03 LIMPIN and SARMIENTO vs.

IAC and PONCE Note: Sir assigned the 1988 case which deals with contempt, but the 1987 ruling discusses the topic of foreclosure more. I combined the 1987 and 1988 facts but only discussed 1987 issue and ruling coz 1988 ruled on contempt only.] FACTS: [Conflicting claims resulting from the mortgage and subsequent sale to different persons of the same real property, and the execution sale thereof at a still later date at the instance of yet another party]

corrective relief by filing a special civil action for certiorari and mandamus in the Intermediate Appellate Court, impleading Limpin and Sarmiento as respondents.

The IAC rendered a decision aside the judgment of the TC and ordering said Court to confirm the same and issue a writ of possession to Ponce with respect thereto, subject to Sarmiento's equity of redemption.The SC affirmed the IAC decision in toto and a writ of possession issued. 3 days later, Sarmiento filed a complaint with the RTC of QC, against Guillermo Ponce, Deputy Sheriff, and Marino Cachero, which was assigned to Judge Beltrans branch. The issue involved in the case was whether or not the Certificate of Sale executed by Sheriffs Marino V. Cachero and Edgardo C. Tanangco is valid. What was being impugned therefore was the self - same foreclosure sale that the Appellate Court's affirmed decision had ordered Judge Solano to confirm. Judge Beltran issued a restraining order, and a writ of preliminary injunction, inhibiting the enforcement of the writ of possession issued on Judge Solano's order. What Judge Beltran enjoined was the writ of possession which the Appellate Court's affirmed decision had precisely directed Judge Solano to issue. A second action was commenced by Atty. Basa in the same Court, predicated on or basically connected with the theory advocated by him in the first case. In this second suit, Atty. Basa again prayed for an injunctive writ against Ponce, in yet another attempt to prevent the latter from coming into possession of the lots in question. Motions for contempt were filed by respondent Ponce against Judge Beltran (for issuing a writ), and against Sarmiento (for forum shopping). A motion for contempt was also filed by the petitioners counsel against respondent Ponce for deceiving the lower court judge, CA and SC that he had the right to foreclose the lots; for having deliberately concealed the fact of (his) donation and the availment of deductions from estate taxes. The counsel likewise filed for contempt against the lawyers of the respondent (Attorneys Sycip Salazar Hernandez and Gatmaitan, Philip Sigfrid A. Fortune Eugenio Lindo and Ernesto L. Pined) for failing to disclose the donation and for keeping silent without explanation enabling Ponce to defraud the courts.

On February 28, 1973, four lots were mortgaged by the spouses Jose and Marcelina Aquino to Guillermo Ponce and his wife Adela security for a loan of P2.2M The mortgages were registered on March 1, 1973. (Aquino ! Ponce, mortgage) 2 of the lots were afterwards sold in 1978 by the Aquinos to the Butuan Bay Wood Export Corporation, which caused an adverse claim to be annotated on the certificates. (Aquino ! Butuan Bay Corporation, sale) In 1979, Gregorio Y. Limpin, Jr. obtained a money Judgement against Butuan Bay Wood Export Corporation in a civil case. To satisfy the judgment, the lots covered by the 2 lots were levied and sold at public auction to Limpin as the highest bidder. (Butuan Bay Corp! Limpin, execution) The titles to the 2 lots were cancelled and and new TCT were issued to Limpin. Limpin then sold the two lots to Rogelio M. Sarmiento. New TCTs were issued in Sarmientos name. (Lipim ! Sarmiento, sale after execution) A day before Limpin's levy on the two lots, Ponce filed suit against the Aquino spouses for judicial FORECLOSURE of the mortgage over the Aquinos' 4 lots. Judgment was rendered in favor of Ponce. After the judgment became final, the TC directed the sale at public auction of 4 mortgaged lots to satisfy the judgment. These were sold to Ponce. The sheriff's certificate of sale was registered. (Aquino ! Ponce, foreclosure) Ponce then moved for the confirmation of the sale and the issuance of a writ of possession in his favor covering an the four lots. The TC confirmed only the sale of the lots covered the 2 lots that were not subjected to execution; refusing to confirm the sale or issue a writ of possession in regard to the lots covered Sarmientos titles. Ponce filed a MR and notified Limpin. Limpin however refused to participate in the hearings contending that the Court had no jurisdiction over his person; but he did comment that the mortgage over the 2 lots covered had been released by Ponce by virtue of a "Partial Release of Real Estate Mortgage. The Trial Court denied Ponce's motion for reconsideration, whereupon he sought

ISSUES: WON Appellate Court erred in according superiority to the mortgage rights of Ponce over the levy and sale in favor of petitioner Limpin and the subsequent sale of the property to petitioner Sarmiento? (as petitioner argues) RULING: NO. The Appellate Court correctly ruled that the rights and interests of petitioners Limpin and Sarmiento to the property in question are subordinate

