SPOUSES TRINIDAD AND EPIFANIO NATINO,

petitioners, vs. THE INTERMEDIATE

APPELLATE COURT, THE RURAL BANK OF
AGUILAR, INC. AND THE PROVINCIAL SHERIFF
EX-OFFICIO OF PANGASINAN, respondents.
Jose P. Villamor for petitioners.
Oscar A. Benzon for private respondents.
Bitty G. Viliran for Rural Bank of Aguilar, Inc.
G.R. No. 73573 | 1991-05-23

DECISION

DAVIDE, JR., J.:

Unsatisfied with the decision of 4 June 1985 and the resolution
of 23 December 1985 of the then Intermediate Appellate Court
(IAC) in A.C.-G.R. CV No. 69539 1 which, respectively, reversed
the decision of the then Court of First Instance of Pangasinan,
Branch II, of 1 December 1981 in Civil Case No. 15573, and
denied the motion for the reconsideration of the 4 June 1985
decision, petitioners filed with this Court the instant petition to
seek reversal thereof. They submit one principal issue: whether
or not the conclusion drawn by the Intermediate Appellate
Court from proven facts is correct. 2
The following facts are not disputed:
On 12 October 1970 petitioners executed a real estate
mortgage in favor of respondent bark as security for a loan of
P2,000.00. Petitioners failed to pay the loan on due date. The
bank applied for the extrajudicial foreclosure of the mortgage.
At the foreclosure sale on 11 December 1974 the respondent
bank was the highest and winning bidder with a bid of
P2,945.11. A certificate of sale was executed in its favor by the

sheriff and the same was registered with the Office of the
Register of Deeds on 29 January 1975. The certificate of sale, a
copy of which was furnished the petitioners by registered mail,
expressly provided that the redemption period shall be two
years from the registration thereof.
Since no redemption was made by petitioners within the twoyear period, which expired on 29 January 1977, the sheriff
issued a Final Deed of Sale on 15 February 1977.
Petitioners, however, claimed that they were granted by
respondent bank an extension of the redemption period; but
the latter denied it.
On 22 November 1979 respondent bank file a petition for a writ
of possession, which petitioners later opposed on the ground
that they had consigned the redemption money of P4,000.00
on 12 December 1979. The court rejected the opposition and
issued the writ of possession. However, to prevent its
execution, petitioners instituted with the then Court of First
Instance of Pangasinan a complaint against respondent bank
and the Ex-Officio Provincial Sheriff for the annulment of the
aforementioned final deed of sale and for the issuance of a writ
of preliminary injunction. The case was docketed as Civil Case
No. 15573 which was raffled to Branch II thereof In their
complaint petitioners alleged that the final deed of sale was
prematurely issued since they were granted an extension of
time to redeem the property.
In resolving the issue of extension of the redemption period,
the trial court, in its Decision of 1 December 1981, made the
following findings and conclusion:
xxx xxx xxx
"From the bank's evidence, it is difficult to believe that the
plaintiffs who are personally known to the president and
manager herself, and from whom she had to hire trucks, would

not have made any move or offer to redeem the property

within the redemption period. The presumption is that they
exercised ordinary care of their concerns (Sc. 5 (d), Rule 131,
Rules of Court, Cabigao vs. Lim, 50 Phil. 844). If indeed, the
plaintiffs made no such offer during the redemption period, the
defendant bank should have presented evidence rebutting the
plaintiffs' evidence. But it did not. While the plaintiff testified
that the tender was made to Mr. Salgado, loan clerk, and Mr.
Madrid, Acting Manager of the Bank and also board members
Dr. Jing Zarate and Mr. Rosario, none of them were presented to
rebut plaintiffs' evidence. Hence, the presumption that if their
testimony were produced, it would be adverse to the defendant
bank under Sec. 5(e) Rule 131 of the Rules of Court, would
apply.
Furthermore, the very evidence of the defendant bank shows
that there was indeed an extension of the period to redeem the
property. The statutory period of redemption granted the
mortgagor in the certificate of sale registered on January 29,
1975 was 2 years. The period should have terminated on
January 29, 1977. However, the Sheriffs Certificate of Final sale
was only executed on February 15, 1977 and registered only on
November 14, 1979 which registration date is the effective
date of the confirmation of the sale which cuts off redemption.
Such extension of nearly 3 years strengthens the plaintiffs'
claim that indeed, there was an agreement to extend the
redemption date.
The plaintiffs' evidence has shown that there was an
agreement between them and the defendant bank through its
personnel and its president and manager, acting as its agents
to extend the period for redemption for the plaintiffs. However,
the plaintiffs were not given a specific time to pay and redeem
but were given by the President and Manager of the bank such
time when their means permit them to do so. This created an
obligation with a period under Art. 1180 of the Civil Code of the
Philippines, which provides:

