G.R. No. 150393, July 31, 2006
Luzon Development Bank, Petitioner, vs. Spouses Bartolome and Zenaida Angeles, Respondents.

FACTS

Petitioner Luzon Development Bank extrajudicially foreclosed the mortgage on respondents’ property after they defaulted on a loan. The bank emerged as the highest bidder at the auction sale in August 1984 and registered the certificate of sale in February 1985. Before the one-year redemption period expired, the parties negotiated for the property’s repurchase. They forged a written agreement extending the redemption period and fixing the redemption price at P871,182.78, payable via a downpayment and monthly installments. Respondents made advance and subsequent payments totaling P525,000, which the bank accepted. However, the bank later refused a further tender of P200,000 and informed respondents it would only resell the property at a much higher market value.
In 1988, the bank filed a petition for a writ of possession in the RTC, claiming absolute ownership due to the respondents’ alleged failure to redeem within the statutory period. The RTC denied the petition, ruling that the parties were bound by their new agreement for an extended redemption period. The Court of Appeals affirmed this decision.

ISSUE

The core issues are: (1) whether the parties validly entered into a new contract extending the redemption period, and (2) whether the petitioner is entitled to a writ of possession.

RULING

The Supreme Court denied the petition, upholding the validity of the new agreement. A contract is perfected by mere consent, which can be express or implied, and is not solely dependent on the parties’ signatures. The bank’s unconditional acceptance of the respondents’ substantial payments, even after the purported lapse of the original redemption period, constituted a clear manifestation of its consent and ratification of the contract. This conduct estopped the bank from subsequently denying the agreement’s binding effect.
Consequently, the bank is not entitled to a writ of possession. The issuance of such a writ is a ministerial duty only when the redemption period has expired without the mortgagor exercising the right of redemption. Here, the parties, through their subsequent agreement and the bank’s acceptance of payments, effectively extended the redemption period and created a new contractual relation. The bank’s four-year delay in seeking the writ further indicated its recognition of the respondents’ right to repurchase. The Court ordered the parties to comply with their agreement, directing the respondents to pay the remaining balance of the redemption price within a specified period.