to those of respondent Ponce, who holds a prior and senior lien. According to said Court: * * * This case is controlled by the decision in Santiago v. Dionisio, 92 Phil. 495 (1935). In theSantiago case, Ramon San Diego mortgaged his land to Eulalia Resurreccion. Later he sold it to Apolonia Santiago. As the mortgage debt was not paid, Resurreccion had the mortgage foreclosed. The Supreme Court upheld the sale to Dionisio, subject, however, to the equity of redemption of Santiago. The Court stated: ... [T]he effect of the failure to implead a subordinate lienholder or subsequent purchaser or both is to render the foreclosure ineffective as against them, with the result that there remains in their favor the "unforeclosed equity of redemption." But the foreclosure is valid as between the parties to the suit. (Ibid; 2 Moran's Rules of Court, 3rd ed., p. 239) Applied to this case, this means that the sale to Ponce, as the highest bidder in the foreclosure sale of the two lots in question should have been confirmed, subject to Limpin's (and now Sarmiento's equity to redemption). As held in Santiago v. Dionisio supra, the registration of the lands, first in the name of Limpin and later of Sarmiento, was premature. At most what they were entitled to was the registration of their equity of redemption. Moreover: The SUPERIORITY OF THE MORTGAGEE'S LIEN OVER THAT OF A SUBSEQUENT JUDGMENT CREDITOR is now expressly provided in Rule 39, Section 16 of the Revised Rules of Court, which states with regard to the effect of levy on execution that it shall create a lien in favor of a judgment creditor over the right title and interest of the judgment debtor in such property at the time of the levy, subject to the liens or encumbrances then existing. It is well settled that a recorded mortgage is a right in rem, a hen on the property whoever its owner may be. 24The recordation of the mortgage in this case put the whole world, petitioners included, on constructive notice of its existence and warned everyone who thereafter dealt with the property on which it was constituted that he would have to reckon with that encumbrance. Hence, Limpin's subsequent purchase of the "interests and participation" of Butuan Bay Wood Export Corporation in the lots covered by TCTs Nos. 92836 and 92837, as well as the sale of the same to Sarmiento on November 21, 1981, were both subject to said mortgage. On the other hand, Ponce's purchase of the lots mortgaged to him at the foreclosure sale on October 12, 1983, was subject to no prior lien or encumbrance, and could in no way be affected or prejudiced by a subsequent or junior lien, such as that of Limpin. 25 Petitioner Sarmiento having acquired no better right than his predecessor-in-interest, petitioner Limpin, his title must likewise fail. The fact that at the time Ponce foreclosed the mortgage on October 21, 1983, the lots had already been bought by Limpin and subsequently sold to Sarmiento is of no consequence, since the settled doctrine is that the effects of the foreclosure sale retroact to the date of registration of the mortgage, i.e., March 1, 1973 in the present case.

* * * It is well to note that the mortgage in favor of the late Ramon Eugelio was annotated on November 13, 1952 at the back of the certificates of title in controversy, while the adverse claim was only annotated on the same certificate more than one year later, on December 21, 1953. Hence, the adverse claim could not effect the rights of the mortgagee; and the fact that the foreclosure of the mortgage and the consequent public auction sale have been effected long after the annotation of the adverse claim is of no moment, because the foreclosure sale retroacts to the date of registration of the mortgage. Anent the claim that respondent Ponce executed a deed of partial release of his mortgage on July 20, 1977, the evidence discloses that Ponce and Jose Aquino, the mortgagor, thereafter executed separate affidavits dated December 1, 1983, stating that the said partial release was void, not only for want of consideration but also for lack of the signatures of Ponce's two sons who at the time of the execution of the document, were co-mortgagees as successors and heirs of Mrs. Adela Ponce. Moreover, the Deed of Partial Release was not registered but had simply been attached, together with the Deed of Sale of the lands to Butuan Bay Wood Export Corporation, to said corporation's affidavit of adverse claim, the last being the document which was actually registered, on February 4, 1978 as already stated. Thus the mortgage in favor of Ponce and his late wife was still subsisting, when the notice of levy in favor of Limpin was annotated on the original of OCTs Nos. 92836 and 92837, and even when the execution sale in favor of Limpin pursuant to the levy was registered. Said annotation was cancelled only on November 25, 1981, after the properties had been sold on execution to Limpin on October 6, 1981. The petitioners finally assert that respondent Ponce did not have a right of action for foreclosure over the lots in question in the Trial Court, much less to pursue this case, first in the respondent Intermediate Appellate Court and now, before this Court, because as early as August 18, 1976, he and his wife had donated the lots to the Doa Josefa Edralin Marcos Foundation and the donation had been accepted on August 31, 1976. However, that donation was never registered, a fact that the petitioners admit. Even if this Court were inclined to take up that issue now, though raised only for the first time, it is obvious that no resolution thereof could possibly improve the petitioners' position as against that of the private respondent or the latter's transferee. WHEREFORE, the petition is denied, with costs against petitioners. 04 QUIMSON vs. PHILIPPINE NATIONAL BANK FACTS: (Francisco) Quimson mortgaged, during his lifetime, several properties with the PNB, among which was a parcel of land situated in San Juan, Rizal. The property was mortgaged for P2,500.00. Because of his failure to pay the mortgage loans, PNB filed foreclosure proceedings in CFI Nueva Ecija.

A Writ of Execution was issued by the CFI and the Provincial Sheriff of Rizal was directed to sell at public auction the property in question. PNB was the highest bidder. A certificate of sale was issued and judicial confirmation of the sale followed. Thereafter, the PNBs Manager wrote a letter to plaintiff's son, who is occupying the property, informing him that the property in question was sold by the bank to Ricardo S. Mendoza. The certificate of sale as well as the judicial confirmation of the court was registered only with the RD Rizal on September 19, 1963. Plaintiffs who are the heirs of the late Francisco Quimson want to redeem the property from PNB. Defendant PNB refused alleging that the period of redemption which is to be counted from the date of judicial confirmation has already expired and that the property has already been sold to Mendoza. Plaintiffs argued that the period of redemption should be counted from registration. Appeal from the CFI order was dismissed. The lower court held that under the charter of the PNB, the right to redeem property sold in a judicial foreclosure sale of real estate mortgage to said Bank can be exercised only within one year from the date of the judicial confirmation thereof and not from the date of its registration. The dismissal was done without passing on the question raised in the pleadings before it as to whether in an instance where the property sought to be repurchased is only one of several properties separately mortgaged by the same mortgagor to the said Bank at different times but sold in a single foreclosure proceeding together with the others [because the separate deeds of mortgage commonly provide that each shall be security for all obligations of the mortgagor to the Bank, as in this case], should be the amount of the particular loan for which the property being redeemed was mortgaged or the total of all the loans covered by all the mortgages involved in the said foreclosure. ISSUE:

