Facts:

This case, G.R. No. 167420, involves Allied Banking Corporation as the petitioner and Ruperto Jose H. Mateo, represented by Warlita Mateo as attorney-in-fact, as the respondent. The events commenced on February 19, 1996, when Ruperto Jose Mateo secured a loan of P950,000.00 from Allied Banking Corporation. To guarantee this loan, Mateo executed a real estate mortgage on a parcel of land, registered under Transfer Certificate of Title (TCT) No. 236351, in favor of the bank. Due to his default on the loan, the bank initiated an extrajudicial foreclosure on the property. At the public auction, the property was sold for P1,531,474.53, with the bank being the only bidder. A Certificate of Sale was issued to the bank on July 21, 1999, and the sale was recorded with the Register of Deeds.

Twelve months later, Mateo, through Warlita, expressed a desire to redeem the foreclosed property for P1.1 million, as indicated in several faxed letters to the bank. On July 21, 2000, which was the l

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Facts:

Background of the Loan and Collateral

• On February 19, 1996, respondent Ruperto Jose H. Mateo secured a loan amounting to P950,000.00 from petitioner Allied Banking Corporation.
• To secure this loan, respondent executed a deed of real estate mortgage over a parcel of land registered under TCT No. 236351 and also executed a promissory note for the same amount.

Extrajudicial Foreclosure and Auction Sale

• Following respondent’s default in payment, petitioner initiated the extrajudicial foreclosure of the mortgage.
• The property was sold at a public auction for P1,531,474.53, with petitioner emerging as the sole and highest bidder.
• A Certificate of Sale was issued to petitioner and subsequently registered on July 21, 1999, solidifying petitioner’s claim as auction purchaser.

Respondent’s Efforts to Redeem

• After the foreclosure sale, respondent (through attorney-in-fact Warlita Mateo) consistently communicated his desire to redeem the property by sending fax letters and written offers.
• Specific communications included:
• Multiple faxed letters indicating respondent’s intention to redeem for an offered amount, including an offer to redeem at P1.1 million.
• A letter dated August 10, 1999, which was used by the trial court to mark the commencement of respondent’s exercise of the right to redeem.

Filing of Legal Redemption Case and Subsequent Proceedings

• On July 21, 2000 – the last day within the one-year redemption period from the registration of the Certificate of Sale – respondent filed a case for legal redemption with prayer for a temporary restraining order and preliminary injunction in RTC, Branch 35, Santiago City.
• During the pre-trial conference held on September 18, 2002, respondent offered to redeem the property for the auction price of P1,531,474.53, but petitioner refused.
• The parties subsequently agreed to submit the case for summary judgment rather than continuing with a full trial.

RTC Decision and Subsequent Motion for Reconsideration

• On October 21, 2004, the RTC rendered a decision allowing respondent to redeem the property provided he paid the amount of P1,531,474.53 plus one percent interest for one month, and further ordered respondent to indemnify petitioner with P30,000.00 for attorney’s fees and suit expenses.
• The RTC's decision stipulated that respondent’s various attempts to tender P1.1 million, including consignation in a bank (Land Bank), were considered sufficient to indicate his desire to redeem.
• Petitioner’s Motion for Reconsideration was filed and subsequently denied in an Order on February 10, 2005.

Grounds for Petition for Review by Petitioner

• Petitioner argued that the RTC erred as:
• It admitted the P1.1 million tender and consignation as sufficient, although redemption requires the full purchase price plus accrued interest.
• It improperly applied Section 28, Rule 39 of the Rules of Court and Act No. 3135 to determine the redemption price, despite Section 78 of the General Banking Act being the controlling provision when the mortgagee is a bank.
• It considered an offer made during the pre-trial conference, which was outside proper parameters for a timely and valid redemption.
• Respondent, in reply, asserted that:
• The case raised primarily questions of fact relative to the sufficiency of his tender.
• His filing of the suit was bona fide intended to exercise the right of redemption within the statutory period.
• Prior communication and a partial tender demonstrated his intent, even though the tender was below the full purchase price.

Issue:

Sufficiency of the Redemption Tender

• Whether the offers made by respondent amounting to P1.1 million, including various communications and attempted consignation, adequately constituted a valid and sufficient tender for the purpose of redemption.
• Whether the tender was made in compliance with the legal requirements of a bona fide redemption, which mandates a full and proper payment of the redemption price including interest and associated costs.

Appropriate Basis for the Computation of the Redemption Price

• Whether the RTC erred in opting to use Section 28, Rule 39 of the Rules of Court and Act No. 3135 in computing the redemption price, given that Section 78 of the General Banking Act is the controlling law in cases involving banking institutions.
• Whether the computation should clearly reflect the full auction price as the base amount since that price already encompasses the factors such as interest, penalties, and expenses.

Good Faith in Filing the Claim for Legal Redemption

• Whether respondent’s filing of the judicial action for legal redemption was made in good faith, aiming to determine the proper redemption price, or merely as an instrument to prolong the redemption period.
• Whether the filing, in the absence of a full tender or proper consignation in court, invalidated respondent’s right to redeem.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)