GR 179781; (April, 2010) (Digest)
G.R. No. 179781 ; April 7, 2010
SPOUSES BASILIO and NORMA HILAGA, Petitioners, vs. RURAL BANK OF ISULAN (Cotabato, Inc., as represented by its Manager), Respondent.
FACTS
Petitioners Spouses Hilaga obtained a loan from respondent Rural Bank of Isulan in 1970, secured by a real estate mortgage over their land, which was then only covered by a tax declaration. Upon default, the bank extrajudicially foreclosed the mortgage, and the property was sold at public auction on April 20, 1977, with the bank as the highest bidder. Unknown to the bank, the spouses had been issued a Free Patent title (OCT No. P-19766) for the same land on August 4, 1976, prior to the foreclosure sale. The certificate of sale was never registered. In 1999, over twenty-two years after the sale, the spouses filed a complaint to redeem the property, arguing that the redemption period had not commenced due to the non-registration of the sale and that, as homesteaders, they had a five-year redemption period under the Public Land Act.
ISSUE
Whether petitioners can still redeem the foreclosed property.
RULING
No, petitioners’ right of redemption had long expired. The Supreme Court affirmed the Court of Appeals’ ruling. The applicable law is Act No. 3135 , as amended, in relation to the Rural Banks Act ( R.A. No. 720 , as amended by R.A. No. 2670 ), which provides a two-year redemption period for mortgagors of rural banks, reckoned from the date of the foreclosure sale. The Court rejected the argument that the period should commence from the registration of the certificate of sale. Registration is required only for the purpose of consolidating ownership, not for starting the redemption period, which begins from the date of sale. The issuance of a free patent title did not alter this period, as the mortgage was constituted before the title was issued, and the property was foreclosed as an ordinary mortgaged property, not as a homestead. Even assuming the five-year redemption period for homesteads under Section 119 of the Public Land Act applied, petitioners still failed to exercise their right within the maximum period, which would have expired in 1984. Their action filed in 1999 was grossly belated, constituting laches. The considerable delay of twenty-two years in asserting their right strongly indicates a lack of merit in their claim.