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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
May-2004 Jurisprudence                 

  • People v. Castillo : 118912 : May 28, 2004 : J. Azcuna : First Division : Decision

  • People v. Vasquez : 123939 : May 28, 2004 : J. Callejo Sr : Second Division : Decision

  • Varona v. CA: 124148 : May 20, 2004 : J. Azcuna : First Division : Decision

  • Bernardo v. CA: 124261 : May 27, 2004 : J. Callejo Sr : Second Division : Decision

  • Ayala Land Inc v. Navarro : 127079 : May 7, 2004 : J. Sandoval-Gutierrez : Third Division : Decision

  • People v. Bello : 124871 : May 13, 2004 : J. Puno : En Banc : Decision

  • Espinosa v. CA: 128686 : May 28, 2004 : J. Tinga : Second Division : Decision

  • Sacdalan v. CA: 128967 : MAy 20, 2004 : J. Austria-Martinez : Second Division : Decision

  • Perez v. Office of the Ombudsman : 131445 : May 27, 2004 : J. Corona : Third Division : Decision

  • People v. Simon : May 27, 2004 : J. Sandoval-Gutierrez : En Banc : Decision

  • BPI Family Savings Bank Inc v. First Metro Investment Corp : 132390 : May 21, 2004 : J. Sandoval-Gutierrez : Third Division : Decision

  • The Executive Secretary v. CA: 131719 : May 25, 2004 : J. Callejo Sr : Second Division : Decision

  • Enrile v. Senate Electoral Tribunal : 132986 : May 19, 2004 : J. Sandoval-Gutierrez : En Banc : Decision

  • People v. Magbanua : 133004 : May 20, 2004 : J. Azcuna : First Division : Decision

  • Sps Del Rosario v. Montaa : 134433 : May 28, 2004 : J. Austria-Martinez : Second Division : Decision

  • People v. Bagnate : 133685-86 : May 20, 2004 : Per Curiam : En Banc : Decision

  • Tee Dee v. CA: 135721 : May 27, 2004 : J. Callejo Sr : Second Division : Decision

  • Dimayacyac v. CA: 136264 : May 28, 2004 : J. Austria-Martinez : Second Division : Decision

  • People v. De Jesus : 134815 : May 27, 2004 : Per Curiam : En Banc : Decision

  • Navarro v. Metropolitan Bank & Trust Comapny : 138031 : May 27, 2004 : J. Callejo Sr : Second Division : Decision

  • People v. Ortillas : 137666 : May 20, 2004 : J. Austria-Martinez : Second Division : Decision

  • People v. Alcanzado : 138335 : May 20, 2004 : J. Austria-Martinez : Second Division : Decision

  • People v. Agudez : 138386-87 : May 20, 2004 : J. Austria-Martinez : En Banc : Decision

  • People v. Tira : 139615 : May 28, 2004 : J. Callejo Sr : En Banc : Decision

  • Aznar Brothers Realty Company v. Heirs of Augusto : 140417 : May 28, 2004 : J. Corona : Third Division : Decision

  • People v. De los Reyes : 140680 : May 28, 2004 : Callejo, Sr : Second Division : Decision

  • Lui v. Sps Matillano : 141176 : May 27, 2004 : J. Callejo Sr : Second Division : Decision

  • Phil Journalists Inc v. Michael Mosqueda : 141430 : May 7, 2004 : J. Sandoval-Gutierrez : Third Division : Decision

  • Cruz v. Phil Global Communication Inc : 141868 : May 28, 2004 : J. Sandoval-Gutierrez : Third Division : Decision

  • People v. Pineda : 141644 : May 27, 2004 : J. Carpio : En Banc : Decision

  • Mabunga v. People : 142039 : May 27, 2004 : J. Carpio-Morales : Third Division : Decision

  • Pasong Bayabas Farmers Asso'n Inc v. CA: 142359 : MAy 25, 2004 : J. Callejo Sr : Second Division : Decision

  • San Juan De Dios Educ'l Foundation Employees Union v. San Juan De Dios Educ'l Foundation Inc : 143341 : May 28, 2004 : J. Callejo Sr : Second Division : Decision

  • Phil Geothermal Inc v. National Power Corp : 144302 : May 22, 2004 : J. Carpio-Morales : Third Division : Resolution

  • People v. Jubail : 143718 : May 19, 2004 : J. Carpio : First Division : Decision

