SECOND DIVISION

[G.R. No. L-51767. June 29, 1982.]
LETICIA CO, assisted by her husband MUI YUK KONG, in substitution of CITADEL INSURANCE & SURETY CO.,
INC., Plaintiff-Appellee, v. PHILIPPINE NATIONAL BANK,Defendant-Appellant.
SYNOPSIS
Standard Parts Manufacturing Corporation obtained several loans from the Philippine National Bank in the total amount of
P4,296,103.36 and as security therefor, mortgaged its real properties in Batuio City and in Makati, Rizal and executed in
addition thereto, a chattel mortgage over its personal properties. For its failure to pay its obligation, the appellant bank
foreclosed extra-judicially the mortgaged properties and purchased the same as the highest bidder leaving a deficiency claim
in the amount of P1,434,321.07. The certificates of sale were registered on March 11, 1973. Due to the mortgagor’s failure
to redeem the properties, appellant bank consolidated its title to the same. Citadel Insurance and Surety Co., to whom
Standard Parts Manufacturing Corporation had assigned its right of redemption over the Makati property, offered to redeem
the same for Pl,621,970.00 in a letter dated March 3, 1976 accompanied by a check as payment. The appellant bank refused
as the amount was very much lower than its total claim. Citadel filed a complaint before the trial court and judgment was
rendered ordering the appellant bank to accept payment.
On petition for review, the Supreme Court held that Citadel’s tender of redemption, made in a letter addressed to the
Philippine National Bank, dated March 3, 1976, accompanied by a manager’s check covering the redemption price was made
on time; that Act 3133 and Sections 29-32 of Rule 39 of the Rules of Court are the applicable legal precepts to its right of
redemption, but it cannot be faulted for non-inclusion in its tender the amount of assessments or taxes the bank might have
paid before redemption as it was not supplied such data; than Pl,621,970.00 tendered by Citadel was the correct redemption
price, but to prevent unjust enrichment on the part of the debtor-mortgagor, and for reasons of equity and substantial
justice, appellant bank should be paid the full amount of P3,366,346.32 without any interest as of March 11, 1976, when it
refused the redemption legally and validly tendered without need however of accounting to Citadel and/or Leticia Co. rentals
it had earned from the time it took possession of the property.
Judgment modified.

SYLLABUS

1. CIVIL LAW; MORTGAGE; EXTRAJUDICIAL FORECLOSURE; REDEMPTION PERIOD IS ONE YEAR UNDER ACT 3133, AS
AMENDED; CASE AT BAR. — STANDARD’s/CITADEL’s period of redemption was up to March 10, 1976. That CITADEL filed its
complaint to compel Philippine National Bank to accept its redemption only on March 11, 1976 is of no moment. The
unequivocal tender of redemption was made in the letter of Francisco S. Corpus, its President, of March 3, 1976 accompanied
by a manager’s check of the Rizal Commercial Banking Corporation for the amount it believed it should pay as redemption
price. The Supreme Court holds that the redemption was made on time, that is, within one year (or even twelve months)
from the date appearing as the date of the registration of the certificate of sale.
2. ID.; ID.; ID.; FORECLOSURE OF MORTGAGE IN CASE AT BAR MADE UNDER ACT 3133. — When PNB foreclosed the
mortgage at issue, it chose Act 3133 and it was exercised before PD 694 came into being. To make the redemption subject to
a subsequent law would be obviously prejudicial to the party exercising the right to redeem. Without considering the date the
loan was secured and the date of the mortgage contract, and taking into account only the dates of the foreclosures and
auction sales, it is quite obvious that any change in the law governing redemption that would make it more difficult than
under the law at the time of the sale cannot be given retroactive effect.
3. ID.; ID.; ID.; ID.; TERMS AND CONDITIONS UNDER WHICH REDEMPTION MAY BE EXERCISED ARE DEEMED PART AND
PARCEL OF MORTGAGE CONTRACT; ALTERATION THEREOF IMPAIRS OBLIGATIONS OF CONTRACTS. — Under the terms of
the mortgage contract, the terms and conditions under which redemption may be exercised are deemed part and parcel
thereof whether the same be merely conventional or imposed by law. To alter those terms in a manner prejudicial to the
mortgagor or the person redeeming the property as his successor-in-interest after the foreclosures and sales would definitely
come within the constitutional proscription against impairment of the obligations of contracts.
4. ID.; ID.; ID.; ID.; REDEMPTION BY CHECKS ALLOWED. — In Javellana v. Mirasol, 40 Phil. 761, the Supreme Court has
already sanctioned redemption by check.
5. ID.; ID.; ID.; ID.; EXECUTION DEBTOR CAN SELL HIS RIGHT OF REDEMPTION. — In Lichauco v. Olegario, Et Al., 43 Phil.

744. On pages 6-7 of appellant’s brief it is stated that as of July 19. the Standard Parts Manufacturing Corporation. the rentals the said bank it has earned.42 without any interest as of March 11. "Considering that this case has been submitted for decision based upon four (4) limited questions of law and there being no evidence presented and submitted to support any claim for damages. in the name of PNB by order of the trial court should be computed to have earned legal interest or 12% p. on February 20. as explained above.. In the final analysis.576." (Pp. We quote further from appellant’s brief: jgc:chanroble s. . Additionally. 180-181. as highest bidder.ph . so earned be less than P3. provided however that should such amount including the compounded interest at 12% p. the amount of P1. the issues We are called upon to resolve are only questions of law. over properties covered by Transfer Certificates of Title Nos.000. hereinafter to be referred to simply as STANDARD. applying hereto the principle of unjust enrichment. an execution debtor was legally authorized to sell his right of redemption is a question already decided by this Court in the affirmative in numerous decisions on the precepts of Sections 463 and 464 and other sections related thereto. the Supreme Court held than "whether or not . J. and provided. as aforementioned.803. on the other hand. on August 8.com.514. 1976 and which was deposited in a savings account.) It goes without saying that under the Act aforementioned by virtue of which this appeal is before Us. this Court finds that plaintiff has validly exercised the right of redemption herein-before discussed and orders the defendant to: chanrob1es virtual 1aw library (a) Accept the amount consigned and deposited pursuant to the Order of this Court on March 11. PNB does not have to account to CITADEL/LETICIA CO for any of the rentals it had earned from the time it took possession of the property. compounded annually. as collateral for a loan consideration of P500. drawing interest apparently less than 12% p. Subsequently. 23101 entitled "Citadel Insurance & Surety Co." cralaw virtua1aw library 6. Philippine National Bank".000.ph "WHEREFORE. for P1. by the mortgages on the Baguio and Makati real estates of STANDARD and the chattel mortgage on its personal properties above referred to.970. .296. of the Code of Civil Procedure.00 tendered by CITADEL on March 5. 1974. 1976. 1961. DECISION BARREDO..340. the "borrowed loan" of STANDARD totalled P4. "SO ORDERED. which We deem in the peculiar circumstances at this instant case to be the fairest way of resolving this controversy.00.546.56.00.621. are as follows: chanrob1es virtual 1aw library On November 10.com . under strict technical legal reasoning.a. 1976. ID. not to mention what must be quite substantial and considerable.366.366. when it refused a redemption legally and validly tendered.42. 1974.546. instead of PNB losing P1. the undisputed material facts of this case.00. petitioner herein should pay PNB such difference. there is no pronouncement and award of damages as well as costs.a. — It is but just and proper that PNB should be paid the full amount of P3. When STANDARD failed to pay its obligation. Briefly stated. v.305. both situated in Baguio City. 1976. (c) Deliver and surrender to plaintiff possession over the property in question.: Direct appeal to this Supreme Court pursuant to Republic Act 5440 from the decision of the Court of First Instance of Rizal. the same debtor corporation executed an amended real estate mortgage to include as collateral for the increase of the above loan to P1.. Inc..00 a property located at Pasong Tamo Extension within the Municipality of Makati (then part of Rizal Province and now of Metro Manila) covered by Transfer Certificate of Title No.000. CASE AT BAR. (b) Execute and specifically comply to the effects of the exercise of the right of redemption so that whatever title is due to the plaintiff after redemption may properly accrue to plaintiff. Record on Appeal. APPELLANT SHOULD BE PAID THE FULL AMOUNT OF REDEMPTION PRICE WITHOUT INTEREST. that with this arrangement. the dispositive portion of which reads: jgc:chanrobles. 1963.. PNB also foreclosed the mortgage on the Makati property and purchased the same. PNB extra-judicially foreclosed the mortgage on the Baguio properties as well as the chattel mortgage on July 19. ID.. which it does not have to account for.. 1963.363. executed a real estate mortgage in favor of herein defendant-appellant Philippine National Bank. 54474. 1974. Branch XXI in its Civil Case No. On February 20.000.42. hereinafter to be referred to simply as PNB. On the other hand.a. with PNB as the highest bidder for P1. ID. as may be culled from the decision of the trial court and elsewhere in the record. since March 11. the same corporation executed in favor of PNB a chattel mortgage of its personal properties listed on pages 96 to 108 of the Record on Appeal. and that the said obligation was secured. it would still be paid by petitioner a certain amount. T-5108 and T-5320.

