Heirs of Quisumbing v. Philippine National Bank
REITERATIONFacts
The Antecedents: Spouses Ricardo C. Silverio and Beatriz Sison-Silverio, along with companies they chaired, assigned their rights of redemption over various real properties foreclosed by Philippine National Bank (PNB) to Atty. Norberto J. Quisumbing. Quisumbing made a formal tender of redemption to PNB, requesting the total redemption prices. PNB requested copies of the Deeds of Assignment, which Quisumbing provided, setting an April 30, 1985 deadline for PNB's reply. Before PNB could reply, Quisumbing executed an Affidavit of Redemption. PNB denied the offer, citing invalid Deeds of Assignment, lack of actual payment, and an insufficient offer amount under Section 25 of P.D. No. 694. Procedural History: Quisumbing filed a complaint to compel PNB to allow redemption. During the pendency, Quisumbing died and was substituted by his heirs. Santiago Land Development Corporation (SLDC), having purchased one of the properties (Pasong Tamo property) from PNB pendente lite, intervened. The Regional Trial Court (RTC) dismissed the complaint, ruling that Quisumbing's tender was not valid due to lack of cash payment and that Section 25 of P.D. No. 694 was applicable. The Court of Appeals affirmed the RTC decision, holding that there was no valid offer to redeem due to the failure to tender payment and that even judicial redemption was ineffectual without tender. The heirs elevated the case to the Supreme Court. The Petition: Petitioners (Heirs of Quisumbing) insisted on the validity of the tender, arguing that PNB's outright refusal excused the need for actual payment and that they perfected a 'judicial redemption.' They also questioned the constitutionality of Section 25 of P.D. No. 694, arguing it applied only to direct debtors and not accommodation mortgagors, and violated due process and equal protection. PNB countered that the Deeds of Assignment were void as Quisumbing was their lawyer. SLDC argued the case was barred by res judicata and that Quisumbing, as a transferee pendente lite, was bound by prior rulings. They also maintained Section 25 of P.D. No. 694 was constitutional.
Issue(s)
Whether Atty. Norberto J. Quisumbing made a valid tender of redemption. Whether the filing of the complaint constituted a valid judicial redemption. Whether Section 25 of P.D. No. 694 is constitutional and applicable to the case. Whether the Deeds of Assignment were valid. Whether the case is barred by res judicata.
Ruling
The petition is denied. The Court of Appeals' decision affirming the RTC's dismissal of the complaint is affirmed.
Ratio Decidendi
On the validity of the tender of redemption: The Court ruled in the negative. A valid tender of redemption, whether under Act No. 3135, the General Banking Act, or P.D. No. 694, requires an actual tender of the full redemption price within the one-year redemption period. Quisumbing failed to make an actual tender of payment. His letter requesting the amount and his subsequent Affidavit of Redemption, without accompanying payment, did not constitute a valid tender. The Court reiterated that redemption is a question of payment or valid tender, not merely of intent. On the validity of judicial redemption: While the filing of a judicial action can preserve redemptive rights, especially in cases of disagreement over the redemption price, this exception requires specific conditions. The action must be filed in good faith, solely to determine the redemption price, and followed by prompt payment once the price is determined. Quisumbing's complaint was not filed solely to determine the redemption price; he explicitly sought the annulment of Section 25 of P.D. No. 694. His admission that he was unwilling to pay based on Section 25, and his execution of the Affidavit of Redemption before PNB could provide the computation, demonstrated a lack of good faith and an intent to delay the process, thus negating the applicability of this exception. On the constitutionality and applicability of Section 25 of P.D. No. 694: The issue of the constitutionality of Section 25 of P.D. No. 694 was rendered moot and academic by the full privatization of PNB. The repeal of P.D. No. 694 and the subsequent sale of the government's remaining shares in PNB meant that the provision was no longer in effect and its application to the case was no longer a live controversy. Therefore, the Court did not rule on its constitutionality or its applicability to accommodation mortgagors. On the validity of the Deeds of Assignment: The Court found it unnecessary to address the validity of the Deeds of Assignment, as the primary issue of a valid tender of redemption was not met. The failure to make a valid tender rendered the subsequent actions and claims regarding the properties moot. On the issue of res judicata: Similarly, the Court deemed it unnecessary to rule on whether the case was barred by res judicata, given that the core issue of a valid redemption was resolved against the petitioners. The resolution of the main issue rendered the collateral issues regarding prior rulings and the effect of being a transferee pendente lite moot.
Main Doctrine
A valid tender of redemption requires an actual and simultaneous tender of the full redemption price within the redemption period. While filing a judicial action to enforce redemption can preserve redemptive rights, it must be done in good faith, solely to determine the redemption price, and followed by prompt payment once the price is determined. An action primarily aimed at annulling a statutory provision governing redemption, rather than resolving a dispute over the price, does not qualify as a good faith judicial redemption.