596

SUPREMECOURTREPORTSANNOTATED Lee Chuy Realty Corporation vs. Court of Appeals G.R.No.104114.December4,1995.

*

LEE CHUY REALTY CORPORATION, vs.HON. COURT OF APPEALS AND MARC REALTY AND DEVELOPMENTCORPORATION,respondents.
Sales; Legal Redemption; To avail of the right of redemption, what is essential is to make an offer to redeem within the prescribed period, either through a formal tender with consignation or by filing a complaint in court coupled with consignation of the redemption price within the prescribed period.Ajudiciousscrutiny ofthecaseshereincitedimpugnstheimpressionofMARCREALTY thattheyenunciateconflictingdoctrines.Onthecontrary,weview them as complementing one another. The Court of Appeals erroneouslyconcludedthatapriortenderorofferofredemptionisa prerequisite or precondition to the filing of the action for legal redemption, notwithstanding prevailing jurisprudence holding that to avail of the right of redemption what is essential is to make an offer to redeem within the prescribed period. There is actually no prescribed form for an offer to redeem to be properly effected. Hence,itcaneitherbethroughaformaltenderwithconsignation, or by filing a complaint in court coupled with consignation of the redemption price within the prescribed period. What is condition precedent to a valid exercise of the right of legal redemption is either the formal tender with consignation or the filing of a complaintincourt.Whatisparamountistheavailmentofthefixed and definite period within which to exercise the right of legal redemption. Same; Same; Where the right to redeem is exercised through judicial action within the reglementary period, the formal offer to redeem, accompanied by a bona fide tender of the redemption price, while proper, may be unessentialthe filing of the action itself is equivalent to a formal offer to redeem.In Hulganza v. Court of Appeals the Court, citing previous decisions, declared that the

formal offer to redeem, accompanied by a bona fide tender of the redemption price, within the prescribed period is only essential to preserve the right of redemption for future enforcement beyond such period of redemption and within the period prescribed for the action by the statute of limitations. Where, as in the instant case, the right to redeem is exercised through judicial action within the reglementary period the formal offer to redeem, accompanied by a bonafidetenderofthe
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* FIRSTDIVISION.

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redemptionprice,whileproper,maybeunessential.Thefilingofthe actionitselfisequivalenttoaformaloffertoredeem. Same; Same; The formal offer to redeem is not a distinct step or condition sine qua non to the filing of the action in Court for the valid exercise of the right of legal redemption.In sum, the formal offertoredeemisnotadistinctsteporconditionsine qua non tothe filingoftheactioninCourtforthevalidexerciseoftherightoflegal redemption. What constitutes a condition precedent is either a formal offer to redeem or the filing of an action in court together with the consignation of the redemption price within the reglementaryperiod. Same; Same; Mortgages; Public policy favors redemption regardless of whether the redemptioner is a coowner or mortgagor, although perhaps with unequal force and effect since each is given a fixed but different period.ThedoctrineinTolentino, Tiosecoand Belisario cases was jettisoned by the Court of Appeals on the groundthattheydonotinvolvelegalredemptionbyacoownerbut by a mortgagor. It concluded that the application of the rules on legalredemptionbyacoownerdiffersfromthelegalredemptionby a mortgagor. But the law does not distinguish; neither should we. Forsure,theprincipleintheaforecitedcasesisapplicableregardless of whether the redemptioner is a coowner or a mortgagor. Public policy favors redemption regardless of whether the redemptioner is

acoownerormortgagor,althoughperhapswithunequalforceand effect since each is given a fixed but different period. A coowner desirousofexercisinghisrightoflegalredemptionisgivenaperiod of thirty (30) days from notice of the sale within which to avail of therighttoredeem.Underthefreepatentorhomesteadprovisions of the Public Land Act a period of five (5) years from the date of conveyanceisprovided,thefiveyearperiodtobereckonedfromthe dateofthesaleandnotfromthedateofregistrationintheofficeof the Register of Deeds. The redemption of extrajudicially foreclosed properties, on the other hand, is exercisable within one (1) year fromthedateoftheauctionsaleasprovidedforinActNo.3135.

