G.R. No. 5194 - Chinese Chamber of Commerce vs. Pua Te Ching

Case Summary (G.R. No. 5194)

Facts: Redemption Attempts and Payments

NSC notified the sheriff of its intention to redeem TCT No. T-14133 (January 10, 1985) and filed an urgent motion to redeem both lots (February 11, 1985) after the sheriff suggested redemption of both parcels given their lump-sum sale. NSC issued a PNB check (March 20, 1985) in the amount of P296,384.43 as redemption money, which the sheriff acknowledged receiving. Bautista sent a letter (March 21, 1985) conforming to NSC’s check and availing himself of it to redeem the other lot (T-7625) but expressly reserved his right to contest the execution and sale.

Facts: Subsequent Repudiation and Deposit Motion

Bautista later wrote the sheriff (March 25, 1985) declaring he would no longer effect the redemption because the auction sale was null and void. He then filed an urgent motion (March 27, 1985) requesting that the P296,384.43 be delivered to and kept by the Clerk of Court of the RTC of Quezon City pending final resolution of the validity of the auction sale. The sheriff notified petitioners’ counsel of the deposit; petitioners’ counsel rejected the check as not legal tender and claimed it was intended merely for deposit.

Procedural Posture and Relief Sought by Petitioners

Petitioners requested issuance of a final deed of sale on April 25, 1985, alleging no valid redemption had occurred within the 12-month redemption period following registration of the sale. When the sheriff did not issue the final deed, petitioners sought mandamus to compel the sheriff to execute the final deed. The trial court denied mandamus but issued an injunction restraining registration of the certificate of redemption in favor of NSC and Bautista; the Court of Appeals denied the petitioners’ application for mandamus, a decision brought before the Supreme Court.

Legal Issue Presented

Whether the redemption of the properties by NSC (and by Bautista through NSC’s instrumentality) was valid despite the use of a check rather than legal tender, and whether Article 1249 of the Civil Code (payment in currency stipulated or legal tender) applies to redemption under Rule 39, Section 30 of the Rules of Court. Ancillary questions included whether Bautista’s reservation or subsequent withdrawal of the redemption made the redemption invalid and whether petitioners were entitled to a final deed of sale.

Petitioners’ Arguments

Petitioners argued Article 1249 of the Civil Code requires payment in the currency stipulated or legal tender and therefore the check was insufficient for redemption. They contended the check was not legal tender and its tender was conditional because Bautista’s letter contained a reservation; moreover, Bautista’s later motion to deposit the redemption money with the clerk of court constituted a withdrawal of tender. Petitioners relied on several precedents (Belisario, Villanueva, Legarda, New Pacific, PAL) they claimed limited or overruled the authority permitting redemption by check.

Respondents’ Arguments and Trial Court’s Rationale

Respondents (NSC and Bautista) and the trial court maintained that Article 1249 is inapplicable because the right of redemption is not the extinction of an obligation but a statutory privilege; it is not a debt situation where Article 1249 is triggered. The trial court relied on Javellana v. Mirasol, which held that acceptance by the officer of a check for redemption money does not render the redemption invalid. The court emphasized that payment to the sheriff is authorized by Rule 39, Section 31, and that acceptance of a check, while potentially exposing the officer to liability if loss to purchaser occurs, does not nullify redemption.

Supreme Court’s Analysis on Applicability of Article 1249

The Supreme Court agreed with the respondents and the trial court: Article 1249 was not applicable because redemption is a privilege rather than the extinguishment of a pre-existing debt. The Court reiterated that redemption is not an obligation that compels payment in legal tender; it is permissive and remedial, deserving of liberal construction to favor reinstatement of ownership when possible.

Supreme Court’s Treatment of Payment by Check and Jurisprudential Basis

The Court relied principally on Javellana v. Mirasol and Tolentino v. Court of Appeals for the proposition that redemption is not invalidated by acceptance of a check as redemption money, provided the officer accepts it within the redemption period. The Court observed that several cases cited by petitioners did not involve redemption by check and therefore were not controlling. The Court noted analogous authorities (including foreign authorities cited in the decision) recognizing that payment by check or banker’s draft can be effective where the officer accepts it in good faith before the redemption period expires.

Reservation, Repudiation, and Effect on Redemption

The Court found nothing objectionable in Bautista’s reservation when making redemption (March 21, 1985). The reservation was a prudent attempt to avoid estoppel; absent the reservation, redemption would be an implied admission of the regularity of the sale and could bar later challenges. The Court characterized Bautista’s alternative actions (initial acceptance/availing of NSC’s check with reservation; later filing of motion to deposit with clerk) as exercise of alternative reliefs and not inconsistent positions that would invalidate the redemption. The Court concluded Bautista’s subsequent repudiation did not render the redemption inofficious; in fact, by the time of the repudiation the sheriff had already issued a certificate of redemption.

