GR 184252; (September, 2009) (Digest)
G.R. No. 184252 ; September 11, 2009
CHINA BANKING CORPORATION, Petitioner, vs. SPS. WENCESLAO & MARCELINA MARTIR, Respondents.
FACTS
Respondents Spouses Martir executed real estate mortgages in favor of petitioner China Banking Corporation (CBC) to secure a credit line. They subsequently defaulted on their loan obligations. After demand, CBC extrajudicially foreclosed the mortgaged properties in May 1998 and purchased them as the sole bidder. A Certificate of Sale was issued and registered.
In 1999, the spouses filed a complaint to nullify the foreclosure, alleging jurisdictional defects in the publication and posting of the notice of sale and imputing bad faith on CBC for failing to respond to their inquiries about the redemption amount. The Regional Trial Court upheld the foreclosure’s validity but granted the spouses an alternative remedy of redemption, finding CBC caused their failure to redeem. The Court of Appeals reversed, invalidating the foreclosure for non-compliance with posting and publication requirements, specifically noting the newspaper used was not accredited.
ISSUE
Whether the Court of Appeals erred in invalidating the extrajudicial foreclosure sale based on alleged non-compliance with posting and publication requirements.
RULING
The Supreme Court granted the petition and reinstated the RTC decision, with modification. The Court held that the respondents were estopped from questioning the validity of the foreclosure proceedings. By offering to redeem the properties in 1999 through a formal letter tendering a specific amount, the spouses voluntarily recognized the legitimacy of the foreclosure sale and effectively waived any right to challenge its procedural regularity. Jurisprudence establishes that an offer to redeem constitutes an admission of the sale’s validity.
The legal logic is clear: a party cannot simultaneously impugn the validity of a foreclosure sale and seek to benefit from its provisions, such as the right of redemption. The act of offering to redeem operates as a waiver of any procedural irregularities and cures any potential defects. Furthermore, the Court found the respondents failed to prove that the alleged defects in publication and posting rendered the sale void. The one-year redemption period had long expired, and their belated challenge, after their own unconditional offer to redeem, was impermissible. Consequently, the foreclosure was declared valid, and the right to redeem was deemed extinguished.