Limpin v. Intermediate Appellate Court
REITERATIONFacts
The Antecedents: Two lots, originally mortgaged in 1973 by the Spouses Jose and Marcelina Aquino to Guillermo Ponce, were later sold by the Aquinos to Butuan Bay Wood Export Corporation in 1978. Gregorio Y. Limpin obtained a money judgment against Butuan Bay Wood Export Corporation in 1979. The two lots were levied and sold at public auction in 1980 to satisfy Limpin's judgment, with Limpin being the highest bidder. Limpin subsequently sold the lots to his co-petitioner, Rogelio M. Sarmiento. Procedural History: A day before the levy on execution, Ponce initiated judicial foreclosure proceedings for the two lots. Judgment was rendered in favor of Ponce, and at the foreclosure sale, Ponce acquired the lots as the highest bidder. Ponce moved for confirmation of the sale, but the court confirmed the sale of only two lots, refusing to confirm the sale of the two lots that were subject to Limpin's execution sale. Ponce filed a special civil action in the Intermediate Appellate Court (IAC), impleading Limpin and Sarmiento. The IAC rendered judgment in favor of Ponce on February 28, 1985, ordering the confirmation of the sale of the two lots subject to Sarmiento's equity of redemption. Limpin and Sarmiento appealed to the Supreme Court, which denied their appeal on January 30, 1987, affirming the IAC's decision. The Supreme Court's judgment explicitly sustained the IAC's exercise of jurisdiction over Sarmiento and Limpin and ordered the Trial Court to confirm the sale and issue a writ of possession to Ponce, subject to Sarmiento's equity of redemption. The Trial Court, under Judge Solano, confirmed the sale and issued a writ of possession in June 1987. Sarmiento did not exercise his equity of redemption before or around the confirmation. Instead, he filed two new actions in the Regional Trial Court, attempting to relitigate the same issues, for which he and his counsel were found guilty of contempt and the cases were dismissed. On March 11, 1988, Sarmiento finally filed a motion to exercise his equity of redemption and asked the court to fix the redemption price. The court opined that this should be a matter of agreement between Ponce and Sarmiento. Sarmiento offered P2.6 million, which Ponce rejected, stating that Sarmiento's right to exercise his equity of redemption had lapsed. Sarmiento filed another motion to fix the price and defer the writ of possession. Ponce opposed, arguing that Sarmiento's right had long expired. Judge Solano, however, ruled against Ponce's theory, stating it would render the IAC's decision nugatory. Ponce filed a Motion for Clarification with the Supreme Court. The Petition: The Supreme Court is asked to determine if Sarmiento's equity of redemption, recognized in its January 30, 1987 judgment, still subsists and may be exercised more than a year after that judgment became final and executory.
Issue(s)
Whether Rogelio M. Sarmiento's equity of redemption subsisted and could still be exercised after the confirmation of the judicial foreclosure sale. Whether Rogelio M. Sarmiento was denied due process regarding the confirmation of the sale.
Ruling
The Court ruled that Rogelio M. Sarmiento's equity of redemption lapsed and ceased to exist without being properly exercised on June 17, 1987, with the issuance of the Trial Court's Order confirming the sheriff's sale on judicial foreclosure in favor of Guillermo Ponce.
Ratio Decidendi
On the subsisting equity of redemption: The Court clarified the distinction between the 'equity of redemption' and the 'right of redemption.' The 'right of redemption' exists only in extrajudicial foreclosures, allowing redemption within one year from the registration of the sheriff's certificate of sale. In judicial foreclosures, no such right exists, except in cases involving the Philippine National Bank or other banking institutions. For other judicial foreclosures, only the 'equity of redemption' is recognized. This equity is the right of the mortgagor to extinguish the mortgage and retain ownership by paying the secured debt within the 90-day period after the judgment becomes final, or even after the foreclosure sale but prior to its confirmation. The Court emphasized that after the order of confirmation, no redemption can be effected anymore. In this case, Sarmiento was a successor-in-interest and was properly impleaded in the foreclosure proceedings. The Supreme Court's prior judgment affirmed the IAC's order to confirm the sale, subject to Sarmiento's equity of redemption. This confirmation occurred on June 17, 1987. Therefore, Sarmiento's equity of redemption ceased to exist on that date. His subsequent attempts to exercise this right, nine months after the confirmation and after engaging in contumacious litigation, were too late. The Court rejected Sarmiento's argument that Ponce's motion for a writ of possession, subject to Sarmiento's equity of redemption, extended this right beyond the confirmation date, stating that such a motion was made before the confirmation and merely affirmed the existing right at that time, not an intent to extend it beyond the legal cut-off. On the denial of due process: The Court found no denial of due process. The Intermediate Appellate Court's decision, which was affirmed by the Supreme Court, explicitly ordered the Trial Court to confirm the judicial foreclosure sale in favor of Ponce. This decision was a peremptory command to the Trial Court to confirm the sale, motu proprio, without the need for further motion from Ponce. Sarmiento and his predecessor, Limpin, were aware of this order and the potential for confirmation. The Supreme Court's denial of their appeal further alerted Sarmiento that confirmation could occur at any time after the judgment became final. Therefore, Sarmiento should have taken steps to redeem the property or at least notify the court of his intention to exercise his equity of redemption immediately after the Supreme Court's decision became final. His failure to do so, and instead engaging in multiple lawsuits to relitigate settled issues, precluded him from claiming lack of notice or denial of due process. The confirmation order was issued on June 17, 1987, and Sarmiento only attempted to exercise his right nine months later, after engaging in contumacious acts.
Main Doctrine
The equity of redemption in a judicial foreclosure, which is the right of the mortgagor to extinguish the mortgage and retain ownership by paying the secured debt within the 90-day period after the judgment becomes final or even after the foreclosure sale but prior to its confirmation, lapses and ceases to exist upon the confirmation of the foreclosure sale by the court.