FIRST DIVISION

[G.R. No. 70987. September 29, 1988.]

GREGORIO Y. LIMPIN, and ROGELIO M. SARMIENTO , petitioners, vs.
INTERMEDIATE APPELLATE COURT and GUILLERMO PONCE ,
respondents.

Danilo A. Basa for petitioner Gregorio Y. Limpin, Jr.

Angara, Abello, Concepcion, Regala & Cruz Law Oces for petitioner
Rogelio Sarmiento.
Sycip, Salazar, Hernandez & Gatmaitan Law Oces and Eugenio C. Lindo
for respondent Guillermo Ponce.
SYLLABUS
1.
CIVIL LAW; CIVIL CODE; CREDIT TRANSACTIONS; MORTGAGE RIGHT OF
REDEMPTION EXISTS IN EXTRAJUDICIAL FORECLOSURE. Under Act 3135, after
an extrajudicial foreclosure, a mortgager has the right of redemption which he may
exercise within one year from the registration of the sheriff's certificate of sale.
2.
SPECIAL LAW; SPECIAL CIVIL ACTION; FORECLOSURE OF MORTGAGE; NO
RIGHT OF REDEMPTION EXISTS; EXCEPTION. There is no right of redemption in
judicial foreclosure, except where the mortgagee is the Philippine National Bank, or
a bank or banking institution (Rule 68, Sec. 3, Rules of Court; Acts Nos. 2747 and
2938; Republic Act No. 337).
3.
ID.; ID.; ID.; ID.; EQUITY REDEMPTION, IN JUDICIAL FORECLOSURE; PERIOD
TO REDEEM. While there is no right of redemption in judicial foreclosure, there is
in favor of the mortgagor an equity of redemption. An equity of redemption is the
right of the mortgagor to extinguish the mortgage and retain ownership of the
property by paying the secured debt within the 90-day period after the judgment
becomes nal, in accordance with Rule 68, or even after the foreclosure sale but
prior to its confirmation.
4.
ID.; ID.; ID.; ID.; JUNIOR ENCUMBRANCES HAVE RIGHT OF EQUITY OF
REDEMPTION. The equity of redemption pertaining to the mortgagor is the same
right that may be exercised by the mortgagor's successor in interest or third persons
acquiring rights over the mortgaged property subordinate to the mortgagee's lien.
5.
ID.; ID.; ID.; ID.; ID.; UNFORECLOSED EQUITY OF REDEMPTION, RETAINED BY
PARTIES NOT IMPLEADED. Where a subsequent or junior lienholder is not

impleaded in the foreclosure proceedings, any judgment in favor of the mortgagee is

not binding upon him, he retains what is known as an unforeclosed equity of
redemption and a separate foreclosure proceeding should be brought to require him
to redeem from the rst mortgagee or the party acquiring title to the mortgaged
property at the foreclosure sale within 90 days under penalty of losing said
prerogative.
6.
ID.; ID.; ID.; EQUITY OF REDEMPTION; GRANT OF EXTENSION MUST BE
CLEAR AND UNEQUIVOCAL. The fact that private respondent recognized
petitioners' equity of redemption does not prevent the redemption from lapsing
where such recognition was made when there was as yet no order conrming the
sale and private respondent's equity of redemption still existed. Moreover, even
assuming that a period to redeem may be extended by the act of the party who
would have been beneted by the expiration, the grant of such extension must be
clear and unequivocal.
7.
CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; PETITIONER WHO
APPEALED THE QUESTIONED DECISION CANNOT CLAIM DENIAL OF DUE PROCESS.
Since petitioner has appealed to this court the decision of the court of appeals
ordering the trial court to conrm the judicial foreclosure, he cannot now claim that
he was denied due process for alleged lack of notice. The denial of the appeal
suciently alerted him that conrmation could come at any time after the nality
of this Court's decision.
RESOLUTION
NARVASA, J :
p

Once again the parties are before this Court; this time, for a determination of
whether or not the equity of redemption recognized in favor of petitioner Rogelio M.
Sarmiento in this Court's judgment promulgated on January 30, 1987, still subsists
and may be exercised, more than a year after that judgment had become nal and
executory.
LLjur