  • Zaragoza v. Nobleza : 144560 : May 13, 2004 : J. Carpio-Morales : Third Division : Decision

  • Sps Isabelo v. Hon CA: 144576 : May 28, 2004 : J. Carpio-Morales : Third Division : Decision

  • Gonzales v. PAGCOR : 144891 : May 27, 2004 : J. Carpio-Morales : Third Division : Decision

  • Siena Realty Corp v. Gal-Lang : 145169 : May 13, 2004 : J. Carpio-Morales : Third Division : Decision

  • Barrera v. People : 145233-52 : May 28, 2004 : J. Carpio-Morales : Third Division : Decision

  • Cotabato Timberland Co v. C Alcantara and Sons Inc : 145469 : May 28, 2004 : J. Quisumbing : Second Division : Decision

  • Salalima v. ECC : 146360 : May 20, 2004 : J. Ynares-Santiago : First Division : Decision

  • People v. Delmindo : 146810 : May 27, 2004 : J. Quisumbing : Second Division : Decision

  • Phil Communications Satellite Corp v. Globe Telecom Inc : 147324 : May 25, 2004 : J. Tinga : Second Division : Decision

  • Lanuza v. Muoz : 147372 : May 27, 2004 : J. Quisumbing : Second Division : Decision

  • Corporate Inn Hotel v. Lizo : 148279 : May 27, 2004 : J. Sandoval-Gutierrez : Third Division : Decision

  • R Transport Corp v. Ejandra : 148508 : May 20, 2004 : J. Corona : Third Division : Decision

  • People v. Kim : 148586 : May 25, 2004 : J. Vitug : En Banc : Decision

  • People v. Belonio : 148695 : May 27, 2004 : Per Curiam : En Banc : Decision

  • Catalina Security Agency v. Gonzalez-Decano : 149039 : MAy 27, 2004 : J. Quisumbing : En Banc : Decision

  • Rep of the Phil v. Quintero -Hamano : 149498 : May 20, 2004 : J. Corona : Third Division : Decision

  • PNB v. RBL Enterprises Inc : 149569 : May 28, 2004 : J. Panganiban : First Division : Decision

  • UCPB v. Magpayo : 149908 : May 27, 2004 : J. Quisumbing : Second Division : Resolution

  • Okabe v. Gutierrez : 150185 : May 27, 2004 : J. Callejo Sr : Second Division : Decision

  • G.R. No. 150224 - PEOPLE OF THE PHILIPPINES v. JOEL YATAR

  • SMC Quarry 2 Workers Union v. TItan Megabags Industrial Corp : 150761 : May 19, 2004 : J. Sandoval-Guierrez : Third Division : Decision

  • Sps Tan v. Mandap : 150925 : May 27, 2004 : J. Quisumbing : Second Division : Decision

  • Salazar v. Callejo Sr : 151068 : May 21, 2004 : J. Callejo Sr : Second Division : Resolution

  • Sps Gudoy v. Guadalquiver : 151136 : May 27, 2004 : J. Quisumbing : Second Division : Decision

  • DBP v. West Negros College Inc : 152359 : May 21, 2004 : J. Tinga : Second Division : Resolution

  • People v. Magdaraog : 151251 : May 19, 2004 : J. Panganiban : First Division : Decision

  • Milwaukee Industries Corp v. Pampanga III Electric Cooperative Inc : 152569 : May 31, 2004 : J. Tinga : Second Division : Decision

  • The Province of Batangas v. Romulo : 152774 : May 27, 2004 : J. Callejo Sr : En Banc : Decision

  • People v. Estoya : 153538 : May 19, 2004 : J. Panganiban : First Division : Decision

  • Sps Samson v. Rivera : 154355 : May 20, 2004 : J. Panganiban : First Division : Decision

  • CSC v. Joson : 154674 : May 27, 2004 : En Banc : Decision

  • People v. Cajucom : 155023 : May 28, 2004 : J. Ynares-Santiago : First Division : Decision

  • People v. Yu : 155030 : May 18, 2004 : J. Ynares-Santiago : First Division : Decision

  • Ceballos v. Mercado : 155856 : May 28, 2004 : J. Panganiban : First Division : Decision

  • Piltel v. Tecson : 156966 : May 7, 2004 : J. Vitug : Third Division : Decision

  • San Pedro v. Lee : 156522 : May 28, 2004 : J. Ynares-Santiago : First Division : Decision

