G.R. No. 143687; July 31, 2001
SPOUSES RAMON ESTANISLAO, JR. and DINA TEOTICO ESTANISLAO, petitioners, vs. COURT OF APPEALS, HI-YIELD REALTY, INC., HUMBERTO BASCO, and NORBERTO VASQUEZ, respondents.

FACTS

In 1985, petitioners Spouses Ramon Estanislao, Jr. and Dina Teotico Estanislao mortgaged their land (TCT No. 120717) to respondent Hi-Yield Realty, Inc. to secure a P200,000.00 loan. Due to petitioners’ failure to comply with the mortgage conditions, the property was extrajudicially foreclosed and sold at public auction on December 9, 1988, with Hi-Yield Realty, Inc. as the highest bidder for P445,000.00. The Certificate of Sale was registered on June 9, 1992. On June 4, 1993, within the redemption period, petitioner Ramon Estanislao, Jr. tendered a manager’s check for P445,000.00 to Atty. Humberto Basco (the notary public who conducted the sale), requesting a statement of interest and other charges. Atty. Basco returned the check on June 15, 1993, stating the amount was incomplete. On June 21, 1993, petitioner tendered two checks (P445,000.00 and P81,521.27 for interest), but these were rejected as inadequate. Unbeknownst to petitioners, the Affidavit of Consolidation of Ownership was notarized by Atty. Basco on June 10, 1993, filed on June 14, 1993, and on June 15, 1993, respondent Norberto Vasquez, Acting Registrar of Deeds, ordered the cancellation of petitioners’ title and the issuance of a new one (TCT No. 265782) in Hi-Yield’s name. Petitioners discovered this on July 14, 1993, and subsequently filed a complaint for annulment of the affidavit and title, and for damages. The Regional Trial Court dismissed the complaint and ordered petitioners to pay damages and attorney’s fees to respondents. The Court of Appeals affirmed this decision.

ISSUE

The primary issue is whether petitioners validly exercised their right of redemption within the statutory period.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ decision with MODIFICATION. The Court held that petitioners failed to validly redeem the property within the redemption period. The tender of payment on June 21, 1993, was made 12 days after the expiration of the redemption period on June 9, 1993. The Court explained that redemption must be made within the one-year period from the date of registration of the sale, and a valid tender requires payment of the full redemption price, which includes the purchase price, interest, and other lawful charges. Petitioners’ initial tender on June 4, 1993, was incomplete as it did not include interest and other charges, and they did not consign the amount in court when their subsequent tender on June 21, 1993, was refused. The Court found no evidence of fraudulent collusion among the respondents regarding the consolidation of title. However, the awards of moral damages and attorney’s fees to respondents were deleted, as petitioners’ action was not shown to be filed in bad faith. The dispositive portion of the decision ordered the affirmation of the Court of Appeals’ decision with the modification deleting the award of moral damages and attorney’s fees.