MEDIO FÍSICO

WON the RTC validly dismissed the petition for writ of possession on the ground of Litis Pendentia given that a complaint for injunction with TRO was pending, in which action sought to declare the sale to Torrefranca as void and to uphold the spouses’ right to pre-emption. NO.

The rights asserted and the reliefs sought by the parties in both cases are not identical. Thus, Litis Pendentia is unavailing.

Sec 33, Rule 39 of the ROC: if no redemption be made within a year from the date of the registration of the certificate of sale, the purchaser is entitled to a conveyance and possession of the property,

Here, no redemption was made within a year from January 1996. So in August, 1997, more than a year after, DBP filed a petition for writ of possession. This is in order.

Where, as here, the title is consolidated in the name of the mortgagee, the writ of possession becomes a matter of right on the part of the mortgagee, and a ministerial duty on the part of the court to issue the same.

The pendency of a separate civil suit questioning the validity of the sale of the mortgaged property cannot bar the issuance of the writ of possession.

Posting Of Bond Not Necessary If Writ Of Possession Applied For After Ownership Has Vested On The Creditor-Mortgagee

METROPOLITAN BANK AND TRUST COMPANY V SPOUSES BANCE (2008)

The writ of possession was not irregular despite the fact that petitioner did not post a bond. The posting of a bond as a condition for the issuance of the writ of possession becomes necessary only if it is applied for within one year from the registration of the sale with the register of deeds, i.e., during the redemption period inasmuch as ownership has not yet vested on the creditor-mortgagee. After the one-year period, and no redemption was made, the mortgagor loses all interest over it. In this case, respondents were already stripped of their rights over the properties when they failed to redeem the same within one year from May 3, 1999, the date of registration of the sale.

Hence, when petitioner applied for the writ after the expiration of the redemption period there was even more reason to issue the writ.

Exception To The Rule That Issuance Of Writ Of Possession Ministerial And May Be Done Ex Parte

CHINA BANKING CORP V SPOUSES LOZADA (2008)

The exception provided under SEC 33 of Rule 39 of the Revised Rules of Court (to the general rule that issuance of a writ of possession is ministerial and may be done ex parte) contemplates a situation in which a third party holds the property by adverse title or right,

such as that of a co-owner, tenant or usufructuary. The co-owner, agricultural tenant, and usufructuary possess the property in their own right, and they are not merely the successor or transferee of the right of possession of another co-owner or the owner of the property. The spouses Lozada cannot claim that their right of possession over Unit No. 402 is analogous to any of these.

It is true that in the case presently before this Court, PPGI executed in favor of the spouses Lozada the Contract to Sell covering Unit No.

402 before it constituted in favor of CBC the real estate mortgages on 51 Project units including Unit No. 402. Nonetheless, it must be emphasized that what PPGI executed in favor of the spouses Lozada was a Contract to Sell, a mere promise to sell, which, at the moment of its execution, did not yet transfer possession, much less, title to Unit No. 402 from PPGI to the spouses Lozada. When PPGI constituted the real estate mortgage on Unit No. 402 in favor of CBC six months later, possession of and title to the property still resided in PPGI. And when PPGI subsequently ceded possession of Unit No.

402, upon its completion, to the spouses Lozada, such right was already burdened by the terms and conditions of the mortgage constituted thereon. By merely stepping into the shoes of PPGI, the spouses Lozada’s right of possession to Unit No. 402 cannot be less or more than PPGI’s.

The spouses Lozada, having succeeded PPGI in the possession of Unit No. 402, cannot be considered a third party holding the said property adversely to PPGI, the defaulting debtor/mortgagor. Resultantly, the general rule, and not the exception, applies to the instant Petition. It was the mandatory and ministerial duty of the Makati City RTC to grant the ex parte petition of CBC and order the issuance of a writ of possession in the latter’s favor over Unit No. 402. It was likewise mandatory and ministerial for the Clerk of Court to comply with the Makati City RTC order by issuing the writ of possession, and for the Sheriff to implement the writ by first issuing a notice to vacate to the occupants of Unit No.

402.

Nature Of Redemption Period

SPOUSES LANDRITO V CA (2005)

In Lazo v. Republic Surety & Insurance Co., Inc., this Court has made it clear 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 into one of conventional redemption.

Here, there is no showing whatsoever that petitioners agreed to pay the redemption price.

