Facts:

In the case of Heirs of Norberto J. Quisumbing vs. Philippine National Bank and Santiago Land Development Corporation, G.R. No. 178242, the events transpired between 1984 and 2009. The key players were the petitioners (Heirs of Norberto J. Quisumbing), the respondent Philippine National Bank (PNB), and the intervenor Santiago Land Development Corporation (SLDC). The origins of the case trace back to the actions of spouses Ricardo C. Silverio and Beatriz Sison-Silverio, who, along with R.C. Silverio Management Corporation and related companies, executed Deeds of Assignment on April 11 and 12, 1985, conveying their rights of redemption for various properties foreclosed by PNB.

Quisumbing formally tendered his offer to redeem these properties on April 8, 1985, seeking information on the total redemption amount from PNB. Despite Quisumbing’s efforts, including requesting confirmation of the redemption price by April 30, 1985, PNB denied his offer on the grounds of invalidity of the

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Facts:

Background Transactions

• In 1984, spouses Ricardo C. Silverio and Beatriz Sison-Silverio, along with companies headed by Ricardo C. Silverio (Delta Motors Corporation, Komatsu Industries, and R.C. Silverio Management Corporation), were involved in mortgage transactions with the Philippine National Bank (PNB) involving various foreclosed real properties located in Quezon City, Manila, Pampanga, Bulacan, Tagaytay, Nueva Ecija, Baguio, Benguet, Zambales, and Rizal.
• The spouses, acting in concert with their companies, assigned their rights of redemption to Atty. Norberto J. Quisumbing by executing Deeds of Assignment dated April 11 and 12, 1985.

Tender and Redemption Process

• On April 8, 1985, prior to the complete execution of the Deeds of Assignment, Quisumbing sent a tender letter to PNB requesting the total computation of the redemption price for the foreclosed properties, accompanied by copies of the Deeds of Assignment and relevant documents from the sheriffs and registers of deeds.
• Shortly thereafter, on April 23, 1985, Quisumbing executed an Affidavit of Redemption, which was also distributed to PNB, the sheriffs, and the registers of deeds.
• By May 3, 1985, within the one-year redemption period, PNB formally denied Quisumbing’s offer to redeem the properties on several grounds, notably:
• The Deeds of Assignment were not registered and were purported to be in violation of Art. 1491(5) of the Civil Code.
• The tender was invalid as it was not accompanied by an actual cash payment.
• The amount tendered was significantly lower than the amount required by Section 25 of P.D. No. 694.

Litigation and Procedural History

• Quisumbing filed a Complaint before the Regional Trial Court (RTC) of Makati City seeking to compel PNB to allow redemption and to furnish the total redemption amount.
• In its Answer, PNB argued that Quisumbing’s tender offer was merely “pro-forma” since it lacked an actual payment, was not in compliance with the statutory requirements, and that the assignments were invalid or barred due to non-registration and public policy issues.
• During the pendency of the case, Quisumbing died; on September 14, 1990, his heirs substituted as petitioners.
• Approximately on December 8, 1989, Santiago Land Development Corporation (SLDC) intervened after purchasing the Pasong Tamo property from PNB. SLDC adopted PNB’s defenses and later consolidated its position by filing a Motion for Partial Substitution in the case.
• The RTC eventually dismissed the Amended Complaint against both PNB and SLDC. On appeal, the Court of Appeals (CA) affirmed the dismissal on February 14, 2007, deciding there was no valid tender due to the absence of a simultaneous cash payment.
• Petitioners subsequently filed a petition for review on certiorari questioning:
• The validity of Quisumbing’s tender, asserting that his actions should be considered as judicial redemption.
• The applicability and constitutionality of Section 25 of P.D. No. 694, arguing it was directed only to debtors-mortgagors and not to accommodation mortgagors like the Silverio spouses.
• Issues regarding the validity of the Deeds of Assignment and whether SLDC’s intervention and its claims constituted a res judicata situation.

Controversial Assertions and Testimonies

• Petitioners argued that Quisumbing did not need to tender the full redemption price due to PNB’s impending refusal and that his filing of the Complaint was to perfect a “judicial redemption,” citing precedents such as Tioseco v. CA.
• During direct examination, Quisumbing admitted that his initiation of the suit was partly motivated by the desire to challenge Sec. 25 of P.D. No. 694 rather than purely to exercise his right of redemption by paying the full amount.
• Respondents (PNB and SLDC) maintained that proper redemption under the relevant laws required an immediate and bona fide tender with cash payment in full, and they argued that Quisumbing’s actions did not satisfy such requisites.

Issue:

Validity of the Tender of Redemption

• Whether Atty. Norberto J. Quisumbing’s tender of redemption, as executed by his letter and supported by the Affidavit of Redemption, constituted a valid tender under the applicable laws and required requisites.
• Whether the tender was effective given that it was not accompanied by an actual cash payment, as mandated by Section 25 of P.D. No. 694, Act No. 3135, and the relevant provisions of the Revised Rules of Civil Procedure.

Judicial Redemption Versus Actual Tender

• Whether Quisumbing’s filing of a Complaint—argued as a form of “judicial redemption”—fulfilled the statutory requirement of a bona fide and simultaneous tender of the full redemption price.
• Whether the exception allowing for judicial action in cases of disagreement over the redemption price applied when the tender is not accompanied by cash payment.

Constitutionality and Applicability of Sec. 25 of P.D. No. 694

• Whether Sec. 25 of P.D. No. 694, which conditions the right of redemption on the tender of payment, is unconstitutional in its application to accommodation mortgagors.
• Whether the alleged vagueness and preferential treatment granted to PNB under Sec. 25 violate the due process and equal protection clauses of the Constitution.

Intervention and Res Judicata Issues

• Whether the intervention by SLDC and subsequent proceedings, including issues previously raised in the Komatsu case, bar the petition on res judicata grounds.
• Whether the assignment of the right of redemption to Quisumbing (and his successors) is valid and free from public policy constraints, particularly in light of potential conflicts of interest.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)