THIRD DIVISION
[G.R. No. 231555. August 23, 2017.]
BPI FAMILY SAVINGS BANK, DULY REPRESENTED BY ITS PRESIDENT, AURELIO LUIS MONTINOLA III, AND THE EX-OFFICIO SHERIFF OF THE REGIONAL TRIAL COURT OF NEGROS ORIENTAL, petitioner,vs. CLEMENTINO F. DALES AND ODETTE B. DALES, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution dated August 23, 2017, which reads as follows:
"G.R. No. 231555 (BPI Family Savings Bank, duly represented by its president, Aurelio Luis Montinola III, and the Ex-Officio Sheriff of the Regional Trial Court of Negros Oriental vs. Clementino F. Dales and Odette B. Dales). — The Court INFORMS petitioners that they or their authorized representative may claim from the Cash Disbursement and Collection Division of this Court the excess payment of the prescribed legal fees in the amount of P1,470.00 under O.R. No. 0180439 dated May 29, 2017.
This is a Petition for Review under Rule 45 of the Rules of Court which seeks to reverse and set aside the Decision dated November 29, 2016 1 and Resolution dated May 5, 2017 2 of the Court of Appeals (CA) in CA-G.R. CV No. 05404. There, the CA ruled against BPI Family Savings Bank (BPI) and held that the redemption price of the property identified as Lot No. 1-D covered by TCT No. 24271 and located in Dumaguete City is fixed at P2,273,040.64, less the amount that Spouses Odette and Clementino Dales (Spouses Dales) already tendered, with interest at 17% per annum on the balance from April 28, 2014 until fully paid.
The case traces its roots to a suit for legal redemption of Lot No. 1-D (covered by Transfer Certificate of Title [TCT] No. 24271), nullification of unconscionable interest, extra charges, attorney's fees and liquidated damages filed by Spouses Dales against BPI. AScHCD
Spouses Dales obtained several loans from Prudential Bank and Trust Company (Prudential, later acquired by BPI) covered by five separate promissory notes (PNs) with the accumulated total price of P2M. The loans were secured by a real estate mortgage (REM) on Lot No. 1-D. Spouses Dales eventually stopped making payments on the loans for personal reasons.
Subsequently, Prudential Bank merged with BPI. As Prudential's successor-in-interest, BPI filed a Petition for Extrajudicial Foreclosure under Act 3135 as amended by Act 4118, against the mortgaged property and stating that, as of January 2011, Spouses Dales had an outstanding obligation of P5,543,868.79, inclusive of penalties and other charges.
Acting upon BPI's petition, Sheriff Uldarico V. Jalandoni (Sheriff Jalandoni) served a Notice of Extrajudicial Sale, with the public auction set on January 5, 2012. The bank was considered as the highest bidder, paying the amount of P2M at the foreclosure sale. Thereafter, a Certificate of Sale was issued to BPI.
In November 2012, Spouses Dales sent a letter to Sheriff Jalandoni, signifying their interest to redeem the property and asking the sheriff for a copy of the computation of the redemption price.
In response, Sheriff Angelito C. Barba (Sheriff Barba) of the RTC-Negros Oriental said they were adopting the Statement of Account of the mortgagee, BPI. Allegedly, in addition to the computation of the legal fees amounting to P81,418.00, the amount of P10,762,374.96 was due as of November 30, 2012.
On December 28, 2012, respondents sent another letter to Sheriff Barba, tendering payment in the amount of P2M, plus allowable interest and cost as redemption price, being the same amount that was bid by BPI for the spouses' property during the auction sale. BPI opposed by saying that P10,762,374.96 is the correct redemption price and that Spouses Dales failed to make an actual and simultaneous tender of payment of the full amount of the repurchase price as the check was never consigned with the Clerk of Court of RTC-Dumaguete City.
As a consequence of BPI's refusal to allow the spouses to redeem the property, the latter instituted the complaint for legal redemption with the lower court.
In its Decision dated April 28, 2014, the RTC ruled: AcICHD
WHEREFORE, premises considered, Judgment is hereby rendered as follows:
A. The plaintiffs may redeem Lot No. 1-D covered by Transfer Certificate of Title No. 24271 in the amount of Two Million, Three Hundred Ninety Thousand Six Hundred Seventy-One Pesos and thirty-one centavos (P2,390,671.31) within one (1) year from finality of this Judgment;
B. The counterclaims are dismissed.
SO ORDERED. 3
The trial court also said that since there was no proof that the Certificate of Sale was registered with the Register of Deeds of Dumaguete City, the one (1) year redemption period did not begin to run.
The lower court debunked the bank's argument that the redemption price is to be computed from the loan amount, plus interest, penalties, and attorney's fees amounting to P1,101,652.41 and liquidated damages amounting to fifteen percent (15%) of the said amount, which brought the total obligation to P10,017,383.15.
