conspicuous public places where the property is situated and in three other public places where the auction sale was to be held, as required by law. In the same certificate, the Sheriff also declared that a copy of the notice was sent to the mortgagors by registered mail. The notice of sale was published once a week within a period of 20 days in a local publication.

Q: What is the value and significance of the Sheriff’s Certificate of Sale?

A: The statements of the Sheriff are entitled to belief unless rebutted by evidence proving otherwise. The presumption of regularity in the performance of duty applies in this case in favor of the Sheriff. It is incumbent upon Dencio and Susan to rebut the presumption, that is, to show that the Sheriff was remiss in his duties.

Q: Can Dencio and Susan take refuge in cases decided by the Supreme Court which applied the liberal construction of redemption laws in favor of the redemptioner?

ADVERTISEMENT

A: No. It is indeed true that the Supreme Court allowed redemption in certain cases even after the lapse of the one-year period: (a) in order to promote justice and avoid injustice; or  (b) where it upheld the policy of the law to aid rather than defeat the right of redemption was expressed, stressing that where no injury would ensue, liberal construction of redemption laws is pursued and the exercise of the right to redemption is permitted to better serve the ends of justice; or (c) that the rule was liberally interpreted in favor of the original owner of the property to give him another opportunity, should his fortunes improve, to recover his property.

In this case, however, the facts cannot justify the application of the above.

Basic is the rule that the right to redeem becomes functus officio on the date of its expiry, and its exercise after the period is not really one of redemption but a repurchase.

As of May 31, 1984, Dencio and Susan were redemptioners. As their mortgage indebtedness was extinguished with the foreclosure and sale of the mortgaged subject property, what they had was the right of redemption granted to them by law. But they lost the right when they failed to exercise it within the prescribed period.

It is acknowledged that the redemption period expired on May 31, 1985, exactly one year after the registration of the certificate of sale in favor of LD Bank, and the same had elapsed without Dencio and Susan exercising their right of redemption.

As a result, ownership of and title to the property was consolidated in favor of LD Bank.

Dencio and Susan offered to redeem the subject property only on December 1990, more than six  years after the foreclosure sale of May 15, 1984.

Evidently, that was a belated attempt at exercising a right which had long expired. To allow redemption at such a late time would simply be unreasonable and would work an injustice on Nilo and Zeny.

Q: Did the negotiations between Dencio and Susan and the Bank in 1989 extend the period of redemption?

A: No,  because there was no longer any redemption period to extend as the same had already expired. Moreover, assuming without admitting, that indeed an extension had been granted by the bank, such an extension would constitute a mere offer on the part of LD Bank to re-sell the subject property to petitioners. Such an offer, however, does not constitute a binding contract.

Q:  What is the difference between redemption and repurchase?

A: Distinction must be made because redemption is by force of law; the purchaser at public auction is bound to accept redemption. Repurchase however of foreclosed property, after redemption period, imposes no such obligation. After expiry, the purchaser may or may not re-sell the property but no law will compel him to do so.

And, he is not bound by the bid price; it is entirely within his discretion to set a higher price, for after all, the property already belongs to him as owner.

(Source: Sps. Robles vs. CA, G.R. No. 128053, June 10, 2004)

Ma. Soledad Deriquito-Mawis is Dean, Lyceum of the Philippines University; Chairman, Philippines Association of Law Schools; and founder, Mawis Law Office

Read Next
LATEST STORIES
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: LD Bank, loan, Property Rules
For feedback, complaints, or inquiries, contact us.
lifestyle

This jewelry designer is also an architect

November 22, 2019 05:35 AM

sports

Becoming his own man

November 22, 2019 05:30 AM

business

PDIC to sue AMA Bank brass, employees

November 22, 2019 05:26 AM



© Copyright 1997-2019 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.