Case Summary (G.R. No. 220605)
Antecedents
In 1997, LCL obtained a loan from Far East Bank & Trust Co. (FEBTC), amounting to P3,000,000.00, secured by a real estate mortgage on two condominium units. Following a merger in 2000, BPI absorbed FEBTC's assets and liabilities. Upon LCL’s non-payment, BPI pursued extrajudicial foreclosure. After winning the public auction and consolidating ownership of the properties, LCL challenged the consolidation, claiming it was premature and filed for annulment in the Regional Trial Court of Pasig City.
RTC Ruling
The Regional Trial Court ruled in favor of LCL on November 14, 2008, declaring BPI's consolidation of ownership void, reinstating LCL’s certificates of title, and affirming LCL’s right to redeem the properties within one year. The court ordered BPI to determine the amount LCL must pay for redemption.
Computation of Redemption Price
BPI provided a redemption amount of P9,339,362.93, while the RTC calculated it at P2,513,583.15, applying a 6% interest rate and excluding BPI's real estate tax expenses. Subsequently, BPI contested the RTC’s computation, asserting that the stipulated interest rate of 17% per annum was applicable.
Court of Appeals Decision
The Court of Appeals partially granted BPI’s petition on May 17, 2018. The appellate court ruled that Section 78 of the General Banking Act governs computations when a banking institution is the mortgagee. The appellate court thus mandated the imposition of a 17% interest rate corresponding to the mortgage agreement while keeping the exclusion of real estate taxes in the redemption price computation.
Conflict of Interests and Reconsiderations
Both parties sought partial reconsideration regarding the inclusion of real estate taxes and the applicable interest rate. LCL argued against further recomputation violating the final judgment, while BPI contended that LCL should reimburse the real estate taxes since it retained possession of the properties.
Legal Principles on Final Judgments
Referring to established legal tenets, the court emphasized that the immutability of a final judgment precludes altering its content to correct perceived errors. The RTC's November 14, 2008, decision became final, which did not specify the redemption amount, prompting the court to state that recomputation did not violate immutability principles.
Determinants of Redemption Price
The Court reiterated that the redemption price under the General Banking Act should consist of the principal obligation, mandated interest, and foreclosure expenses. It clarified discrepancies in previous rulings regarding the bid price used for the computation, which the law did not support, promoting clarity in lawful financial obligations.
Real Estate Taxes and Liabi
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Core Issues
- The primary issues in these consolidated petitions involve the correct computation of the redemption price and the applicable interest rate.
- The case arises from the extrajudicial foreclosure of properties mortgaged by LCL Capital, Inc. to Far East Bank & Trust Co., which was subsequently acquired by the Bank of the Philippine Islands (BPI).
Antecedents
- In 1997, LCL obtained a loan of P3,000,000.00 from FEBTC at an interest rate of 17% per annum, secured by a real estate mortgage on two condominium units.
- In 2000, BPI merged with FEBTC, inheriting its assets and liabilities.
- Following LCL’s default on payments, BPI initiated extrajudicial foreclosure, resulting in BPI purchasing the properties at a public auction on May 21, 2003.
- BPI executed an Affidavit of Consolidation of Ownership on July 11, 2003, leading to the issuance of new titles in its name.
Initial Legal Actions
- LCL filed a case against BPI for annulment of the certificates of title, claiming the consolidation was premature as it occurred before the expiration of the redemption period.
- The RTC ruled on November 14, 2008, declaring the consolidation void and reinstating LCL's titles, allowing for redemption within one year.
Appeal and Subsequent Developments
- BPI appealed the RTC decision but later withdrew its appeal, leading to the finality of the RTC ruling.
- LCL sought determination of the redemption cost, with BPI asserting a redemption amount of P9,339,362.93 as of March 15, 2015.
RTC Computation of Redemption Price
- On January 27, 2017, the RTC calculated the