GR 141974; (August, 2004) (Digest)
G.R. No. 141974 , August 9, 2004
BPI FAMILY SAVINGS BANK, INC., petitioner, vs. SPS. JANUARIO ANTONIO VELOSO AND NATIVIDAD VELOSO, respondents.
FACTS
Respondent spouses Veloso obtained a loan from Family Bank and Trust Company, secured by a real estate mortgage over three parcels of land. Upon default, the bank extrajudicially foreclosed the mortgage on July 1, 1985, and the properties were sold at public auction with the bank as the highest bidder. The bank later assigned its rights to petitioner BPI Family Savings Bank. On July 24, 1986, within the one-year redemption period, the respondents, through counsel, sent a letter to BPI offering to redeem the properties for P1,872,935. BPI rejected this offer.
The respondents subsequently filed a complaint for annulment of foreclosure with consignation. The trial court, in an order, allowed them to deposit P1,500,000 with the clerk of court. After protracted litigation, the Regional Trial Court upheld the validity of the foreclosure but allowed redemption, fixing the price at P2,140,000. The Court of Appeals affirmed the decision but modified the redemption price to P2,678,639.80. BPI elevated the case to the Supreme Court, arguing that the respondents failed to validly exercise their right of redemption.
ISSUE
Whether the respondents validly exercised their right of redemption over the foreclosed properties.
RULING
No. The Supreme Court reversed the Court of Appeals and dismissed the respondents’ complaint. The Court held that while the extrajudicial foreclosure was valid, the respondents did not effectively exercise their right of redemption. The general rule is that redemption is not sufficiently exercised by a mere written offer or manifestation of intent. For a valid redemption, the offer must be accompanied by an actual and simultaneous tender of payment of the full redemption price. This constitutes the bona fide exercise of the right.
In this case, the respondents’ letter of July 24, 1986, was merely an offer to redeem at a specific amount, which BPI rightfully rejected as it was not the full redemption price. The subsequent consignation of P1,500,000 was also insufficient as it was less than the amount ultimately determined by the courts. The respondents never tendered the full redemption price within the statutory one-year period. Redemption is a matter of strict compliance; it is a question of payment or valid tender of the full price within the period allowed by law, not merely a declaration of intent. Equity cannot be invoked against these clear legal requirements. Consequently, the right of redemption was lost.