The proceedings concern two (2) lots, then covered by TCTs Nos. 92836 and 92837,
which, together with two (2) others, were originally mortgaged in 1973 to herein
private respondent Ponce by their former owners, the Spouses Jose and Marcelina
Aquino. These two lots were afterwards sold in 1978 by the same Aquino Spouses to
Butuan Bay Wood Export Corporation. Against this corporation herein petitioner
Limpin obtained a money judgment in 1979; and to satisfy the judgment, the two
lots were levied on and sold at public auction in 1980, Limpin being the highest
bidder. Limpin later sold the lots to his co-petitioner, Sarmiento.
Earlier however or a day before levy was made on the two lots in execution of
the judgment against Butuan Bay Wood Export Corporation Ponce had initiated
judicial proceedings for the foreclosure of the mortgage over said two (2) lots

(together with the two (2) others mortgaged to him). Judgment was rendered in his
favor and became nal; and at the ensuing foreclosure sale, the lots were acquired
by Ponce himself as highest bidder. Ponce then moved for conrmation of the
foreclosure sale, but the Court conrmed the sale of only two lots, refusing to do so
as regards the two which had been subject of the execution sale in Limpin's favor
(i.e., those covered by TCTs Nos. 92836 and 92837).
LLphil

It was to resolve the resulting dispute that Ponce instituted a special civil action in
the Intermediate Appellate Court, impleading Limpin and Sarmiento as
indispensable parties respondents. That Court rendered judgment on February 28,
1985 in Ponce's favor; Limpin and Sarmiento appealed; this Court denied their
appeal.
The judgment of this Court of January 30, 1987 dismissed Sarmiento's and Limpin's
petition for review on certiorari of the Appellate Court's decision of February 28,
1985. It in eect armed the latter's decision which inter alia ordered the Trial
Court "to conrm the sale (of the lots formerly covered by TCT Nos. 92836 and
92837) and issue a writ of possession to . . . (Guillermo Ponce) with respect to the
aforesaid lots, subject to the equity of redemption of the respondent Rogelio V.
Sarmiento," 1 Applying the doctrine laid down in Santiago v. Dionisio, a 1953
decision of this Court, 2 the Intermediate Appellate Court's decision declared that
"the sale to Ponce, as the highest bidder in the foreclosure sale of the two lots in
question should have been conrmed, subject to Limpin's (and now Sarmiento's)
equity of redemption."
This Court's aforesaid judgment also clearly and categorically sustained the exercise
by the Appellate Court of jurisdiction over the persons of Rogelio M. Sarmiento and
Gregorio Limpin. 3 There can thus be no question that the petitioners herein, said
Rogelio Sarmiento and Gregorio Limpin, were aected and are bound by the
decision of the Intermediate Appellate Court, and that of this Court affirming it.
cdrep

Rogelio M. Sarmiento, particularly, was aware that the Trial Court had the
ministerial duty to execute the Appellate Court's decision, i.e., to conrm the sale
and issue a writ of possession as regards the aforesaid lots, subject to the equity of
redemption explicitly recognized in his favor in the decisions mentioned. He knew
that he had the prerogative to exercise his equity of redemption, if not from the
moment that the judgment of this Court became final and executory, 4 at least until
the Court a quo, presided over by Hon. Antonio Solano, subsequently conrmed the
sale and issued a writ of possession in favor of Guillermo Ponce in June, 1987. 5
He did not try to exercise that right before, at or about the time of the conrmation
of the foreclosure sale by Judge Solano. Instead, he instituted no less than two (2)
actions in the same Regional Trial Court which were assigned to another branch,
presided over by Hon. Teodoro Beltran attempting to relitigate precisely the same
issues which this Court and the Intermediate Appellate Court had already passed
upon and resolved adversely to him. For doing so for triing with and abusing the
processes of the courts, and thus unwarrantedly delaying execution of the nal and
executory judgment against him he and his counsel were both found guilty of

contempt and correspondingly punished by this Court, by Resolution dated May 5,

1988. The same resolution also decreed the dismissal of the complaints in both
cases and the nullication and setting aside of the restraining or injunctive orders of
Judge Beltran.
LibLex

