Spouses Natino v. Intermediate Appellate Court
REITERATIONFacts
1. The Antecedents: Spouses Trinidad and Epifanio Natino executed a real estate mortgage in favor of the Rural Bank of Aguilar, Inc. to secure a loan of P2,000.00. Upon failure to pay the loan on its due date, the bank initiated extrajudicial foreclosure proceedings. The bank emerged as the highest bidder at the foreclosure sale held on December 11, 1974, with a bid of P2,945.11. A certificate of sale was issued and registered on January 29, 1975, stipulating a two-year redemption period. The petitioners claim an extension of this redemption period was granted by the bank, a claim the bank denies. The sheriff issued a Final Deed of Sale on February 15, 1977, after the redemption period expired on January 29, 1977, without redemption. 2. Procedural History: Following the bank's petition for a writ of possession in 1979, which the petitioners opposed by tendering P4,000.00, the petitioners filed a complaint against the bank and the Provincial Sheriff for the annulment of the final deed of sale and for an injunction. This case, Civil Case No. 15573, was decided by the Court of First Instance of Pangasinan, Branch II, which annulled the final deed of sale and set a new redemption period. The respondent bank appealed this decision to the Intermediate Appellate Court (IAC), which reversed the trial court's decision, finding that the redemption period had expired and no extension was granted. The petitioners' motion for reconsideration was denied, leading them to file the instant petition for review on certiorari. 3. The Petition: The petitioners filed a petition for review on certiorari with the Supreme Court, seeking to reverse the decision of the Intermediate Appellate Court. They contend that the IAC erred in concluding that the attempts to redeem the property were made after the expiration of the redemption period and that no extension was granted. The core issue presented is whether the IAC's conclusion, drawn from the established facts, is legally correct. The petitioners argue that the trial court correctly found an agreement to extend the redemption period, which was not extinguished by the bank's subsequent actions.
Issue(s)
Whether the Intermediate Appellate Court erred in reversing the trial court's decision regarding the validity of the redemption attempts. Whether the petitioners made a valid offer to redeem the property within the redemption period. Whether the respondent bank granted an extension of the redemption period. Whether the alleged assurances by bank officers constituted a binding agreement to extend the redemption period.
Ruling
The Supreme Court dismissed the petition, finding no merit therein. It affirmed the decision of the Intermediate Appellate Court, setting aside the contrary conclusion of the trial court. The Court ruled that the attempts to redeem the property were made after the expiration of the redemption period and that no extension was granted to the petitioners.
Ratio Decidendi
On the validity of the redemption attempts and the IAC's decision: The Supreme Court held that the petitioners failed to demonstrate that their attempts to redeem the property were made within the legally prescribed redemption period. The Court emphasized that the right to redeem becomes functus officio upon its expiry, and any subsequent action is considered a repurchase, not a redemption, which imposes no obligation on the purchaser to accept. The deposit of P4,000.00 made on December 12, 1979, was deemed a belated attempt to exercise a right that had long expired, occurring after the two-year redemption period from January 29, 1977, and after the registration of the sheriff's final sale on November 14, 1979. The Court noted that if an offer to redeem within the period was refused, the proper recourse would have been to tender the redemption money to the sheriff, which the petitioners failed to do. On the validity of the redemption offer: The Supreme Court held that the petitioners failed to demonstrate that their attempts to redeem the property were made within the legally prescribed redemption period. The Court emphasized that the right to redeem becomes functus officio upon its expiry, and any subsequent action is considered a repurchase, not a redemption, which imposes no obligation on the purchaser to accept. On the alleged extension of the redemption period: The Supreme Court agreed with the IAC that no valid extension of the redemption period was granted by the respondent bank. On the alleged assurances by bank officers: The Court found that the alleged assurances given by bank officers, as testified by petitioner Epifanio Natino, were either made before the expiry of the redemption period (and thus unnecessary) or, if made later, could not bind the bank. The Court pointed out that any such agreement to extend the redemption period would require approval or ratification by the bank's Board of Directors, which was not proven. Furthermore, the alleged offer to re-sell the property for P30,000.00, made after the petition for a writ of possession was filed and well after the redemption period expired, did not constitute a meeting of the minds for redemption. The Court also clarified that a unilateral promise to resell, without a distinct consideration, is not binding under Article 1479 of the Civil Code.
Main Doctrine
Attempts to redeem property after the expiration of the redemption period, without a valid extension granted by the bank and approved by its Board of Directors, do not constitute a valid redemption but a mere offer to repurchase, which the bank is not legally bound to accept.