Rosario v. Tayug Rural Bank
REITERATIONFacts
The Antecedents: Romeo C. Ramirez borrowed P440 from Tayug Rural Bank, secured by a mortgage on Melecio Rosario's land. Ramirez failed to pay the full balance of P170 on maturity. The bank extrajudicially foreclosed the mortgage. The provincial sheriff sold the land at public auction on July 21, 1961, for P208.53 to the bank, issuing a certificate of sale on the same day. The certificate of sale was registered in the Registry of Deeds on November 16, 1962. Five days later, on November 21, 1962, the bank sold the land to Nenita Vergara for P1,600. Procedural History: On August 22, 1962, Ramirez deposited P100 for redemption. On November 7, 1963, he offered to pay the remaining balance plus interest and expenses, enclosing P108.53, totaling P208.53. The bank refused, asserting the redemption period expired on July 21, 1962. Melecio Rosario and Romeo Ramirez sued the bank and Nenita Vergara to compel acceptance of payment and reconveyance. Nenita Vergara defaulted. The lower court ruled in favor of the plaintiffs, ordering the bank and Vergara to allow redemption within 30 days from finality of the decision, with payment of the remaining indebtedness plus 1% monthly interest, and attorney's fees. The Petition: The Tayug Rural Bank appealed the decision, raising only questions of law.
Issue(s)
Whether the redemption period for property sold at public auction via extrajudicial foreclosure under Act 3135 is reckoned from the date the sheriff executes the certificate of sale or from the date it is recorded in the Registry of Deeds. Whether the amount tendered for redemption was adequate.
Ruling
The judgment of the lower court is affirmed. The Tayug Rural Bank and Nenita Vergara are ordered to permit Melecio Rosario to redeem the property by paying the remaining indebtedness as of July 21, 1961, plus 1% monthly interest from that date until redemption, within thirty (30) days from the finality of the decision. Defendants are also ordered to pay P100.00 for attorney's fees and litigation expenses, plus costs.
Ratio Decidendi
On the reckoning of the redemption period: The Court reiterated its ruling in Arsenio Reyes vs. Antonio Noblejas (L-23691, November 25, 1967) that the redemption period in extrajudicial foreclosure sales of registered land under Act 3135 should be reckoned from the date of registration of the certificate of sale in the Registry of Deeds, not from the date of the auction sale. This is because, under the Torrens system, specifically Section 50 of Act 496 (Land Registration Act), the act of registration is the operative act that conveys and affects the land. Failure to register the certificate of sale means it does not take effect as a conveyance or bind the land covered by a Torrens title. Therefore, constructive notice to possible redemptioners, as contemplated by law, is only served upon registration. The phrase "date of sale" in Section 6 of Act 3135 must be construed to mean the date of registration of the certificate of sale. On the adequacy of the redemption amount: While the amount tendered was the auction purchase price, the Court, considering the tender was timely and made in good faith, and to serve the ends of justice, afforded the appellees the opportunity to redeem by paying the auction purchase price plus 1% interest per month thereon up to the time of redemption, as per Castillo vs. Nagtalon (L-17079, January 29, 1962). This case clarified that the amount payable for redemption is the purchase price, not the original judgment debt, plus stipulated interest and taxes paid by the purchaser.
Main Doctrine
In extrajudicial foreclosure of a mortgage under Act 3135, the one-year redemption period for registered land is reckoned from the date of registration of the certificate of sale in the Registry of Deeds, not from the date of the auction sale.