It was not until March 11, 1988 nine months or so after entry of the judgment
recognizing his equity of redemption as successor-in-interest of the original
mortgagors that Sarmiento nally bestirred himself to attempt to exercise his
unforeclosed equity of redemption. On that day he led a motion with the Court
presided over by Hon. Judge Antonio Solano, manifesting that he would exercise the
right and asked the Court to x the redemption price. 6 The Court opined that "this
should be the subject of the agreement between Ponce and Sarmiento." 7
Sarmiento then wrote to Ponce on March 23, 1988 oering "P2.6 million as
redemption price for the two lots originally covered by TCTs Nos. 92836 and 92837,
now 307100 and 307124." 8 Ponce's answer, dated March 25, 1988, rejected the
oer and averred "that the period within which x x (Sarmiento) could have
exercised such right . . . (had) lapsed." 9 Sarmiento reacted by ling a motion with
the Solano Court, dated March 29, 1988, asking it to "x the redemption price . . .
and that the implementation of the writ of possession be provisionally deferred." 10
An opposition was promptly led by Ponce under date of May 4, 1988 11 in which he
argued that "Sarmiento's right to exercise his equity of redemption over those lots
had long expired," the opportunity to exercise it having presented itself but not
availed of "(i) after . . . default in the performance of the conditions of the mortgage
and (ii) before the Sheri's sale of the property and the judicial conrmation
thereof" According to Ponce, "from October 17, 1982, . . . (when) Sarmiento's
predecessors-in-interest defaulted in their obligations over the mortgaged
properties, up to June 17, 1987, when this . . . (Trial) Court conrmed the auction
sale of those properties, Sarmiento could (and should) have exercised his 'equity of
redemption.'" Judge Solano did not share this view, and ruled accordingly. 12

The issue has been brought to this Court for resolution by Ponce's "Motion for
Clarication" dated May 27, 1988 and "Supplemental Motion . ." dated June 13,
1988, as to which Sarmiento has submitted a Comment dated June 17, 1988. To
the comment a reply has been presented by Ponce under date of August 3, 1988.
Ponce states 13 that the term, equity of redemption, means "the right of the
mortgagor to redeem the mortgaged property after his default in the performance
of the conditions of the mortgage but before the sale of the property or the (judicial)
conrmation of the (Sheri's) sale," citing Top Rate International Services, Inc. v.
I.A.C., 142 SCRA 473 [1976], or "the right to redeem mortgaged property by paying
the amount ordered by the court within a period of ninety days, or, even thereafter
but before the conrmation of the sale, invoking Sun Life Assurance Co. of Canada
v. Diez, 52 Phil. 275 [1928]. 14 On this premise, he postulates that "from October
17, 1982, the date Sarmiento's predecessors-in-interest defaulted in their
obligations over the mortgaged properties, up to June 17, 1987, when the lower

court conrmed the auction sale of those properties, Sarmiento could have
exercised his 'equity of redemption." Not having done so within that time, his
equity of redemption had been extinguished; indeed, by opting to le "new suits
against Ponce . . . seeking to annul Ponce's titles over those properties" instead of
redeeming the same, he had "waived his equity of redemption (assuming such right
existed at the time the suits were commenced)."
It is Sarmiento's position, on the other hand, 15 that the "17 June 1987
conrmation of the sale of the two lots could not have cut o . . . (his) equity of
redemption;" in fact, "Ponce himself, in his 'Urgent Motion' dated 1 June 1987,
precisely prayed for the issuance of a writ of possession 'subject to the equity of
redemption of Rogelio M. Sarmiento' thereby recognizing Sarmiento's equity of
redemption beyond confirmation date," 18
The equity of redemption is, to be sure, dierent from and should not be confused
with the right of redemption. 19
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 sheri's
certificate of foreclosure sale. 20
Where the foreclosure is judicially eected, however, no equivalent right of
redemption exists. The law 21 declares that a judicial foreclosure sale, "when
conrmed by an order of the court, . . . shall operate to divest the rights of all the
parties to the action and to vest their rights in the purchaser, subject to such rights
of redemption as may be allowed by law ." 23 These laws confer on the mortgagor,
his successors in interest or any judgment creditor of the mortgagor, the right to
redeem the property sold on foreclosure after conrmation by the court of the
foreclosure sale which right may be exercised within a period of one (1) year,
counted from the date of registration of the certicate of sale in the Registry of
Property.
LLphil

But, to repeat, no such right of redemption exists in case of judicial foreclosure of a

mortgage if the mortgagee is not the PNB or a bank or banking institution. In such a
case, the foreclosure sale, "when conrmed by an order of the court . . . shall
operate to divest the rights of all the parties to the action and to vest their rights in
the purchaser." There then exists only what is known as the equity of redemption.
This is simply the right of the defendant mortgagor to extinguish the mortgage and
retain ownership of the property by paying the secured debt within the 90-day
period after the judgment becomes nal, in accordance with Rule 68, or even after
the foreclosure sale but prior to its confirmation.
Section 2, Rule 68 provides that