Suite 202 Sikatuna Bldg. 3.970. "Meantime.621.F.. 1976 per the Statement of Account of Standard Parts (Annex ‘G’.970.ph "CITADEL INSURANCE & SURETY CO. 54474 was cancelled and TCT No.). 3135. Citadel wrote PNB a letter (Annex ‘H’.363. 1976 PHILIPPINE NATIONAL BANK Escolta.S. 1976. Brief of PNB) To Our mind then.F..521. it being the alleged assignee of the right of redemption of Standard Parts with respect only to said property. Ayala Ave. The mortgages here in question were constituted way back in 1961 to 1963.00 — interest at the rate of 1% a month from the date of auction. is the Assignee of the right of redemption. 1976 in the name of the Bank. the deficiency claim of the Bank against Standard Parts as of August 8.F. the PNB consolidated titles to the Baguio properties and TCT Nos.621. 1974 also with it as the highest bidder for P1.000. P.).514. which will expire on March 11. Subsequently.S. 1974 and that of the Makati estate on August 8. 1974. T-5708 and T-5320 (Annex ‘C’.434. The letter of CITADEL in this regard reads thus: jgc:chanroble s.S. ________________ .) and registered on March 14. 7-9. P. TCT No.S.S. 1974. Citadel Insurance & Surety Co. offering to pay therefor as redemption price P1. P. 54474 of the Register of Deeds For the Province of Rizal. Rizal Tel. the facts that are decisive herein are the following: chanrob1es virtual 1aw library 1.366." (Pp. 1976 stating that it was redeeming the Makati property. Citadel. Hence.. March 5.S. INC. 1974 was issued by the Sheriff of Baguio City covering TCT Nos.000.). after foreclosure of the above-mentioned mortgage. respectively. PNB foreclosed the Baguio properties and chattels on July 19.00. On May 14. 1976) transferred its rights in the mortgages here in issue.42 as of March 5.00 and the Pasong Tamo property on August 8. P. justifiably refused to accept the tender of payment of Citadel considering that the amount of P1. As assignee of the aforementioned Right of Redemption. No. by virtue of a ‘Deed of Assignment and Waiver of Redemption Rights’ dated February 29. Manila Re: Legal Redemption of Extra-Judicial Foreclosed Property of Standard Parts Manufacturing Corporation Under Act No. 1976.F. photostat copy of which is attached to this letter as Annex ‘A’. we wish to inform you that the CITADEL INSURANCE & SURETY CO.) were issued by the Register of Deeds of Baguio City on May 5. In its reply to said letter.. (CITADEL.. P. 54474. 2. for short) to whom STANDARD had in the meanwhile (or on February 20. 1976 in the Registry of Deeds.970. A Certificate of Sale dated August 8.) stating therein its desire to redeem the property covered by TCT No.00 was very much lower than the Bank’s total claim of P3. in a letter dated March 5.07. 54474 was also issued by the Sheriff of Rizal (Annex ‘D’. wrote PNB on March 5. August 8. As amended Gentlemen: chanrob1es virtual 1aw library In connection with the above-mentioned property which is covered by TCT No.305. 1974 amounted to P1. P. S-28133 issued in the name of the PNB. a Certificate of Sale dated July 19. offered to redeem the property for only P1. 1976 (Annex ‘I’. on March 5. P 258. PNB."When Standard Parts failed to pay its obligation. 1974 with it as the highest bidder for P1.546. Makati. 1976. INC.621. Inc. Upon failure of Standard Parts to redeem the foreclosed properties within the reglementary period. 1974. 1974 covering TCT No.com. our Company is now exercising the same by tendering to you the redemption price computed as follows: chanrob1es virtual 1aw library P1. up to the time of redemption.F.970.00. 26080 and 26081 (Annexes ‘E’ and ‘E-1’. 87-33-07 & 87-34-44.363.00 — total bid of the PNB per its letter to the Sheriff dated August 8.F. 1976. The foreclosure sale of the Baguio properties and the chattels took place on July 19. however.00.

Very truly yours. and in the name of defendant PNB. contending that the offered price was much lower than P3. On March 11.621. We feel that the Legal Department is in no position to decide the acceptance of your offer because it appears that the amount offered is less than our total claim. it is respectfully prayed that upon the filing of this complaint this Honorable Court forthwith issue an order authorizing its Branch Clerk to accept a Manager’s Check in the amount of P1. Vice Pres. 1976. March 8..970.00 and deposit the same with the Rizal Commercial Banking Corporation under a Savings Account in order that the same shall not remain idle. which is attached to this letter as Annex ‘B’. according to the decision of the trial court. 133-134. 202 Sikatuna Bldg.366. Record on Appeal.970. Thank you.970.621. The following was the reply of PNB: jgc:chanrobles. (Page 8. 1976 wherein you expressed your desire to redeem the property covered by TCT No.com . Africa or Asst.com . and/or such amount as may be found by this Honorable Court to . judgment be rendered. Corpus President Citadel Insurance & Surety Co. Rizal Dear Mr.546.ph "PRAYER "WHEREFORE.) ARTEMIO S." cralaw virtua1aw library (Pp. which PNB maintained was the correct redemption price. 54474 of the Register of Deeds of Rizal which we acquired from Standard Parts Manufacturing Corp. 1976.00 — TOTAL as evidenced by RCBC Manager’s Check No. 1976 in the Registry of Deeds. 1976 Mr. Record on Appeal. Immediately or on even date PNB rejected the above tender. (Sgd. Francisco S.42. The Certificate of Sale dated August 8. 1974 covering TCT No.. 1 as of said date March 6. 1976.) 5. In view of the foregoing. "(a) Ordering defendant to accept the amount so deposited. Raul Leveriza on Monday. therefore. Corpus: chanrob1es virtual 1aw library This refers to your letter of March 5. and after hearing.: a/s" (Pages 131-133. the certificate of sale was registered on March 11. that you see either Vice President Andres L. TIPON Senior Supervising Atty.)FRANCISCO S CORPUS President Att. 54474 was issued by the Sheriff of Rizal and registered on March 14. 1976. Makati. however. MC 194188 dated March 4. (Page 176. Very truly yours (Sgd. Ayala Ave. We suggest. Record on Appeal) 4.) 6. 1976.ph "PHILIPPINE NATIONAL BANK LEGAL DEPARTMENT March 5.P1.621. Inc. PNB’s brief) Notably. CITADEL filed the instant action in the court below with the following prayer: jgc:chanrobles. kindly acknowledge the receipt of the redemption amount and cause the issuance of the corresponding Certificate of Redemption in favor of our Company.00 in the form of RCBC Manager’s Check No. subject to the control and disposition of this Honorable Court. 1976. in the amount of P1. MC 194188 dated March 4.

as amended. Record on Appeal) accompanied the complaint and was actually deposited under a savings account with the same bank by order of the trial court of the same date "in the name of the PNB subject to the control and disposition of the Court. known as the New Charter. 141. Record on Appeal. or Republic Act No. S-28133 issued in the name of PNB. 1976 up to the time possession is actually surrendered to the plaintiff. plus the interests thereon counted from the date of filing of this complaint. 8." (p. the foreclosure sale of the subject property was made on August 8. 7-8) and the corresponding certificate of sale was issued by sheriff on the same day and "registered on March 14. MC 194188 dated March 4. Record on Appeal." (id. 2933.) Timeliness of the redemption To be sure. "(c) Ordering defendant to execute such documents and papers that may be necessary for the transfer of the title and possession of the property in question to plaintiff. Well. So. 6-8. Record on Appeal. known as the new Charter part and parcel of the mortgage contract. Whether the Deed of Assignment is binding and enforceable against defendant PNB." (P. Limitation of Issues "The parties agreed that the issues raised by the pleadings are one of law. 1975 3 as point of reference regarding the date of the registration of the certificate of sale. the parties stipulated in the partial stipulation facts they submitted to the trial court that. "2 What is the correct redemption amount required under the law? "3. what is the legal import or consequence of such express incorporation of and submission to Act 3135 and Republic Act 1300 by STANDARD/CITADEL? Republic Act 1300 entitled "An Act Revising the Charter of the Philippine National Bank" was approved and made effective on . We find the opposing postures of the parties on the timeliness of the redemption here in question a little blurred and confusing." (Pp.com. 1974 (pp. which amended Act No. 1976 and in the amount of P1. We feel it is sufficient to point out that according to the brief of appellant. Whether there was a valid and effective tender of payment. paragraph (g) of the mortgage contract made the provisions of Act No. "4. 1976 TCT 54474 was cancelled and TCT No.ph "(g) The mortgagor hereby waives the right granted him under Section 119 of Commonwealth Act No.) 2 In such ambiguous premises. 1976 in the Register of Deeds. STANDARD/CITADEL stand bound by the same.com . "(b) Ordering defendant to turn over the title and possession of the property in question to plaintiff.00 (Pp. 14-15. "(e) Ordering the defendant to pay the costs of suit. the amount of which is left to the sound discretion of this Honorable Court.) In the light of the foregoing facts. Appellant assumes that on this basis the period of redemption was up to March 10." (Page 15. the predecessor-in-interest of CITADEL. "B.) "On May 14. 3135 or Act No.ph "1. Record on Appeal.) Going by the literal terms of this quoted provision. 1976. We have no alternative than to use March 11. 1612. the truth of the matter is that this detail is tied up inextricably to the main question of law that pervades the whole of this controversy.621. STANDARD.) 7. and CITADEL is bound by such agreement. 1612. PNB’s Brief. as amended. Whether the redemption period has expired. There is no dispute that a manager’s check of the Rizal Commercial Banking Corporation No." Specifically paragraph (g) of said real estate mortgage provides: jgc:chanrobles. "to abide and to be bound by the provisions of the Charter of the PNB. True it is that as underscored by counsel for PNB. What is the law applicable to this case as to the period of redemption? Let us not forget that the mortgage at issue was executed in 1963. who signed the deed of mortgage agreed." (p. to wit: jgc:chanroble s. rather than to try to extricate Ourselves out of such maze.be the lawful redemption price for the particular property in question. In other words.970. as amended and agrees to abide to be bound by the provisions of Act No. 1300. known as the Public Land Act. "(d) Ordering defendant to pay plaintiff damages in the form of attorney’s fees and expenses of litigation. Now. 3135 or Act 2933. or Republic Act 1300. 20. together with its fruits from March 11. "PLAINTIFF FURTHER PRAYS for such other relief as may be found just and equitable in the premises. which amended Act No. 151.

