ARSENIO REYES, PLAINTIFF-APPELLANT, VS. OSCAR DE LOS SANTOS AND AURORA T. INGALLA, DEFENDANTS-APPELLEES.

Reyes versus De los Santos

The Case

This is an appeal by Arsenio Reyes, the plaintiff, against the spouses Oscar de los Santos and Aurora T. Ingalla, the defendants. Reyes had bought the defendants' house and lot at an extrajudicial foreclosure sale and sought to eject them after they failed to redeem within the period stated in the certificate of sale. The defendants answered that they had in fact redeemed, by paying the redemption price to the provincial sheriff. The case matters because it settles two recurring questions in the law on redemption: whether payment to the sheriff who conducted the sale is a valid payment, and whether a redemption is defeated by the omission of small, unproven amounts. It also shows the Supreme Court's firm policy of protecting the debtor's right to redeem against a purchaser who insists on technicalities.

Procedural History

Reyes filed an action for ejectment in the trial court against the defendant spouses. The trial court rendered judgment in favor of the defendants, declaring that they had validly exercised their right of redemption, voiding the cancellation of their title and the new title issued in Reyes's name, ordering the Register of Deeds to issue a new title in the defendants' favor, ordering the defendants to reimburse Reyes for realty taxes he had paid, and dismissing the complaint. Reyes appealed to the Supreme Court. The appeal reached the Court as an ordinary appeal from the decision of the lower court, and the Court affirmed that decision.

Facts

On May 12, 1955, the defendant spouses obtained a loan of 7,500 pesos from the Rehabilitation Finance Corporation and, to secure it, executed a real estate mortgage over their house and lot covered by a transfer certificate of title in Rizal. The Development Bank of the Philippines, which succeeded the Rehabilitation Finance Corporation, extrajudicially foreclosed the mortgage under Act 3135, as amended, when the spouses failed to pay. On July 10, 1961, the Provincial Sheriff of Rizal sold the property at public auction to Arsenio Reyes, the highest bidder, for 5,460 pesos, and a certificate of sale was issued to him fixing the redemption period to end on July 10, 1962.

On July 10, 1962, the very last day of the period, the defendants exercised their right of redemption by tendering to the Provincial Sheriff of Rizal the total redemption price of 6,115.20 pesos, consisting of the purchase price of 5,460 pesos and interest of 655.20 pesos. The sheriff issued a certificate of redemption on July 24, 1962. The defendants also notified Reyes of the redemption by letter and asked him to surrender the title. Reyes, however, had already executed an affidavit of consolidation of ownership on July 11, 1962, on the basis of which the defendants' title was cancelled and a new title was issued in his name on July 12, 1962. He had also paid real estate taxes for 1961 and 1962 amounting to 202.68 pesos.

Reyes then filed the ejectment action, claiming ownership by consolidation. The defendants set up redemption as their defense. The trial court found the redemption valid and ruled for the defendants, and Reyes appealed.

Issues

• Whether or not the Provincial Sheriff of Rizal was authorized by law to accept the redemption money on behalf of the purchaser.
• Whether or not the redemption was defective because the amount tendered did not include certain small sums, such as 45 pesos for assessment and 16.95 pesos for documentary stamps, claimed by the purchaser.

Applicable Provisions

Section 31 of Rule 39 of the Rules of Court, whose last sentence the Court quotes, provides:

The payments mentioned in this and the last preceding sections may be made to the purchaser or redemptioner, or for him to the officer who made the sale.

This sentence is the textual basis for holding that payment to the sheriff who conducted the sale is a valid redemption.

Section 30 of Rule 39 of the Rules of Court, as quoted in the Court's opinion, provides:

If any assessments or taxes are paid by the redemptioner or if he has or acquires any lien other than that upon which the redemption was made, notice thereof must in like manner be given to the officer and filed with the registrar of deeds; if such notice be not filed, the property may be redeemed without paying such assessments, taxes, or liens.

This provision defeats the second assignment of error, because the purchaser gave no notice of his additional payments to the sheriff, so the property could be redeemed without paying them.

Ruling

On the first issue, the Court held that the Provincial Sheriff was authorized to accept the redemption money. It quoted its earlier ruling in Reyes versus Chavoso, penned by Justice Barredo, rejecting the argument that the sheriff may accept redemption money for the purchaser only if the purchaser refused it or authorized the sheriff to accept it:

No such conditions are imposed by the Rules.

The Court relied on the last sentence of Section 31 of Rule 39, which allows payment to the officer who made the sale, and noted that earlier decisions, beginning with a 1915 case, had long recognized the validity of payment to the provincial sheriff to effect a redemption.

On the second issue, the Court held that the redemption was not defective for omitting the small amounts claimed. It stressed that the very decision appealed required the defendants to reimburse the plaintiff for the realty taxes, and that the argument had already been rejected in Reyes versus Chavoso. Under Section 30 of Rule 39, the purchaser had to give notice to the sheriff of any assessments or taxes he had paid, and he gave none; without such notice, the property could be redeemed without paying them. The Court also cited its earlier ruling in Reyes versus Tolentino, where a claimed shortage of 29.71 pesos was brushed aside as too unsubstantial and unsupported by any explanation of computation. The Court closed by condemning the plaintiff's persistence in reading into the law on redemption features amounting to an affront to reason and a disregard for fairness, and affirmed the policy of protecting the unfortunate debtor's right to redeem.

Doctrine

First, redemption money may validly be paid to the purchaser or redemptioner, or for him to the officer who made the sale. Payment to the provincial sheriff who conducted the auction sale is therefore a valid exercise of the right of redemption, and no condition of refusal or authorization by the purchaser is imposed by the Rules.

Second, a purchaser who pays assessments, taxes, or other liens must give notice thereof to the officer who made the sale and file it with the registrar of deeds. If he fails to do so, the property may be redeemed without paying such assessments, taxes, or liens, and the redemption cannot be defeated by their omission.

Third, a redemption is not invalidated by the omission of small, unsubstantial, or unproven amounts. The law favors the debtor's right to redeem and will not allow a purchaser to frustrate it through picayune objections.

Disposition

The Supreme Court affirmed the decision of the lower court, holding the redemption valid and ordering the issuance of a new title in the defendants' favor, with treble costs against the plaintiff, Arsenio Reyes.

Remember This

Memorize this line: redemption money may be paid to the purchaser or for him to the officer who made the sale, and the property may be redeemed without paying assessments or taxes of which the purchaser gave no notice. Examiners use this case to test the validity of payment to the sheriff and the effect of a purchaser's failure to give notice of additional payments under the rules on redemption.