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JAIME TAN v. CA

FACTS:

This case involves a parcel of land in Bunawan, Davao City, covered by TCT No. T-72067 registered under the name of Jaime C. Tan and Praxedes V. Tan. On January 22, 1981, Tan executed a deed of absolute sale of the property in favor of Jose Magdangal and Estrella Magdangal for a consideration of P59,200. The parties also entered into an agreement where Tan was given one year to redeem or repurchase the property. Tan failed to redeem the property and passed away on January 4, 1988. On May 2, 1988, Tan's heirs filed a suit for reformation of instrument against the Magdangals, alleging that their intention was to conclude an equitable mortgage instead of a sale. Hours after the complaint was filed, the Magdangals had Tan's title canceled and secured a new title in their names. On June 4, 1991, the Regional Trial Court declared the deed of absolute sale as an equitable mortgage and ordered Tan's heirs to pay the Magdangals the repurchase price plus interest. The court further ordered the cancellation of the new title and the reinstatement of Tan's original title. The Magdangals appealed the decision to the Court of Appeals, but the decision was affirmed in 1995. The Entry of Judgment was issued on March 13, 1996. The Magdangals filed a motion for consolidation and writ of possession, claiming that the decision has become final. Tan's heirs opposed the motion, asserting that the decision cannot be considered final and executory until the Entry of Judgment was issued. Tan's heir also filed a motion for execution and a manifestation and motion to redeem the property. The court a quo ruled on these motions.

The petitioner, Tan, Jr., and the respondent, Magdangal, entered into a contract which the trial court declared as an equitable mortgage. The trial court ordered Tan to pay Magdangal a certain amount within 120 days after the finality of the decision. The Court of Appeals affirmed the decision of the trial court, and both parties received the decision on October 5, 1995. On March 13, 1996, the decision was entered in the Book of Entries of Judgement and became final and executory. The respondents filed a Motion for Consolidation and Writ of Possession, claiming that the redemption period expired. The petitioner filed a motion for execution in the appellate court and deposited the repurchase price with the clerk of court on April 17, 1996. The trial court allowed the petitioner to redeem the lot on June 10, 1996, but the Court of Appeals set aside this ruling.

Unimasters Conglomeration, Inc. (Unimasters) filed a Complaint for Specific Performance and Damages against Universal Motors Corporation (UMC) before the Regional Trial Court (RTC). The RTC rendered a decision in favor of Unimasters, ordering UMC to pay damages and attorney's fees. UMC appealed the decision to the Court of Appeals (CA).

While the appeal was pending, Unimasters filed a Motion for Execution Pending Appeal with the CA. The CA granted the motion and directed the RTC to issue the appropriate writ for the enforcement of the judgment. UMC questioned the grant of the motion, arguing that the 90-day period for the exercise of the right of redemption had already expired.

The CA affirmed the grant of the motion for execution pending appeal. UMC then filed a Petition for Review before the Supreme Court (SC).

ISSUES:

  1. Whether the petitioner's right to redeem the property should be deemed timely and valid.

  2. Whether Section 1, Rule 39 of the 1997 Revised Rules of Civil Procedure, which amends the rule on finality of judgment, can be applied retroactively to the detriment of the petitioner.

RULING:

  1. The petitioner's redemption of the property was deemed timely and valid. The trial court, applying the rule established in Cueto vs. Collantes, correctly reckoned the 120-day redemption period from the date of entry of judgment by the appellate court, and the petitioner's deposit of the redemption amount on April 17, 1996, was within this period.

  2. Section 1, Rule 39 of the 1997 Revised Rules of Civil Procedure cannot be applied retroactively to this case. The retroactive application of the procedural rule on the finality of judgment would result in injustice to the petitioner, depriving him of his vested right to redeem the property. The change of procedure affecting the period of redemption should not defeat the substantive right already vested in the petitioner.

IN VIEW WHEREOF, the decision of the Court of Appeals dated July 15, 1998, and its Resolution dated November 9, 1998, in CA-G.R. SP-41738 are annulled and set aside. The Orders dated June 10, 1996, and July 24, 1996, of the RTC of Davao City, 11th Judicial Region, Branch 11, in Civil Case No. 19049-88 are reinstated. No costs.

SO ORDERED.

PRINCIPLES:

  1. Finality of Judgment Under Rule 51 of the Revised Rules of Court (prior to the 1997 amendments), a judgment becomes final upon the expiration of the period to appeal if no appeal is filed, and entry of judgment is then recorded.

  2. Retroactivity of Procedural Laws Procedural laws can be given retroactive effect, but this general rule has exceptions where applying the new rule retroactively would impair vested rights or lead to injustice.

  3. Right to Redeem The right to redeem is a substantive right. Procedural changes should not be applied retroactively to negate a vested substantive right if it results in great injustice.

  4. Cueto vs. Collantes Doctrine The period for exercising the right of redemption should be counted from the date of entry of judgment, rather than from the date when the judgment becomes final and executory if a petition for review is filed within the reglementary period.

  5. Equity Considerations Courts should avoid retroactive application of procedural laws if it would result in inequity or injustice to parties who have acted under the old procedural law.