G.R. No. L-5976; October 25, 1955
BERNABE B. AQUINO, plaintiff-appellee, vs. MACONDRAY & CO., INC., ET AL., defendants-appellants.

FACTS

Bernabe B. Aquino became indebted to Macondray & Co., Inc. On May 6, 1935, the debts were consolidated into a single promissory note for P15,585, secured by a real estate mortgage on properties in Bayambang, Pangasinan, and Manila. The mortgage authorized extrajudicial foreclosure under Act No. 3135 . Due to Aquino’s default, Macondray initiated foreclosure. The Deputy Sheriff, Dominador C. Ungson, conducted the auction sale on October 9, 1937, after publishing notice in the Agno Valley Times and posting notices. Macondray was the sole bidder, acquiring the properties for P20,043.18. A certificate of sale was issued. Aquino failed to redeem within the one-year period. On November 25, 1938, after the redemption period, Aquino sent a letter to Macondray, confirmed by its General Manager, Carlos Young, wherein he recognized Macondray as the absolute owner and was granted a privilege to repurchase the properties under specified terms and installments. Aquino did not comply with these terms. On June 1, 1945, Aquino wrote another letter applying to repurchase the properties. Subsequently, Aquino filed an action seeking to annul the foreclosure sale and recover the properties.

ISSUE

The primary issue is whether the contract of repurchase embodied in the letter of November 25, 1938, perfected between Aquino and Macondray, validly superseded and rendered moot any alleged defects in the extrajudicial foreclosure proceedings.

RULING

The Supreme Court reversed the decision of the Court of First Instance. It held that the letter of November 25, 1938, confirmed by Macondray, constituted a perfected and executory contract of purchase and sale, with Macondray as vendor and Aquino as vendee. By this contract, Aquino expressly recognized Macondray’s ownership acquired through the auction sale and agreed to repurchase the properties under specific terms. His failure to comply with these terms barred his action. The perfection of this contract rendered all questions regarding the validity of the foreclosure sale (such as the posting of notices, the alleged unconscionability of the price, and the sale of the lots en masse) moot and academic. The Court also noted that Aquino, a lawyer and former judge, could not plausibly claim ignorance of any defects in the foreclosure at the time he entered into the repurchase agreement. The contention that Macondray could not hold real estate under the Corporation Law was deemed not proper for Aquino to raise.