Banco Filipino Savings v. Santiago (Isabela) Memorial Park, Inc.
REITERATIONFacts
The Antecedents: Private respondent Santiago (Isabela) Memorial Park, Inc. (SIMPI) mortgaged a property to petitioner Banco Filipino Savings & Mortgage Bank (BF) to secure a loan. BF foreclosed the mortgage, and a Sheriff's Certificate of Sale was issued in BF's favor on October 9, 1990, and inscribed on January 21, 1991. SIMPI expressed interest in redemption, making an offer of ₱700,000.00 on August 6, 1991. BF, through its Deputy Liquidator, responded on January 23, 1992, giving SIMPI until the end of March 1992 to negotiate and make special arrangements for payment. On March 12, 1992, BF directed SIMPI to remit ₱50,000.00 to manifest its willingness to redeem, which SIMPI did on March 24, 1992. On January 20, 1993, SIMPI amended its offer to ₱1,000,000.00. Between January 1993 and November 1993, SIMPI exerted efforts to effect redemption, but BF, in a letter dated November 5, 1993, demanded ₱5,830,000.00 as purchase price. SIMPI alleged that BF's actuations indicated a refusal to allow redemption. Procedural History: SIMPI filed a complaint for redemption and specific performance against BF. BF filed a motion to dismiss for failure to state a cause of action, arguing that SIMPI failed to redeem within one year from the registration of the sheriff's certificate of sale. The Regional Trial Court (RTC) dismissed the complaint, finding that SIMPI did not tender the correct redemption price within the redemption period. SIMPI appealed to the Court of Appeals (CA), which reversed the RTC's order, holding that SIMPI was entitled to repurchase the property and that a new contract extending the period of purchase was entered into. BF filed a motion for reconsideration, which was denied. Hence, this petition for review on certiorari. The Petition: Petitioner BF seeks to annul the CA's decision, arguing that the CA erred in holding that SIMPI's complaint stated a cause of action for redemption and specific performance, and that SIMPI was entitled to repurchase the foreclosed property for ₱925,448.17.
Issue(s)
Whether the complaint filed by private respondent states a cause of action for redemption and specific performance against the petitioner, specifically regarding the tender of payment within the statutory redemption period and the existence of a new contract extending the redemption period. Whether the Court of Appeals erred in holding that private respondent was entitled to repurchase the foreclosed property, considering the lack of a perfected contract for repurchase.
Ruling
The petition is granted. The decision of the Court of Appeals is reversed and set aside. The Order of the Regional Trial Court dismissing the complaint for redemption and specific performance is reinstated and affirmed.
Ratio Decidendi
On the issue of whether the complaint states a cause of action for redemption: The Court held that based on the allegations in the complaint, private respondent has no cause of action for redemption. The sheriff's certificate of sale was registered on January 21, 1991, establishing the one-year period for redemption until January 21, 1992. While SIMPI made an offer to redeem on August 6, 1991, within the redemption period, the complaint does not allege an actual tender of payment of the redemption price. The offer of ₱700,000.00 was significantly lower than the bank's claim. It is not sufficient to manifest a desire to redeem; it must be accompanied by an actual and simultaneous tender of payment of the full redemption price within the allowed period. The Court also found no basis for the CA's conclusion that a new contract extending the period for redemption was entered into. The allegations in the complaint do not show a meeting of the minds on the purchase price, which is essential for the perfection of a contract of sale. SIMPI's offer of ₱1,000,000.00 in January 1993 and BF's subsequent demand for ₱5,830,000.00 in November 1993 clearly indicate a lack of agreement on the price. On the issue of whether the Court of Appeals erred in holding that private respondent was entitled to repurchase the foreclosed property: SIMPI could not repurchase the property based on a new contract, as no such contract was perfected. The letter dated March 12, 1992, directing SIMPI to remit ₱50,000.00, was merely a step to show interest and did not establish a perfected contract. Therefore, the Court of Appeals erred in holding that the private respondent was entitled to repurchase the foreclosed property.
Main Doctrine
A complaint for redemption and specific performance must allege facts demonstrating a valid tender of payment of the redemption price within the statutory or extended period, and a mere offer to redeem or an agreement to negotiate does not constitute a perfected contract of sale or an exercise of the right of redemption.