  • Eceta v. Eceta :157037 : May 20, 2004 : J. Ynares-Santiago : First Division : Decision

  • Bautista v. CA: 157219 : May 28, 2004 : J. Ynares-Santiago : First Division : Decision

  • Chua v. Victorio : 157568 : May 18, 2004 : J. Ynares-Santiago : First Division : Decision

  • Bernat v. Sandiganbayan : 158018 : May 20, 2004 : J. Azcuna : First Division : Decision

  • Go v. CA: 158922 : 158922 : May 28, 2004 : J. Ynares-Santiago : First Division : Decision

  • Sim Jr v. CA: 159280 : May 18, 2004 : J. Ynares-Santiago : First Division : Decision

  • Abante Jr : Lamadrid Bearing & Parts Corp : 159890 : May 28, 2004 : First Division : Decision

  • Estrella v. COMELEC : 160465 : May 27, 2004 : J. Carpio-Morales : En Banc : Resolution

  • Gaviola v. Salcedo : AC 3037 : May 20, 2004 : J. Corona : Third Division : Resolution

  • Zaballero v. Montalvan : AC 4370 : May 25, 2004 : J. Tinga : Second Division : Decision

  • Orbe v. Adaza : AC 5252 : May 20, 2004 : J. Vitug : Third Division : Decision

  • Bon v. Ziga : AC 5436 : May 27, 2004 : J. Tinga : Second Division : Decision

  • De Juan v. Baria III : AC 5817 : May 27, 2004 : J. Quisumbing : Second Division : Resolution

  • Ricafort v. Bansil : AC 6298 : May 27, 2004 : J. Austria-Martinez : Second Division : Resolution

  • Re: Mr Datu Ashary M Alauya : AM 02-4-03-SDC : May 27, 2004 : J. Ynares-Santiago : En Banc : Decision

  • Re: Alleged Tampering of the DTR of Sherry B. Cervantes : AM 03-8-463-RTC : May 20, 2004 : J. Austria-Martinez : Second Division : Resolution

  • Bejarasco Jr v. Buenconsejo : AM MTJ-02-1417 : May 27, 2004 : J. Callejo Sr : Second Division : Decision

  • Arnado v. Buban : AM MTJ-04-1543 : May 31, 2004 : J. Tinga : Second Division : Decision

  • Obaana Jr v. Ricafort : AM MTJ-04-1545 : May 27, 2004 : J. Austria-Martinez : Second Division : Resolution

  • Quinto v. Vios : AM MTJ-04-1551 : May 21, 2004 : J. Callejo Sr : Second Division : Resolution

  • Dy v. Pascua : AM P-04-1798 : May 27, 2004 : J. Callejo Sr : Second Division : Decision

  • Aquino Jr v. Miranda : AM P-01-1453 : May 27, 2004 : Per Curiam : En Banc

  • Apuyan Jr v. Sta Isabel : AM P-01-1497 : May 28, 2004 : J. Austria-Martinez : Second Division : Resolution

  • Fernandez Jr v. Gatan : AM P-03-1720 : May 28, 2004 : J. Tinga : Second Division : Decision

  • Sismaet v. Sabas : AM P-03-1680 : May 27, 2004 : J. Corona : En Banc : Resolution

  • Reliways Inc v. Grantoza : AM P-04-1812 : May 28, 2004 : J. Tinga : Second Division : Resolution

  • Manzon v. Perello : AM RTJ-02-1686 : May 7, 2004 : J. Vitug : Third Division : Resolution

  • Portic v. Villalon-Pornillos : AM RTJ-02-1717 : May 28, 2004 : J. Carpio : First Division : Decision

  • Cruz v. Ubiadas : AM RTJ-03-1768 : May 24, 2004 : J. Quisumbing : Second Division : Resolution

  • Sison v. Caibes Jr : AM RTJ-03-1771 : May 27, 2004 : Per Curiam : En Banc : Decision

  • Floresta v. Ubiadas : AM RTJ-03-1774 : May 27, 2004 : J. Carpio-Morales : Third Division : Decision

  •  





     
     

    DBP v. West Negros College Inc : 152359 : May 21, 2004 : J. Tinga :
Second Division : Resolution

      DBP v. West Negros College Inc : 152359 : May 21, 2004 : J. Tinga : Second Division : Resolution

    PHILIPPINE SUPREME COURT DECISIONS

    SECOND DIVISION

    [G.R. NO. 152359 : May 21, 2004]

    Development Bank of the Philippines, Petitioner, v. West Negros College, Inc., Respondent.