Right of redemption of property foreclosed. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to. And it was exercised before P. We are of the considered opinion and so hold that STANDARD’s/CITADEL’s period of redemption was up to March 10. would alter and modify to the prejudice of any of the parties the terms of the contract under the aegis of the prior law. From all the foregoing. since the promulgation of the Rules of Court of 1940. It was therefore the law when in 1963 the mortgage here in dispute was executed. New Constitution) Stated otherwise. On the other hand. PNB rejected it on the sole and only ground that it considered the amount insufficient. in this instant case. In this connection. PNB had the contractually acquired option to resort either to its Charter. Its Section 6 very clearly governs the right of redemption in extrajudicial foreclosures thus: jgc:chanrobles. therefore. Hence. to make the redemption subject to a subsequent law would be obviously prejudicial to the party exercising the right to redeem. To alter those terms in a manner . 694. and all the costs and other judicial expenses incurred by the Bank by reason of the execution and sale and for the custody of said property. it simply cannot apply." cralaw virtua1aw library Sections four hundred sixty-four to four hundred sixty-six. Republic Act 1300 or to Act 3135. Republic Act 1300. The Court. And so. In fact. 1976 accompanied by a manager’s check of the Rizal Commercial Banking Corporation. the Court finds its hands inert and shackled in the face of the constitutional proscription against the impairment of contracts. Art. became Sections 29.com.D. 20. of its brief on the applicability to this case of "Section 25 of Presidential Decree No. (Sec. for the amount it believed it should pay as redemption price. conventional legal and banking business sense dictates that it must have been because of such omission that paragraph (g) above had to expressly incorporate Act 3135 which provides for extrajudicial foreclosure. taken the position that it was the old PNB Charter. even the principle that no law is unamendable nor unrepealable cannot hold. escape the conclusion that what STANDARD agreed to in respect to the possible foreclosure of its mortgage was to subject the same to the provisions of Act 3135 should the PNB opt to utilize said law instead of Republic Act 1300. The unequivocal tender of redemption was made in the letter of Francisco S. the foreclosure sales took place in 1974 yet. his successors in interest or any judicial creditor or judgment creditor of said debtor. 694. its paragraph (g)." cralaw virtua1aw library Indeed. holds that the redemption was made on time. Stated otherwise. the debtor. when the subsequent legislative enactment. otherwise known as the new PNB Charter" which provides: chanrob1es virtual 1aw library Section 25. When it foreclosed the mortgage at issue. 1976 is of no moment. The same sections were reiterated in the Revised Rules of Court in July 1964. But prescinding from possible legal flaw in such pose. quoted earlier. Right of Redemption of Foreclosed Property — Right of Possession During Redemption Period — Within one year from the registration of the foreclosure sale of real estate. it is quite obvious that any change in the law governing redemption that would make it more difficult than under the law at the time of the sale cannot be given retroactive effect. and such redemption shall be governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-six. evidently overlooked by counsel for PNB is that Republic Act 1300 does not contemplate extrajudicial procedure. the mortgagor shall have the right to redeem the property by paying all claims of the Bank against him on the date of the sale including all the costs and other expenses incurred by reason of the foreclosure sale and custody of the property. of March 5. of the Code of Civil Procedure. IV. P. 6.June 16. namely. In other words. of the Code of Civil Procedure.D. as well as charges and accrued interests. with interest thereon at the rate specified in the mortgage. within one year (or even twelve months) from the date appearing as the date of the registration of the certificate of sale. Indisputably. PNB insists on p. may redeem the same at any time within the term of one year from and after the date of the sale. 1976. seq. Act 3135. inclusive. as already mentioned above. That was an option it freely exercised without the least intervention of appellee. 694 took effect only on May 8. Corpus. Without considering the date the loan was secured and the date of the mortgage contract. We cannot. its President. is of 1924 vintage. 11. 30 and 34 of Rule 39. that is. 4 That CITADEL filed its complaint to compel PNB to accept its redemption only on March 11. 1955. the terms and conditions under which redemption may be exercised are deemed part and parcel thereof whether the same be merely conventional or imposed by law. inclusive. therefore. the application of P. 9 et. it was by virtue of such contractual stipulation and not ex propio vigore that the provisions of the bank’s then current charter bound the mortgagor STANDARD. PNB’s counsel himself has. Republic Act 1300." cralaw virtua1aw library But P. and taking into account only the dates of the foreclosures and auction sales. — The mortgagor shall have the right. 1975. within the year after the sale of real estate as a result of the foreclosure of a mortgage.com . and that all provisions of the charter are enforceable and must be read into all mortgages with the PNB as integral parts thereof.ph "Sec. since the contract of mortgage herein was entered into under a specific law. Clearly indicative of this is Section 20 thereof which provides: jgc:chanroble s.D. Under the terms of the mortgage contract. a well known.D. It was the very law that the above-quoted paragraph (g) of the mortgage contract made reference to. as amended by Act 4018. in so far as these are not inconsistent with the provisions of this Act. or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold. 694 to the mortgage herein involved would violate the Constitution. by virtue of the provision of the mortgage contract precisely cited by PNB. big and reputable banking institution. that was expressly made part of the contract. 694 came into being.ph "Sec. it chose Act 3135. How about the amount needed for such redemption? On this score. to redeem the property by paying the amount fixed by the court in the order of execution.