PETITIONforreviewoncertiorariofadecisionoftheCourt ofAppeals. ThefactsarestatedintheopinionoftheCourt. Numeriano Tanopo and Daniel C. Macaraeg for petitioner. Manalo, Puno, Tuason, Jocson & Placidoforprivate respondent.
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SUPREMECOURTREPORTSANNOTATED Lee Chuy Realty Corporation vs. Court of Appeals

BELLOSILLO,J.: Is a judicial action to redeem coupled with consignation of the price within the redemption period equivalent to a formal offer to redeem under Art. 1623 in relation to Art. 1620 of the Civil Code? Corollarily, is a formal offer to redeem accompanied with tender of payment a condition precedenttothefilingofanactionforthevalidexerciseof therightoflegalredemption?Plainlystated,isthefilingof theactionwithconsignationequivalenttoaformalofferto redeem? A valuable piece of land in Malhacan, Meycauayan, Bulacan,withanareaof24,576squaremetersandcovered by OCT No. 05290 is disputed by petitioner Lee Chuy Realty Corporation (LEE CHUY REALTY) and private respondent Marc Realty and Development Corporation (MARCREALTY).Originallythepropertywascoownedby Ruben Jacinto to the extent of onesixth and Dominador, Arsenio, Liwayway, all surnamed Bascara, and Ernesto

Jacintowhocollectivelyownedtheremainingfivesixths. On 4 February 1981 Ruben Jacinto sold his onesixth proindiviso share to LEE CHUY REALTY. The sale was registered on 30 April 1981. On 5 May 1989 the Bascaras and Ernesto Jacinto also sold their share to MARC REALTY.Thesalewasregisteredon16October1989. LEECHUYREALTYclaimsthatitwasneverinformed oftheexistenceofthesalebetweenMARCREALTYonone handandtheBascarasandJacintoontheother,andthat onthecontraryitwasonlyuponinquiryfromtheRegister of Deeds of Bulacan that the sale was brought to its attention. MARC REALTY contends otherwise. It insists thatLEECHUYREALTYwasverballynotifiedofthesale andwasinfactgivenacopyofthedeedofsale. On 13 November 1989 LEE CHUY REALTY filed a 1 complaint for legal redemption against MARC REALTY andconsignedincourtamanagerscheckfor614,400.Inits Amended Answer
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1 Docketed as Civil Case No. 661M89, RTC Malolos, Br. 7; Annex

D,Rollo,pp.3840. 599

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with Counterclaim with Motion to Dismiss,MARCREALTY insistedthatthecomplaintbedismissedforfailuretostatea cause of action there being no allegation of prior valid tenderofpaymentnorapriorvalidnoticeofconsignation. 2 On 26 December 1990 the trial court ruled in favor of LEECHUYREALTYholdingthattherewasapriorvalid tenderofpaymentandconsignation.Itfurtherdecreedthat (n)eitheraseparateoffertoredeemnoraformalnoticeof consignationare(sic)necessaryforthereasonthatthefiling of the action itself, within the period of redemption, is 3 equivalenttoaformaloffertoredeem. On1February1991MARCREALTYfileda Petition for Certiorari Prohibition with Temporary Restraining Order and/ or Writ of Preliminary InjunctionwiththisCourt.The petition however was referred to the Court of Appeals pursuanttoSec.9,B.P.Blg.129.

On 22 November 1991 the Court of Appeals rendered a decisionreversingthatofthelowercourtandrulingthata prior tender or offer of redemption is a prerequisite or preconditiontothefilingofanactionforlegalredemption. It further ruled that there must be tender of the redemption price within the required period x x x because thepolicyofthelawisnottoleavethepurchaserstitlein uncertainty beyond the established 30day period. LEE CHUY REALTY filed a motion for reconsideration but it wasdeniedhencethepresentpetition. MARC REALTY contends that prior tender of payment isaconditionprecedenttothefilingofanactionincourtin ordertovalidlyexercisetherightoflegalredemption.LEE CHUYREALTYhoweverarguesthatthefilingoftheaction itself is equivalent to a formal offer to redeem, which is a conditionprecedenttothevalidexerciseoftherightoflegal redemption. WesustainLEECHUYREALTY.Arts.1620and1623of theCivilCodeonlegalredemptionprovide:
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2PresidedbyJudgeDaniloA.Manalastas;AnnexF,Records,p.54. 3 Citing Tolentino

