G.R. No. L-28165 December 19, 1970
DEVELOPMENT BANK OF THE PHILIPPINES, mortgagee-appellant, vs. LEONARDO JIMENEZ and CORAZON BENITO, mortgagors-appellees, JOSEFINA B. JIMENEZ redemptioner-appellee.

FACTS

The spouses Leonardo Jimenez and Corazon Benito, registered owners of a parcel of land covered by Original Certificate of Title No. 14483, mortgaged the property to the Development Bank of the Philippines (DBP) for loans totaling P17,000. Due to non-payment, the property was sold at a public extra-judicial foreclosure auction on March 25, 1966, with DBP as the sole bidder for P11,000. In 1967, the mortgagors sold their right of redemption to their daughter, Josefina B. Jimenez. She paid the Provincial Sheriff P12,320 (P11,000 redemption price plus P1,320 interest), and the Sheriff executed a Deed of Redemption in her favor. The Deed was presented for registration, but DBP refused to surrender the owner’s duplicate certificate of title, preventing annotation and cancellation. Josefina filed an Ex-Parte Motion in the Court of First Instance of Pangasinan, which granted the motion and ordered DBP to deliver the title to the Register of Deeds. DBP filed a Motion for Reconsideration, contesting the validity of the redemption on the grounds that the Sheriff had no authority to execute the Deed and that the redemption price was inadequate, arguing the correct amount was its total claim of P32,020.57 as of March 27, 1967. The court denied the motion, prompting DBP’s appeal.

ISSUE

1. Whether the lower court erred in issuing the order to surrender the title without a hearing, contrary to Section 111 of Act No. 496 .
2. Whether the lower court erred in holding that Section 31 of Commonwealth Act No. 459 is not applicable to properties mortgaged to and foreclosed by the DBP.

RULING

1. The procedural defect of issuing the order without a hearing was cured when DBP filed its Motion for Reconsideration, was given the opportunity to present its objections, and the court ruled on them. Thus, DBP was afforded its day in court.
2. The lower court erred. Section 31 of Commonwealth Act No. 459 , a special law governing redemptions of properties mortgaged to the DBP (formerly the Rehabilitation Finance Corporation/Agricultural and Industrial Bank), applies, not the general provision of Section 30, Rule 39 of the Rules of Court. Under Section 31 of CA No. 459 , the redemptioner must pay the bank all amounts owed on the date of the auction sale, with agreed interest, not merely the purchase price paid at the auction plus interest. The paramount reason is to protect the government’s investment in the institution. Therefore, the redemption by Josefina B. Jimenez by paying only P12,320 was invalid, as the correct redemption price was DBP’s total claim. The orders of the lower court are reversed.