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San Fernando Rural Bank Vs Pampanga Omnibus Development Corporation

PODC secured loans from San Fernando Rural Bank and another bank, using land as collateral. PODC defaulted and the land was sold at auction. The new owner, Aquino, attempted to redeem the land within the statutory period, but the bank rejected the redemption price and demanded a higher amount. Aquino filed a case claiming lawful redemption. The court ruled it did not need to determine if redemption was valid, as that issue should be decided in the separate civil case, but the register of deeds must still record the redemption certificate during the legal process.

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77 views2 pages

San Fernando Rural Bank Vs Pampanga Omnibus Development Corporation

PODC secured loans from San Fernando Rural Bank and another bank, using land as collateral. PODC defaulted and the land was sold at auction. The new owner, Aquino, attempted to redeem the land within the statutory period, but the bank rejected the redemption price and demanded a higher amount. Aquino filed a case claiming lawful redemption. The court ruled it did not need to determine if redemption was valid, as that issue should be decided in the separate civil case, but the register of deeds must still record the redemption certificate during the legal process.

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PAC
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San Fernando Rural Bank vs Pampanga Omnibus Development Corporation

FACTS:

Pampanga Omnibus Development Corporation was the registered owner of a


parcel of land in San Fernando, Pampanga, named (TCT) No. 275745-R. PODC
secured two loans from petitioner and Masantol Rural Bank, Inc. on April 20, 1989
to mature on April 15, 1990 and another loan on May 3, 1989 payable on April 28,
1990. Moreover, PODC President secured a P950,000.00 loan from petitioner on
March 27, 1992. The spouses also executed a chattel mortgage over their personal
property as security.

Upon respondent PODC's failure to pay its loan to petitioner, the latter filed a
petition for extrajudicial foreclosure of real estate mortgage, petitioner emerged as
the winning bidder for P1,245,982.05. The Ex-Officio Sheriff executed a Certificate
of Sale on May 9, 2001.

On May 29, 2002, respondent Aquino offered to redeem the property for
P1,588,094.28, but petitioner rejected the offer and demanded the payment of
P16,805,414.71. Respondent Aquino rejected the demand of petitioner.

On May 30, 2002, respondent Aquino remitted P 1,588,094.28 to the Ex-


Officio Sheriff as redemption money for the property for which he was issued
Receipt No. 15582906.

Petitioner contended that, under the real estate mortgage executed by


respondent PODC in its favor, the loan account of the spouses Garbes was secured
by the property covered by said deed; on the other hand, respondents averred that
only the loan account of respondent PODC was secured by the mortgage of its
property. Indeed, the parties could have raised the issue of the redemption period
under the second paragraph of Section 47 of R.A. No. 8791.

ISSUE:

Whether or not the issue contended will prosper

RULING

NO. The ministerial duty of the RTC to issue a writ of possession does not
become discretionary simply because the Register of Deeds had elevated
in consulta to the LRA the question of whether the Torrens title should be issued in
favor of petitioner whose Affidavit of Consolidation was registered in the Office of
the Register of Deeds, or in favor of respondent Aquino who claimed to have
redeemed the property on June 7, 2002 as gleaned from the Certificate of
Redemption of the Ex-Officio Sheriff but registered only on June 17, 2002.
Respondent Aquino claimed to have redeemed the property with the correct
redemption price and within the one year period of redemption. The LRA himself
admitted that the issue of whether respondent Aquino had remitted the correct
redemption price is a matter that should be resolved by the regular courts. The LRA
was vested with jurisdiction to resolve only the registrability of the Affidavit of
Consolidation executed by petitioner and the Certificate of Redemption executed by
the Ex-Officio Sheriff.

The court held that it need not rule on the issue of whether respondent
Aquino had lawfully redeemed the property as provided in Section 47 of R.A. No.
8791. This issue shall be passed upon by the RTC in Civil Case No. 12785 after the
parties present their testimonial and documentary evidence.

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