It is true that the case of Agbulos v. Alberto involved a sale on an ordinary execution and not a foreclosure sale, but it must be borne in mind that exactly one year after the court ruled that it is squarely applicable to a ase which involves also registered land, inspite of the fact that the sale in question is not an execution sale but a foreclosure sale. Appellees insist that the said ruling cannot apply to this case because, according to them, what is here involved is a sale resulting from judicial foreclosure of real estate mortgage and not, as in those cases, one by virtue of an extrajudicial foreclosure under Act 3135 as amended by Act 4118. It is pointed out that in judicial foreclosures under Rule 68 (formerly 70) of the Rules of Court, a mortgage debtor has no right of redemption after the judicial confirmation of the sale of the mortgaged property, all that he has being the equity of redemption which must be exercised within 90 days from the finality of the judgment, and that it is only by virtue of the Charter of the Philippine National Bank that such a right of redemption after the foreclosure sale is recognized as regards properties mortgaged to the said Bank We do not agree. The property therein involved is registered land. While, indeed, sales on foreclosure of properties mortgaged to the Philippine National Bank may partake of being sui generis, they need not depart from the sound principles governing registration of transactions concerning lands coming under the Land Registration Act or the Torrens system. As already stated, this Court has uniformly ruled that redemption from execution sales under ordinary judgments pursuant to Section 30, Rule 39 of the Rules of Court should be made within twelve (12) months from the registration of the same and We have as uniformly applied the same rule to sales upon extrajudicial foreclosure of registered lands. We see no valid reason why the rule in foreclosure of mortgages of registered real estate where the mortgagee is the Philippine National Bank should not be the same. Section 32 of Act 2938 (now Section 20 of Republic Act 1300), the BANK'S CHARTER, provides: SEC. 20. Right of Redemption of property foreclosed.-The mortgagor shall have the right, within the year after the sale of real estate as a result of the foreclosure of a mortgage, to redeem the property by paying the amount fixed by the court in the order of execution, with interest thereon at the rate specified in the mortgage, and all the costs and other judicial expenses incurred by the bank by reason of the execution and for the custody of said property. This is practically the same language as that of Section 6 of Act 3135 governing redemption in extrajudicial foreclosures and Section 30 of Rule 39 governing redemption from sales on execution of ordinary judgments. Nothing said in the Gonzales case

1. 2. 3.

When should the period of redemption run? From registration. Is actual knowledge (notice) equivalent to registration? NO How much should be paid? The amount stated in the order.

RULING: 1. In their discussion of this alleged error of the trial court, appellants rely on the firm and uniform rulings of this Court that the period of redemption of real property with Torrens title and sold in an execution sale under Sections 24 and 30 of Rule 39 must be computed from the date of registration.

relied upon by appellees precludes the desirability and propriety of having a uniform procedure to govern matters or transactions of the same nature or in pari materia. It is to be noted that nowhere in the Gonzales case does it appear that what was involved therein was registered land (as contended by PNB). Of course, it is understandable that with regard to unregistered land, the most natural date from which the period of redemption should be company computed should be that of the judicial confirmation of the sale as it is only then that, in the language of Section 3 of Rule 68, the sale "operates to divest the rights of all the parties to the action and to vest their rights in the purchaser." Withal, the qualification contained in the same Section 3 of Rule 68 to the effect that the vesting of the rights of all the parties to the foreclosure in the purchaser is "subject to such rights of redemption as may be authorized by law" verily implies that the applicable rules of redemption, particularly as to the period thereof, must be premised on the character of finality imparted by the judicial confirmation upon the sale but it need not be computed from the date thereof but, rather, according to what the particular applicable law providing for the right of redemption may ordain or specify. It is thus clear that it is preferable that even in foreclosure of mortgage of registered real property by the PNB by virtue of its charter, the period of redemption should start from the registration of the deed of sale conducted by the sheriff and not from the date of confirmation thereof, and we so hold.

rule upon in connection with appellants' second assignment of error just quoted is the question of how much they should pay as principal repurchase price, on the assumption that they can still make such repurchase. 3. Appellants contend that the amount that they should be made to pay should be only P6,045.00, the amount for which appellee Bank acquired the subject property at the foreclosure sale of January 10, 1957. On the other hand, both appellees maintain that such principal amount should be P64,400.73, the amount stated in the writ of execution under which the mortgaged properties of appellants' predecessor in interest were sold at the foreclosure sale. Appellees are right. Although nothing is said about it in the decision of the trial court, it is nevertheless clear in the stipulation of facts and its annexes, which were submitted at the trial and which are the only evidentiary matters appellants have incorporated in their record on appeal, that the foreclosure judgment under which the land herein involved was sold was not solely for the loan and mortgage over said land but for all the other several indebtedness and mortgage, that Francisco Quimson, predecessor of appellants, had incurred and executed in favor of appellee bank, all of which had already matured and had not been paid. It is undisputed and plainly obvious from the real evidence in the record that, contrary to the impression given by appellants in their brief, the judgment against them or their predecessor for which the subject property was sold, together with their other properties, was for more than P64,400.73 and that is the amount that appears in the writ of execution. In such circumstances, We have no alternative but to apply the pertinent provision of Section 20 of the appellee bank's charter, aforequoted, the language of which is unmistakable and unequivocal "The mortgagor shall have the right, ... to redeem the property by paying the amount fixed by the court in the order of execution, with interest thereon at the rate specified in the mortgage, and all the costs and other judicial expenses incurred by the Bank by reason of the execution and sale and for the custody of said property. Accordingly, We hold that the amount which appellants should pay for the redemption of the property in question must be the one fixed in the writ of execution under which it was sold, which as stated above is more than P64,000.00. Ramos v Manalac Facts: The Ramoses executed a power of attorney in favor of their brother Eladio Ramos giving the latter authority to encumber, mortgage and transfer in favor of any person a parcel of land situated in Bayambang, Pangasinan.

2.

