Bernandez v. Reyes
REITERATIONFacts
The Antecedents: Petitioner Leon Bernardez mortgaged a parcel of land to the Government Service Insurance System (GSIS) to secure a loan. The land was subsequently foreclosed and sold at public auction to respondent Arsenio Reyes on April 17, 1962. The certificate of title indicated that the period of redemption expired one year after the auction sale, on April 17, 1963. GSIS, as attorney-in-fact for the Bernardez spouses, executed a Deed of Sale in favor of Reyes on November 8, 1962. Both the certificate of foreclosure sale and the Deed of Sale were registered on April 18, 1963, and a new Transfer Certificate of Title was issued in Reyes' name. Procedural History: Reyes filed an action to be declared owner and to collect back rentals and attorney's fees. The Court of First Instance (CFI) of Rizal ruled in favor of the Bernardez spouses, granting them 173 days from receipt of the decision to redeem the property by paying P1,315.00, with the GSIS to provide the balance. The CFI also awarded moral damages and attorney's fees to the Bernardez spouses. Reyes appealed to the Court of Appeals (CA), which affirmed the CFI decision but modified the redemption price to P6,510.00 with interest, and granted the Bernardez spouses thirty (30) days from finality of the decision to redeem. The GSIS was ordered to refund certain amounts to the Bernardez spouses. The Petition: On January 31, 1978, the Bernardez spouses offered P18,000.00 to Reyes for redemption, which he refused. They then consigned the sum to the CFI, praying for modification of the judgment to fix the redemption price at P18,944.10, less P6,114.00 in damages, and for Reyes to accept the balance of P12,831.00. The CFI ruled that there was no valid tender of payment as the Bernardez spouses had lost their right to redeem, but affirmed Reyes' liability for P6,140.00 in damages. The CA affirmed the CFI's order. The Bernardez spouses' motion for reconsideration was denied, leading to the present petition for review on certiorari.
Issue(s)
Whether the Bernardez spouses exercised their right of redemption within the statutory period. Whether Reyes is entitled to claim back rentals from the Bernardez spouses during the period of redemption.
Ruling
The Supreme Court affirmed the decision of the Intermediate Appellate Court with the modification that there was no valid tender of payment because the period of redemption had lapsed on April 18, 1964, as provided by law, and not due to the 30-day period given by the respondent Court of Appeals. The Court also ruled that Reyes cannot claim back rentals from the Bernardez spouses during the period of redemption.
Ratio Decidendi
On the issue of the right of redemption: The Court reiterated the well-settled rule that under Act 3135, the mortgagor has the right of redemption within one (1) year from the registration of the sheriff's certificate of foreclosure sale. In this case, the certificate of foreclosure sale was registered on April 18, 1963. Therefore, the right of redemption could only be exercised until April 18, 1964. The Bernardez spouses clearly lost their right to redeem the property beyond this date. Their offer to redeem more than fourteen years later, despite adding considerable interest, could not revive a right that had already expired. The statutory period of redemption, counted from the registration of the Certificate of Sale, remains fixed at one year. Furthermore, the thirty-day 'grace period' to redeem granted by the Court of Appeals was found to have no basis in law, as the Court has previously held that if no redemption is made within the statutory period, the purchaser has an absolute right to a writ of possession, and the debtors lose their right over the property. On the claim for back rentals: The Court referred to Section 34, Rule 39 of the Rules of Court, which provides that a purchaser is entitled to receive rents from the property from the time of sale until redemption, if such property is in the possession of a tenant. The Bernardez spouses, as judgment debtors, were in possession of the property and were not tenants. Therefore, they could possess the property without being liable for rents for its use. Consequently, Reyes cannot claim back rentals from the Bernardez spouses during the period of redemption.
Main Doctrine
The statutory period of redemption, counted from the registration of the Certificate of Sale under Act 3135, is fixed at one year from the date of registration, and failure to redeem within this period renders the right to redeem inutile. A subsequent thirty-day period granted by the Court of Appeals, if not based on law, has no legal basis.