GR L 66597; (August, 1986) (Digest)
G.R. No. L-66597 August 29, 1986
LEONARDO TIOSECO, petitioner, vs. HONORABLE COURT OF APPEALS, JOSE P. VILLANUEVA and TIMOTEA P. VILLANUEVA, respondents.
FACTS
The respondent spouses Villanueva mortgaged three lots to the Philippine National Bank (PNB) to secure a loan. Upon default, PNB extrajudicially foreclosed the mortgage. At the public auction on March 7, 1977, petitioner Leonardo Tioseco was the highest bidder. The certificate of sale was registered on March 8, 1977. After the redemption period expired without redemption, Tioseco consolidated his ownership, and a new title was issued in his name on March 7, 1978.
The spouses Villanueva claimed they attempted to redeem the properties within the statutory period but that Tioseco demanded an excessive redemption price of P22,641.08. Tioseco denied this, asserting that the spouses offered to pay but never returned after he quoted the auction price plus interest. On March 7, 1978, the spouses filed a suit to annul the sale and to be allowed to redeem the properties by paying the proper amount.
ISSUE
Have the respondents effectively exercised their right of redemption over the foreclosed properties?
RULING
Yes. The Supreme Court affirmed the decisions of the lower courts, allowing the respondents to redeem. The legal right to redeem is expressly granted by Section 25 of P.D. No. 694 (Revised Charter of PNB), which provides a one-year period from the registration of the foreclosure sale for the mortgagor to redeem by paying all claims of the Bank as of the sale date, plus costs and expenses. The respondents filed their judicial action on March 7, 1978, which was within one year from the registration of the certificate of sale on March 8, 1977.
The Court clarified that P.D. No. 694 does not prescribe any formal tender of the repurchase price or prior notice to the vendee as a precondition for validly exercising the redemption right. The filing of the court action within the redemption period itself constitutes a formal offer to redeem. The lack of a prior consignation or tender does not extinguish the right, especially when the redemptioner seeks judicial determination of the correct amount, as was the case here where the parties disputed the sum required. This interpretation aligns with the policy of the law to aid rather than defeat the right of redemption. Consequently, the respondents were permitted to redeem by paying Tioseco the auction price of P18,975.00 plus interest and other lawful expenses.