". . . If upon the trial . . . the court shall nd the facts set forth in the
complaint to be true, it shall ascertain the amount due to the plainti upon
the mortgage debt or obligation, including interest and costs, and shall
render judgment for the sum so found due and order the same to be paid
into court within a period of not less than ninety (90) days from the date of
the service of such order, and that in default of such payment the property
be sold to realize the mortgage debt and costs." 24

This is the mortgagor's equity (not right) of redemption which, as above stated, may
be exercised by him even beyond the 90-day period "from the date of service of the
order," and even after the foreclosure sale itself, provided it be before the order of
conrmation of the sale. 25 After such order of conrmation, no redemption can be
effected any longer.
It is this same equity of redemption that is conferred by law on the mortgagor's
successors-in-interest, or third persons acquiring rights over the mortgaged property
subsequent, and therefore subordinate, to the mortgagee's lien. 26 If these
subsequent or junior lien-holders be not joined in the foreclosure action, the
judgment in the mortgagor's favor is ineective as to them, of course. In that case,
they retain what is known as the "unforeclosed equity of redemption," and a
separate foreclosure proceeding should be brought to require them to redeem from
the rst mortgagee, or the party acquiring title to the mortgaged property at the
foreclosure sale, within 90 days, 27 under penalty of losing that prerogative to
redeem. In the case at bar, however, there is no occasion to speak of any
"unforeclosed equity of redemption" in Sarmiento's favor since he was properly
impleaded in the judicial proceeding where his and Ponce's rights over the
mortgaged property were ventilated and specifically adjudicated.
prcd

Under the circumstances obtaining in this case, the plain intendment of the
Intermediate Appellate Court was to give to Sarmiento, not the unforeclosed equity
of redemption pertaining to a stranger to the foreclosure suit, but the same equity
of redemption possessed by the mortgagor himself. The judgment cannot be
construed as contemplating or requiring the institution of a separate suit by Ponce
to compel Sarmiento to exercise his unforeclosed equity of redemption, or as
granting Sarmiento the option to redeem at any time that he pleases, subject only
to prescription. This would give rise to that multiplicity of proceedings which the law
eschews. The judgment plainly intended that Sarmiento exercise his option to
redeem, as successor of the mortgagor.
Upon the facts on record, Sarmiento cannot be heard to complain of denial of due
process for alleged lack of notice of any motion or hearing for conrmation of sale.
The Decision of the Intermediate Appellate Court which he and his predecessor,
Limpin, had appealed to this Court specically ordered the Trial Court to conrm 28
the judicial foreclosure sale in favor of Ponce over the two lots, in these terms: 29
"WHEREFORE, the orders dated October 16, 1983 and December 19, 1983
of the respondent court, so far as they deny the conrmation of the sale of
the lots formerly covered by TCT Nos. 92836 and 92837, are SET ASIDE,
and the respondent court is hereby ORDERED to conrm the sale and issue

a writ of possession to the petitioner with respect to the aforesaid lots,

subject to the equity of redemption of the respondent Rogelio V. Sarmiento.
Without costs."

Given the fact that said appealed orders of the Trial Court had been issued upon
motion for conrmation earlier made by Ponce which was duly served and heard
the aforecited Decision of the Intermediate Appellate Court can be construed in
no wise than as a peremptory command to the Trial Court to conrm the sale as
directed, motu proprio, and without the need of any further motion or other action
on the part of Ponce. The rejection by this Court of Sarmiento's and Limpin's appeal
in its own Decision of January 30, 1987, which imported nothing less than a total
armance of the Decision of the Appellate Court, should therefore have suciently
alerted Sarmiento that conrmation could come at any time after this Court's
Decision became nal, with or without any action from Ponce. He cannot, in the
circumstances, claim unfair surprise. He should, upon being notied of this Court's
Decision, have taken steps to redeem the properties in question or, at the very
least, served the Trial Court and Ponce with notice of his intention to exercise his
equity of redemption. There was certainly time enough to do this the order
confirming the foreclosure sale issuing only on June 17, 1987 had he not occupied
himself with the fruitless maneuverings to re-litigate the issues already recounted.
Indeed, had he made an attempt to redeem, even belatedly but within a reasonable
period of time after learning of the order of conrmation (the record shows he did
learn of it within three [3] days after its issuance), 30 he might perhaps have given
the Court some reason to consider his bid on equitable grounds. He did not. He let
nine (9) months pass, to repeat, in carrying out improper (and contumacious)
stratagems to negate the judgments against him, before making any such move.
LLpr