On the contrary, their act of filing their complaint to declare the nullity of the foreclosure sale is indicative of their refusal to pay the redemption price on the alleged deadline set by the husband. At the very least, if they so believed that their loan obligation was only for P1,000,000.00, petitioners should have made an offer to redeem within one (1) year from the registration of the sheriff’s certificate of sale, together with a tender of the same amount. This, they never did.

It must be remembered that the period of redemption is not a prescriptive period but a condition precedent provided by law to restrict the right of the person exercising redemption.

Correspondingly, if a person exercising the right of redemption has offered to redeem the property within the period fixed, he is considered to have complied with the condition precedent prescribed by law and may thereafter bring an action to enforce redemption. If, on the other hand, the period is allowed to lapse before the right of redemption is exercised, then the action to enforce redemption will not prosper, even if the action is brought within the ordinary prescriptive period. Moreover, the period within which to redeem the property sold at a sheriff’s sale is not suspended by the institution of an action to annul the foreclosure sale. It is clear, then, that petitioners have lost any right or interest over the subject property primarily because of their failure to redeem the same in the manner and within the period prescribed by law. Their belated attempts to question the legality and validity of the foreclosure proceedings and public auction must accordingly fail.

One Year Of Period Of Redemption Computed From Date Of Registration Of Certificate Of Foreclosure Sale

REYES V NOBLEJAS (1967)

Redemption is not the concern merely of the auction-vendee and the mortgagor, but also of the latter’s successors in interest or any judicial creditor or judgment creditor of said mortgagor, or any person having a lien on the property subsequent to the mortgage under which the property has been sold. It is precisely for this reason that the certificate of sale should be registered, for only upon such registration may it legally be said that proper notice, though constructive, has been served unto possible redemptioners contemplated in the law. It is for

this reason that the date of sale mentioned in SEC 6 of Act 3135 should be construed to mean the date of registration of the certificate of sale in the office of the register of deeds concerned.

The Land Registration Commissioner was right in ordering the Register of Deeds of Rizal to deny the registration of the Deed of Sale and the Affidavit of Consolidation of Ownership, the simultaneous registration of which documents was sought by herein petitioner even before the certificate of sale issued by the sheriff was registered.

Extension Of 1-Year Redemption Period LAZO V REPUBLIC SURETY (1970)

The parties had abandoned entirely the concept of legal redemption in this case and converted it into one of conventional redemption, in which the only governing factor was the agreement between them.

The plaintiffs' repeated requests for time within which to redeem, each with a definite date of expiration, generated binding contracts when approved by the defendant company. A contract, needless to say, has the force of law between the parties. In any event, the principle of estoppel would step in to prevent the plaintiffs from going back upon their own acts and representations to the prejudice of the other party who relied upon them. This is a principle of equity and natural justice, expressly adopted in our Civil Code (Arts. 1431 et seq.) and articulated as one of the conclusive presumptions in Rule 31, Sec. 3(a), of our Rules of Court as follows:

Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act, or omission, be permitted to falsify it.

IBAAN RURAL BANK V CA (1999)

When petitioner received a copy of the Certificate of Sale registered in the Office of the Register of Deeds of Lipa City, it had actual and constructive knowledge of the certificate and its contents. For two years, it did not object to the two-year redemption period provided in the certificate. Thus, it could be said that petitioner consented to the two-year redemption period especially since it had time to object and did not. When circumstances imply a duty to speak on the part of the person for whom an obligation is proposed, his silence can be construed as consent. By its silence and

inaction, petitioner misled private respondents to believe that they had two years within which to redeem the mortgage. After the lapse of two years, petitioner is estopped from asserting that the period for redemption was only one year and that the period had already lapsed.

The doctrine in Lazo vs. Republic Surety and Insurance Co., Inc. does not apply in this case.

In that case the court held that the one year period of redemption provided in Act No. 3135 is only directory and can be extended by agreement of the parties. But it bears noting that in Lazo the parties voluntarily agreed to extend the redemption period. Thus, the concept of legal redemption was converted by the parties in Lazo into conventional redemption. This is not so in the instant case.

There was no voluntary agreement. In fact, the sheriff unilaterally and arbitrarily extended the period of redemption to two (2) years in the Certificate of Sale. The parties were not even privy to the extension made by the sheriff.

Nonetheless, as above discussed, the bank cannot after the lapse of two years insist that the redemption period was one year only.

Additionally, the rule on redemption is liberally interpreted in favor of the original owner of a property. The fact alone that he is allowed the right to redeem clearly demonstrates the solicitousness of the law in giving him another opportunity, should his fortune improve, to recover his lost property.

