De los Reyes vs. Intermediate Appellate Court

The Court held that the one-year redemption period for extrajudicially foreclosed property under Rule 39 of the Rules of Court begins upon the registration of the certificate of sale with the Register of Deeds. A valid redemption may be effected by a timely tender of the purchase price plus interest to the sheriff who conducted the sale, and such tender, if refused, need not be followed by a deposit to remain effective.

Petitioner Juana de los Reyes obtained a loan from the Rural Bank of Bauan secured by a real estate mortgage on her land. Due to non-payment, the mortgage was extrajudicially foreclosed, and the land was sold at public auction to respondents Spouses Ylagan on April 29, 1976. The certificate of sale was registered on May 4, 1977. Respondents later filed an action to vacate the property. Petitioner contested the sale's validity and attempted to redeem the property by tendering the redemption price to the Provincial Sheriff in April 1978, which was refused as allegedly late.

Petitioner's land was sold at auction on April 29, 1976, after foreclosure of a mortgage. The certificate of sale was registered on May 4, 1977. On April 26, 1978, petitioner tendered P4,925.00 plus interest to the Provincial Sheriff to redeem the property. The sheriff refused, stating the redemption period had expired. On May 9, 1978, pursuant to a court order, petitioner deposited P6,107.00 (the purchase price plus accrued interest) with the trial court. The lower courts found the redemption untimely because the initial tender was insufficient and the corrected deposit was made after the one-year period, which they calculated as ending on May 4, 1978.

• Petitioner argued that the one-year redemption period commenced on the date of registration of the certificate of sale (May 4, 1977), not the date of the auction sale (April 29, 1976), making her tender on April 26, 1978 timely.
• She maintained that her tender to the Provincial Sheriff was valid under Rule 39, Section 31, as the sheriff is an authorized recipient.
• Petitioner contended that the amount tendered was sufficient as it included the purchase price and an offer to pay the required 1% monthly interest.

• Respondents argued that the redemption period expired one year from the auction sale (April 29, 1976), making any tender in 1978 late.
• They questioned the admissibility of the tender and rejection letters, as they were not formally offered in evidence.
• Respondents claimed the initial tender was insufficient because it did not specify the exact accrued interest amount.

• Procedural Issues: Whether the trial court erred in considering the letters of tender and refusal as evidence despite not being formally offered.
• Substantive Issues:
  1. Whether the redemption period for extrajudicially foreclosed property runs from the date of the auction sale or from the registration of the certificate of sale.
  2. Whether a tender of the redemption price to the Provincial Sheriff is valid.
  3. Whether the petitioner's tender was timely and sufficient to effect a valid redemption.

• Procedural: The Court found no error in the trial court's consideration of the letters. The documents were part of the case record, were presented at a hearing without objection from respondents, and were noted by the court in an order. In summary judgment proceedings, the judge may base the decision on pleadings and documents on file.
• Substantive: The Court reversed the lower courts. It held that the one-year redemption period under Act No. 3135 (governing extrajudicial foreclosures) and Rule 39 commences upon the registration of the certificate of sale. The petitioner's tender on April 26, 1978, was therefore timely. The tender to the Provincial Sheriff was valid pursuant to Rule 39, Section 31. The tender of the purchase price plus an offer to pay interest, made in good faith, was sufficient to preserve the right of redemption; the subsequent court deposit was merely confirmatory.

• Liberal Construction of Redemption Laws — The right of redemption is to be liberally construed in favor of the original owner, as it embodies the policy of giving the debtor a second chance to recover lost property. The Court applied this principle to uphold the redemption despite technical objections regarding the sufficiency of the tender.
• Commencement of Redemption Period — For extrajudicial foreclosures, the one-year redemption period begins upon the date of registration of the certificate of sale with the Register of Deeds, not the date of the auction sale itself.
• Validity of Tender to Sheriff — Under Rule 39, a judgment debtor may redeem property by making payment to the purchaser or, for the purchaser, to the officer who made the sale. A valid tender to the sheriff, if refused, need not be followed by a deposit to be effective.

• "The rule on redemption is liberally interpreted in favor of the original owner of the property. The fact alone that he is allowed the right to redeem clearly demonstrates the tenderness of the law toward him in giving him another opportunity, should his fortunes improve, to recover his lost property." — This passage articulates the foundational policy guiding the Court's interpretation.
• "Where the judgment debtor or a redemptioner validly tenders the necessary payment for the redemption and the tender is refused, it is not necessary that it be followed by the deposit of the money in court or elsewhere, and no interest after such tender is demandable on the redemption money." — Cited from Moran's Comments, this supports the sufficiency of the petitioner's initial tender.

• Rosario v. Tayug Rural Bank, Inc., 22 SCRA 1220 — Cited for the principle that a timely and good-faith tender of the purchase price, even if the interest amount is not precisely computed, warrants allowing the redemptioner an opportunity to complete the redemption in the interest of justice.
• Castillo v. Nagtalon, 114 Phil. 7 — Cited for a similar holding that a timely, good-faith tender of an insufficient amount may be completed later, balancing the interests of the redemptioner and the purchaser.
• Enage v. Vda. de Hijos de Escano, 38 Phil. 657 and Basco v. Gonzales, 59 Phil. 1 — Cited from Moran's treatise to support the validity of redemption payments made to the sheriff.

• Rule 39, Sections 30 and 31 of the Rules of Court — These sections govern the redemption of property sold on execution. The Court interpreted them to allow tender to the sheriff and to require only the purchase price plus 1% monthly interest.
• Act No. 3135 (An Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real-Estate Mortgages) — The statute governing extrajudicial foreclosure sales. The Court's ruling on the start of the redemption period is based on its provisions as implemented by registration.