G. 326-327. supra.546. DBP v. it is not necessary that it be followed by the deposit of the money in court or elsewhere (Enage v. Rule 39) validly tenders the necessary payment for the redemption and the tender is refused. up to the time of redemption. The case of Perez. as successors of the Manila Commercial Company. at least in equity. If anything in that opinion is relevant hereto. We have not really closed Our eyes to the jurisprudence cited by PNB in its brief. PNB. Having thus come to the ineludible conclusion that Act 3135 and Sections 29 to 32 of Rule 39 of the Rules of Court rather than P. Mirang.42 specified by PNB in its reply of March 5. 687) and no interest after such tender is demandable on the redemption money.366. In any event. 1976 the required data. namely: Medina v. Fabros v. In fact. now the Development Bank of the Philippines). that nearly approximates the position PNB is pressing on Us now. a reproduction of Section 708 of the Code of Civil Procedure. as the bank contends and the trial court has held. 694 are the laws applicable to the right of redemption invoked by appellee in this case. (Martinez v. that it did furnish CITADEL on March 5. 626. there could be a possibility that March 5. 336). Pursuant to Section 30 of Rule 39.ph "As we have indicated above. . Perez v. follows in principle the Nepomuceno ruling that the special provisions in the charter of DBP govern in matters of redemption of property acquired by it in a foreclosure sale. because in a portion of the opinion thereof. as already discussed earlier. P. lest it be argued that CITADEL did not include in its tender the amount of assessments or taxes PNB might have paid before the redemption. The Court found no difficulty in not applying Section 6 of Act 3135 because it found that there is in Section 31 of the Charter of the RFC a provision basically similar to Section 25 of Presidential Decree 694. PNB failed to comply with such requirement. "the main issue in this appeal is the application of Section 7. 5 it would appear that all that remains for Us to do is to apply the said legal precepts. There was no more time for CITADEL to have a breakdown of the P3. No. We note that the trial judge. 1979 ed. the Court upheld the RFC’s contention that the whole amount of the mortgagor’s indebtedness should be paid. here Leticia Co. on paying the purchaser the amount of his purchase. 23. supra. 56 Phil. stated: jgc:chanroble s. should be deducted "the value of any rents and profits derived by the (said) bank from the property in question. 66 SCRA 141." (at p. together with the amount of any assessments or taxes which the purchaser may have paid thereon after the purchase. 1976 should be considered as the last day of redemption. . which necessarily includes his successor-ininterest (Section 29. Naturally. As the Court said. 1976 is not clear enough to show the details on taxes and assessments under discussion. 10 Phil. Before passing to another aspect of this case. So. has pointed out that in spite of the requirement in the certificate of sale issued by the sheriff that the purchaser or highest bidder submits within 30 days immediately preceding the expiration of the period of redemption. Campbell.546.366. His Honor. Nov. In this respect we are also of the opinion that the judgment appealed from is correct. Rule 87 of the Rules of 1940 (now Section 7 of Rule 68). Chief Justice Avenceña. The jurisprudence cited by PNB are not applicable Even as We have so far focused Our discussion and resolution of the issues herein on the pertinent statutory provisions. with one per centum per month interest thereon in addition.). Anyway. considering that as earlier pointed out by Us. Agustin. L-14877. But in the instant case. there is no question with regard to the plaintiffs’ right. an appropriate statement of the amount of such assessments or taxes. hence it would be unfair to fault CITADEL for the non-inclusion thereof in its tender. four of which are worthy of mention. 38 Phil. de Escano. (here PNB) at any time within twelve months after the sale. however. this discussion is practically academic because in the manner We are resolving this case. the explanation of PNB is. 694 came too late. a.R. did not involve a redemption in the sense that it is in issue in this case. however. to repurchase the parcels covered by the transfer certificates of title Nos. it is stated that where the judgment debtor. supra." cralaw virtua1aw library In this connection. RFC. We note. . it is that portion thereof that justly and equitably holds that from whatever amount should be payable to the mortgagee Bank. supra. PNB. that the statement of P3.) may redeem the property from the purchaser.D. now being invoked here by PNB. anything said therein at issue may be deemed as obiter.com.42 to find out what items were included therein. PNB. the redemption should be made by paying to the bank the entire amount owed to it by the Manila Commercial Company. PNB argues. 18 Phil. 1960.D. 17 SCRA 833 and DBP v. as correctly underlined by PNB in its brief. Vda. "the judgment debtor — (or his successor-in-interest per Section 29." (Page 655) . this point would be of no moment." Hence. and interest on such last-named amount at the same rate.prejudicial to the mortgagor or the person redeeming the property as his successor-in-interest after the foreclosures and sales would definitely come within the constitutional proscription against impairment of the obligations of contracts. Mirang. The appellants contend that this redemption may be made by only reimbursing the bank what it has paid for the sale made to it. it may not be amiss to mention here that in Moran’s Comments on the Rules of Court (p. 655. We need not elucidate any further on its inapplicability hereto. This is because what was fundamentally the problem therein was whether or not it was obligatory on the part of the bank-mortgagee to foreclose judicially the mortgage inasmuch as the mortgagor died. The question is whether. unavailing. Nepomuceno v. It is the earlier case of Medina v. what confronted the Court was a question relative to a mortgage with the Rehabilitation Finance Corporation (RFC for short. 840) In the Nepomuceno case. 137 and 139. the point involved in the instant case is not even touched in the syllabus thereof in SCRA.

which was a special law. this Court held that "whether or not . described in the complaint. and the sale thus made would carry the right of repurchase on the part of the debtor through the payment of the entire amount of the debt. Our sense of justice cannot permit such inequitous advantage. Since PNB refused to allow the redemption thus legally tendered. Olegario. 1920. We are persuaded that all such considerations would render the result of this case short of what appears to be substantial justice in the light of the situation on hand. The record contains nothing to show that the bank made this waiver of said right. . 3135. even if the request to the sheriff did mention said Act that PNB foreclosed. applying the law strictly. the Court did take into account that the mortgage at issue in that case was executed before the approval of Act 3135 and observed that without such Act. To avoid this loss. as already stated above. might be indebted to the Philippine National Bank. 3135 was already in force.576. in order to sell the mortgaged property extrajudicially. but that action cannot be taken to mean a waiver of its right to demand the payment of the whole debt before the property can be redeemed.com . "When the bank’s right to foreclose the mortgage of the Manila Commercial Company accrued. and at such sale. that obligation was waived when in its letter of rejection. before Act No. 91 Phil. Articles 22 and 2142 of the Civil Code should be the guideposts of Our decision here. 1976. v. there would be unjust enrichment on the part of the debtor-mortgagor in such an eventuality. this Court has already sanctioned redemption by check. P." (Page 651) (Emphasis supplied) Thus. the Philippine National Bank may take possession of the mortgaged property and sell or dispose of it by public or private sale. PNB invokes. 1920 the Manila Commercial Co. 3135 in March. this law. an execution debtor was legally authorized to sell his right of redemption. without the necessity of a judicial action. It strikes Us as rather unconscionable that by a literal application of the law and perhaps due to a mistake in the amount of the bid made by PNB. is a question already decided by this Court in the affirmative in numerous decisions on the precepts of Sections 463 and 464 and other sections related thereto. of the Code of Civil Procedure. De Paterno and Vidal. Towards the concluding portion of the opinion. When CITADEL made its tender on May 5. it did so merely to find a proceeding for the sale. when the bank. This is not quite accurate. it may acquire for itself all or any of the parcels of land. he explained that: jgc:chanroble s. mortgaged four parcels of land with Torrens titles. 761) Neither do We find any substantial weight in PNB’s pose that the transfer or conveyance of STANDARD’s right of redemption to CITADEL and the latter to Leticia Co is not binding on it. Et Al..ph . We have made reference to above in precluding the applicability hereto of P. 6 the bank would not get full satisfaction of its credit. the bank did not invoke it. (Javellana v. . If. which cannot be allowed under the Constitution. Act No. In Lichauco v. the Manila Commercial Company had violated the contract. it would stand to lose P1. 786) More importantly. With this point in mind.com. it is stated that: chanroble s law library : red "On October 30. PNB did not question the personality of CITADEL at all. did not affect the charter of the bank.00 tendered by CITADEL on March 5. On the minor issues We are not impressed that PNB is really serious in its pose that the tender by manager’s check by CITADEL was inefficacious. rather than Act 3135. The foregoing discussion inexorably points to the conclusion that the price of redemption of P1. beyond all doubt the bank would have been able to sell the mortgaged property. Of course. but We have also pointed out earlier that to apply said decree would result in the impairment of the contractual obligation of CITADEL.000 or for whatever amount the Manila Commercial Co.621. Inc. the first and fourth parcels being in the name of the La Yebana Co. before the approval of Act No. if public. We deem it fairer and so hold that considering the unique factual milieu of this case. for in the opening paragraph of the same opinion. 1976 was the correct amount. 40 Phil. Mirasol.ph "It will be remembered that the mortgage contract between the bank and the Manila Commercial Company was executed on October 30. 43 Phil." (The mentioned provisions are carried over in Rule 39 of the Revised Rules of Court. it is to Our mind closer to the truth that it was by virtue of such contractual clause. and the second and third in the name of the Manila Commercial Co. 656657) There is here an implication that in undertaking the foreclosure therein involved. 540. In any event. It is now too late and purely technical to raise such an innocuous failure to comply with Article 1625 of the Civil Code. of any of the conditions of the contract. to the Philippine National Bank. However.But this statement needs clarification. without first having to file a complaint or to give any notice. One of the clauses of the mortgage provides that in case of a violation by the Manila Commercial Co. Said articles provide: jgc:chanrobles. (Gregorio Araneta. Indeed.42 of what it claims was the total indebtedness or outstanding obligation of CITADEL as of March 11. 694. This is the same principle of non-impairment of the contracts by subsequent legislative action. the right of the bank to full payment would have been indisputable." (Pp.970. 694. 3135 took effect. 1976. For one thing.D. there being no showing that PNB was damaged or could be damaged by such omission. resorted to Act No. The mortgage was given to secure the payment of P680. and La Yebana Co. 1924. the PNB relied on Act 3135. being general. Thus. No.D.744.) That the transfers or conveyances in question were not registered is of miniscule significance.