No. Actual notice of the sale by the judgment debtor or redemptioner is immaterial. The period must always be computed from the date of registration of the corresponding auction sale. Therefore, appellants' period of redemption should be computed from September 19, 1963. It may be stated, however, that since the record is not very clear as to what concrete steps have been taken by appellants towards the actual redemption in controversy, outside of the letter they have written to appellee Bank on June 17, 1964 "requesting information as to proper steps to be taken in order to repurchase the (subject) property," We are not in a position to hold now whether or not appellants' right to make the said redemption may be considered as still subsisting. To determine the possibility that appellants might still be able to exercise the redemption in question, we must decide whether or not appellants' pretended right of redemption herein in controversy may still be exercised. But we are not ready to do so because it is not clear whether or not they have made within one year after registration of the sale the appropriate tender to the proper party, it follows that We cannot now also pass upon the question of whether or not the sale of the subject property to appellee Mendoza by appellee Bank on April 16, 1959 is null and void. All that We can

Eladio Ramos executed in favor of one Romualdo Rivera a mortgage on therefore said property. Together with another parcel of land, to guarantee the payment of loan of 300, with interest thereon at the rate of 12% per annum. When Eladio Ramos failed to pay the obligation on its date of maturity, Romualdo Rivera, the mortgagee, filed an action to foreclosure the mortgage, making as parties-defendants the herein petitioners, brothers and sisters of Eladio Ramos. After trial, at which both parties presented their evidence, the court rendered decision ordering Eladio Ramos to pay to the plaintiff his obligation of 300, with interest thereon at the rate of 12 per cent per annum, from August 9, 1934, until its full payment, plus the sum of 100 as attorney's fees, and ordering the foreclosure of the mortgage upon failure of Eladio Ramos to pay the judgment within ninety (90) days from the date the decision becomes final. As Eladio Ramos failed to pay the judgment within the period therein specified, on motion of the plaintiff, the court ordered the sale at public auction of the mortgaged properties, which were sold to the plaintiff as the highest bidder and the provincial sheriff issued the corresponding deed of the sale in his favor. The sale was confirmed by the court on April 1, 1941. On August 21, 1947, Romualdo Rivera sold the properties to Felipa Lopez, who later filed a motion praying that she be placed in possession thereof. This motion was granted on September 22, 1947. Issue: The validity of the order of the court dated September 22, 1947, directing the issuance of a writ of possession to place respondent Felipa Lopez in possession of the properties purchased by her from the mortgagee.

In a foreclosure suit, where no third person not a party thereto intervenes and the debtor continues in possession of the real property mortgaged, a writ of possession is a necessary remedy to put an end to the litigation, inasmuch as Code of Civil Procedure provides that the confirmation of the sale by judicial decree operates to divest all the parties to the action of their respective rights and vests them in the purchaser. According to this legal provision, it is the duty of the competent court to issue a writ so that the purchaser may be placed in the possession of the property which he purchased at the public auction sale and become his by virtue of the final decree confirming the sale.

Grimalt v Velasquez Facts: The plaintiff commenced an action in the Court of First Instance of the city of Manila to foreclose a mortgage executed and delivered by the defendant Macaria V. Velazquez to the plaintiff upon a certain piece or parcel of land; that a general denial was made by the defendant to the petition; that upon the issue thus joined a trial was had, and on the 3d day of August a judgment was rendered ordering the foreclosure of said mortgage; that the defendant was given time, in accordance with the provisions of the law, in which to deposit the amount due on said mortgage with the court; that in default of such deposit the land was ordered to be sold; that the defendant failed to make said deposit and an execution was issued; the property was sold to Sy Quio, the appellant herein; the said purchaser (Sy Quio), by a motion, asked the court to confirm said sale; that on the 5th day of January, 1916, the court granted said motion and confirmed said sale; that on the 7th day of January, 1916, the defendant presented a motion in court praying that said order confirming said sale be annulled and set aside for the reason that no notice of said motion had been given to him, it appearing at the same time that he had, on the 6th day of January, 1916, deposited with the sheriff the full amount due upon said judgment of foreclosure. Said motion was duly heard. After hearing the respective parties the Honorable Simplicio del Rosario, judge, found that the defendant had not been given notice of said motion, and annulled and set aside his order theretofore made confirming the said sale, upon condition that the defendant Macaria V. Velazquez return to the purchaser Sy Quio the amount which he had theretofore paid to the sheriff. Issue: whether or not the debtor, in proceedings for the foreclosure of a mortgage, must be given notice of a motion made to have the sale of the mortgaged premises confirmed.

Held: The issuance of a writ of possession in a foreclosure proceedings is not an execution of judgment within the purview of section 6, Rule 39, of the Rules of Court, but is merely a ministerial and complementary duty of the court can undertake even after the lapse of five (5) years, provided the statute of limitations and the rights of third persons have not intervened in the meantime This is a case where the judgment involved is already final, and the properties mortgaged sold by order of the court, and purchaser thereof has transferred them to a third person, who desires to be placed in their possession. In the exercise of its interlocutory duty to put and end to the litigation and save multiplicity of an action, no plausible reason is seen why the court cannot issue a peremptory order to place the ultimate purchaser in the possession of the property. The general rule is that after a sale has been made under a decree in a foreclosure suit, the court has the power to give possession to the purchaser, and the latter will not be driven to an action at law to obtain possession. The power of the court to issue a process and place the purchaser in possession, is said to rest upon the ground that it has power to enforce its own decrees and thus avoid circuitous action and vexatious litigation. It has also been held:

Held: The question of the necessity of giving the defendant notice of a motion to confirm the sale of premises under foreclosure proceedings has heretofore been discussed by this court. Section 257 of Act No. 190 provides that the title to premises sold under foreclosure proceedings does not pass until the sale of the same has been confirmed by the court. In the case of

Raymundo vs. Sunico (25 Phil. Rep., 365), we held that, in order that a foreclosure sale may be validly confirmed by the court, it is necessary that a hearing be given the interested parties at which they may have an opportunity to show cause why the sale should not be confirmed; that a failure to give notice is good cause for setting aside the sale. In the present case, however, in view of the fact that the defendant had, before the sale was finally confirmed, deposited with the sheriff the full amount of the judgment, with interest and costs, there is no occasion for ordering a resale of the premises.

