HUERTA ALBA RESORT, INC. vs. CA & nd SYNDICATED MANAGEMENT GROUP, INC. September 1, 2000 Private respondent instituted a civil case as mortgagee-assignee of a loan amounting to P8.5 million obtained by petitioner from Intercon. In a complaint for judicial foreclosure of mortgage private respondent sought the foreclosure of (4) parcels of land mortgaged by petitioner to Intercon Fund Resource, Inc. (“Intercon”), which was granted by the CA. On September 6, 1994, private respondent was declared the highest bidder during the auction sale and the Certificate of Sale issued in its favor was registered on October 21, 1994. In opposition to the Motion for Issuance of Writ of Possession, petitioner filed a Motion to Compel Private Respondent to Accept Redemption on May 2, 1995 ,invoking for the very first time its alleged right to redeem subject properties under to Section 78 of R.A. No. 337 (General Banking Act). Section 78 of R.A. No. 337 provides that “in case of a foreclosure of a mortgage in favor of a bank, banking or credit institution, whether judicially or extrajudicially, the mortgagor shall have the right, within one year after the sale of the real estate as a result of the foreclosure of the respective mortgage, to redeem the property.” ISSUE: whether petitioner had the right of redemption or equity of redemption over subject properties. HELD: From the various decisions, resolutions and orders a quo , petitioner has been adjudged to have was only the equity of redemption over subject properties. The right of redemption in relation to a mortgage - understood in the sense of a prerogative to re-acquire mortgaged property after registration of the foreclosure sale - exists only in the case of the extrajudicial foreclosure of the mortgage. No such right is recognized in a judicial foreclosure except only where the mortgagee is the Philippine National Bank or a bank or banking institution. Where a mortgage is foreclosed extrajudicially, Act 3135 grants to the mortgagor the right of redemption within one (1) year from the registration of the sheriff’s certificate of foreclosure sale. In light of the aforestated facts, it was too late in the day for petitioner to invoke a right to redeem under Section 78 of R.A. No. 337. Thus, the claim that petitioner is entitled to the beneficial provisions of the said law - since private respondent’s predecessor- in-interest is a credit institution - is in the nature of a compulsory
HUERTA ALBA RESORT, INC. vs. CA & nd SYNDICATED
MANAGEMENTGROUP, INC.Septembe !, "###Private respondent instituted
a civil case as mortgagee-assignee of a loanamounting to P8.5
million obtained by petitioner from Intercon. In a complaint
forjudicial
foreclosureofmortgageprivaterespondentsoughttheforeclosureof
(4)parcels of land mortgaged by petitioner to Intercon und
!esource" Inc. (#Intercon$)"%hich%asgrantedbythe&'. (n)eptember
*" +,,4" privaterespondent %asdeclaredthehighest bidder
duringtheauctionsaleandthe&erti-cateof )aleissued in its favor
%as registered on (ctober .+" +,,4. In opposition to the /otion for
Issuanceof0rit ofPossession"petitioner -leda /otionto&ompel
Private!espondent to'ccept !edemption on /ay ." +,,5 "invo1ing for
the very -rst time its alleged rightto redeem subject properties
under to )ection 28 of !.'. 3o. 442 (5eneral 6an1ing'ct).
)ection28of !.'. 3o. 442providesthat #incaseof aforeclosureof
amortgageinfavor of aban1" ban1ingor credit institution" %hether
judiciallyore7trajudicially" the mortgagor shall have the right"
%ithin one year after the sale ofthe realestate as a result of the
foreclosure of the respective mortgage" to redeemthe
property.$ISSUE$ %hether petitioner had the right of redemption or
e8uity of redemption oversubject
properties.HELD$romthevariousdecisions" resolutionsandordersa8uo"
petitionerhasbeen adjudged to have %as only the e8uityof redemption
over subject properties.9he right of redemption in relation to a
mortgage - understood in the sense of aprerogativeto
re-ac8uiremortgaged property afterregistration ofthe
foreclosuresale - e7ists only in the case of the e7trajudicial
foreclosure of the mortgage. 3osuch right is recogni:ed in a
judicial foreclosure e7cept only %here themortgageeis the
Philippine 3ational 6an1 or a ban1 or ban1ing institution. 0here a
mortgage isforeclosed e7trajudicially"'ct 4+45 grants to the
mortgagor the right of redemption%ithin one (+) year from the
registration of the sheri;