if only to maintain the bank’s liquidity position as conveniently as possible.ph "Another rule is expressed in article 22 which compels the return of a thing acquired ‘without just or legal ground.07. petitioner herein should pay PNB such difference. Endnotes: 1. a liberal construction will be given to our redemption laws to the end that the property of the debtor may pay as many of the debtor’s liabilities". when it refused a redemption legally and validly tendered. 1976 and which was deposited in a savings account. the rentals the said bank it has earned. 1976. Guerrero.a. supra. Acquired assets generally add to liquidity problems of banks. Of course. We may add that in Escaño."ART. 2142.. De Castro and Escolin. This payment must be made within ten (10) days from the finality of this judgment. The foreclosure of the security is a measure of last resort. took no part. nothing could be more proper than to allow the borrower to retain his property. drawing interest apparently less than 12% p. 22.546.576. Should there be any thought that Our resolution of this case is not strictly according to legal principles.42 without any interest as of March 11. voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another.42 in practically over a year and a half only is not disclosed in the record. was its deficiency claim as of August 8. which We deem in the peculiar circumstances at this instant case to be the fairest way of resolving this controversy.970. The German Civil Code has a similar provision (art. taught by common business experience. and not really the acquisition of the collateral. concur. what is of uppermost consideration to such lender is the borrower’s capacity to pay according to the terms stipulated. and when an injury is to follow. the judgment of the trial court against the Philippine National Bank herein on appeal is hereby modified and another one is hereby rendered in favor of the said defendant-appellant bank in accordance with the formula hereinabove stated. it would still be paid by petitioner a certain amount. and. chanroble svirtualawlibrary In closing. upon payment by LETICIA CO of the amount due it pursuant to the above computation. JJ. How P1.621. Certain lawful. compounded annually. it is but in consonance with the Escaño policy that the redemption herein involved be allowed on the basis of the injunction against unjust enrichment. the amount which. under strict technical legal reasoning. instead of PNB losing P1. shall return the same to him. it is but just and proper that PNB should be paid the full amount of P3.366.00 tendered by CITADEL on March 5. which it does not have to account for. that when a bank grants a loan.434.744.42.’ This provision embodies the doctrine that no person should unjustly enrich himself at the expense of another. On the other hand. this Court laid down as a policy that "redemptions are looked upon with favor. Article 2142 makes its enhancement in this jurisdiction most comprehensive..42. Aquino and Abad Santos. Every person who through an act of performance by another.com. provided however that should such amount including the compounded interest at 12% p. so earned be less than P3. JJ." cralaw virtua1aw library Although the report of the Code Commission states that: jgc:chanroble s. applying hereto the principle of unjust enrichment. Jr. no one may unjustly benefit himself to the prejudice of another. since March 11. as explained above. on the other hand.a." cralaw virtua1aw library x x x "ART.a. In the final analysis. 1974 ballooned to P3. and provided." cralaw virtua1aw library it may be said that whatever of the principle of unjust enrichment may not be covered by Article 22. the bank can recover the money it has loaned. That is why this decision cannot be invoked as a precedent for other parties not exactly similarly situated as the appellee in this case. 1976.366. in the name of PNB by order of the trial court should be computed to have earned legal interest or 12% p.546.. or any other means.521. let everyone be reminded that this Court has inherent equity jurisdiction it can always exercise in settings attended by unusual circumstances to prevent manifest injustice that could result from bare technical adherence to the letter of the law and unprecise jurisprudence under it. peculiar instances are naturally excepted. that with this arrangement. secured by any collateral. 812).. No costs. PNB does not have to account to CITADEL/LETICIA CO for any of the rentals it had earned from the time it took possession of the property. hence when by the exercise of the right of redemption.. not to mention what must be quite substantial and considerable. Concepcion.. WHEREFORE. 7 We may add here the observation.366. Consequently. according to PNB’s brief aforequoted. . the amount of P1. which has been one of the mainstays of every legal system for centuries. It is most needful that this ancient principle be clearly and specifically consecrated in the proposed Civil Code to the end that in cases not foreseen by the lawmaker. PNB is hereby ordered to transfer the title to the property in question to LETICIA CO. acquires or comes into possession of something at the expense of the latter without just or legal ground. accordingly.546. PNB having foreclosed on the Baguio properties and the chattels of STANDARD for what appears could have been a fairer price.

which is the date mentioned in the decision of the trial court.2.) . because even if the period were to be deemed as 360 days. However. 4.000. 3. albeit inconsequential in this case. 1975. there could be a legal problem in this regard. 1976. the bid was only P1.000 square-meter lot on Pasong Tamo very close to Buendia Avenue with considerable improvements existing thereon. While Section 6 of Act 3135 speaks of one year. 1980. Although. which under the Civil Code (Article 13) should he counted only as 360 days on the basis of 30 days a month. We do not need further clarification from the parties because even following the data most favorable to appellant. however. there being indications it was worth at least that much. The bank could have bidded the full amount of the indebtedness. limits the period to twelve months. 7. Leticia Co’s substitution for CITADEL was approved by this Court in its resolution of December 15. We do not believe it essential in this case to resolve any point in connection with this conflict of periods.00. since the date of registration was March 11. the 360th day. Section 465 of the Code of Civil Procedure. 6. now Section 30 of Rule 39. PNB claims that the last day for redemption was March 10. Presumably knowing the property to be worth much more than P3M. the proper tender of redemption here was made on March 5. 5.363. 1976. (It is a 4. We consider Ourselves adequately prepared to render a just decision. Somewhere in the record.

The Court of First Instance of Manila. and this fact was alleged by him as proof that he had already paid said fees to the plaintiff. of a private instrument proving a credit. as soon as he had finished rendering them. after hearing the evidence introduced by both parties. without express finding as to costs. and as the trial court very correctly said in the judgment appealed from. according to the complaint. rendered judgment on December 17. ] LEONIDES LOPEZ LISO. and furthermore alleged that the obligation which the plaintiff endeavored to compel him to fulfill was already extinguished. Gibbs. "that an obligation delivered up to the debtor has been paid. as he claims to have done. Defendant-Appellant. pursuant to the last cited article. amount of the fees. the testimony given by . and furthermore. EVIDENCE. in accordance with the statement Exhibit A. the sum of P2." article 1188 of the Civil Code prescribes that the voluntary surrender. PRESUMPTION. by a creditor to his debtor. The second question raised by this appeal involves the question of whether the defendant has really paid the plaintiff. which. 9806. The latter claimed the sum of P2. after entering a motion for a new trial. by means of these proceedings. In the judgment appealed from. and that the creditor’s purpose was not to leave the instrument evidencing the credit in the possession of the debtor. asked for compensation in the sum of P700 only. the sum of P700 before mentioned. appealed from said judgment and forwarded to this court the proper bill of exceptions. With respect to this point. after discussing the matter of the service rendered and after taking into account that the plaintiff. The defendant denied the allegations of the complaint. the amount of his fees he endeavored to collect from the defendant after he had finished rendering the services in question (which receipt was presented by the defendant at the trial as (Exhibit 1) was in the latter’s possession. January 19. holding that it was in no wise proven that. whether the obligation alleged in the complaint has already been extinguished. when from the evidence it appears that the evidence of the obligation was not returned to the debtor. Nevertheless.FIRST DIVISION [G. but was sent to him solely for the purpose of collecting the debt. presented by the plaintiff. because said amount was not paid the plaintiff was entitled to recover from the defendant. Silvestre Apacible for Appellant.R. SYLLABUS 1. as a legal presumption. 1913. are owing for professional medical services rendered by the plaintiff to a daughter of the defendant from March 10 to July 15. — Number 8 of section 334 of the Code of Civil Procedure provides. v. for P700. DECISION ARAULLO.000. that is. RECEIPT AS PROOF OF PAYMENT. and article 1189 of the same Code likewise prescribes that whenever the private instrument which evidences the debt is in the possession of the debtor it shall be presumed that the creditor delivered it of his own free will. 1916. The first question raised by this appeal relates to the amount or value of the fees which the defendant was ordered to pay. which fees the defendant refused to pay. The defendant. if the latter did not forthwith pay the amount mentioned therein. No. We agree with this finding of the trial court. The receipt signed by the plaintiff. ordering the defendant to pay to the plaintiff the sum of P700. J. held that the reasonable value of said services could only be worth said P700. 1913.000 as the reasonable value of his services. notwithstanding the demands therefor made upon him by the plaintiff.000. : These proceedings were brought to recover from the defendant the sum of P2. the medical services rendered by the plaintiff to the defendant’s daughter are given in detail. MANUEL TAMBUNTING. implies the renunciation of his right of action against the debtor. The court. Plaintiff-Appellee. this presumption cannot stand. which was denied. McDonough & Blanco for Appellee.

with the costs of this instance against the Appellant. JJ. it will be presumed that the creditor delivered it of his own free will. the said P700 had not been paid to the plaintiff. By reason of the foregoing. The court.J. . it was not his intention that that document should remain in the possession of the defendant if the latter did not forthwith pay the amount specified therein. In the case at bar the trial court correctly held that there was sufficient evidence to the contrary. and Trent. In the present case. C. reached the conclusion that. as well as by their respective witnesses. Torres. it cannot be said that these circumstances concurred. After a careful examination of the evidence we find no reason whatever for changing or modifying this finding of the court below. Johnson. concur.both the plaintiff and the defendant. Moreland. The trial judge had the plaintiff and the defendant and their witnesses before him. as stated in the laws cited. Arellano." Article 1188 of the Civil Code also provides that the voluntary surrender by a creditor to his debtor. implies the renunciation of the right of action against the debtor.. it is necessary.. inasmuch as when the plaintiff sent the receipt to the defendant for the purpose of collecting his fee. after hearing the testimony. we affirm the judgment appealed from. in order that such a presumption may be taken into account. It is true that number 8 of section 334 of the Code of Civil Procedure provides as a legal presumption "that an obligation delivered up to the debtor has been paid. in view of the preponderance thereof in favor of the plaintiff and of the circumstances connected with the defendant’s possession of said receipt Exhibit 1. So ordered. he heard them make their respective statement and was in a position to know which of them was telling the truth and to determine on which side the preponderance of the evidence lay. is entirely contradictory. of a private instrument proving a credit. But the legal presumption established by the foregoing provisions of law cannot stand if sufficient proof is adduced against it. and article 1189 prescribes that whenever the private instrument which evidences the debt is in the possession of the debtor. unless the contrary is proven. Furthermore. that the evidence of the obligation be delivered up to the debtor and that the delivery of the instrument proving the credit be made voluntarily by the creditor to the debtor. notwithstanding that the defendant was in possession of the receipt.

