GR 241981; (December, 2020) (Digest)
G.R. No. 241981, December 02, 2020
Development Bank of the Philippines, Petitioner, vs. West Negros College, Inc., Substituted by V-2 SAC Management and Development Corporation, Respondent.
FACTS
This case, the third time the matter has been elevated, concerns the determination of the redemption price for properties foreclosed by the Development Bank of the Philippines (DBP). Bacolod Medical Center (BMC) obtained a loan from DBP, secured by a mortgage on two parcels of land. Upon BMC’s default, DBP extrajudicially foreclosed the mortgage in 1989 and was the highest bidder at the auction. Before the redemption period expired, BMC assigned its right of redemption to West Negros College (WNC). WNC sought to redeem the properties by tendering payment based on the foreclosure sale price under Act No. 3135. DBP objected, insisting that its charter (Commonwealth Act No. 459, as amended) governs, requiring payment of the total indebtedness as of the foreclosure sale date plus contractual interest.
ISSUE
The core issue is whether the Court of Appeals correctly computed the specific redemption price and the applicable interest rate during the grace period for WNC to pay the final amount.
RULING
The Supreme Court ruled in favor of DBP, reversing the Court of Appeals. The legal logic is anchored on the Court’s final and executory ruling in G.R. No. 174103 (December 23, 2008 Resolution), which settled the applicable law. For properties mortgaged to and foreclosed by DBP, the redemption price is governed by Section 31 of its charter, not the general provisions of Act No. 3135. The redemptioner must pay DBP all amounts owed as of the date of the foreclosure sale, plus interest on the total indebtedness at the contractually agreed rate.
Consequently, the Court of Appeals erred in fixing the redemption price at Php 23,099,850.82 and imposing a 12% per annum interest during the grace period. The case was remanded to the trial court with the directive to compute the redemption price strictly in accordance with the formula established in the final 2008 Resolution: the total indebtedness as of August 24, 1989 (the foreclosure sale date) plus the stipulated interest from that date until full payment. Any computation must adhere to this settled legal parameter, and the 60-day grace period for payment commences only after the final redemption price is determined and communicated to the redemptioner.