Tolentino v. Court of Appeals
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns the repurchase of a homestead land originally owned by Ceferino de la Cruz, who died leaving his heirs, the De la Cruzes. The De la Cruzes sold this land to the spouses Jose and Vicenta Tolentino. Subsequently, the Tolentinos mortgaged this land, along with two other parcels, to the Bank of the Philippine Islands (BPI). When the Tolentinos failed to pay their loan, BPI foreclosed on the properties, with BPI emerging as the highest bidder at the sheriff's sale. The De la Cruzes then sought to repurchase the homestead land from the Tolentinos under Section 119 of the Public Land Act, alleging prior unsuccessful attempts to do so extrajudicially. 2. Procedural History: The De la Cruzes filed an action for repurchase of the homestead land against the Tolentinos, with BPI and another bank as formal defendants. The Tolentinos were declared in default by the trial court for failing to file an answer within the prescribed period, despite extensions and motions to dismiss. The trial court eventually rendered a decision allowing the De la Cruzes to repurchase the land. The Tolentinos filed a petition for relief from judgment and a motion to quash the writ of possession, both of which were denied. They also filed a separate action against BPI for the redemption of the three foreclosed properties, which was also dismissed by the trial court. Both the repurchase case and the redemption case were appealed to the Court of Appeals, which consolidated them. The Court of Appeals affirmed the trial court's decisions, denying the Tolentinos' claims regarding the default judgment and the validity of their redemption tender. 3. The Petition: The Tolentinos filed a petition for review by certiorari with the Supreme Court, challenging the consolidated decision of the Court of Appeals. They raise three main issues: (I) whether Article 1249 of the New Civil Code applies to the redemption of properties, (II) whether their tender of payment and consignation via a crossed check before the City Sheriff were valid, and (III) whether the default judgment against them in the repurchase case had become final and executory. The petition essentially questions the appellate court's rulings on the validity of their redemption attempts and the finality of the default judgment, seeking to have their right to redeem the properties, other than the homestead land, recognized.
Issue(s)
Whether Article 1249 of the New Civil Code applies to the redemption of properties sold at a foreclosure sale, and whether the tender of payment and consignation made by the Tolentinos before the City Sheriff of Davao were valid. Whether the default judgment against the Tolentinos in Civil Case No. 5432 (CA-G.R. No. 54004-R) had become final and executory. Whether the right of redemption extended to the homestead land.
Ruling
The Supreme Court modified the decision of the Court of Appeals, authorizing the petitioners (Tolentinos) to redeem the properties other than the homestead land within thirty (30) days from entry of judgment, and ordering BPI to execute a deed of absolute conveyance upon payment of the purchase price with interest and taxes. In all other respects, the consolidated decision and resolution of the Court of Appeals were affirmed.
Ratio Decidendi
On the applicability of Article 1249 of the New Civil Code and the validity of the tender of payment: The Court held that Article 1249 of the Civil Code, which deals with the payment of debts in money, is not applicable to the exercise of the right of redemption. The right of redemption is a privilege, not an obligation. The Tolentinos were not indebted to BPI after the foreclosure sale; rather, they had a right to redeem. The Court emphasized that the policy of the law favors redemption, and a liberal construction should be given to redemption laws. While a check is not legal tender, its acceptance by the Sheriff for the redemption price, especially when accompanied by the filing of a judicial action within the redemption period, is valid. The Court cited jurisprudence that a formal offer to redeem is not essential if a judicial action is filed within the period. The acceptance of a check by the Sheriff, even if he could have required lawful money, does not affect the validity of the payment, and a subsequent stop-payment order does not forfeit the right to redeem. The Court found that the tender of payment made by the Tolentinos, despite being a crossed check, was valid for the purpose of exercising their right to redeem the properties other than the homestead land. On the validity of the default judgment: The Court affirmed the findings of the lower courts and the Court of Appeals that the Tolentinos were duly served with the default judgment. The issue of service was deemed factual and had already been settled in a previous petition (CA G.R. No. SP-46321), which had attained finality. The Court reiterated that it is not its function to re-evaluate evidence, and findings of fact by the Court of Appeals are generally conclusive. The Tolentinos' contention that the question of service was one of law was rejected, as it required calibration of evidence. The Court found no circumstance justifying a departure from the rule that factual findings of the Court of Appeals are not reviewable. Therefore, the default judgment was considered final and executory. On the redemption of the homestead land: The Court clarified that the right of redemption did not extend to the homestead land. While the Tolentinos were allowed to redeem other properties, the specific reasons for this exclusion concerning the homestead land were to be discussed in relation to the third issue, which was implicitly resolved by the affirmation of the Court of Appeals' decision regarding the repurchase case filed by the De la Cruzes. The Court's modification was limited to the properties other than the homestead land, implying that the repurchase by the De la Cruzes was upheld.
Main Doctrine
A tender of payment made through a crossed check, while not strictly legal tender, can be valid for the exercise of the right of redemption, especially when the redemption is exercised through a judicial action filed within the redemption period, and the officer accepting the check does not require payment in lawful money. The policy of the law favors redemption, and technicalities should not defeat this right unless substantial injury results.