the debtor is not relieved of his liability. OBLIGATION AND CONTRACT. the debtor may relieve himself of the liability by the deposit (consignacion) of the thing due." cralaw virtua1aw library In the complaint. SYLLABUS 1. previous notice thereof must be given to the persons interested in the performance of the obligation..." According to article 1177. True that consignation of the redemption price is not necessary in order that the vendor may compel the vendee to allow the repurchase within the time provided by law or by contract. V. there is no allegation that the amount of debt was consigned in court after tender of payment had been made and rejected. PAYMENT. Briones. a parcel of land was mortgaged in favor of the creditor. . — Tender does not in itself relieve the vendor from his obligation to pay the price when redemption is allowed by the court. The rule regarding payment of redemption prices is invoked.] FELISA R.. Montemayor.. For that reason. but was rejected by the creditor. JJ. tender of payment is sufficient to compel redemption but is not in itself a payment that relieves the vendor from his liability to pay the redemption price. FRANCISCO MAGNO. The order of dismissal is correct. according to article 1178. when required. accompanied by proof of tender. (Rosales v. "in order that the deposit (consignacion) of the thing due may release the obligor. plaintiffs and appellants borrowed from defendant and appellee P4. EFFECT OF. In other words. DECISION MORAN. Defendant filed a motion to dismiss upon the ground that plaintiffs have no cause of action. On September 1944.SECOND DIVISION [G. — "If a creditor to whom tender of payment has been should refuse without reason to accept it. Juan S. and Reyes. 1949. "in order that the deposit (consignacion) of the thing due may release the obligor. an action was filed on November 18. Pablo. ID.) We have held that in such cases a mere tender of payment is enough. PAEZ ET AL. M. with costs against plaintiffs and appellants. In other words.J. Defendant-Appellee. v. Article 1176 of the Civil Code provides that "if a creditor to whom tender of payment has been made should refuse without reason to accept it. the debtor may relieve himself of the liability by the deposit (consignacion) of the thing due. Perfecto. accompanied by proof of tender. when required. C. if made on time. 1945 asking that the obligation be declared as already paid and the deed of mortgage be cancelled.R. as provided by law. hence.. tender of payment is sufficient to compel redemption but is not in itself a payment that relieves the vendor from his liability to pay the redemption price. previous notice thereof must be given to the persons interested in the performance of the obligation. and of notice of the deposit in other cases. 25 Phil. Bengzon. according to article 1178. Tuason. ID. Rustia for Appellee. But that tender does not in itself relieve the vendor from his obligation to pay the price when redemption is allowed by the court. And the consignation shall be made. From all the foregoing. the order appealed from is affirmed. concur. "by delivery to a judicial authority of the things due." cralaw virtua1aw library 2. as a basis for action against the vendee to compel him to resell. Paras. Plaintiffs-Appellants. and of notice of the deposit in other cases. No. Therefore." According to article 1177. : On October 1943. Fortich Zerda and Buenaventura Evangelista for Appellants. April 27. As a security.000 in Japanese Military notes. The motion was granted. TENDER OF PAYMENT IS SUFFICIENT TO COMPEL REDEMPTION BUT IS NOT IN ITSELF A PAYMENT. Feria. payment of this debt was offered and tendered. "by delivery to a judicial authority of the things due. 495. L-793. there being no allegation that the thing due was consigned in court. with the promise to pay within a period of five years." And the consignation shall be made. this appeal by the plaintiffs. TENDER OF PAYMENT WITHOUT CONSIGNATION. Reyes and Ordoveza.

and it was error for the lower court to direct appellee to ask for the execution thereof. He would have been liable only from the moment valid consignation had been made. whereas with respect to debts. DECISION GUTIERREZ DAVID. while in the latter two cases. 3.: This is an appeal by defendant Fulgencio Medrano from a decision of the Court of First Instance of Ilocos Norte. On January 31. Ruiz. Hence. 1944. 18. and he cannot be made liable to the debtor for the fruits he may have received from the time tender of payment was made or for any other damage which may have resulted from his non-acceptance of the proffer of payment.200. Conrado Rubio for Appellee.FIRST DIVISION [G. Ruiz & Ruiz for Appellant. declared valid the redemption of the land mortgaged to Pedro Medrano and invalid the redemption of the land mortgaged to Fulgencio Medrano.R. they do not have to effectuate consignation. No. On May 3. v. EXECUTION. the indebtedness is not discharged and the effects of payment cannot take place. and that ownership over them had been consolidated in the plaintiffs. JUDGMENTS. Dingras. thereunder. but merely specified the nature of the contract between the parties and defined their rights. the mortgage debtor is discharging an obligation. Francisco Capalungan paid and delivered to Pedro Medrano the total sum of P1. Ruiz. — One of the modes by which an obligation is extinguished is tender to payment and consignation. Francisco Capalungan executed in favor of Pedro Medrano a deed over another parcel of land in the same sitio. On May 22. PAYMENT. ID. — Since in the case at bar the Court of Appeals did not order appellant to do anything for or to pay any amount to appellee.00 a parcel of land in San Laureano. which deed was similarly denominated and contained substantially the same provisions as the first mentioned contract. the legal redemptioner and the vendor a retro are exercising a privilege. EFFECT ON RIGHT OF CREDITOR OVER THE PROPERTY MORTGAGED. Should the repurchase price be refused. Where there is a failure to consign with the court. 1960. FULGENCIO MEDRANO. Fulgencio and Pedro Medrano then filed in the Court of First Instance of Ilocos Norte a suit against Francisco and Paciano Capalungan to annul the repurchase of the lands made from Pedro Medrano and to secure judgment declaring that Francisco Capalungan has lost the right to repurchase said lands.. all the latter two have to do is to tender payment within the prescribed period. The trial court. which is a kind of payment. ordered the defendants to receive from the clerk of court the redemption price of P1. No. in order to preserve their right. tender of payment without consignation does not constitute valid payment..] FRANCISCO CAPALUNGAN. 1933.800. ID. DISTINCTION BETWEEN MORTGAGE DEBTOR REDEEMING THE PROPERTY AND VENDOR A RETRO REPURCHASING THE PROPERTY. If the creditor to whom tender of payment has been made refuses without just cause to accept it. TENDER OF PAYMENT AND FAILURE OF CONSIGNATION. with right to repurchase within ten years from the sale. the debtor shall be released from responsibility by the consignation of the thing due. The contract provided further that the vendee a retro shall have no right to dispose of the land while the contract was in force but would only have the right to enjoy possession thereof. there was nothing to be executed under said decision. Ilocos Norte. 1931. L-13783. defendant andAppellant. May 18. SYLLABUS 1.00 deposited there by Fulgencio Medrano and . plaintiff and appellee. is that in the first case. after finding the two contracts to be equitable mortgages. the creditor has the right to enjoy the property mortgaged to secure the indebtedness. Francisco Capalungan executed in favor of Fulgencio Medrano a deed denominated "compraventa con pacto de retro" whereby he transferred to the latter for P1. 2.200. — The distinction between the case of a mortgage debtor attempting to redeem the mortgaged property and the cases of the legal redemptioner and the vendor a retro trying to repurchase the property. WHEN IT IS IMPROPER. OBLIGATIONS AND CONTRACTS. J.00 for the redemption and/or repurchase of the two parcels of land subject matter of the two deeds. So.