v. Court of Appeals, G.R. Nos. 5040506, 5 August

1981,106SCRA513. 600

600

SUPREMECOURTREPORTSANNOTATED Lee Chuy Realty Corporation vs. Court of Appeals

Art. 1620. A coowner of a thing may exercise the right of redemptionincasethesharesofalltheothercoownersorofanyof them are sold to a third person. If the price of the alienation is grosslyexcessive,theredemptionershallpayonlyareasonableone. xxxx Art.1623.Therightoflegalpreemptionorredemptionshallnot beexercisedexceptwithinthirtydaysfromthenoticeinwritingby the prospective vendor, or by the vendor, as the case may be. The deedofsaleshallnotberecordedintheRegistryofPropertyunless accompaniedbyanaffidavitofthevendorthathehasgivenwritten noticethereoftoallpossibleredemptioners.

MARC REALTY would apply the ruling5 in Cabrera v. 4 Villanueva andDe la Merced v. De Guzman whereanoffer

to redeem was required for the exercise of the right of redemption. On the other hand, LEE CHUY REALTY 6 anchorsitsclaimon Tioseco v. Court of Appeals, Tolentino 7 v. Court of Appeals, and Belisario v. Intermediate Appellate 8 9 Court. Specifically,in Cabrera v. Villanueva weheldthat for the legal and effective exercise of the right of legal redemptiononemustmaketheofferwithintheperiodsetin Art.1623.Inotherwords,ifnoclaimorofferismadewithin thirty (30) days from written notice, no action may be allowedtoenforcetherightofredemption.Butin Tolentino 10 11 v. Court of Appeals, Tioseco v. Court of Appeals and 12 Belisario v. Intermediate Appellate Court weadoptedthe viewthataformaloffertoredeem,accompaniedbyabona fide tender of the redemption price, is not essential where the right to redeem is exercised through a judicial action within the redemption period and simultaneously depositingtheredemptionprice.Theformaloffertoredeem accompaniedbyabonafidetenderoftheredemptionprice prescribedbylawisonlyessentialtopreservetheright
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4G.R.No.75069,15April1988,160SCRA672. 5No.L36626,15August1988,160SCRA87. 6G.R.No.66597,29August1986,143SCRA705. 7G.R.No.50405,5August1981,106SCRA513. 8G.R.No.73503,30August1988,165SCRA101. 9 Supra, p.677. 10 Supra, p.526. 11 Supra, pp.709,710. 12 Supra, p.108.

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of redemption for future enforcement even beyond the period of redemption. The filing of the action itself within the period of redemption is equivalent to a formal offer to redeem. Ajudiciousscrutinyofthecaseshereincitedimpugnsthe impression of MARC REALTY that they enunciate conflicting doctrines. On the contrary, we view them as complementing one another. The Court of Appeals

erroneously concluded that a prior tender or offer of redemptionisaprerequisiteorpreconditiontothefilingof theactionforlegalredemption,notwithstandingprevailing jurisprudence holding that to avail of the right of redemptionwhatisessentialistomakeanoffertoredeem withintheprescribedperiod.Thereisactuallynoprescribed formforanoffertoredeemtobeproperlyeffected.Hence,it caneitherbethroughaformaltenderwithconsignation,or byfilingacomplaintincourtcoupledwithconsignationof theredemptionpricewithintheprescribedperiod.Whatis conditionprecedenttoavalidexerciseoftherightoflegal redemptioniseithertheformaltenderwithconsignationor thefilingofacomplaintincourt.Whatisparamountisthe availment of the fixed and definite period within which to 13 exercisetherightoflegalredemption. 14 In Hulganza v. Court of Appeals the Court, citing previousdecisions,declaredthattheformaloffertoredeem, accompaniedbyabonafidetenderoftheredemptionprice, withintheprescribedperiodisonlyessentialtopreservethe right of redemption for future enforcement beyond such period of redemption and within the period prescribed for the action by the statute of limitations. Where, as in the instant case, the right to redeem is exercised through judicial action within the reglementary period the formal offer to redeem, accompanied by a bona fide tender of the redemption price, while proper, may be unessential. The filing of the action itself is equivalent to a formal offer to redeem. Insum,theformaloffertoredeemisnotadistinctstepor conditionsine qua nontothefilingoftheactioninCourtfor the valid exercise of the right of legal redemption. What constitutesa
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13