Limitation on Scope: Not Endorsing Nonconsensual Use of Checks Generally

The Court expressly stated it was not sanctioning the use of checks over the objection of the creditor as universal practice; rather, it held

Case Syllabus (G.R. No. 5194)

Procedural History

Petitioners sought mandamus to compel the sheriff to execute a final deed of sale in their favor after they purchased two parcels at public auction and were issued a certificate of sale.
The writ of execution originated from a judgment rendered by the Regional Trial Court (RTC) of Quezon City on April 21, 1981 in Civil Case No. Q-22367 (Alfaro Fortunado vs. Angel Bautista), ordering defendant to pay damages.
Sheriff Basilisa Campano levied upon two parcels registered to Bautista (TCT Nos. T-7625 and T-14133) pursuant to that judgment; one parcel had already been purchased by National Steel Corporation (NSC) on August 17, 1983 but not yet registered in its name.
After due notice, the sheriff sold both lots at public auction on April 23, 1984; petitioners were the only bidders and were issued a certificate of sale, registered April 25, 1984.
NSC, on January 10, 1985, gave notice to the sheriff of its intention to redeem the lot covered by TCT No. T-14133; the sheriff suggested NSC redeem both lots because they had been sold together for a lump sum.
NSC filed an Urgent Motion to redeem both lots on February 11, 1985; petitioners opposed on grounds of lack of personality to intervene.
NSC issued PNB Check No. 313551 for P296,384.43 to the sheriff on March 20, 1985 as redemption price for TCT No. T-14133; sheriff acknowledged receipt March 20, 1985.
Bautista sent a letter dated March 21, 1985 conforming to NSC’s check and purporting to use it to redeem the other lot (T-7625), expressly reserving rights and protesting validity of the writ and sale.
Sheriff issued a certificate of redemption in favor of NSC and Bautista on March 22, 1985 after acknowledging receipt of the check as redemption money for both parcels.
Bautista wrote the sheriff on March 25, 1985 repudiating the redemption, asserting the auction sale was null and void; on March 27, 1985 he filed an Urgent Motion to have the P296,384.43 delivered to and kept by the Clerk of Court of the RTC of Quezon City pending resolution of sale validity.
Sheriff wired petitioners’ counsel March 29, 1985 notifying deposit of the PNB check; petitioners’ counsel rejected the check as not legal tender and intended only for deposit.
Petitioners on April 25, 1985 requested issuance of a final deed of sale; when refused they filed a petition for mandamus with the Court of Appeals.
On November 10, 1986 the Court of Appeals denied mandamus but granted an injunction restraining registration of the certificate of redemption in favor of NSC and Bautista. Petitioners’ motion for partial reconsideration filed November 22, 1986 was denied on May 8, 1987.
NSC filed a Manifestation on March 18, 1987 informing the Court of Appeals that the certificate of redemption had already been registered and TCT No. T-27154 issued in its favor on September 12, 1985.
Petitioners elevated the case to the Supreme Court by certiorari; decision authored by Justice Cruz affirmed the appealed decision with modification, and the petition was denied with costs against petitioners.

Facts (chronological and material)

RTC judgment: April 21, 1981 (Civil Case No. Q-22367) ordering defendant to pay damages.
Sheriff Basilisa Campano levied on two parcels registered to Angel L. Bautista, Iligan City – covered by Transfer Certificate of Title Nos. T-7625 and T-14133.
NSC had purchased the lot covered by TCT No. T-14133 on August 17, 1983 but had not completed registration in its name as of the auction.
Auction sale: April 23, 1984; petitioners were sole bidder; certificate of sale registered April 25, 1984.
NSC notice of intention to redeem: January 10, 1985; sheriff suggested redemption of both lots since they were sold together for P267,013.00 (lump sum sale price).
NSC urgent motion to redeem both lots: filed February 11, 1985; petitioners opposed.
NSC issued PNB Check No. 313551 dated March 20, 1985 for P296,384.43 (redemption price for TCT No. T-14133); sheriff acknowledged receipt March 20, 1985.
Bautista’s conformity letter of March 21, 1985 used NSC’s check to redeem T-7625, with reservation expressly disavowing acknowledgement of validity of writ of execution and sale and reserving legal remedies.
Sheriff acknowledged receipt March 21, 1985 and issued certificate of redemption March 22, 1985 in favor of NSC and Bautista.
Bautista’s March 25, 1985 letter repudiated redemption; March 27, 1985 Urgent Motion asked that the P296,384.43 be deposited with the Clerk of Court of RTC Quezon City pending resolution of sale validity.
Sheriff notified petitioners’ counsel of deposit March 29, 1985; petitioners’ counsel rejected the check because it was not legal tender and was allegedly intended for deposit only.
Petitioners sought final deed of sale April 25, 1985 asserting no valid redemption within 12 months from registration of sale.
Court of Appeals denied mandamus November 10, 1986 but granted injunction against registration of certificate of redemption; later informed that certificate of redemption had been registered and TCT No. T-27154 issued to NSC on September 12, 1985.
Trial court records relating to CC No. Q-22367 were destroyed by fire at Quezon City Hall on June 11, 1988; thus facts relating to sale validity were not before the Supreme Court.

Issues Presented

Whether Article 1249 of the New Civil Code (payment in currency stipulated or legal tender) applies to redemption under Rule 39, Section 30 of the Rules of Court.
Whether the tender of a crossed PNB check (No. 313551) for P296,384.43 by NSC satisfied the requirements for redemption payment and whether acceptance by the sheriff made the redemption valid.
Whether Bautista’s letter containing a reservation rendered his purported redemption conditional and thus inofficious.
Whether the tender/receipt of redemption money was effectively a payment within the meaning of Article 1233 of the Civil Code.
Whether the Court of Appeals erred in concluding the redemptions by NSC (and by Bautista) were valid and unqualified.
Whether the Supreme Court has ancillary jurisdiction to rule on the validity of the auction sale as attacked by Bautista and whether petitioners have established grounds to compel issuance of the final deed of sale.

Petitioners’ Contentions

Article 1249 of the Civil Code requires payment of debts in the currency stipulated or, if impossible, in legal tender; petitioners assert this provision governs redemption under Rule 39, Section 30 and thus a check is unacceptable for redemption.
The PNB check is not legal tender and therefore cannot