and the lower court erred in directing appellee to ask for execution thereof. Reyes. 1953.00 has not been paid to him.00.C. whereas with respect to debts.200.00 only. . However.00. the mortgage debtor is discharging an obligation. 25 Phil. JJ. Wherefore. Inasmuch as appellee never consigned the sum due with the court. Ilocos Norte.200. concur.205. the appellant." Defendant Fulgencio Medrano appealed to this Court. the lower court ordered defendant to give plaintiff 10 1/2 uyones of palay or their total value in the amount of P577. all they have to do is to tender payment within the prescribed period. 1954. Should the repurchase price be refused. In the first case. the legal redemptioner and the vendor a retro are exercising a privilege.200.00 he had deposited there.500. the appealed decision is hereby modified. 235. C. It merely specified the nature of the contract between the parties and defined their rights thereunder. 5425).50. appellee is still under obligation to pay the indebtedness of P1. 46 Off. and he cannot be made liable to appellee for the fruits he may have received from the time tender of payment was made. Consequently. Garcia (CA). (2) in concluding that appellant was not justified in refusing the offer of payment. so we cannot order appellee to reimburse him therefore. Francisco Capalungan filed in the same court. As declared in the appellate court’s decision in Civil Case No. The contract expressly provided that the mortgage creditor. On appeal. Consignation not having been made.50 representing the expenses incurred by reason of the execution of the deed. 2406.200.50 was spent for registering the document in the registry of deeds. 83 Phil. Bautista Angelo. 47 Off. Appellant does not have to pay damages nor does he have to deliver to appellee the products he received from the time payment was tendered. Gaz. and to pay moral damages of P100. Appellee still owes appellant the sum of P1. Labrador. they do not have the effectuate consignation. One of the modes by which an obligation is extinguished is tender of payment and consignation. 104. Hence appellant still has the right to enjoy the property. in order to preserve their right. No.00. This is a kind of payment. 18. Bengzon. We have to distinguish the case of a mortgage debtor attempting to redeem the mortgaged property. Montemayor. the debtor shall be released from responsibility by the consignation of the thing due (Article 1256. The court subsequently amended its decision by ordering plaintiff "to ask for the issuance of the corresponding writ of execution for the satisfaction of the decision of the Court of Appeals rendered in Civil Case No.00. and Barrera. the indebtedness was not discharged and the effects of payment cannot take place.205. and therefore prayed that defendant be ordered to receive said amount from plaintiff and to execute the proper deed of release. the contract between the parties is an equitable mortgage. but the latter refused to accept the money.. So. The contract indeed provides that appellee should pay for such expenses. from the cases of the legal redemptioner and the vendor a retro trying to repurchase the property. In the latter two cases. and (4) in ordering appellant to deliver to appellee 10 1/2 uyones of palay and moral damages in the amount of P100. Padilla. He is ordered. Court of First Instance of Ilocos Norte. If the creditor to whom tender of payment has been made refused without just cause to accept it.) . tender of payment without consignation does not constitute valid payment (Paez v. there was nothing to be executed under said decision. [De Jesus v. Neither can he be made liable for other kinds of damages which may have resulted from his non-acceptance of the proffer of payment. to accept payment and to execute the proper release paper upon payment to him by appellee of the sum of P1. there is no showing that it was appellant who paid for the same. Under the contract. Rosales v.J. has the right to possess the land and to enjoy the fruits thereof. Magno. as long as the sum of P1.200. On June 23.50. 235.. Without costs. the present action against Fulgencio Medrano. Gaz. Dingras. 235..200.C. payment was never effected. And it is also true that the record discloses that said sum of P5.200. In May. alleging that the lower court erred (1) in ordering appellee to ask for the issuance of a writ of execution for the satisfaction of the decision of the Court of Appeals in Civil Case No. appellee personally approached appellant and offered to pay him the sum of P1. however. N. to deliver to plaintiff the palay he received for the agricultural year 1953-1954 and all other palay he may have received from that time until actual execution of the deed of release. 495]. alleging substantially the facts outlined above.00 but defendant refused to accept it and to execute the corresponding deed of redemption. (3) in not finding that the redemption price should be P1. and further averring that he tried to redeem the land from defendant by tendering the sum of P1. There is no basis for appellant’s contention that appellee should pay him P1. the Court of Appeals affirmed the lower court’s decision. After trial.00 and the costs. Paras.00 as actual and moral damages resulting from his unwarranted refusal. the P5. He would have been liable only from the moment valid consignation had been made.00.50 and not P1. and to pay plaintiff P2. which indebtedness is secured by the mortgage on the property of appellee located in San Laureano.ordered Pedro Medrano to receive from the clerk of court the redemption price of P600. and to deliver to defendants possession of the land redeemed from him. The decision of the Court of Appeals did not order appellant to do anything for or to pay any amount to appellee.

43 SCRA 136). FORTUNATO BARGAYO. REMEDY OF LESSEES WHEN OWNERS OF LOT FAIL TO COLLECT OR REFUSE TO ACCEPT RENTALS. they did not thereby acquire the legal status of tenants. provides as additional ground for judicial ejectment the need of the owner/lessor to repossess his property for his own use or for the use of any member of his family as a residential unit. NATURE THEREOF AS DIFFERENTIATED FROM FORCIBLE ENTRY AND UNLAWFUL DETAINER. No. all surnamed VELEZ. their possession is by tolerance. — Even if the case were to be decided as an ejectment case. CFI Cebu Branch XIII. (Cf. Only Marcial Burgos alleged that he had an oral agreement with Rodrigo Velez. MARCIAL BURGOS. LEOPOLDO LINES. — The petitioners’ need of the premises for their own use or for the use of any member of his family as a residential unit entitles them to the possession of the lots in question. ACCION PUBLICIANA. all others surprisingly failed to testify that they had such an oral agreement of lease. — The failure of the owners to collect. It should be recalled that this is a case of accion publiciana. v. Neither is it a case of unlawful detainer because the preponderance of evidence shows that the occupancy of private respondents on the lot in question is due to the tolerance of the owners thereof and against the latter’s will. NATIVIDAD BAJARIAS.. A GROUND THEREFOR.R. E. Petitioners. HON. MAGIN.: . 25. (Pangilinan v. Jr. Although respondents had been paying nominal rentals ranging from P4. ALDING ACEDERA. CASE AT BAR. Garcia. the insistence of respondents that they are lessees and. ID. and IMELDA. City of Manila v.00 per month for some time. Et. 2.. EJECTMENT UNDER PRESIDENTIAL DECREE NO. ID. v. Al. RAFAEL ALQUISALAS. 20 suspended ejectment when the lease is for an indefinite period. VICTOR ALFAFARA. the purpose of which is being to establish who have a better right to possess.. 1979.. P. DECISION GUERRERO. ID. — Whether or not respondent Judge acted with grave abuse of discretion must be resolved in the affirmative. respondents are squatters. 1984.00 to P12. They likewise admit that their houses were constructed without building permits. Squatting is unlawful and no amount of acquiescence converts it into a lawful act. the debtor shall be released from responsibility by the consignation of the thing or sum due. Respondents. MAGDALENA TESORO... FABIANA ALLISON. 3. 20. CASE AT BAR. which took effect on April 10. 1983). NEED OF OWNER/LESSOR TO REPOSSESS PROPERTY FOR HIS OWN USE OR FOR THE USE OF ANY MEMBER OF HIS FAMILY AS A RESIDENTIAL UNIT. Article 1256 of the Civil Code provides that "if the creditor to whom tender of payment has been made refuses without just cause to accept it. Oct. ID. NONPAYMENT OF RENTAL. Et Al. ROSITA GARCIA. VIDAL BUSTAMANTE. Batas Pambansa Blg. 27. 58399. J. G. MAXIMO CABAHUG.. CASE AT BAR. JUANITO. Said Presidential Decree No. No. There is no allegation of forcible entry in the complaint. RAMON TEJANO.. SYLLABUS 1. SOCRATES. Presiding Judge. Gabriel. Illegal constructions constitute public nuisance per se.. HILARIO GAVIOLA. (Bernabe. Private respondents admit that they have no written contract of lease with the petitioners not with petitioners’ predecessor in interest. Pedro L. CELSO AVELINO. February 20. PLACIDA TEJANO. LEASE.. such owner or immediate member not being the owner of any other available residential unit. ELISEO BELARMA. or their refusal to accept the rentals are not valid defenses. MAURA BELARMA. under the protective mantle of Presidential Decree No. 19 SCRA 413). L-48448. Judge Dayrit. for Petitioners. PROPERTY. They pose problems of health and sanitation. JUANITA VERGARA. A GROUND THEREFOR.SECOND DIVISION [G. Aguilar. ID. Et Al. Albino for Private Respondents. 20 loses ground when We consider the finding of fact that respondents had not been paying any consideration for the occupancy of their respective premises. FLORO COROCOTO.. In the true sense of the word. It did not suspend ejectment on other grounds like lack of payment of the rental stipulated. ID." cralaw virtua1aw library 4.R. CIVIL LAW. As such. and AMBROSIO VILLACES.] CRESENCIO. ID. ID. therefore.