Tolentino, Arturo M., Commentaries and jurisprudence on the

Civil Code of the Philippines,Vol.5,1992ed.,pp.185,187.

14G.R.No.56196,7January1986,147SCRA.77.

602

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SUPREMECOURTREPORTSANNOTATED Lee Chuy Realty Corporation vs. Court of Appeals

conditionprecedentiseitheraformaloffertoredeemorthe

filingofanactionincourttogetherwiththeconsignationof theredemptionpricewithinthereglementaryperiod. The doctrine in Tolentino, Tioseco and Belisario cases wasjettisonedbytheCourtofAppealsonthegroundthat theydonotinvolvelegalredemptionbyacoownerbutbya mortgagor.Itconcludedthattheapplicationoftheruleson legal redemption by a coowner differs from the legal redemption by a mortgagor. But the law does not distinguish;neithershouldwe.Forsure,theprincipleinthe aforecited cases is applicable regardless of whether the redemptioner is a coowner or a mortgagor. Public policy favorsredemptionregardlessofwhethertheredemptioneris a coowner or mortgagor, although perhaps with unequal force and effect since each is given a fixed but different period. A coowner desirous of exercising his right of legal redemptionisgivenaperiodofthirty(30)daysfromnotice 15 of the sale within which to avail of the right to redeem. UnderthefreepatentorhomesteadprovisionsofthePublic Land Act a period of five (5) years from the date of 16 conveyanceisprovided, thefiveyearperiodtobereckoned from the date of the sale and not from the date of 17 registration in the office of the Register of Deeds. The redemption of extrajudicially foreclosed properties, on the otherhand,isexercisablewithinone(1)yearfromthedate 18 oftheauctionsaleasprovidedforinActNo.3135. WHEREFORE,thepetitionforcertiorariisGRANTED. ThedecisionofrespondentCourtofAppealsinCAG.R.SP No. 24220 dated 22 November 1991 is REVERSED and SET ASIDE. The decision of the Regional Trial Court of Malolos, Bulacan, Br. 7, in Civil Case No. 661M89 dated 26 December 1990 holding that the filing of the action for legal redemption coupled with the consignation of the redemptionpriceisequivalenttoaformal
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15Art.1623,CivilCode. 16Sec.119,ActNo.141. 17Pea,Narciso, Philippine

Law on Natural Resources,1992Revised

Ed.,p.35,citingGalanza v. Nuesa,No.L6628,31August1954,95 Phil. 713.

18 Suprafootnote17,p.37.

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People vs. Patamama offertoredeemasaconditionprecedenttothevalidexercise oftherightoflegalredemption,isREINSTATED. LettherecordsofthiscasebeREMANDEDtothecourt of origin for further proceedings in the light of this pronouncement. SOORDERED. Padilla (Chairman), Davide, Jr., Kapunan and Hermosisima, Jr., JJ.,concur. Petition granted. Judgment reversed and set aside, decision of court a quo reinstated. Notes.Redemptionbyacoownerinurestothebenefit ofalltheothercoowners.(Mariano vs. Court of Appeals,222 SCRA736[1993]) Theredemptionperiodshouldbereckonedfromthedate oftheregistrationoftheCertificateofSaleintheOfficeof the Register of Deeds concerned and not from the date of publicauction.(Sta. Ignacia Rural Bank, Inc. vs. Court of Appeals,230SCRA513[1994]) o0o

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