General v Barrameda

General v. Barrameda  January 30, 1976 Rodolfo General and Carmen Gontang- Petitioners Leoncio Barrameda- Repsondent Petition for certiorari to review the decision of the CA I. Facts: 1. Plaintiff seeks to redeem the land formerly embraced by Transfer Certificate Title (TCT) No. 1418, containing an area of 59 hectares in Minabalac Camarines Sur, and to annul all contracts affecting the property between the Development Bank of the Philippines and Rodolfo General. 2. The land in dispute was mortgaged by plaintiff  (General) to DBP for P22,000. For failure to pay, the mortgagee (DBP) foreclosed the property. 3. On April 23, 1962, provincial sheriff conducted auction sale in which the highest bidder, the said mortgagee, bought the mortgaged property for P7, 271.22 4. On September 2, 1963, the registration of the sale and affidavit wherein TCT No. 1418 in the name of  plaintiff was canceled and TCT No. 5003 was issued to the DBP.

5. On Sept 3, 1963 defendants General and Gontang purchased land from DBP. Their sale was annotated in  TCT 5003 on Nov. 26. 1963 only. 6. On Nov. 20 -1963 plaintiff offered to redeem the land. When DBP refused, then planitiff filed suit. The original complaint was filed on Nov. 20, 1963 while on August 12, 1964, plaintiff deposited with the clerk of  court the sum of P7,271.22 representing the purchase price of the land. 7. In the trial court, the judge asserted that the oneyear period of redemption began to run on april 23, 1962, when the sale at public auction was held, and ended on April 24, 1963 and the deposit of redemption price on August 12, 1964 were made beyond the redemption period and that defendants Rodolfo General and Carmen Gontang were legitimate purchasers. 8. In the appellate court, the appealed judgment was reversed and the other one entered declaring 1. Null and void the sale executed on September 3, 1963, by defendant DBP to Gontang and General 2. TCT 5003 cancelled and 3. Mortaged property redeemed and ordering the clerk of court to deliver to General and Gontang and the Register of Deeds to issue a new transfer certificate of title in the name of pl aintiff in lieu of TCT 5003 upon payment of fees. II. Issue/s:

1. WoN the interpretation of Section 31, Commonwealth Act 459 (law that created the DBP), which provides that mortgager has right to redeem the real property upon full or partial payment within one year from the date of the auction sale, shall start from the date of the auction sale or the date of the registration of sale in the register of deeds. (start from the registration of sale)

expressly stated that the redemption period of one year shall start from the registration of the certificate of sale in the registration of deeds.

2. Were petitioners under obligation to look beyond what appeared in the certificate of title of their vendor the Development Bank of the Philippines and investigate the validity of its title before they could be classified as purchasers in good faith?

 The Algubos v Alberto ruling cited by respondent appellate court wasn’t applicable to the case at bar because it was not clear when the period of  redemption should start (date when execution sale was conducted, or when the certificate of sale was executed by sheriff, or when the certificate of sale was registered in the registry of deeds), and this Court ruled that as the land involved in that case is registered under the Torrens system, the date of  redemption should begin to run from the date of  registration, unlike in the case at bar where Section 31 of Commonwealth Act 459 specifically and clearly provides that the running of the redemption period shall start from the date of the auction sale.

III. Decision Decision of Appellate Court affirmed with costs against petitioners. No longer necessary to determine WON the petitioners were purchasers in good faith of the land involved since Barrameda redeemed the mortgaged property within the legal period of redemption. Ratio: 1. Petitioner originally contended that Sec 31 of  Commonwealth Act 459 clearly states that the right to redeem the the real property sold at public auction  judicially or extra-judicially may only be exercised “within one year from the date of the auction sale” and that there was no provision in the same act that

Also, he contended that the same provision governs redemption of real property foreclosed by the DBP and prescribes the redemption period for judicial foreclosures of mortgage.

Moreover, the petitioners rebuffed Gonzales vs. P.N.B.’s applicability to the case at bar because the provisions on the matter of the P.N.B. Charter, Act No. 2938, are different from that of Commonwealth Act 459. Section 32 of Act 2938, wherein it provided mortgagor shall have the right to redeem within one year the sale of the real estate. This was Identical to the provision appearing in Sec. 26, now Sec. 30, Rule

39, Rules of Court, while under Sec. 31 of  Commonwealth Act 459, the period of redemption should start, on the date of the auction sale, and the latter provision is applicable specifically and expressly to the case at bar.  The petitioners, on the other hand, asserted the applicability of the Marcaide v Pigtain case where it categorically stated that the one year redemption period shall start from the date of sale and not from the report of the sale or the registration of the sale certificate in the office of the Register of Deeds, is more applicable to the present case. 2. The court was of the vi ew that a correct solution to the foregoing issue must entail not merely trying to determine the meaning of the words “auction sale" and "sale" in different legislative enactments, but, more importantly, a determination of the legislative intent which is quite a task to achieve as it depends more on a determination of the purpose and objective of the law in gi ving mortgagors a period of redemption of their foreclosed properties. A public auction sale is an indispensible prerequisite to the valid disposal of properties used as collateral for the obligation. So that whether the legislators in different laws used the term "sale" or "auction sale" is of no moment, since the presumption is that when they used those words "sale" and "auction sale" interchangeable in different laws they really referred to only one act —

the sale at public auction indispensably necessary in the disposition of mortgaged properties and those levied upon to pay civil obligations of their owners. 3. The court adhered to Salazar v. Meneses, where the period of redemption was held as started on the date when the certificate of sale issued was registered. The deed of sale does not take effect until it is registered.  They found no compelling reason to deviate from the ruling and not apply the same to the present case. Because, to the court, the important issue was whether “auction sale” shall be considered in its ordinary meaning or in the same meaning of “sale“ used in the texts of Sec 26 of Rules of Court and Act 2938 (PNB Charter) and Sec 30 And Rule 39 of the Rules of Court. To them these words used interchangeably refer to one thing and that is the public auction sale required by law in the disposition of  properties foreclosed or levied upon. This view was contrary to the petitioners main contention that there was a great deal of difference in l egislative intent in the two words.  The stands mentioned by the Court in the mentioned cases and other ones (Garcia vs. Ocampo and Gonzales et al. vs. Philippine National Bank et al.) were firmly planted on the premise that registration of the deed of conveyance for properties brought under the  Torrens System is the operative act to transfer title to the property and registration is also the notice to the

whole world that a transaction involving the same had taken place.  To affirm the previous stand this Court has taken on the question of when the one year period of  redemption should start (from the time of registration of the sale) would better serve the ends of j ustice and equity especially in this case, since to rule otherwise would result in preventing the respondent-mortgagor from redeeming his 59.4687 hectares of land which was acquired by the Development Bank of the Philippines as the highest bidder at the auction sale for the low price of only P7,271.22 -the unpaid balance of  the mortgage debt of P22,000.00 after the respondentmortgagor had paid the sum of P14,728.78. No answer on 2nd question posted by plaintiffs.