Biana vs. Gimenez

A check may be used for the exercise of the right of redemption, and the mere tender of a check is sufficient to compel redemption, the right of redemption being a right and not an obligation; accordingly, the Civil Code provisions on payment of obligations, particularly Article 1249, do not apply to the exercise of the right of redemption.

Santos B. Mendones obtained a monetary judgment in a labor case against Gimenez Park Subdivision and George Gimenez before the Department of Labor and Employment, Naga City District Office. When the defendants failed to satisfy the judgment, the sheriff levied on four parcels of urban land in Naga City covering more than 74 hectares, registered under TCT No. 10249 in the names of several Gimenez family members including respondent George Gimenez. Mendones acquired the property at the execution sale as sole bidder and, during the pendency of the subsequent mandamus litigation, assigned his rights over the property to petitioner Jaime Biana for ₱1,000,000, at a time when the property was already valued at approximately ₱40,000,000.

In a labor case entitled Santos B. Mendones vs. Gimenez Park Subdivision and George Gimenez, docketed as Term Case No. R05-D-008-78 before the Naga City District Office of the Department of Labor and Employment, the defendants, including respondent George Gimenez, were ordered to pay Mendones the sum of ₱1,520.00 plus ₱8.00 per day starting August 1, 1978 until reinstatement, as well as ₱3,168.00 as sheriff's fees and expenses of execution. Deputy Sheriff Renato Madera computed the total judgment obligation at ₱5,248.50 and demanded immediate payment from the defendants.

When the defendants failed to pay, Sheriff Madera levied on four parcels of urban land in Naga City with an aggregate area of more than 74 hectares, registered under TCT No. 10249 in the names of Jose F. Gimenez, Tessa F. Gimenez, Maricel G. Gimenez, and respondent George Gimenez. A public auction was conducted on December 6, 1978, where Mendones, as sole bidder, won with a bid of ₱8,908.50, representing the judgment obligation plus expenses of execution. A Provisional Certificate of Sale was issued and registered in Mendones's name on December 7, 1978.

Respondent Gimenez claimed he was not duly notified of the execution sale and learned of it only when a sheriff's representative asked him to pay the publication fee of ₱3,510.00. He paid the full publication fee by issuing checks and was issued O.R. No. 161 on January 27, 1979, approximately ten months and twenty days before the expiration of the one-year redemption period. To exercise his right of redemption, Gimenez approached Provincial Sheriff Manuel Garchitorena, having failed to locate Sheriff Madera. Garchitorena computed the redemption balance, including interest and sheriff's fee, at ₱6,615.89. Gimenez issued four postdated checks payable to Garchitorena: Check No. 272377 dated July 18, 1979 for ₱1,500.00, Check No. 272384 dated August 3, 1979 for ₱1,500.00, Check No. 272385 dated August 18, 1979 for ₱1,500.00, and Check No. 272386 dated September 1, 1979 for ₱1,115.89. Garchitorena issued a receipt dated July 19, 1979 — four months and eighteen days before the expiration of the redemption period — acknowledging receipt of ₱5,615.89 in "full payment and satisfaction of the judgment."

On December 3, 1979, Sheriff Madera wrote to Gimenez's counsel stating that the one-year redemption period would expire on December 7, 1979 and that Gimenez still had an unpaid balance of ₱4,367.81. When counsel requested an itemization, Madera submitted one that included ₱3,510.00 as publication fee due to Bicol Star. Gimenez disagreed, contending he had already paid the full publication cost to the publisher. Nonetheless, on December 8, 1979, Madera executed a Definite Deed of Sale in favor of Mendones. Gimenez then requested Garchitorena to execute a deed of redemption, but the request was refused.

Gimenez filed a special civil action for mandamus with damages before the RTC of Naga City, docketed as Civil Case No. 860, to compel the sheriffs to execute a deed of redemption, with an alternative prayer that if a definite deed of sale had already been issued, the same be declared null and void. Mendones was permitted to intervene and contended that no valid redemption was effected within the one-year period. During the pendency of the case, Mendones assigned his right over the 74-hectare property to petitioner Jaime Biana for ₱1,000,000.00. The trial court found that Gimenez had validly redeemed the property within the reglementary period, that the sheriffs acted in collusion with Mendones to unjustly enrich themselves by enforcing a writ for a paltry sum against property valued at ₱40,000,000, and that Biana, as successor-in-interest, had insisted on continuing the litigation despite full knowledge of the disproportion between Mendones's original claim and the property's value.

