Rural Bank of Parañaque, Inc. v. Remolado
REITERATIONFacts
The Antecedents: Isidra Remolado owned a lot mortgaged to Rural Bank of Parañaque, Inc. (the Bank) for loans. The Bank foreclosed the mortgage on July 21, 1972, and bought the property for P22,192.70. The one-year redemption period was to expire on August 21, 1973. On August 8, 1973, the Bank advised Remolado that she had until August 23 to redeem. On August 9, 1973, the Bank provided a statement showing P25,491.96 was needed for redemption by August 23. No redemption was made by August 23. Procedural History: On September 3, 1973, the Bank consolidated its ownership, and a new title was issued to it. On September 24, 1973, the Bank gave Remolado until October 31, 1973, to repurchase the property, without specifying a price. Remolado and her daughter promised to pay P33,000 on October 31 for repurchase. However, Remolado did not repurchase on October 31. On November 5, 1973, they delivered P33,000 cash to the bank's assistant manager, which was returned the next day. The Bank was no longer willing to allow repurchase. On November 6, 1973, Remolado filed an action to compel reconveyance and for damages. On November 15, 1973, the Bank sold the property to Pilar Aysip for P50,000. The trial court ordered the Bank to return the property upon payment of P25,491.96 plus charges and P15,000 damages. The Court of Appeals affirmed this. The Bank appealed. The Petition: The Bank contends that Remolado had no more right of redemption and, therefore, no cause of action.
Issue(s)
Whether the Rural Bank of Parañaque can be legally compelled to reconvey the property to Remolado based on an expired option to repurchase and equitable considerations.
Ruling
The judgment of the Court of Appeals is reversed and set aside. The complaint and counterclaim are dismissed. The notice of lis pendens is cancelled.
Ratio Decidendi
On Issue 1: The Supreme Court ruled that there was no binding agreement for the repurchase of the property. The Court noted that the bank's commitment to allow Remolado to repurchase the property until October 31, 1973, was an option not supported by a consideration distinct from the price, which under Article 1479 of the Civil Code, renders the option void. Applying the precedent in Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Company, the Court held that without such distinct consideration, the bank was not legally bound to keep the offer open. Furthermore, even if the bank were bound by the commitment, Remolado failed to comply with the terms of the offer because she did not repurchase the property on or before the specified date of October 31, 1973. The Court emphasized the principle that 'equity follows the law,' stating that while Remolado might deserve commiseration, the bank acted within its legal rights by refusing an extension after it had already given her nearly two years to liquidate her obligation. Citing Vales v. Villa, the Court clarified that legal intervention is only authorized when there is a violation of law or an actionable wrong, not merely because a person has made a 'ridiculous contract' or used 'miserable judgment.' Since Remolado failed to exercise her rights within the legal and agreed-upon periods, the court had no authority to restore her lost property based on mere sympathy.
Main Doctrine
A commitment to allow repurchase of mortgaged property after the redemption period has expired, if not supported by a distinct consideration, is a void option. Failure to repurchase on the agreed date, even if the bank later withdraws its offer, negates any cause of action for reconveyance.