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RODOLFO GENERAL and CARMEN GONTANG v LEONCIO BARRAMEDA

G.R. No. L-29906, 30 January 1976

FULL TEXT

FACTS
Barrameda mortgaged his land in Taban, Camarines Sur, to DBP, for P22,000. He forfeited the
land due to failure to pay. DBP foreclosed the loan extrajudicially.
The land was auctioned by the provincial sheriff and was bought by DBP (as the highest bidder),
April 23, 1962. TCT was transferred from Barrameda to DBP Sept 2, 1963, upon registration of
sale and affidavit. The next day, Sept 3, 1963, Rodolfo General and Carmen Gontang purchased
the land from DBP. This sale was noted on TCT on Nov 26, 1963.
Barrameda offered to redeem the land on Nov 20, 1963. After being refused by DBP, he filed suit.
On August 12, 1964, Barrameda deposited with the clerk of court P7,271.22 (the exact amount of
the winning bid of DBP).
The trial court held that the one-year period redemption began on April 23, 1962, when the public
auction was held, and that period ended on April 24, 1963.

Appellate Court decision overturned the trial court, declaring 1. the sale to General and Gontag
null and void; 2. the TCT with the names of General and Gontang cancelled; 3. the mortgaged
property redeemed, and a new TCT issued in Barrameda’s name.

ISSUES
1. In the interpretation and application of Section 31, Commonwealth Act 459, shall the
period of redemption start from the date of auction sale or the date of the registration of the
sale in the register of deeds as the respondent Appellate Court held?
2. Were petitioners under obligation to look beyond what appeared in the certificate of title
of their vendor the Development Bank of the Philippines and investigate the validity of its
title before they could be classified as purchasers in good faith?

CITATIONS
Section 31, Commonwealth Act 459 (Law that created the Agricultural and Industrial Bank,
now Development Bank of the Philippines). The Mortgagor or debtor to the Agricultural and
Industrial Bank whose real property was sold at public auction, judicially or extra- judicially, for
the full or partial payment of an obligation to said bank shall, within one year from the date of' the
auction sale, have the right to redeem the real property
Act 3135 of 1924, Sec. 6. In all cases in which an extrajudicial sale is made under the special
power hereinbefore referred to, the debtor, his successors in interest or any judicial creditor or
judgment creditor of said debtor, or any person having a lien on the property subsequent to the
mortgage or deed of trust under which the property is sold, may redeem the same at any time within
the term of one year from and after the date of the sale; and such redemption shall be governed by
the provisions of sections four hundred and sixty-four to four hundred and sixty-six, inclusive, of
the Code of Civil Procedure, in so far as these are not inconsistent with the provisions of this Act.
Rule 39 of Rules of Court. Section 30. Proof required of redemptioner. — A redemptioner must
produce to the officer, or person from whom he seeks to redeem, and serve with his notice to the
officer a copy of the judgment or final order under which he claims the right to redeem, certified
by the clerk of the court wherein the judgment or final order is entered, or, if he redeems upon a
mortgage or other lien, a memorandum of the record thereof, certified by the registrar of deeds, or
an original or certified copy of any assignment necessary to establish his claim; and an affidavit
executed by him or his agent, showing the amount then actually due on the lien.

RULING
1. SC says the correct ruling is not just the determination of the meaning of “auction sale”
and “sale”, but to determine the legislative intent. Registered land falls under the Land
Registration Act, “the operative act is the registration of the deed of conveyance.” In other
words: The registration of the deed of conveyance is also the notice to the whole world that
a transaction involving the same had taken place. The objective is to give the mortgagor a
chance to redeem the land, and the one-year from registration of sale better serves justice
and equity. Also, the P7,271.22 is the remaining balance on the mortgage, so Barrameda,
in effect, was simply paying his debt in full.
2. In the light of the foregoing, the SC no longer deemed it necessary to tackle the second
issue.
Decision of the respondent Appellate Court is affirmed, with costs against petitioners.