Right Of Redemption Distinguished From Equity Of Redemption

HUERTA ALBA RESORT V CA (2000)

From the various decisions, resolutions and orders a quo it can be gleaned that what petitioner has been adjudged to have was only the equity of redemption over subject properties. On the distinction between the equity of redemption and right of redemption, the case of Gregorio Y. Limpin vs. Intermediate Appellate Court,7 [166 SCRA 87.] comes to the fore:

The equity of redemption is, to be sure, different from and should not be confused with the right of redemption.

The right of redemption in relation to a mortgage - understood in the sense of a prerogative to re-acquire mortgaged property after registration of the foreclosure sale - exists only in the case of the extrajudicial foreclosure of the mortgage. No such right is recognized in a judicial foreclosure except only where the

mortgagee is the Philippine National Bank or a bank or banking institution.

Where a mortgage is foreclosed extrajudicially, Act 3135 grants to the mortgagor the right of redemption within one (1) year from the registration of the sheriff’s certificate of foreclosure sale.

Where the foreclosure is judicially effected, however, no equivalent right of redemption exists. The law declares that a judicial foreclosure sale, ‘when confirmed by an order of the court, x x shall operate to divest the rights of all the parties to the action and to vest their rights in the purchaser, subject to such rights of redemption as may be allowed by law.’

Such rights exceptionally ‘allowed by law’ (i.e., even after confirmation by an order of the court) are those granted by the charter of the Philippine National Bank (Acts No. 2747 and 2938), and the General Banking Act (R.A. 337).

These laws confer on the mortgagor, his successors in interest or any judgment creditor of the mortgagor, the right to redeem the property sold on foreclosure - after confirmation by the court of the foreclosure sale - which right may be exercised within a period of one (1) year, counted from the date of registration of the certificate of sale in the Registry of Property.

But, to repeat, no such right of redemption exists in case of judicial foreclosure of a mortgage if the mortgagee is not the PNB or a bank or banking institution. In such a case, the foreclosure sale, ‘when confirmed by an order of the court. x x shall operate to divest the rights of all the parties to the action and to vest their rights in the purchaser.’ There then exists only what is known as the equity of redemption.

This is simply the right of the defendant mortgagor to extinguish the mortgage and retain ownership of the property by paying the secured debt within the 90-day period after the judgment becomes final, in accordance with Rule 68, or even after the foreclosure sale but prior to its confirmation.

This is the mortgagor’s equity (not right) of redemption which, as above stated, may be exercised by him even beyond the 90-day period ‘from the date of service of the order,’

and even after the foreclosure sale itself, provided it be before the order of confirmation of the sale. After such order of confirmation, no redemption can be effected any longer.

Redemption Price To Be Paid By Accommodation Mortgagors

BELO V PNB (2001)

Eduardo Belo, assignor of the petitioners, is an accommodation mortgagor. Accommodation mortgagors as such are not in any way liable for the payment of the loan or principal obligation of the debtor/borrower. The liability of the accommodation mortgagor extends only up to the loan value of their mortgaged property and not to the entire loan itself. Hence, it is only just that they be allowed to redeem their mortgaged property by paying only the winning bid price plus interest at the public auction sale with respect only to the property belonging to the accommodation mortgagor.

The principle of indivisibility of mortgage contracts does not apply to the right of redemption of an accommodation mortgagor and her assignees. Indivisibility arises only where there is a debt, that is, there is a debtor-creditor relationship. But, this relationship is wanting in the case at bar in the sense that petitioners are assignees of an accommodation mortgagor and not of a debtor-mortgagor.

Hence, it is fair and logical to allow the petitioners to redeem only the property belonging to their assignor, Eduardo Belo.

With respect to the 4 parcels of land belonging to Eslabon Spouses, petitioners being total strangers to said lots lack legal personality to redeem the same. Fair play and justice demand that respondent PNB’s interest of recovering its entire bank claim should not be at the expense of petitioners, as assignees of Belo, who is not indebted to it.

Preserving The Right Of Redemption Beyond Redemption Period

HI-YIELD REALTY V CA (2002)

What is the redemptioner’s 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, 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 respondent’s 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.

In the instant case, the respondents did not tender payment within the period set by the trial court. Instead, they asked for a 45-day extension to tender payment. Such 45-day extension for payment must be denied.

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. Thus, unless and until the redemption is resolved with finality, both the landowner’s and buyer’s needs cannot be met.

Petitioner and private respondent herein were

Petitioner and private respondent herein were