Bodiongan v. Court of Appeals
REITERATIONFacts
The Antecedents: Respondent Lea Simeon obtained a loan from petitioner Estanislao Bodiongan and his wife, secured by a mortgage on three parcels of land with a hotel building and personal properties. Respondent failed to pay the loan, leading petitioner to file a civil case for collection or foreclosure. The trial court ordered respondent to pay the debt, and in case of non-payment, to foreclose the mortgaged properties. This decision was affirmed by the Court of Appeals and became final. Procedural History: Following respondent's continued failure to pay, the mortgaged properties were foreclosed and sold at an auction where petitioner was the sole bidder. Petitioner took possession of the properties. Respondent later offered to redeem the properties, tendering a check for an amount based on a tentative computation by the sheriff. Petitioner accepted the check and the sheriff issued a certificate of redemption. Petitioner then moved to correct the redemption price, claiming additional interest, and to suspend the issuance of a writ of possession, which the trial court denied. Subsequently, petitioner filed another civil case seeking annulment of the redemption and confirmation of the foreclosure sale due to alleged insufficiency of the redemption price. The trial court dismissed this complaint but ordered petitioner to refund excess interest and pay damages and attorney's fees. The Court of Appeals affirmed the trial court's decision with a modification regarding the interest rate. The Petition: Petitioner seeks review on certiorari of the Court of Appeals' decision, arguing that the redemption price was inadequate under Rule 39, Section 30 of the Revised Rules of Court. Petitioner contends that the redemption price should have included attorney's fees awarded in the initial collection case, which respondent's tendered payment did not cover. The petition also addresses the issue of personal properties within the hotel that petitioner had sold and appropriated the proceeds from, and the subsequent compensation respondent received for this loss, arguing against double compensation while acknowledging the policy favoring the right of redemption.
Issue(s)
Whether the redemption price tendered by the respondent was sufficient to effect a valid redemption, and whether attorney's fees awarded in the original judgment should be included in the redemption price. Whether the deduction of the value of personal properties sold by the petitioner should be considered in determining the redemption price. Whether the respondent should be given an opportunity to complete the redemption price despite a deficiency in the tender.
Ruling
The petition is denied. The decision of the Court of Appeals is affirmed with the modification that respondent is allowed to complete the redemption price by paying the difference of P8,500.00 with 1% interest per month from January 8, 1988, until full payment, within fifteen (15) days from the finality of the decision.
Ratio Decidendi
On the sufficiency of the redemption price and inclusion of attorney's fees: The redemption price for properties sold at an extrajudicial foreclosure sale is governed by Section 30 of Rule 39 of the Revised Rules of Court. This price includes the purchaser's bid, 1% per month interest thereon, and any taxes or assessments paid by the purchaser with interest. The amount payable is the purchase price at the auction sale, not the original judgment debt. Therefore, attorney's fees awarded in the original judgment should not be added to the redemption price. The Court calculated the correct redemption price to be P346,080.00 (P309,000.00 purchase price + P37,080.00 interest). On the deduction of personal properties: Petitioner admitted selling personal properties from the hotel and appropriating the proceeds of P13,500.00. While this deduction was not authorized under Section 30 of Rule 39, the Court noted that respondent had already sought and was compensated for this loss through a separate case, where she was awarded P23,246.00 for the loss of properties and P85,000.00 for unrealized income. Allowing this deduction again would result in double compensation and unjust enrichment for the respondent. Therefore, the value of the personal properties should not be deducted from the redemption price. On the opportunity to complete the redemption price: The Court reiterated the policy of the law to aid rather than defeat the right of redemption, interpreting the rule liberally in favor of the original owner. Although the respondent's tender of P337,580.00 was short by P8,500.00 from the correct redemption price of P346,080.00, the tender was timely and made in good faith. The deficiency was not substantial, and the Court, in the interest of justice, granted respondent fifteen (15) days from the finality of the decision to complete the redemption price by paying the difference with interest.
Main Doctrine
The redemption price for properties sold at an extrajudicial foreclosure sale is composed of the purchase price plus 1% per month interest thereon, and any assessments or taxes paid by the purchaser with interest. Attorney's fees awarded in the original judgment are not part of the redemption price. The law favors the right of redemption, and a timely tender in good faith with a slight deficiency may be allowed to be completed.