In deciding against BPI, the court harped on the detailed limit of the redemption price set by Section 47 of Republic Act No. (RA) 8791, otherwise known as the General Banking Law of 2000, considering that the mortgagee is a banking institution, in relation to Act No. 3135 and the Rules of Court. As the amended Real Estate Mortgage between the parties secured the indebtedness up to the amount of P2,000,000.00, the same amount was used by the lower court to compute the fees to be paid by Spouses Dales for the redemption price.
BPI then filed a Motion for Reconsideration which was denied by the RTC in its July 14, 2014 Order. An appeal before the CA thus ensued.
The Ruling of the CA
The CA denied the appeal with modification in that the redemption price of the subject property is fixed at P2,738,040.64, less the amount that has been tendered by Spouses Dales, with interest at 17% per annum on the balance from April 28, 2014 (the date of the RTC judgment) until fully paid. In modifying the RTC's decision, the CA noted that Spouses Dales already offered P2M as redemption price. The fallo of the CA decision reads:
WHEREFORE, this appeal is DENIED. The Decision dated 28 April 2014 of the Regional Trial Court and its Resolution dated 14 July 2014 in Civil Case No. 2013-14776 are AFFIRMED with MODIFICATION in that the redemption price of the property identified as Lot No. 1-D covered by TCT No. 24271 is hereby fixed at P2,738,040.64 less the amount that has been tendered by spouses Clementino F. Dales and Odette B. Dales, with interest at 17% per annum on the balance from 28 April 2014 until fully paid.
SO ORDERED.4
The CA ruled that since BPI, the mortgagee, is a banking institution, the determination of the price of the foreclosed property should be governed by Section 78 of the General Banking Act (now Section 47 of the General Banking Law of 2000). It provides, among others, that the amount at which the foreclosed property is redeemable is the amount due under the mortgage deed, or the outstanding obligation of the mortgagor plus interest and expenses. The REM between the parties stated an interest rate of seventeen percent (17%) per annum. Spouses Dales' obligation is thus limited to the 17% interest as stated in the mortgage. TAIaHE
The CA also added that the power to decide whether or not to foreclose is the prerogative of the mortgagee. However, once it made the decision by filing a petition with the sheriff, the acts of the latter shall thereafter be governed by the provisions of the mortgage laws, and not by the instructions of the mortgagee. Therefore, BPI cannot alter the statutory right of Spouses Dales by unilaterally imposing additional charges and including other loans.
BPI moved for reconsideration from the abovequoted ruling, but it was denied by the CA through its May 5, 2017 Resolution. A copy of the Resolution was duly received by BPI on May 17, 2017. Under the rules, BPI had fifteen (15) days reckoned therefrom, or until June 1, 2017, to interpose its appeal via a Rule 45 Petition for Review on Certiorari.
Before the period to lodge an appeal lapsed, BPI prayed for a 30-day extension, or until July 2, 2017, to challenge the CA rulings. The said motion was granted by the Court in a Resolution dated June 28, 2017, with a warning that no further extension shall be allowed.
Despite this, however, BPI filed the petition only on July 20, 2017, or 18 days late, notwithstanding the final 30-day extension to file a petition for certiorari, which it should have filed on or before July 2, 2017.
The Issue
In its petition, BPI contends that the CA committed a reversible error when it ruled that the redemption price should be based on the principal amount represented by the winning bid at the auction sale instead of being "equivalent to the remaining balance of the loan."
The Ruling of the Court
For having been filed beyond the period granted by this Court, the same shall be dismissed. In any case, both the RTC and the CA are correct in ruling that the amount at which the foreclosed property is redeemable is the amount due under the mortgage deed, or the outstanding obligation of the mortgagor plus interest and expenses in accordance with Section 78 of the General Banking Act. In Union Bank of the Philippines v. Court of Appeals,5 the Court ruled that Section 78 of the General Banking Act had the effect of amending Section 6 of Act No. 3135 insofar as the redemption price is concerned when the mortgagee is a bank or a banking or credit institution. Further, in Asiatrust Development Bank v. Tuble,6 the Court emphasized that, in the event of a judicial or extrajudicial foreclosure of any mortgage on real estate that is used as a security for an obligation to any bank, banking institution or credit institution, the mortgagor can redeem the property by paying the amount fixed by the court in the order of execution, with interest at the rate specified in the mortgage. Thus, BPI's contention that the redemption price should be based on the total amount of indebtedness, which includes other charges and interests, finds no support. cDHAES
WHEREFORE, finding no reversible error in the assailed November 29, 2016 and May 5, 2017 Resolution of the Court of Appeals in CA-G.R. CV No. 05404, the Court resolves to DENY the Petition and, thus, AFFIRM said Decision and Resolution.
SO ORDERED."
Very truly yours,
(SGD.) WILFREDO V. LAPITANDivision Clerk of Court
Footnotes
1.Rollo, pp. 73-86. Penned by Associate Justice Pablito Perez and concurred in by Associate Justices Pamela Ann Abella Maxino and Gabriel T. Robeniol.
2.Id. at 88-92.
3.Id. at 68-69.
4.Id. at 84.
5. G.R. No. 134068, June 25, 2001, 359 SCRA 480.
6. G.R. No. 183987, July 25, 2012, 677 SCRA 519.