G.R. No. 193453 - Spouses Hojas vs. Philippine Amanah Bank

On April 11, 1980, petitioners, Spouses Rubin and Portia Hojas, secured a loan of P450,000.00 from Philippine Amanah Bank (PAB), with the loan being secured by a mortgage covering both personal and real properties.
From May 14, 1981 to June 27, 1986, petitioners made several payments amounting to P486,162.13.
PAB allegedly failed to properly credit these payments:

Only 13 payments were recognized, erroneously totaling ?317,048.83.
A payment amounting to P165,623.24 was not credited.
The statement of account as of October 17, 1984, inaccurately reflected P412,211.54 on the principal and P138,472.09 as 30% interest, although the total payments already exceeded these figures.

Alleging non-payment, PAB applied for the extrajudicial foreclosure of the mortgaged properties, and a Notice of Extrajudicial Foreclosure was issued on January 12, 1987.
The foreclosure sale was set for April 21, 1987, stating the mortgage debt as P450,000.00.
In the public auction, PAB acquired the properties and later sold them to respondent Ramon Kue in a bidding held on November 4, 1988.

On March 9, 1988, Farouk A. Carpizo, then OIC-President of PAB, sent a letter to Roberto Hojas (the petitioners’ son) indicating that:

Although the regular one-year redemption period would expire on April 21, 1988, under the bank’s "incentive scheme" the opportunity to redeem was available until December 31, 1988.

A conflicting communication was subsequently issued by the OIC of the Project Development Department, stating that the real properties would be sold in a public bidding before the end of August 1988.
Petitioners, relying on the language of the letter, attempted to avail themselves of the incentive scheme but did not follow through with a formal proposal.

Due to the foreclosure and subsequent public bidding, petitioners filed an action on May 7, 1991, seeking the determination of the true balance of mortgage debt, annulment/setting aside of the foreclosure, and damages, along with a prayer for a preliminary injunction.
The Regional Trial Court (RTC), Branch 13, Zamboanga City, dismissed the complaint on May 27, 1996, ruling that:

PAB acted in good faith and even suspended foreclosure upon petitioners’ request, yet petitioners failed to settle their accounts.
Petitioners failed to redeem their properties within the allowed period, thereby vesting absolute ownership in PAB, which subsequently sold the property to Kue.
The foreclosure, conducted in accordance with legal procedures, did not result from any collusion between PAB and Kue.

Petitioners appealed, contending that the March 9, 1988 letter from Carpizo unambiguously extended the redemption period until December 31, 1988.
They argued that PAB, by selling the property on November 4, 1988, violated the principle of estoppel and prejudiced them by foreclosing their right to redeem.
They maintained that having manifested interest in the incentive scheme, PAB should have deferred the public sale until the extended period had lapsed.

PAB asserted that the incentive scheme was merely an invitation for petitioners to submit a proposal for repurchase on relaxed payment terms.
PAB clarified that the letter was not an unqualified representation or an extension of the one-year redemption period.
The bank noted that petitioners never submitted an acceptable proposal, and subsequent communications (e.g., the August 11, 1988 letter regarding scheduled bidding) indicated the advancement toward sale.

The Court of Appeals (CA) upheld the RTC ruling, finding no merit in petitioners’ estoppel claim since the letter did not extend the redemption period.
The petitioners sought review on the sole issue of whether PAB breached the principle of estoppel by conducting the public sale on November 4, 1988.

Whether PAB violated the principle of estoppel by conducting the public sale on November 4, 1988, despite the representations made in the March 9, 1988 letter regarding the redemption period.
Whether the "incentive scheme" communicated by PAB effectively extended the statutory one-year redemption period until December 31, 1988.
Whether petitioners’ failure to make an unequivocal tender and submit an acceptable proposal negated their right to redeem the property and precluded their claim of damages due to alleged misrepresentations.