    R E S O L U T I O N

    TINGA, J.:

    For resolution is the Motion for Reconsideration1 dated November 26, 2002 filed by West Negros College, Inc. (West Negros) assailing the Courts Decision2 dated October 28, 2002.

    Briefly, the facts are as follows:3 cralawred

    On December 12, 1967, Bacolod Medical Center (BMC) obtained a loan from the Development Bank of the Philippines (DBP) in the amount of P2,400,000.00 secured by a mortgage on two (2) parcels of land, namely: Lots Nos. 1397-A and 1397-B-1 covered by Transfer Certificates of Title (TCT) Nos. T-25053 and T-29169, respectively.The mortgage was expressly constituted subject to the provisions of Republic Act No. 85 (R.A. 85) creating the Rehabilitation Finance Corporation, a predecessor agency of DBP.

    For failure of BMC to pay the loan, DBP instituted on January 30, 1989 an extrajudicial foreclosure of mortgage under Act 3135.On August 24, 1989, the mortgaged properties were sold at public auction with DBP emerging as the highest and only bidder for the sum of P4,090,117.36.On August 25, 1989, the Ex-Officio Provincial Sheriff of Bacolod City executed the certificate of sale in favor of DBP. On July 11, 1990, the sale was registered in the Registry of Deeds as Entry No. 166752 and annotated on the TCTs of the mortgaged properties.

    Prior to the expiration of the redemption period on July 11, 1991, BMC and the Bacolod branch office of DBP agreed to peg the redemption price at P21,500,000.00 representing the compromise settlement of the outstanding account subject to the approval of DBPs head office.BMC further resolved to pay an installment of 20% of the compromise amount, or P4,300,000.00, on or before August 31, 1991.After several extensions of the deadline to pay the installment, BMC finally settled the amount in three (3) separate payments.

    In the meantime, on July 10, 1991, in the course of paying the 20% installment, BMC and West Negros executed a Deed of Assignment which assigned to the latter BMCs interests in the foreclosed properties and vested upon West Negros the right to redeem them.While acknowledging that redemption should be based on the outstanding loan obligation of BMC to DBP, West Negros demanded the reduction of the redemption price from P21,500,000.00 to P12,768,432.90 allegedly because of excessive interest charges.

    On October 27, 1991, the head office of DBP rejected the compromise amount of P21,500,000.00 since the amount was way below the re-appraised value of the foreclosed parcels of land which stood at P28,895,500.00 as of May 31, 1991.

    On November 8, 1991, West Negros requested the Ex-Officio Provincial Sheriff to issue the certificate of redemption in view of the payment to DBP of P4,300,000.00 representing 20% of the compromise amount, with one percent (1%) interest thereon including other expenses defrayed by DBP at the extrajudicial sale.The computation of the redemption price made by West Negros was based on Section 30, Rule 39 of the Rules of Court and Act 3135.The Ex-Officio Provincial Sheriff concurred with West Negros basis for the redemption price but responded that the amount paid was still short of P358,128.58.In a letter of even date to the DBP, the Ex-Officio Provincial Sheriff informed DBP of the request for a certificate of redemption and the amount pegged for the full redemption of the foreclosed properties based on Section 30, Rule 39 of the Rules of Court, and requested the surrender of the TCTs covering the redeemed properties.

    On November 12, 1991, West Negros settled the deficit of P358,128.58.The Sheriff then requested the Manager of DBP on November 12, 1991 to get the deposit in the amount of P358,128.58 and bring with him the owners duplicate copies of the TCTs covering the subject properties.

    In response, the DBP sent a letter dated November 14, 1991 to the Sheriff arguing that West Negros does not have any personality to enter into the picture and that whatever transaction the latter may have entered into with BMC does not bind DBP because the same was executed without its approval and express consent as mortgagee.4 DBP further objected to the issuance of the certificate of redemption and argued that the redemption price must be based on the charter of the DBP requiring payment of the amount owed as of the date of the foreclosure sale with interest on the total indebtedness at the rate agreed upon in the obligation.It also refused to hand over the TCTs of the foreclosed properties and caused the registration of its adverse claim thereon.

