GR L 82735; (August, 1988) (Digest)
G.R. No. L-82735 August 18, 1988
SPOUSES CRISOSTOMO MEDINA and AURORA MEDINA, petitioners, vs. THE COURT OF APPEALS, MASANTOL RURAL BANK INC., THE SPOUSES REMIGIO LOBO and AIDA LOBO, respondents.
FACTS
Petitioners mortgaged a lot to respondent Rural Bank of Masantol to secure a loan. Upon default, the bank foreclosed the mortgage and acquired the property at the foreclosure sale on October 6, 1978. The sheriff’s certificate of sale was registered on June 5, 1979, starting the one-year redemption period. Petitioners alleged they attempted to redeem on August 11, 1979, but the bank president refused. The bank denied any tender of payment. After the redemption period expired on June 5, 1980, the bank consolidated ownership and later sold the property to respondent spouses Lobo on August 28, 1981. Petitioners then filed an action for annulment of consolidation and for redemption.
The trial court and the Court of Appeals dismissed the complaint. The lower courts found petitioners’ claim of a redemption attempt uncorroborated, noting no written offer or tender of payment was made. They accepted the bank’s version that the August 1979 visit was merely to inquire about the redemption amount. Petitioners also argued the bank’s subsequent sale to the Lobos was void for lack of prior notice to them as former owners, as required by Central Bank regulations.
ISSUE
Whether petitioners, despite the expiration of the statutory redemption period, may still redeem the foreclosed property from the bank or the subsequent vendees.
RULING
No. The petition is denied. The right of redemption is statutory and must be exercised within the one-year period from registration of the sheriff’s sale. The factual findings of the Court of Appeals, which concluded petitioners failed to validly exercise this right through a proper tender or consignation of the redemption price, are binding. Petitioners’ claim of an oral extension agreement is unenforceable under the Statute of Frauds, which requires such agreements concerning immovable property to be in writing.
Regarding the sale to the Lobos, the Court acknowledged that Central Bank Circular No. 502 requires rural banks to notify former owners before selling foreclosed assets. However, this regulatory requirement does not invalidate a consummated sale to innocent third parties. The subject property was registered land. Petitioners failed to annotate any adverse claim or notice of their right under the circular on the bank’s title. Consequently, respondent spouses Lobo, as purchasers in good faith and for value, acquired the property free from this unregistered claim pursuant to the Property Registration Decree. The bank’s non-compliance with the circular is a matter for administrative sanction but does not affect the validity of the sale or the indefeasibility of the title acquired by the innocent buyers.