'Art. 1180. When the debtor binds himself to pay when his
means permit him to do so, the obligation shall be deemed to
be one with a period, subject to the provisions of Article 1197.'
This does not mean that the condition was exclusively
dependent of the will of the plaintiffs, for they had already
promised payment. If therefore became necessary, under
Article 1197 for the Court to fix the term in order that the
condition may be fulfilled. Any action to recover before this is
done is considered premature (Patente vs. Omega, 93 Phil.
218).
That agreement or contract entered into between the President
and Manager of the bank was not in writing is of no moment
since under Article 1315 of the Civil Code,' contracts are
perfected by mere consent, and from that moment the parties
are bound not only to the fulfillment of what has been
expressly stipulated but also to all the consequences which
according to their nature, may be in keeping with good faith,
usage and law." The defendant's claim that the agreement
must be in writing citing the ruling in the case of Pornellosa vs.
Land Tenure Administration, 1 SCRA 375, only applies to
executory contracts, not to those either totally or partially
performed, (Inigo vs. Estate of Maloto, 21 SCRA 246). In this
case, the bank had already partially performed its obligation
thereunder by extending the period redemption from January
29, 1977 to November 14, 1979.
The agreement does not novate the original contract of
mortgage but only changes one of its conditions, that which
concerns the period of redemption. The period of redemption
may be extended by the parties under special circumstances
(Lichauco vs. Olegario, 43 Phil. 540, 542). This the parties may
do, since the right of the mortgagee to demand compliance
within the 2 year period of redemption maybe waived, unless
the waiver is contrary to the public order, public policy, morals
or good customs or prejudicial to a third person with a right
recognized by law." None of the inhibitions enumerated are

present in this case.

Hence, the action of the defendant bank in securing the
Sheriffs Final Sale prior to the fixing of the period within which
the plaintiffs had to pay was not in order by reason of the
extension of the period of redemption without a term. Not
being in order, the period for redemption by the plaintiffs still
exists but has to be set." 3
and on the basis thereof, decreed to (a) annul the Sheriffs Final
Deed of Sale, dated 15 February 1977 and its registration of 17
March 1979, (b) fix the period of redemption to ninety (90)
days from receipt of the decision by petitioners, (c) order
petitioners to pay the respondent bank, within ninety (90) days
from receipt of the decision the amount of P2,945.11, the
purchase price, with 1% interest per month from 11 December
1974 to 14 December 1979, together with any amount
representing assessment or taxes which the bank may have
paid after 11 December 1974, with interest thereon at 1% per
month up to 14 December 1979, (d) order the Bank to receive
and credit the petitioners with such amounts, restore
petitioners to the property and to deliver to them a certificate
of redemption, and to pay petitioners the sum of P2,000.00 as
attorney's fees and the costs. 4

-IITHE LOWER COURT ERRED IN HOLDING THAT THE APPELLANTS

GRANTED THE APPELLEES AN EXTENSION OF THE PERIOD FOR
THE REDEMPTION OF THE PROPERTY WHICH WAS SOLD
DURING THE FORECLOSURE SALE.
-IIITHE LOWER COURT ERRED IN HOLDING THAT THE
PREPONDERANCE OF EVIDENCE FAVORS THE APPELLEES
DESPITE THE FACT THAT THE ONLY EVIDENCE PRESENTED BY
THEM IS THE SOLE TESTIMONY OF EPIFANIO NATINO, WHICH IS
NOT ONLY UNCORROBORATED, BUT IS EVEN CONTRARY TO THE
IMPORT OF HIS DECLARATIONS AND ADMISSIONS MADE IN
OPEN COURT; AS AGAINST THE TESTIMONY OF THE
APPELLANTS' WITNESS WHICH IS CORROBORATED, NOT ONLY
BY DOCUMENTARY EVIDENCE, BUT EVEN BY THE IMPORT OF
PLAINTIFF-APPELLEES' TESTIMONY.
-IVTHE LOWER COURT ERRED IN NOT REJECTING THE TESTIMONY
OF PLAINTIFF-APPELLEE WHICH DID NOT PROVE AN OFFER TO
REDEEM WITHIN THE REGLEMENTARY PERIOD IN AN
AUTHENTIC MANNER AS REQUIRED BY THE LAW, RULES AND
JURISPRUDENCE.

Respondent bank appealed from said Decision to the then

Intermediate Appellate Court which docketed the appeal as
C.A.-G.R. CV No. 69539.
In support of its appeal, respondent bank assigned the
following errors:.

