Spouses Prudencio Robles and Susana de Robles v. The Honorable Court of Appeals, Second Laguna Development Bank and Spouses Nilo de Robles and Zenaida de Robles
REITERATIONFacts
The Antecedents: Spouses Prudencio and Susana de Robles obtained a loan from Laguna Development Bank, secured by a real estate mortgage. Due to non-payment, the bank foreclosed the mortgage, and the property was sold at public auction. The bank was the highest bidder, and a certificate of sale was registered. The redemption period expired without the petitioners exercising their right to redeem, leading to the issuance of a new title in the bank's name. Subsequently, the bank sold the property to respondent spouses Nilo and Zenaida de Robles. Procedural History: The petitioners filed a case with the Regional Trial Court seeking the annulment of the certificate of sale, deed of absolute sale, reconveyance, damages, and preliminary injunction. The trial court ruled in favor of the private respondents, upholding the validity of the foreclosure sale and the ownership of the respondent spouses. This decision was affirmed in toto by the Court of Appeals. The Petition: The petitioners seek review of the Court of Appeals' decision, primarily arguing that the judicial foreclosure of the mortgage was void due to alleged fraud and lack of proper notice and publication. They also implore the Court to liberally interpret redemption laws in their favor, citing equitable considerations. The petition is filed under Rule 45 of the Rules of Court, seeking to overturn the appellate court's affirmation of the lower court's ruling.
Issue(s)
Whether the judicial foreclosure of the mortgage is void ab initio due to alleged fraud and lack of requisite notice and publication. Whether petitioners should be allowed to redeem the subject property beyond the statutory redemption period on equitable considerations.
Ruling
The Petition is devoid of merit. The Court affirmed the validity of the foreclosure sale and denied the petitioners' request to redeem the property beyond the expired redemption period.
Ratio Decidendi
On the validity of the foreclosure sale: The Court found no merit in the petitioners' claim that the foreclosure sale was void due to fraud and lack of notice and publication. The Sheriff's Certificate of Sale provided evidence that the required twenty (20)-day written notice of the sale was posted in conspicuous public places and sent to the mortgagors by registered mail. The notice was also published in a local publication. The statements of the Sheriff are entitled to belief unless rebutted by evidence, and the presumption of regularity in the performance of duty applies. Since the petitioners failed to rebut this presumption, the Court found no reason to doubt the regularity of the Sheriff's actions. On the allowance of redemption beyond the statutory period: The Court distinguished between redemption and repurchase. Redemption is a right granted by law, and the purchaser at auction is bound to accept it. Repurchase, however, occurs after the redemption period has expired, and the purchaser is not obligated to re-sell the property. The Court cited Natino v. Intermediate Appellate Court which held that the right to redeem becomes functus officio on the date of its expiry. In this case, the redemption period expired on May 31, 1985, and the petitioners did not exercise their right within this period. Their offer to redeem in December 1990, more than six years after the foreclosure sale, was a belated attempt to exercise a right that had long expired. The Court found no basis to apply the liberal interpretation of redemption laws as invoked by the petitioners, as the cited cases were not applicable. Specifically, even in cases where redemption was allowed beyond the period, a valid tender was made within the redemption period, which was not the situation here. The Court also dismissed the petitioners' claim of an extended redemption period, as they failed to present documentary evidence to support it, and even if negotiated, there was no longer a redemption period to extend. Any extension would merely constitute an offer to re-sell, not a binding contract.
Main Doctrine
The right to redeem foreclosed property is a right granted by law, which becomes functus officio upon its expiry. Exercise of the right after the redemption period constitutes a repurchase, which the purchaser is not bound to accept.