GR 170785; (October, 2007) (Digest)
G.R. No. 170785 , October 19, 2007.
Republic Planters Bank (Maybank) and Philmay Property, Inc. vs. Vivencio T. Sarmiento, Jesusa N. Sarmiento, Jose N. Sarmiento, and Elizabeth B. Sarmiento.
FACTS
Respondents obtained loans from petitioner Maybank, secured by a real estate mortgage. They defaulted, leading Maybank to extrajudicially foreclose the mortgage on November 9, 1982. The certificate of sale was registered on March 4, 1983, starting the one-year redemption period. During this period, a manager’s check for P300,000.00 from a respondent’s relative and a P12,000.00 cash deposit were made with Maybank. The bank treated these as deposits and refused to execute a deed of redemption. After consolidating ownership in 1990, Maybank sold the property to co-petitioner Philmay, which later sold it to a third party. Respondents filed an action for specific performance to compel redemption and rescind the subsequent sales.
ISSUE
Whether respondents validly exercised their right of redemption by tendering the redemption price within the statutory period.
RULING
No. The Supreme Court reversed the Court of Appeals and dismissed the complaint. The legal logic centers on the nature of a valid redemption in extrajudicial foreclosure. For a redemption to be effective, the mortgagor must pay or tender to the mortgagee the redemption price in full within the one-year period. Mere deposit of funds with the mortgagee-bank, without a clear and unequivocal indication that it constitutes payment of the redemption price, is insufficient. The act of redemption is not a mere offer but a consummated act requiring actual payment or a valid tender that is unconditional.
Here, the amounts delivered were treated and accepted by the bank as mere deposits, not as payment for redemption. Respondents failed to establish that they made an express and unconditional tender of the full redemption price to Maybank with the clear intent to redeem the property within the statutory period. Consequently, no valid redemption occurred. Maybank’s consolidation of title and subsequent sale of the property were therefore valid. The right of redemption, being statutory, must be exercised in strict compliance with the law, and the burden of proof rests upon the mortgagor to show that redemption was made within the period and in the manner prescribed.