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BPI vs. SPS.docx

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  BPI FAMILY SAVINGS BANK, INC. vs. SPOUSES VELOSO FACTS: Spouses Veloso obtained a loan in the amount of P1.3M from family Bank and Trust Company secured by a deed of mortgage over three parcels of land, with improvements, registered in their names. They likewise executed a promissory note. However they failed to pay the installment amounts of the loan hence their properties were foreclosed and was sold to Family Bank and Trust Company as the highest bidder in the auction sale for P782,554.66 Later, Family Bank and Trust Company assigned its rights on the said properties in favor of BPI Family Bank, Inc. To affect the transfer of title, the certificate of sale was registered in the Register of Deeds of QC. Acting on the matter, respondents offered to redeem the properties for P1,872,935. Respondent thereafter filed a complaint for annulment of foreclosure with consignation and prayer for damages before RTC Branch 94 of QC where he was allowed to deposit with said court the sum of P1,500 representing the redemption price. The latter initially granted the prayer for injunction. Respondent went to Supreme Court via Petition for review which affirmed BPI’s  right to possess the properties. Pursuant to the said decision, on December16, 1992, upon motion of respondents and despite the opposition of petitioner, Branch 94 ordered the release of P1,400,000 of the consigned amount to respondents, with the balance of P100,000 to take the place of the injunction bond to answer for whatever damages petitioner might suffer because of the issuance of the  preliminary injunction(previously issued and later lifted) in favor of respondents. After 10 years, Branch 94 finally decided in favor of the validity of the foreclosure proceedings but allowed the respondents to redeem the properties at P2.14M. From this decision BPI appealed to the CA which affirmed the trial court’s  decision with modification that the redemption prices should be at P2,678,639.80. Hence that the decision of the CA in granting respondent’s  right to redeem at P2,678,639.80 was in violation of the earlier ruling by the Supreme Court. ISSUE: Whether or not the spouses have complied with all the requirements for redemption in order to obtain a favorable ruling from the Court of Appeals. RULING:  No. Bona fide redemption necessarily implies a reasonable and valid tender of the entire repurchase price, otherwise the rule on the redemption period fixed by law can easily be circumvented. As explained by this Court in Basbas vs. Entena the existence of the right of redemption operates to depress the market value of the land until the period expires, and to render that period indefinite by permitting the tenant to file a suit for redemption, With either party unable to foresee when final judgment will terminate the action, would render nugatory the period of two years fixed by the statute for making the redemption and virtually paralyze any efforts of the landowner to realize the value of his land. No buyer can be expected to acquire it  without any certainty as to the amount for which it may be redeemed, so that he can recover at least his investment in case of redemption. In the meantime, the land owner’s needs and obligations cannot be met. Fixing a definite term within the property should be redeemed is meant to avoid prolonged economic uncertainty over the ownership of the thing sold. The disposition of the instant case in the trial court unnecessarily dragged for almost a decade. Now, it is on its 18thyear and still respondents have not tendered the full redemption price. Nor have they consigned the full amount, if only to prove their willingness and ability to pay. This would have evidenced their good faith. Their offer was not a legal and effective exercise of the right of redemption contemplated by law, hence, refusal of the offer by petitioner was completely justified.
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