No. 337, otherwise known as the General Banking Act. The RTC dismissed petitioner's action on the ground that there being no valid tender of payment, there was no valid consignation. No appeal was interposed by petitioner from this order. After the dismissal of the aforementioned action, SIHI consolidated its ownership over the foreclosed property After learning of this development, petitioner instituted another action in the Regional Trial Court for annulment and cancellation of title, with damages, against SIHI and the Register of Deeds for the Province of Rizal The court a quo dismissed petitioner's complaint holding that it stated no cause of action because petitioner failed to effect a valid redemption as required under Section 78 of the General Banking Act, as amended by P.D. No. 1828. Petitioner's motion for reconsideration was subsequently denied. Respondent appellate court affirmed the trial court's judgment. Issue: Is Sec 78of the General Banking Act the applicable statute in determining the redemption price? YES Ratio: Petitioner insists that the present case is governed by Act No. 3135, as amended, in relation to Section 30, Rule 39 of the Revised Rules of Court. Petitioner contends that a valid redemption was made by him as assignee of the mortgagor's right of redemption when he tendered and paid to the Sheriff of Rizal the amount of P851,000.00 representing the purchase price plus interest computed at the rate of 1% per month for a period of twelve months. This was the same amount allegedly tendered to, and refused acceptance by, SIHI. On the other hand, respondent appellate court, citing the case of Ponce de Leon v. Rehabilitation Finance Corporation applied Section 78 of the General Banking Act, as amended by P. D. No. 1828, and consequently held that no valid redemption was effected by petitioner because the amount tendered to SIHI and thereafter paid to the sheriff was insufficient, it being less than the amount due under the real estate mortgage contract of Carlos Coquinco or the latter's outstanding balance, with interest as specified in the mortgage contract plus expenses incurred by SIHI by reason of the foreclosure and sale of the subject property. The Court finds that respondent appellate court committed no reversible error, having acted in accordance with the law and jurisprudence. Section 78 of the General Banking Act, as amended by P.D. No. 1828 ...to redeem the property by paying the amount fixed by the court in the order of execution, or the amount due under the mortgage deed, as the case may

Sy v Court of Appeals 172 SCRA 125 (1989) Facts: Carlos Coquinco executed in favor of private respondent State Investment House, Inc. (SIHI) a real estate mortgage over a land in San Juan, MetroManila as security for the payment of a loan in the amount of P1,000,000.00. Coquinco was unable to pay his outstanding balance of 1.1M and so SIHI extrajudicially foreclosed SIHIs property and sold it in a public auction for 760K. SIHI was the only bidder and thus registered it under the ROD. SIHI filed an action for collection of the sum of 600K representing the deficiency in the indebtedness. In the meantime Conquinco assigned his right of redemption to petitioner Sy. Before the expiration of the one-year redemption period, petitioner offered to redeem the foreclosed property from SIHI by tendering to the latter two (2) manager's checks , one for P760K representing the purchase price, and another for P91K representing interest at the rate of 1% per month for 12 months, totalling P851,200.00. SIHI rejected this offer. Thus, petitioner filed an action for consignation of the aforesaid amount with the RTC to compel SIHI to accept the payment of the redemption price for the foreclosed property, to order SIHI to surrender the title over the property and to issue a certificate of redemption in favor of petitioner. A day before the expiration of the redemption period, petitioner decided to redeem the foreclosed property directly from the Ex-Officio Regional Sheriff of Rizal, who accepted from him the amount of P851,200.00 as redemption price and P4,269.00 as percentage fee of collection, and issued to him the corresponding certificate of redemption. On March 30,1984, SIHI filed a motion to dismiss on the ground of lack of cause of action, alleging that the amount sought to be consigned was insufficient for purposes of redemption pursuant to Section 78 of Rep. Act

be, with interest thereon at the rate specified in the mortgage and all the costs, and judicial and other expenses incurred by the bank or institution concerned by reason of the execution and sale and as a result of the custody of said property less the income received from the property. [Emphasis supplied]. It must be emphasized that the above section is applicable not only to "banks and banking institutions," but also to "credit institutions." SIHI is a credit institution Thus, inasmuch as petitioner failed to tender and pay the required amount for the redemption of the subject property pursuant to Section 78 of the General Banking Act, as amended, no valid redemption was effected by him. Consequently, there was no legal obstacle to the consolidation of title by SIHI. Tolentino vs Court of Appeals 106 SCRA 513 Facts: (note two consolidated cases) 1st Case Ceferino de la Cruz died in Davao City leaving as his only heirs his widow and their children (hereinafter referred to as the De la Cruzes). At the time of his demise, Ceferino left a parcel of land (homestead land). In a deed of sale executed by the De la Cruzes, the homestead land was sold to the spouses Tolentinos who took immediate possession of the homestead land. The Tolentinos constituted a first mortgage over the homestead land, together with two other parcels of land in favor of the BPI Davao Branch, for a loan of P40,000. Another mortgage was constituted over the said properties in 1964 in favor of Philippine Banking Corporation. The Tolentinos failed to pay their mortgage indebtedness to the BPI upon maturity in the judicial foreclosure sale that followed, conducted by the City Sheriff of Davao on July 15, 1967, BPI was the sole and highest bidder. The Sheriff's Certificate of Sale in favor of BPI was registered only on April 2, 1969 in the Registry of Deeds of Davao. Meanwhile in 1967 the De la Cruzes filed an action with the CFI of Davao against the Tolentinos for the repurchase of the homestead land. BPI and Philippine Banking Corporation were included in the action as formal party defendants, being the first and second mortgagees, respectively, of the homestead land. The Tolentinos filed a motion for extension of ten (10) days "from and after June lst" to file their answer. This motion was granted by the lower court. On June 14, 1967, the De la Cruzes filed a petition to declare the Tolentinos in default for failure to file an answer. On that same day, the Tolentinos filed a Motion to Dismiss the repurchase case on the ground that the complaint