they alleged that they have been occupying portions of the lots by virtue of oral agreements of lease for an indefinite period. 2-A to 2-I) and claimed that other receipts were lost. petitioners made again an extrajudicial demand in a letter which required respondents to vacate the premises within 15 days at the same time threatening them with prosecution under Presidential Decree No. petitioners cite Article 1256 of the Civil Code where mere willingness to pay is not payment.000. 20. that the present action is barred by res judicata and or prior judgment and that the present action. following the suspension of judicial ejectment by Presidential Decree No. the plaintiffs below brought this instant petition for certiorari. Around the end of 1973. In support of their claim of payment of rentals. petitioners filed an ejectment case before the City Court of Cebu.com : virtual law library In their answer. Rodrigo Velez’ daughter. particularly Natividad Bajaras. 1256. that respondents are not only occupying the premises but also accepting boarders and/or using the same for commercial purposes and that several demands have been made to give way to the needs of petitioners and their respective families but respondents maliciously.00 to P12. is essentially one for unlawful detainer since the last demand to vacate was made less than a year ago. R-17011. respondents admitted the ownership of the land by petitioners. therefore. Branch XIII dismissing their complaint for recovery of possession of five parcels of land pursuant to Presidential Decree No. which case was docketed as Civil Case No. 20 does not mean that (1) they are freed from paying rentals for the lots in question. On July 3. thus: jgc:chanrobles. (2) they can use the lots for commercial purposes. 5311-A-2-C. petitioners again advised respondents that they needed the premises for their own use and ordered them to vacate the premises by removing their dwelling units from the lots. paying monthly rentals for their respective portions ranging from P4.00. p. Petitioners contend that the preponderance of evidence shows that the occupancy of private respondents on the lots in question is due to the tolerance of the owners thereof and against the latter’s will. In an extrajudicial partition. cannot be a valid ground for judicial ejectment of the former. 772 for the crime of squatting.00. the debtor shall be released from responsibility by the consignation of the thing or sum due. (Decision of the CFI. 20. then assessed at P17. 1970. privileged to continue staying on the lots in question pursuant to Presidential Decree No. Juanito. pursuant to Presidential Decree No. Maura Belarma and Placida Tejano. 1977. The evidence shows that the five parcels of land all located at Katipunan Street. 1976. issued by the President on March 15. and (3) they can refuse to adduce evidence — specifically referring to the twelve respondents who did not testify on their behalf. if at all there is any cause of action. thereby removing said respondents from the protective mantle of Presidential Decree No. Rollo." (sic. Magin.00 and known as Lots 5311-A-2-A. chanrobles law library : red . At least one of them. 20. personal use by the plaintiffs and/or then families of the said land. Hilario Gaviola. respondents changed their minds and refused to vacate. Upon their refusal. at least six of them presented one or two receipts dated 1973 or earlier (Exhibits 2. 1974 on the ground that there exists no cause of action. the trial court ruled: jgc:chanrobles. should be October 12. the said lots were adjudicated to petitioners herein on June 16. are using the premises not only as residences but also stores while Alding Acedera is using her residence as a boarding house. 1972)." cralaw virtua1aw library Petitioners also claim that they had presented evidence that some respondents. Segundo Macatol and Hilario Gaviola. abusively and defiantly refused to accede to petitioners’ lawful demands. Conceding that respondents are lessees.ph "Art. petitioners claim that Presidential Decree No. 20. Cebu City. the father of petitioners. 1976. petitioners made a demand to vacate upon respondents who asked an extension of one year but thereafter. But all respondents admitted not having paid rentals since 1973. petitioners invoke the equal protection rights guaranteed by the Constitution contending that respondent Judge’s undue application of Presidential Decree No. were formerly owned by Rodrigo Velez.com . produced what he claimed as a building permit but the same turned out to be a mere application. petitioners filed the complaint for recovery of possession of the aforesaid five parcels of land alleging that except for Magin Velez. they have no other lot of their own and are living on other persons’ premises. But in their special and affirmative defenses. constitutes a denial of said constitutional provision. 20. chanrobles. If the creditor to whom tender of payment has been made refuses without just cause to accept it.00 to P12. Socrates and Imelda. the City Court dismissed the case without prejudice in an Order dated August 3. for grave abuse of discretion. As early as 1970. In answer to the argument of respondents that they are willing to pay rentals if petitioners send collectors. 20 in spite of the undisputed fact that petitioners have no other lot of their own and are renting other people’s properties.ph "It appearing that the defendants are lessees of the portions of the land in question wherein their respective dwelling units are erected. except Magin Velez (who nevertheless wants to recover his property for the use of one of his children who is married). 30). chanrobles virtual lawlibrary After the case was submitted for decision. all surnamed Velez. 5311-A-2-B. On August 5. Rodrigo Velez. some reasoning out that nobody collected and others claiming that Fabiola Velez Garganera. the decision dated May 22. On the ground that respondent Judge of the Court of First Instance of Cebu acted with grave abuse of discretion in the exercise of his judicial functions by holding that private respondents are lessees and. 1978 of the Court of First Instance of Cebu. Finally. On motion of respondents. They also testified that they have been paying rentals for their respective portions ranging from P4. claimed to have bought their houses from third persons with the understanding that they should pay rentals to the landowner. refused to accept their rentals. 5311-A-2-D and 5311-A-2-F.This is a petition for certiorari filed by Cresencio.com . seeking the reversal. p. Eight of the twenty respondents testified that they are the original occupants of the lots while two of them. 5.

Concepcion. There is no allegation of forcible entry in the complaint. the petition for certiorari is granted. Court of Appeals and Paraguas. Elemental sense of justice and fairness dictates that it must be so. this Court held that "the retroactive application of Batas Pambansa Blg." The case of Betts v.. Et Al. 97 SCRA 439. 1979. 20 had been held to be not without exception. 20 is not well taken. v." chanroble s.. 20 loses ground when We consider the finding of fact that respondents had not been paying any consideration for the occupancy of their respective premises. Et Al. 1983). (Pangilinan v. 43 SCRA 136). Jr. 25. the purpose of which is being to establish who have a better right to possess. They likewise admit that their houses were constructed without building permits. It could not have been the intention of the said decree to deprive the owner of the rightful use of her home. when petitioners reneged on their promise to look for another house in the mistaken belief that PD 20 gave them a preferential right over that of the owner. reaffirmed that "Presidential Decree No.Whether or not respondent Judge acted with grave abuse of discretion must be resolved in the affirmative. (Cf. G. chanrobles. 20 is not in order. not being owners of any other dwelling place. the insistence of respondents that they are lessees and. No. Gutierrez v. their possession is by tolerance.. Court of Appeals. 97 SCRA 439). Oct. Aquino. Matias. L-45071.ph : virtual law library Even before the effectivity of Batas Pambansa Blg. March 17. Garcia. 95 SCRA 313. SO ORDERED. Jr.. 95 SCRA 313. It did not suspend ejectment on other grounds like lack of payment of the rental stipulated..R. Aguilar. they did not thereby acquire the legal status of tenants. May 30. Matias.com. provides as additional ground for judicial ejectment the need of the owner/lessor to repossess his property for his own use or for the use of any member of his family as a residential unit. G. this Court said that "petitioners’ reliance on the provision of Presidential Decree No. the debtor shall be released from responsibility by the consignation of the thing or sum due. 20 does not sanction the deprivation of a lessor of residential property in extreme need of the leased premises for his own use of his right to terminate the lease and recover possession of his property. . concur. De Castro and Escolin. Private respondents admit that they have no written contract of lease with the petitioners not with petitioners’ predecessor in interest. It was also held therein that "the right of the private respondents over the property which they own in order to use the same as their residence. all others surprisingly failed to testify that they had such an oral agreement of lease.R. 115 SCRA 318. 58399. more so. 90 SCRA 1.. 20 "buttresses the right of respondent Llave to judicially eject petitioner Rantael from the leased premises. City of Manila v. Article 1256 of the Civil Code provides that "if the creditor to whom tender of payment has been made refuses without just cause to accept it. G. such owner or immediate member not being the owner of any other available residential unit. 97 SCRA 453. Jose L. 1983. under the protective mantle of Presidential Decree No. which took effect on April 10. Hon. this Court ruled that "extreme necessity for personal use of the property entitles the owner to exemption from the operation of PD 20 which suspends the provision of Article 1673 of the Civil Code on judicial ejectment. this Court held that "a strict and rigid compliance with Presidential Decree No. No. is hereby REVERSED and SET ASIDE. 25. Judge Dayrit. In Ongchengco v. Betts v. (Alejandro Melchor. Makasiar (Chairman). Morja. Although respondents had been paying nominal rentals ranging from P4..com . Batas Pambansa Blg. Illegal constructions constitute public nuisance per se. CFI of Kaloocan City. or their refusal to accept the rentals are not valid defenses. As such. therefore. 25 to pending ejectment cases is already a settled matter and may no longer be questioned. 25 which superseded P. 1983. Al. City Court of Zamboanga. Et. chanrobles virtual lawlibrary The failure of the owners to collect. The decision of the defunct Court of First Instance of Cebu.00 per month for some time. No. Presidential Decree No. JJ. 121 SCRA 438." In Rantael v. City Court of Zamboanga. this Court upheld the right of the lessor to judicially eject the lessee on the ground not only that "expiration of period of written lease contract is manifestly present" but also because Batas Pambansa Blg. Court of Appeals. etc. Ongchengco v. ordering respondents to vacate the premises in question and to remove their respective constructions and/or improvements therefrom within sixty (60) days from notice." In Santos v." cralaw virtua1aw library Independently of the foregoing. dismissing the complaint of petitioners." Then. in Tan Tok Lee v. the petitioners’ need of the premises for their own use or for the use of any member of his family as a residential unit entitles them to the possession of the lots in question. for an exemption from its provisions is warranted for humanitarian reasons. Branch XIII. In the true sense of the word. L-35256. 19 SCRA 413).ph : virtual law library WHEREFORE. To deny the owner of the use and possession of her property would be tantamount to depriving her of her constitutional right to abode. Neither is it a case of unlawful detainer because the preponderance of evidence shows that the occupancy of private respondents on the lot in question is due to the tolerance of the owners thereof and against the latter’s will. (Bernabe. Et Al.D. It should be recalled that this is a case of accion publiciana. respondents are squatters. may not be denied. Only Marcial Burgos alleged that he had an oral agreement with Rodrigo Velez. 20 suspended ejectment when the lease is for an indefinite period.R. Even if the case were to be decided as an ejectment case. v. Cantada. A new judgment is hereby entered in favor of petitioners." Again. Said Presidential Decree No. etc. Et Al.00 to P12. Squatting is unlawful and no amount of acquiescence converts it into a lawful act. Such right is expressly recognized by Batas Pambansa Blg. 27. They pose problems of health and sanitation.. 25. in Sinclair v. Abad Santos.