View full case

SPS. RAMON ESTANISLAO v. CA

FACTS:

The case involves spouses Ramon Estanislao, Jr. and Dina Teotico Estanislao who mortgaged their property to respondent Hi-Yield Realty, Inc. as security for a loan. Due to the petitioners' failure to comply with some of the mortgage's conditions, the property was foreclosed and sold to Hi-Yield Realty, Inc. Petitioner Ramon Estanislao, Jr. attempted to redeem the property but his tendered checks were rejected. The petitioners later discovered that their property had been transferred to Hi-Yield Realty, Inc. Dissatisfied with the outcome, the petitioners filed a lawsuit seeking the annulment of the transfer of ownership, the cancellation of the new title, and payment of damages and attorney's fees. The trial court dismissed their suit and ordered them to pay damages to the private respondents. The Court of Appeals upheld the trial court's decision. As a result, the petitioners filed a petition for review on certiorari.

ISSUES:

  1. Whether the tender of full redemption price made by the petitioners was within the prescribed period.

  2. Whether the tender of payment made by the petitioners included the full amount of the purchase price.

  3. Whether or not the failure of the petitioners to pay additional amounts required by law is excused.

  4. Whether or not the registration of the Affidavit of Consolidation of Ownership and the issuance of a new TCT to Hi-Yield Realty, Inc. involved fraudulent collusion.

RULING:

  1. The tender of the full redemption price made by the petitioners was 12 days late counted from the expiration of the redemption period, therefore, not within the prescribed period.

  2. The payment tendered by the petitioners did not include the interest but was limited to the purchase price, thus, it did not include the full amount of the purchase price.

  3. The failure of the petitioners to pay additional amounts required by law is excused because the respondent failed to furnish the petitioners with a statement of account. This statement of account was necessary in order for the petitioners to know the exact amount of assessments or taxes that may have been paid by the respondent. The respondent also failed to file the statement of account with the Registry of Deeds as required by law. Therefore, the petitioners were justified in not paying any assessments or taxes that the respondent may have paid.

  4. The allegation of fraudulent collusion in the registration of the Affidavit of Consolidation of Ownership and the issuance of a new TCT to Hi-Yield Realty, Inc. is without basis. The consolidation of ownership in the purchaser was justified because the period of redemption had expired without the petitioners being able to pay the purchase price plus the required interest. The Acting Registrar of Deeds also approved the registration of the Affidavit of Consolidation of Ownership and denied knowing any of the persons connected with Hi-Yield Realty, Inc. The lack of evidence of fraudulent collusion or bad faith on the part of the respondent justifies the dismissal of this allegation.

PRINCIPLES:

  • The right of redemption should be exercised within the period prescribed by law.

  • The tender of payment must be for the full amount of the purchase price to avoid indefinite extension of the redemption period.

  • The property may be redeemed without paying assessments, taxes, or liens if proper notice was not filed.

  • Failure to comply with requirements may excuse a party from fulfilling a certain obligation.

  • A statement of account and proofs thereof must be furnished to the redemptioner by the purchaser for the purpose of computing the actual amount payable upon redemption.

  • The law presumes good faith, and the burden of proving bad faith or ill motive lies with the party seeking damages.

  • No penalty should be imposed on those who exercise their right to litigate in good faith, therefore the award of attorney's fees may be deleted.