states no cause of action, but said motion was denied by the lower court on the ground that the same was filed out of time. Subsequently, the Tolentinos were declared in default and the De la Cruzes were allowed to present their evidence ex parte. The lower court rendered a decision allowing the De la Cruzes to repurchase the homestead land. Upon payment by the De la Cruzes of the amount of P16,000 representing the repurchase price to the BPI, the latter executed a deed of conveyance over the homestead land. On motion, the lower court issued a writ of possession in favor of the De la Cruzes. The possession of the homestead land was delivered to the De la Cruzes. The Tolentinos filed a petition for relief from the Decision on the ground of excusable mistake in the counting of the reglementary period for the filing of an answer, with a prayer that the Order declaring them in default be lifted and that they be allowed to present their defense. The Tolentinos filed a Motion to Quash the writ of possession alleging as principal grounds therefor the absence of service on their counsel of a copy of the writ of possession, as well as the decision of the lower court declaring the De la Cruzes entitled to repurchase the homestead land. The De la Cruzes filed an opposition to this Motion. The lower court denied the Motion to Quash. Ttrial court issued an Order denying for lack of merit the petition for relief from judgment filed therein by the Tolentinos. It likewise denied a motion for reconsideration . The Tolentinos appealed to the respondent Court of Appeals the above 2 Orders of the lower court 2nd Case In the meantime, petitioner Tolentino went to the Branch Manager of BPI Davao Branch, carrying a letter offering to redeem the homestead property for P16,000 covered by a check. Upon being informed that she can no longer redeem the same for the reason that it was already conveyed to the De la Cruzes pursuant to the decision dated March 27, 1969, Vicenta left the office of the manager, bringing with her the letter which she later on sent to Mr. Lopez by registered mail, inclosed In another letter reiterating her desire to redeem the homestead land. Mr. Lopez sent said letters to the BPI's legal counsel with specific request to inform the Tolentinos that they can still redeem the two other properties before the expiration of the redemption period upon payment of the amount of P75,995.07 the balance remaining after deducting the amount of P16,000 paid by the De la Cruzes for the homestead property. However, instead of complying with BPI's advice, Vicente consigned with the Office of the City Sheriff of Davao a crossed PNB check for P91,995.07 drawn against the PNB Kidapawan Branch, Cotabato, allegedly for the redemption of the 3 lots, including the homestead land. The following day, however, upon advice of their counsel, Vicente issued a stop-payment order against the said crossed check purportedly to protect her rights and to prevent BPI cashing said check without returning all the properties which BPI had foreclosed and purchased.

Simultaneously with the consignation of the crossed check with the City Sheriff of Davao the Tolentinos filed a complaint (redemption case) 6 against BPI with the Davao Court of First Instance for the redemption of their properties which were foreclosed by and sold to BPI, imputing bad faith on BPI in allegedly refusing to allow them to redeem all three lots and praying that BPI be ordered to allow the Tolentinos to redeem their properties, to accept the payment consigned by them with the City Sheriff's Office of Davao BPI seasonably filed an answer with counterclaim, denying the material averments of the complaint, the truth being that the Tolentinos did not have an intention to redeem their said properties but only the homestead land. The trial court rendered its decision dismissing the complaint of the Tolentinos. From that decision, both the Tolentinos and BPI appealed to the respondent Court of Appeals. Issues: 1st Case WON the redemption made by the Cruzes was proper? YES 2nd Case WON Art 1249 of the Civil Code is applicable. NO WON the tender of payment to the Sheriff was valid. YES Ratio: 1st Case: Not gonna discuss the Ratio since not relevant to the case 2nd Case: Article 1249 of the new Civil Code deals with payment of debts stating that it should be made under the currency stipulated or thru legal tender. And with regard to checks not being legal tender. We are of the considered view that Article 1249 should not be applied in the instant case. The Tolentinos are not indebted to BPI their mortgage indebtedness having been extinguished with the foreclosure and sale of the mortgaged properties. The right of redemption is an absolute privilege not an obligation. On the other hand, if the redemptioners choose to exercise their right of redemption, it is the policy of the law to aid rather than to defeat the right of redemption. In the instant case, the ends of justice would be better served by affording the Tolentinos the opportunity to redeem the properties in question other than the homestead land. Under existing jurisprudence, what the redemptioner should pay, is not the amount of the "loan for which the mortgage was constituted" as stated by the Court of Appeals, but the auction purchase price plus 1 % interest per month on the said amount up to the time of redemption, together with the taxes or assessment paid by the purchaser after the purchase, if any. And in this

connection, a formal offer to redeem, accompanied by a bona fide tender of the redemption price, although proper, is not essential where, as in the instant case, the right to redeem is exercised thru the filing of judicial action, which as noted earlier was made simultaneously with the deposit of the redemption price with the Sheriff, within the period of redemption. Moreover, when the action to redeem was filed, a simultaneous deposit of the redemption money was tendered to the Sheriff. And the redemption is not rendered invalid by the fact that the said officer accepted a check for the amount necessary to make the redemption instead of requiring payment in money. The check as a medium of payment in commercial transactions is too firmly established by usage to permit of any doubt upon this point at the present day.

09 Ponce de Leon v. Rehabilitation Finance Corporation Plaintiff-Appellant: Jose Ponce de Leon Defendant-Appellant & 3rd Party Appellants: Rehabilitation Finance Corporation; Rosalina Soriano; Teofila Soriano; Rev. Fr. Eugenio Soriano Ponente: Concepcion, J. Facts:

Plaintiff Jose Ponce de Leon and Francisco Soriano obtained a P10,000.00 loan from the Philippine National Bank (PNB), mortgaging a parcel of land situated at Barrio Ibayo, Municipality of Paraaque, Rizal, in the name of Francisco Soriano, as security for the loan. Ponce de Leon gave P2,000.00 to Soriano from the proceeds of the loan. The loan was subsequently increased to P17,500.00. Jose Ponce de Leon filed with the Rehabilitation Finance Corporation (RFC) Manila, his loan application for an industrial loan, for putting up a sawmill, in the amount of P800,000.00 offering as security certain parcels of land, among which, was the parcel which Ponce de Leon and Soriano mortgaged to the PNB. The application stated that the properties offered for security for the RFC loan are encumbered to the PNB, Bacolod, and to Cu Unjieng Bros. The application was approved for P495,000.00 and the mortgage contract was executed on by Ponce de Leon, his wife, and Soriano. The same parties signed a promissory note for P495,000.00, with interest at 6% per annum, payable on installments every month for P28,831.64 in connection with the mortgage deed. The mortgage deed specifically stipulated that the proceeds thereof shall be used exclusively for the purchase of machinery and equipment, construction of buildings and the payment of obligations and that the release of the amounts loaned shall be at the discretion of the RFC.

