GR L 62051; (March, 1985) (Digest)
G.R. No. L-62051 March 18, 1985
RURAL BANK OF PARANAQUE, INC., petitioner, vs. ISIDRA REMOLADO and COURT OF APPEALS, respondents.
FACTS
Isidra Remolado mortgaged her property to the Rural Bank of Paranaque to secure loans. After she defaulted, the bank foreclosed on the mortgage, purchased the property at the public auction on July 21, 1972, and obtained a certificate of sale. The one-year statutory redemption period was set to expire on August 21, 1973. Remolado failed to redeem the property within this period. Subsequently, the bank consolidated its ownership, and a new title was issued in its name on September 5, 1973.
After the expiration of the redemption period, the bank, in a letter dated September 24, 1973, granted Remolado an option to repurchase the property by October 31, 1973, but did not specify a repurchase price. On October 26, Remolado and her daughter promised to pay P33,000 on October 31. However, they failed to pay on that date. They tendered the P33,000 on November 5, but the bank refused to accept it and returned the money the next day. Remolado then filed an action for reconveyance.
ISSUE
Whether a binding agreement for the repurchase of the foreclosed property existed, obligating the bank to reconvey the property to Remolado.
RULING
No. The Supreme Court reversed the lower courts and dismissed Remolado’s complaint. The legal logic is anchored on the absence of a legally binding contract for repurchase. First, the right of statutory redemption had irrevocably expired, and no such right existed after August 21, 1973. Second, the bank’s subsequent offer for a repurchase was a mere gratuitous option. Under Article 1479 of the Civil Code, an option contract requires a consideration distinct from the price to be binding. The bank’s offer lacked such separate consideration and was therefore unenforceable.
Even assuming the bank was bound by its offer until October 31, Remolado still had no cause of action because she failed to perform her promise to pay on that stipulated date. Her tender of payment five days later was ineffective, as the bank was no longer willing to accept it. The Court emphasized that while the situation may evoke sympathy, judicial intervention requires a violation of a legal duty, not merely a disadvantageous outcome from a failed negotiation. The bank acted within its legal rights in refusing the late payment and subsequently selling the property to a third party.