• Postdated Checks Do Not Constitute Valid Redemption: Petitioner contended that there was yet no redemption because what respondent tendered were postdated checks, which did not operate as payment of the redemption price, relying on the ruling in Philippine Airlines, Inc. vs. Court of Appeals where payment by check issued in the name of an absconding sheriff did not operate as payment of the judgment obligation.
• Impropriety of Mandamus: Petitioner argued that mandamus was improper because a Definite Deed of Sale had already been executed by Deputy Sheriff Madera, such that there was no longer a duty compellable by mandamus; respondent's speedy and adequate remedy was to file an independent action to nullify the deed and thereafter seek a deed of redemption.
• Conversion of Mandamus into Ordinary Civil Action: Petitioner faulted the trial and appellate courts for converting the special civil action of mandamus into an ordinary civil action with multiple reliefs, particularly by nullifying the Definite Deed of Sale in the same proceedings.
• Lack of Prayer for Damages Against Petitioner: Petitioner maintained that the Court of Appeals erred in sustaining the award of moral damages and attorney's fees because no such prayer was directed against petitioner in the complaint for mandamus, which was directed only against the Provincial Sheriff.
• Sheriff's Discretion: Petitioner argued that the act of executing a deed of redemption involves the exercise of discretion by the Provincial Sheriff, rendering mandamus — a remedy for ministerial duties — unavailing.

• Validity of Redemption via Postdated Checks: Whether the tender of postdated checks to the Provincial Sheriff within the one-year redemption period constitutes a valid exercise of the right of redemption.
• Propriety of Mandamus: Whether mandamus lies to compel the Provincial Sheriff to execute a deed of redemption notwithstanding the prior execution of a Definite Deed of Sale.
• Nullification of Definite Deed of Sale in Mandamus Proceedings: Whether the trial court acted beyond its jurisdiction in nullifying the Definite Deed of Sale within the same mandamus proceedings.
• Award of Moral Damages and Attorney's Fees: Whether moral damages and attorney's fees were properly awarded against petitioner as successor-in-interest of Mendones.

• Validity of Redemption via Postdated Checks: Yes. The mere tender of a check is sufficient to compel redemption, the right of redemption being a right and not an obligation; the Civil Code provisions on payment of obligations, particularly Article 1249, do not apply.
• Propriety of Mandamus: Yes. Mandamus was proper because respondent's petition included an alternative prayer to nullify the Definite Deed of Sale, and the sheriff's duty to execute a deed of redemption upon valid exercise of the right of redemption is ministerial.
• Nullification of Definite Deed of Sale in Mandamus Proceedings: Yes. The nullification was necessary to give effect to the writ of mandamus; an independent action would have resulted in multiplicity of suit, and the issue had already been brought to the trial court's attention in the same case.
• Award of Moral Damages and Attorney's Fees: Yes. The original petition was for mandamus with damages, and Mendones, as intervenor, became a party-respondent against whom damages were prayed; petitioner, as successor-in-interest, is bound by the actions of his predecessor.

• Validity of Redemption via Postdated Checks: The distinction between payment of an obligation and exercise of a right of redemption is decisive. In Philippine Airlines, Inc. vs. Court of Appeals, the Court held that a check issued in the name of an absconding sheriff did not operate as payment of the judgment obligation, applying Article 1249 of the Civil Code, which provides that bills of exchange and other mercantile documents produce the effect of payment only when cashed or impaired through the creditor's fault. That ruling, however, involved payment of a judgment obligation, not the exercise of a right of redemption. In Fortunado vs. Court of Appeals, the Court explicitly held that a check may be used for the exercise of the right of redemption, the same being a right and not an obligation, and that the tender of a check is sufficient to compel redemption though not in itself a payment that relieves the redemptioner from liability to pay the redemption price. Moreover, the factual backdrop in PAL — where the sheriff absconded with the checks — does not obtain here. Sheriff Garchitorena did not abscond; he issued a receipt dated July 19, 1979 acknowledging full payment, and Sheriff Madera himself deducted the aggregate amount of the four checks from Gimenez's liability when submitting the itemization. The tender was made well within the one-year redemption period, and the receipt was issued four months and eighteen days before its expiration.

• Propriety of Mandamus: Petitioner's argument that mandamus cannot lie because a Definite Deed of Sale had already been executed overlooks the alternative prayer in respondent's petition, which expressly sought that "in the event that a final confirmation of sale was in fact executed by respondent Renato Madera, the same be declared null and void ab initio." The trial court therefore did not go beyond what was prayed for. The nullification of the Definite Deed of Sale was necessary to give effect to the writ ordering the Provincial Sheriff to execute a deed of redemption; granting the writ without annulling the prior deed would render the judgment a mere farce. The Court declined to sanction a strict application of procedural rules that would defeat the purposes of the law and sanction actions found to be clearly in violation of law and settled jurisprudence.

• Nullification of Definite Deed of Sale in Mandamus Proceedings: Because the issue of nullification had already been brought to the trial court's attention in the same mandamus case, an independent action for nullification would only result in multiplicity of suit. The mandamus case was filed on February 25, 1982, more than two decades prior to the Supreme Court's resolution, further underscoring the impracticality of requiring a separate action. The Court agreed with the appellate court that it was "very much appropriate" to resolve the nullification in the same proceedings, consonant with the finding that respondent had made a valid redemption within the reglementary period.