Neither can Sarmiento acceptably claim that Ponce, by moving for a writ of
possession subject to his (Sarmiento's) equity of redemption, recognized the
existence and enforceability of that prerogative beyond the prescribed cut-o date
of conrmation of the sale. Such an interpretation of the motion is totally
unwarranted, given the fact that said motion was made at a time (June 1, 1987)
when there was as yet no order conrming the sale and, since Sarmiento's equity of
redemption then still unquestionably existed, there was hardly occasion or for that
matter, any reason as far as Ponce was concerned, to provide against its lapsing.
Moreover, assuming for the sake of argument that a resolutory period xed by law
may be extended by act of the party in whose favor its expiration would operate,
that act must bespeak a clear and unequivocal intent to grant such an extension. No
such clear grant can be inferred from the terms of Ponce's motion, which can, and in
fact should be, read as a mere armation that there existed at the time an equity
of redemption in Sarmiento's favor.
LexLib

WHEREFORE, the Court hereby rules that the equity of redemption claimed and
invoked by Rogelio M. Sarmiento over the properties originally covered by Transfer
Certicates of Title Nos. 92836 and 92837 (now by TCTs Numbered 307100 and
307124), Registry of Deeds of Quezon City, subject of this case, lapsed and ceased to
exist without having been properly exercised, on June 17, 1987, with the issuance

by the Trial Court of the Order conrming the sheri's sale (on judicial foreclosure)
of said, properties in favor of Guillermo Ponce.
SO ORDERED.

Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

Footnotes

1.

At p. 1; emphasis supplied.

2.

92 Phil. 495.

3.

At pp. 7-8; and p. 4, Resolution, May 5, 1988.

4.

The petitioners' motion for reconsideration of the judgment was denied with nality
by the Court's Resolution dated April 27, 1987 (Rollo, p. 363), and entry of
judgment was made on June 1, 1987 (Rollo, p. 364).

5.

The writ of possession was issued, more precisely, on June 17, 1987 (Rollo, p.
386).

6.

"Motion (Ex Abundanti Cautela)," Annex 1 of Sarmiento's Comment dated 17 June

1988.

7.

Order, March 17, 1988, Annex 2 of same Comment.

8.

Annex 3 of Sarmiento Comment.

9.

Annex 4, id.

10.

Annex 6, id.

11.

Annex 7, id.

12.

13.
14.

In his Order of April 8, 1988, he declared that Ponce's theory "would render
nugatory and empty the decision of the Appellate Court on this issue" (Annex 8,
Comment of June 17, 1988, supra); and in his Order dated July 8, 1988, His Honor
denied Ponce's motion for reconsideration dated May 4, 1988.
Reply to Comment, Aug. 3, 1988.
Drawing attention, too, to Quimson v. PNB , 36 SCRA 265; Villar v. Javier de
Paderanga, 97 Phil. 604; Anderson v. Reyes , 54 Phil. 944.

15.

Comment, June 17, 1988.

16.

Emphasis supplied.

17.
18.
19.
20.

Citing Tiglao v. Botones , 90 Phil. 275.

Invoking Pascua v. Perez , 10 SCRA 198; Doronila v. Basquez , 72 Phil. 572; de
Castro v. Olondriz , 50 Phil. 725; La Urbana v. Belando, 54 Phil. 930.

Top Rate International Services v. IAC, et al., 142 SCRA 467, supra.
Salazar v. Meneses , 8 SCRA 495; General v. Barrameda, 69 SCRA 182; Gorospe
v. Santos , 69 SCRA 191; PNB v. CA, 94 SCRA 357.

21.

Sec. 3, Rule 68, Rules of Court.

22.

Emphasis supplied.

23.

24.
25.

SEE Moran, Comments on the Rules, 1970 ed., Vol. 3, p. 273, citing Gonzales v.
PNB, 48 Phil. 824, 828; and Martin, Rules of Court, etc., 3rd ed., Vol. 3, p. 289,
citing Villar v. Javier de Paderanga, 97 Phil. 64; Piano v. Cayanong, 7 SCRA 397.
Emphasis supplied.

Anderson v. Reyes , 54 Phil. 944; Grimalt v. Velasquez , 36 Phil. 936; La Urbana v.

Belando, 54 Phil. 930; Villar v. Paderanga , 51 O.G. 5162, cited in Moran, op cit., at
p. 273.

26.

E.g., by second mortgage or subsequent attachment or judgment.

27.

The period fixed in Section 2, Rule 68 for the mortgagor himself to redeem.

28.

Something which it had earlier refused to do.

29.

Rollo, p. 26.

30.

Rollo, p. 382.