-VTHE LOWER COURT ERRED IN NOT REJECTING THE TESTIMONY

OF PLAINTIFF-APPELLEE ON THE ALLEGED EXTENSION OF THE
REDEMPTION PERIOD INASMUCH AS IT IS NOT IN A PUBLIC
DOCUMENT OR AT LEAST IN AN AUTHENTIC WRITING.

"-ITHE LOWER COURT ERRED IN NOT HOLDING THAT THE OFFERS

BY THE APPELLEES TO THE APPELLANTS WERE MADE AFTER
THE PERIOD OF REDEMPTION HAD ALREADY EXPIRED AND AS A
MATTER OF FACT, WERE MADE ONLY AFTER THE EXECUTION OF
THE DEED OF FINAL SALE BY THE SHERIFF.

-VITHE LOWER COURT ERRED IN APPLYING ARTICLES 1180 AND

1197 OF THE CIVIL CODE, BOTH OF WHICH HAS NO RELEVANCE
OR MATERIALITY TO THE CASE AT BAR.
-VIIASSUMING ARGUENDO THAT SOME OFFICERS OR EMPLOYEES

OF THE APPELLANT BANK MANIFESTED TO THE PLAINTIFFAPPELLEE THAT THEY CAN RECOVER THE LAND IN QUESTION,
AS TESTIFIED BY THE PLAINTIFF-APPELLEE, THE LOWER COURT
ERRED IN HOLDING THAT SUCH OFFICERS ACTED AS AGENTS
OF THE APPELLANT-BANK.

requiring a reversal, but any doubt entertained by the

appellate court as to what disposition should be made of the
case will be resolved against the appellee (4 CJS 1832, cited in
Francisco, the Revised Rules of Court Civil Procedure, Vol. III, p.
638).

CONSEQUENTLY, THE LOWER COURT ERRED IN NOT HOLDING

THAT ONLY THE ACTION BY THE BOARD OF DIRECTORS OF THE
BANK CAN BIND THE LATTER.

Re the first error

-VIIITHE LOWER COURT ERRED IN HOLDING THAT THE EXECUTION

OF THE DEED OF FINAL SALE WAS NOT IN ORDER AND IN
HOLDING THAT THE APPELLEES MAY STILL REDEEM THE
PROPERTY BY PAYING THE PURCHASE PRICE PLUS 1% INTEREST
PER MONTH, DESPITE THE LAPSE OF THE PERIOD OF
REDEMPTION.
-IXTHE LOWER COURT ERRED IN NOT DECIDING THE CASE IN
FAVOR OF
THE APPELLANTS AND CONSEQUENTLY ERRED IN NOT
AWARDING DAMAGES TO THE APPELLANTS HEREIN." 5
Herein petitioners, as appellees, did not file their Brief.
In its Decision of 4 June 1985, the Intermediate Appellate Court
disposed of the assigned errors as follows:
xxx xxx xxx
"The bank has assigned eight (8) errors in the decision but the
determinants are the first and the second. But before going
into their merits We must take note of the failure of the
appellees to file their brief. Appellees did not file any motion for
reconsideration. It has to be stated there that, generally,
appellee's failure to file brief is considered as equivalent to a
confession of error, warranting, although not necessarily

THE LOWER COURT ERRED IN NOT HOLDING THAT THE OFFERS

BY THE APPELLEES TO THE APPELLANTS WERE MADE AFTER
THE PERIOD OF REDEMPTION HAD ALREADY EXPIRED AND AS A
MATTER OF FACT, WERE MADE ONLY AFTER THE EXECUTION OF
THE DEED OF FINAL SALE BY THE SHERIFF.
It will take better proofs than appellees' mere declaration for
the Court to believe that they had tendered the redemption
money within the redemption period which was refused by the
bank. There would have been no valid reason for a refusal; it is
an obligation imposed by law on every purchaser at public
auction that admits of redemption, to accept tender of
redemption money.
And should there be refusal, the correlative duty of the
mortgagor is clear: he must deposit the money with the sheriff.
The evidence does not show that appellees complied with this
duty.
All that was shown by way of compliance was the deposit made
with the Clerk of Court of the sum of P4,000.00. This deposit is
a belated and last ditch attempt to exercise a right that had
long expired. It was made only on December 12, 1979, or after
the redemption period of two (2) years from January 29, 1977
when the sheriffs certificate of sale was registered and after
sheriffs final sale which was registered on November 14, 1979.
And, it is clear that the late deposit was utilized to defeat the
bank's vested right which it sought to enforce by its petition for
a writ of possession. The lower court correctly ruled against
any validity to it.