    This prompted West Negros to file a petition against DBP with the RTC-Branch 50, Bacolod City, docketed as Cad. Case No. 2, GLRO CAD. REC. No. 55, for the surrender of the TCTs or, in the alternative, the cancellation of the existing TCTs and the issuance of new ones. West Negros alleged full payment of the redemption price under Section 30, Rule 39 of the Rules of Court and Act 3135.On the other hand, DBP claimed that proper redemption under its charter could only take place when the total outstanding loan had been satisfied.

    The trial court found merit in the petition and ordered DBP to surrender the TCTs and, in case of failure to turn them over, instructed the Register of Deeds to issue new certificates of title for the foreclosed properties.Because DBP manifested that it was not relinquishing the documents, new TCTs were issued in the name of West Negros.On February 14, 1992, upon an ex-parte motion of West Negros, the trial court also cancelled the adverse claim and notice of lis pendens in favor of DBP.On April 28, 1992, it denied DBPs separate motions for reconsideration of the two (2) orders.

    On appeal, the Court of Appeals held that the applicable legal provisions were Section 30, Rule 39 of the Rules of Court and Act 3135 such that the redemption price must be the amount of purchase with one percent (1%) monthly interest thereon including other expenses defrayed by the purchaser at the extrajudicial sale.On February 21, 2002, a Special Division of five of the appellate court denied DBPs motion for reconsideration.

    DBP raised the matter on Petition for Review on Certioraribefore this Court.The bone of contention, as summarized by the Court, was how much a mortgagor must pay to redeem real property mortgaged to and foreclosed extrajudicially by the DBP, i.e., whether the mortgagor must pay to the bank the entire amount he owed the latter on the date of the sale with interest on the total indebtedness at the rate agreed upon in the obligations, or whether it is enough for purposes of redemption that he reimburse the amount of purchase with one percent (1%) monthly interest thereon including other expenses defrayed by the purchaser at the extrajudicial sale.

    In its Decision, the Court declared that in redeeming the foreclosed property respondent West Negros College as assignee of Bacolod Medical Center should pay the balance of the amount owed by the latter to petitioner DBP with interest thereon at the rate agreed upon as of the date of the public auction on August 24, 1989.5 Accordingly, it granted the petition declaring as follows:chanroblesvirtua1awlibrary

    WHEREFORE, the instant Petition for Review is GRANTED.The 7 August 2001 Decision and the 21 February 2002 Resolution of the Court of Appeals in CA-GR CV No. 38277 are REVERSED and SET ASIDE.The appealed Orders of RTC-Br. 50 in CAD. Case No. 2, GLRO CAD. REC. No. 55, dated 7 February 1992, 14 February 1992 and 28 April 1992, ordering petitioner Development Bank of the Philippines through the Ex-Officio Provincial Sheriff to surrender the transfer certificates of title covering the foreclosed parcels of land and, in case of the failure to turn them over, instructing the Register of Deeds to issue new transfer certificates of title for the foreclosed properties, as it did issue new transfer certificates of title designated as TCT Nos. T-165261 and T-165262 in the name of West Negros College; canceling the adverse claim and notice lis pendens in favor of petitioner Development Bank of the Philippines; and denying the separate motions for reconsideration of petitioner Development Bank of the Philippines, are also REVERSED and SET ASIDE.

    The Certificate of Redemption dated 13 November 1991 in favor of respondent West Negros College is DECLARED VOID AND OF NO EFFECT. Respondent is given however a grace period of sixty (60) calendar days from notice of the finality of this Decision within which to redeem the mortgaged properties (Lots Nos. 1397-A and 1397-B-1 originally covered by Transfer Certificates of Title Nos. T-25053 and T-29169, respectively, improvements thereon and other properties subject of the mortgage and the extrajudicial foreclosure) if respondent so desires by paying petitioner Development Bank of the Philippines the balance of the credit of Bacolod Medical Center (as assumed by respondent West Negros College under a deed of assignment) secured by the properties plus the expenses and the agreed rate of interest, to be computed as of the date of the public auction on 24 August 1989, unless petitioner Development Bank of the Philippines has taken material possession of the properties in which case the proceeds of the properties shall compensate the interest but only during the period of their possession.