• Award of Moral Damages and Attorney's Fees: Petitioner is the successor-in-interest of Santos Mendones and is bound by all actions made by the latter. The original petition filed before the trial court was a special civil action for mandamus with damages. Although the sheriffs were the original respondents, Mendones filed an answer-in-intervention with leave of court, thereby becoming a party-respondent against whom Gimenez prayed for the award of moral damages and attorney's fees. The trial court found that Gimenez suffered mental anguish, extreme humiliation, and social ridicule due to the patently void acts of the sheriff in collusion with the intervenor, who enforced a writ to satisfy a judgment for a paltry sum in the hope of unjustly enriching themselves by obtaining title over property valued at ₱40,000,000. Biana, knowing the property's value, persuaded Mendones to part with his claim for ₱1,000,000 and insisted on continuing the litigation. These findings of fact, affirmed by the appellate court, sufficiently established the factual basis for the award.

• Right of Redemption Distinguished from Payment of Obligations — The exercise of the right of redemption is a right, not an obligation; consequently, the Civil Code provisions on payment of obligations, particularly Article 1249, do not apply. A mere tender of a check is sufficient to compel redemption, though the tender is not itself payment that relieves the redemptioner from liability to pay the redemption price. The Court applied this doctrine to hold that Gimenez's postdated checks, tendered to and acknowledged by the Provincial Sheriff within the one-year redemption period, constituted a valid exercise of the right of redemption.

• Mandamus as Remedy for Ministerial Duty — Mandamus lies to compel the performance of a ministerial duty when there is no other plain, speedy, and adequate remedy. The execution of a deed of redemption upon valid exercise of the right of redemption is a ministerial duty of the sheriff. The Court applied this doctrine to uphold the issuance of the writ, while also recognizing that nullification of a prior Definite Deed of Sale — properly pleaded as an alternative prayer — could be accomplished in the same proceedings to avoid multiplicity of suit.

• "What we are saying is that a check may be used for the exercise of the right of redemption, the same being a right and not an obligation. The tender of a check is sufficient to compel redemption but is not in itself a payment that relieves the redemptioner from his liability to pay the redemption price." — This passage, quoted from Fortunado vs. Court of Appeals, articulates the controlling doctrine distinguishing the right of redemption from payment of obligations and is the ratio decidendi for the ruling on the validity of redemption via postdated checks.

• "The grant of the writ of mandamus (commanding the Provincial Sheriff of Camarines Sur to execute the Deed of Redemption) without annulling the Definite Deed of Sale would all be nothing but a mere farce." — This passage, quoted from the Court of Appeals' decision, explains why nullification of the Definite Deed of Sale in the same mandamus proceedings was necessary and proper, constituting the ratio decidendi on the issue of procedural propriety.

• "We cannot, even in our wildest imagination, allow this absurdity to defeat the purposes of the law, and more so to sanction actions of the parties which we found to be clearly in violation of the law and settled jurisprudence, on the basis merely of a technicality brought about by a strict application of the rules." — This passage underscores the Court's refusal to elevate procedural technicality over substantive justice, a principle frequently invoked in subsequent jurisprudence on procedural liberality.

• Philippine Airlines, Inc. vs. Hon. Court of Appeals, et al., 181 SCRA 557 (1990) — Distinguished. Petitioner invoked this case for the proposition that payment by check issued in the name of an absconding sheriff did not operate as payment of the judgment obligation. The Court distinguished it on two grounds: first, PAL involved payment of a judgment obligation governed by Article 1249 of the Civil Code, whereas the instant case involves the exercise of a right of redemption; second, the sheriff in PAL absconded, a circumstance not present here.

• Fortunado, et al. vs. Court of Appeals, et al., 196 SCRA 269 (1991) — Followed. This case established the rule that a check may be used for the exercise of the right of redemption and that the mere tender of a check is sufficient to compel redemption. The Court relied on this ruling as directly controlling on the issue of whether postdated checks validly exercised the right of redemption.

• Article 1249, Civil Code — Provides that the delivery of promissory notes, bills of exchange, or other mercantile documents shall produce the effect of payment only when they have been cashed or when through the fault of the creditor they have been impaired. The Court held that this provision applies to payment of obligations, not to the exercise of the right of redemption, and thus does not govern the tender of checks for redemption purposes.

• Rule 45, Rules of Court — Governs petitions for review on certiorari before the Supreme Court. Petitioner invoked this rule to seek review of the Court of Appeals' Decision dated July 9, 1997 and Resolution dated January 30, 1998.

Artemio V. Panganiban (Acting Chief Justice, Chairman), Angelina Sandoval-Gutierrez, Renato C. Corona (on official business), and Conchita Carpio Morales.