The right to redeem becomes functus officio on the date of its

expiry, and its exercise after the period is not really one of
redemption but a repurchase.
Distinction must be made because redemption is by force of
law; the purchaser at public auction is bound to accept
redemption. Repurchase however of foreclosed property, after
redemption period, imposes no such obligation. After expiry,
the purchaser may or may not re-sell the property but no law
will compel him to do so. And, he is not bound by the bid price;
it is entirely within his discretion to set a higher price, for after
all, the property already belongs to him as owner.
This brings Us to the second error
THE LOWER COURT ERRED IN HOLDING THAT THE APPELLANTS
GRANTED THE APPELLEES AN EXTENSION OF THE PERIOD FOR
THE REDEMPTION OF THE PROPERTY WHICH WAS SOLD
DURING THE FORECLOSURE SALE.
Appellees' main premise is the alleged assurances of the
bank's officers that they could redeem the property. From the
testimony of Epifanio Natino, however, it is clear that these
assurances were given before expiry of redemption (tsn, pp. 15
& 16). Such assurances were not at all necessary since the
right to redeem was still in existence. Those assurances
however could not and did not extend beyond the redemption
period.
It seems clear from testimony elicited on cross-examination of
the president and manager of the bank that the latter offered
to re-sell the property for P30,000.00 but after the petition for a
writ of possession had already been filed, and well after expiry
of the period to redeem. Appellants failed to accept the offer;
they deposited only P4,000.00. There was therefore no meeting
of the minds, and accordingly, appellants may no longer be
heard." 6

and in the light thereof, REVERSED and SET ASIDE the

appealed decision.
Their motion to reconsider the same having been denied in the
resolution of 23 December 1985, 7 petitioners have come to Us
on appeal by certiorari raising the sole issue stated in the
beginning of this decision.
We find the petition to be devoid of merit. Petitioners have
failed to demonstrate that the conclusion made by the
respondent Intermediate Appellate Court from the proven facts
is wrong. We agree with said Court, and, therefore, set aside
the contrary conclusion of the trial court, that the attempts to
redeem the property were done after the expiration of the
redemption period and that no extension of that period was
granted to petitioners.
The contrary conclusion made by the trial court is drawn from
inferences which are not supported by adequate or sufficient
facts or is based on erroneous assumptions. We note that its
decision is remarkably silent as to the dates when petitioner
Epifanio Natino went to the respondent bank to talk with a
bank personnel to offer to pay the loan. If indeed the offer was
made within the redemption period, but the Bank refused to
accept the redemption money, petitioners should have made
the tender to the sheriff who made the sale and who then had
the duty to accept the tender and execute the certificate of
redemption. (Enage vs. Vda. de Hijos de Escano, 38 Phil. 657,
cited in II MORAN, Comments on the Rules of Court, 1979 Ed.,
pp. 326-327).
There was no such tender to the Sheriff.
Again, if indeed this occurred during the redemption period,
then, as correctly pointed out by respondent IAC, it was not
necessary to ask for extension of the period to redeem.
In respect to the alleged assurance given by Mrs. Brodeth, the

President and Manager of the Bank, sometime In May of 1978

to the effect that petitioners can redeem the property as soon
as they have the money, it is obvious that this took place after
the expiration of the redemption period. As correctly pointed
out by the respondent IAC, this could only relate to the matter
of resale of the property, not redemption.

purchase price.

Furthermore, even assuming for the sake of argument that Mrs.

Brodeth gave the assurance, the same could bind the bank
only if its Board of Directors approved or ratified it. No evidence
was offered to prove such action by the Board. Moreover, Mrs.
Brodeth denied that during that meeting in May 1978 she
made the assurance; according to her petitioner Epifanio
neither mentioned the loan nor offered to redeem, although
earlier he was told that to "redeem" the property he should pay
P30,000.00. The latter statement supports the conclusion of
respondent IAC that this was the Bank's offer for the re-sell (not
redemption of the property), which, logically took place after
the expiration of the redemption period.

"An accepted unilateral promise to buy or to sell a determinate

thing for a price certain is binding upon the promissor if the
promise is supported by a consideration distinct from the
price."

Even if Mrs. Brodeth is to be understood to have promised to

allow the petitioners to buy the property at any time they have
the money, the Bank was not bound by the promise not only
because it was not approved or ratified by the Board of
Directors but also because, and more decisively, it was a
promise unsupported by a consideration distinct from the re-

The second paragraph of Article 1479 of the Civil Code

expressly provides:
xxx xxx xxx

Thus in Rural Bank of Paraaque Inc. vs. Remolado, et al., 8 a

commitment by the bank to resell a property, within a specified
period, although accepted by the party in whose favor it was
made, was considered an option not supported by a
consideration distinct from the price and, therefore, not binding
upon the promissor. Pursuant to Southwestern Sugar and
Molasses Co. vs. Atlantic Gulf and Pacific Company, 9 it was
void.
WHEREFORE, the instant petition is DISMISSED, with costs
against the Petitioners.
SO ORDERED.