None of the amortization and interests which had become due was paid and, for this reason, the RFC took steps for the extra-judicial foreclosure of the mortgaged properties consisting of real estates and the sawmill and its equipments of Ponce de Leon situated in two places in Samar. The RFC was the purchaser of all the mortgaged properties in the ensuing sheriff's sales. The RFC scheduled a public sale of the lot registered in the name of Soriano and of the other lots which the RFC acquired in the Sheriff's sale in view of the inability of Ponce de Leon or Soriano to legally redeem the properties sold by the Sheriff within the one year period after the sale. Ponce de Leon instituted the present action alleging that the sheriff's sales be declared null and void because the properties were sold at grossly inadequate prices and that said sales were not conducted in accordance with law. He asked for the issuance of a writ of preliminary injunction to restrain the RFC from carrying out its contemplated public sale. The Court set the petition for injunction for hearing but no one appeared for the RFC at the hearing thereof so that the Court had to issue the preliminary injunction prayed for. Ponce De Leon caused notice of lis pendens to be recorded in relation with this case. Soriano wrote a letter to the President so that the projected sale on the same date to be conducted by the RFC may be suspended insofar as the lot in his name is concerned and that he be allowed to redeem it. Soriano received a letter informing the him that he could redeem his former property for not less than its appraised value of P59,647.05, payable 20% down and the balance in ten years, with 6% interest. Soriano did not redeem the lot under the conditions of the RFC. He then filed a third-party complaint in this case.

Issues/Held: 1. Was the price of the Paraaque property was sold to RFC at the sheriffs sale, is ridiculously inadequate? No. 2. Should the redemption price be the amount of the purchase or the amount fixed by court? Court. 3. Was the price of the mortgaged properties unconscionable? No. 4. Did the lower court err in avoiding the sale to RFC on the ground that the property is conjugal? Yes. The property is not conjugal. Rationale: 1. The Sorianos maintain that the sum of P10,000, for which the Paraaque property was sold to the RFC, is ridiculously inadequate, considering that said property had been assessed at P59,647.05. This pretense is devoid of merit, for said property was subject to redemption and where there is the right to redeem, inadequacy of price should not be material, because the judgment debtor may re-acquire the property or else sell his right to redeem and thus recover any loss he claims to have suffered by reason of the price obtained at the execution sale. Mere inadequacy of the price obtained at the sheriff's sale unless shocking to the conscience will not be sufficient to set aside the sale if there is no showing

that, in the event of a regular sale, a better price can be obtained. The reason is that, generally, and, in forced sales, low prices are usually offered. 2. The Sorianos insist that the present case is governed, not by RA 337, but by Act No. 3135, as amended by Act No. 4118 pursuant to which, in relation to section 465 of Act No. 190, the redemption may be made by "paying the purchaser the amount of his purchase," with interest and taxes. The conclusion drawn by the Sorianos from these facts is untenable. Under RA 337 (General Banking Act), property sold may be redeemed "by paying the amount fixed by the court in the order of execution," or the amount judicially adjudicated to the creditor bank. This provision had the effect of amending section 6 of Act No. 3135, insofar as the redemption price is concerned, when the mortgagee is a bank or a banking or credit institution. In short, the Paraaque property was sold pursuant to said Act No. 3135, but the sum for which it is redeemable shall be governed by RA 337, which partakes of the nature of an amendment to Act No. 3135, insofar as mortgages to banks are banking or credit institutions are concerned, to which class the RFC belongs. At any rate, the conflict between the 2 laws must be resolved in favor of RA 337, both as a special and as the subsequent legislation. 3. Plaintiff maintains that the aggregate price of P112,332.00, for which the mortgaged properties had been sold at public auction, is unconscionable, said properties being allegedly worth P1,202,976. This premise is inaccurate. It should be noted that plaintiff and Francisco Soriano were granted a P495,000 loan on the security, not only, of the existing properties offered as guarantee, but, also, on that of assets appraised at P570,000 yet to be acquired only plaintiff, partly with money thus received from the RFC and partly with his own funds. RFC found that the mortgaged lots which were originally appraised at P492,288.00, were actually worth P172,530,00 only. Again, a good part of the machinery and equipment existing in one of the mortgaged lands, when it was inspected before the granting of the loan, were subsequently lost or missing, and those that remained were, at the time of the sale to the RFC, in bad shape, so that the appraised value thereof was then estimated at P10,000 only. Under these circumstances, it is clear that the lower court did not err in approving the sale of the mortgaged properties for the aggregate sum of P112,332. 4. Defendant RFC contends that the lower court erred in avoiding the sale to the RFC of the Paraaque property, upon the ground that the same formed part of the conjugal partnership of Mr. and Mrs. Francisco Soriano. In this connection, it appears that the property was registered in the name of "Francisco Soriano, married to Tomasa Rodriguez," and that based upon this fact alone without any proof establishing satisfactorily that the property had been acquired during coverture the lower court presumed that it belongs to the conjugal partnership of said spouses. We agree with the RFC that the lower court has erred in applying said presumption. The Sorianos have not succeeded in proving that the Paraaque property was acquired "during the marriage" of their parents. Had the property been acquired by them during coverture, it would have been registered, in the name not of "Francisco Soriano, married to Tomasa Rodriguez," but of the spouses "Francisco Soriano and Tomasa Rodriguez." Their failure to contest the legality of the mortgage for over five (5) years and these attempts to redeem the property constitute indicia that the same belonged exclusively to

Francisco Soriano, not to the conjugal partnership with his deceased wife, Tomasa Rodriguez. Apart from the fact that said attempts to redeem the property constitute an implied admission of the validity of its sale and, hence, of its mortgage to the RFC there are authorities to the effect that they bar the Sorianos from assailing the same. It is thus clear that the lower court erred in annulling the RFC mortgage on the Paraaque property and its sale to the RFC as regards one-half of said property, 10 Spouses Arquiza v. CA Petitioner: Spouses Godofredo Arquiza and Remedios Arquiza Respondents: Court of Appeals and Equitable PCI Bank Ponente: Callejo, Sr., J. Facts:

Spouses Godofredo Arquiza and Remedios Arquiza, obtained a loan from private respondent Equitable PCI Bank for P2.5 million. To secure the payment thereof, the petitioners executed a Real Estate Mortgage over their parcel of land. When the spouses defaulted in the payment of their loan, the private respondent filed a petition for extrajudicial foreclosure of the real estate mortgage. A public auction was held in accordance with Act No. 3135, as amended by Act No. 4118 during which the mortgaged property, together with all the improvements existing thereon, was sold to the private respondent as the highest bidder. Accordingly, a Certificate of Sale over the property was issued in favor of the private respondent. Following the expiry date of the redemption period without the petitioners having exercised their right to redeem the property, the private respondent consolidated its ownership over the subject property. As a consequence, the Registry of Deeds issued TCT No. N-221650 in the name of the private respondent, cancelling the petitioners former title. The petitioners filed a complaint against the private respondent and the sheriffs with the RTC Quezon City for the declaration of the nullity of the promissory note, real estate mortgage and the foreclosure sale and damages with a plea for injunctive relief for the suspension redemption period. Private respondent demanded that the petitioners vacate and surrender possession of the subject property, but the latter refused to do so. This compelled the private respondent to file an Ex Parte Petition for Issuance of a Writ of Possession. The trial court conducted a hearing of the petition during which the petitioners and the private respondent adduced their respective evidence. The RTC granted the petition. It was appealed before the CA, but the CA affirmed the decision of the RTC. The petitioners assert that the ex parte petition for the issuance of the writ of possession should have been dismissed by the RTC for failure to attach a certification against forum shopping. They claim that this requirement is mandatory and there is no law exempting the private respondents ex parte petition from compliance therewith.

The petitioners contend that they are legally entitled to be protected in their possession over the subject property pending the resolution of the case for the declaration of nullity of the promissory note, real estate mortgage, and foreclosure sale. They argue that the issuance of a writ of possession preempted and pre-judged the outcome of case. The petitioners maintain that the private respondent failed to substantiate its ex parte petition for the issuance of the writ of possession. They fault the trial court for not scrutinizing judiciously the private respondents evidence because had it done so, it would have noted the nullity of the mortgage, which appears to have been executed not by the owners of the subject property. They question the private respondents failure to attach the promissory notes evidencing their loan, which would have shown that the real estate mortgage was executed prior to the execution of the said promissory notes. The petitioners aver that the private respondent failed to prove the validity and legality of the real estate mortgage, and without a valid mortgage, there can be no valid foreclosure sale or valid title.

Issue/Held: Did the lower court err in granting the ex-parte petition for issuance of a writ of possession despite pendency of the case which questions the legality, validity and regularity of the real estate mortgage and its foreclosure? No. Rationale: The petition is denied for lack of merit. The assailed ruling of the CA is correct. The certification against forum shopping is required only in a complaint or other initiatory pleading. The ex parte petition for the issuance of a writ of possession filed by the respondent is not an initiatory pleading. The Court rejects the contention of the petitioners that the RTC erred in not dismissing the petition of the private respondent on the grounds of forum shopping and litis pendentia, in view of the pendency of the other civil case. Well established is the rule that after the consolidation of title in the buyers name for failure of the mortgagor to redeem, the writ of possession becomes a matter of right. Its issuance to a purchaser in an extrajudicial foreclosure is merely a ministerial function. The issuance of the writ of possession being a ministerial function, and summary in nature, it cannot be said to be a judgment on the merits, but simply an incident in the transfer of title. Hence, a separate case for annulment of mortgage and foreclosure sale cannot be barred by litis pendentia or res judicata. Conversely, we reject the petitioners argument that the ex parte petition for the issuance of a writ of possession should have been dismissed on the ground of forum shopping. The test to determine whether a party violated the rule against forum shopping is whether the elements of litis pendentia are present, or whether a final judgment in one case will amount to res judicata in another. In

other words, when litis pendentia or res judicata does not exist, neither can forum shopping exist. Having settled that litis pendentia does not exist, it follows then that no forum shopping likewise exists in this case. The ruling in Ong v. CA is instructive, thus: As a rule, any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of possession. Regardless of whether or not there is a pending suit for annulment of the mortgage or the foreclosure itself, the purchaser is entitled to a writ of possession, without prejudice of course to the eventual outcome of said case. The petitioners contention that the private respondent failed to sufficiently establish its right to a writ of possession is belied by the evidence. In support of its application for a writ of possession, the private respondent submitted the following documentary evidence: (1) real estate mortgage; (2) TCT No. N-143274 in the name of the petitioners, and the annotations on its back of the real estate mortgage, certificate of sale, and the consolidation of ownership; (3) the petition for sale; (4) affidavit of publication of the extrajudicial sale; (5) TCT No. N-221650 in the name of the private respondent; (6) notice to vacate; (7) petitioners reply to the notice to vacate; and (8) affidavit of consolidation of ownership. The petitioners fault the trial court for not delving into the validity of the mortgage and the foreclosure proceeding before granting the petition for a writ of possession. This contention is barren of legal basis. The judge to whom an application for writ of possession is filed need not look into the validity of the mortgage or the manner of its foreclosure. In the issuance of a writ of possession, no discretion is left to the trial court. Any question regarding the cancellation of the writ or in respect of the validity and regularity of the public sale should be determined in a subsequent proceeding as outlined in Section 8 of Act No. 3135.