    In the event that respondent West Negros College is not interested in redeeming the mortgaged properties at the statutory redemption price, or that the redemption period of sixty (60) days expires without any redemption having been undertaken or without a compromise agreement for such purpose having been reached and perfected, respondent West Negros College shall yield possession of the properties in question to petitioner Development Bank of the Philippines as TCT No. T-165261 for Lot No. 1397-A and TCT No. 165262 for Lot No. 1397-B-1 issued in the name of West Negros College are DECLARED VOID and OF NO EFFECT and the Register of Deeds of Bacolod City is ORDERED TO ISSUE new transfer certificates of title over the mortgaged properties in the name of the Development Bank of the Philippines. No Costs.6 cralawred

    Contending that it is desirous of redeeming the subject properties, West Negros filed the instant Motion for Reconsideration7 dated November 26, 2002 on the main issue of how much the redemption price should be.The respondent asks the Court to determine the legality of the amount claimed by DBP as the total outstanding obligation considering that DBP allegedly compounded the interest due and imposed penalties on the principal amount and interest on expenses even as these were neither expressly agreed upon by the parties nor imposed from the time of judicial demand in accordance with Article 2212 of the Civil Code. These circumstances are, according to West Negros, violative of due process. Alternatively, West Negros asks the Court to remand the case to the lower court for determination of the exact amount to be paid.In support of its motion, West Negros attached copies of two (2) Promissory Notes (PNs) respectively dated July 19, 1966 and December 12, 1967 which allegedly support the mortgage contract.The PNs both impose an interest of 12% per annum on unpaid interests and amortizations.

    The respondent further avers that DBP is estopped by its agreement to reduce the redemption amount to P21,500.000.00, acceptance of part of the redemption price and representation that BMC would be allowed to redeem the property.Finally, West Negros challenges the constitutionality of Executive Order No. 81 (E.O. 81),8 which governs the mortgage contract between DBP and BMC, as it allegedly violates the non-impairment clause of the Constitution by giving the DBP the unbridled authority to determine the amount West Negros should pay at the time of redemption.

    In its Comment to Respondents Motion for Reconsideration Dated 26 November 20029 dated March 10, 2003, DBP counters that the PNs attached to the Motion for Reconsideration are non-existent.Allegedly, the PN dated July 19, 1966 refers to an earlier loan granted by DBP to BMC, which had since been fully paid.On the other hand, the PN dated December 12, 1967 had been superseded by a supplemental document and another PN both dated January 6, 1975 which authorize the imposition of compounded interest, penalties and other charges upon the outstanding obligation.

    DBP stresses that it cannot be deemed in estoppel by its acceptance of the amount of P4,300,000.00 as deposit on the proposed redemption price of P21,500,000.00 because the deposit was accepted on condition that it would form part of the redemption price only if approved by DBPs higher management.DBP notes that the instant motion substantially raises factual issues which may not be passed upon by the Court.Furthermore, the constitutionality of E.O. 81 was never raised by the respondent except in the instant motion.

    In its Reply to Comment10 dated August 29, 2003, West Negros avers that DBP introduced new documents which may no longer be considered at this stage of the case. It also insists that it raises substantial legal questions in its Motion for Reconsideration.

    In the main, West Negros argues that the compounded interest, penalties and other charges imposed by DBP are illegal and invalid not having been expressly agreed upon by the parties to the mortgage contract, i.e., DBP and BMC, nor judicially demanded in accordance with the Civil Code.11 cralawred

    Before we resolve this issue, we shall answer the more fundamental question of whether the properties can still be redeemed in the first place. It should be recalled that the certificate of sale in favor of DBP was registered with the Registry of Deeds on July 11, 1990.Under Executive Order No. 81, the mortgagor whose property has been extra-judicially sold at public auction shall have the right to redeem the property within one (1) year counted from the date of registration of the certificate of sale.12 cralawred

    The right of legal redemption must be exercised within specified time limits.13 However, the statutory period of redemption can be extended by agreement of the parties.14 It bears noting that DBP accepted installment payments of 20% of the compromise amount beyond the July 11, 1991 deadline for redeeming the properties.Effectively, DBP and BMC agreed to the extension of the redemption period.Significant, too, is the fact that DBP did not file a motion for reconsideration of the Decision dated October 28, 2002 which granted West Negros a grace period of 60 days from notice of finality of the judgment in this case within which to redeem the mortgaged properties.All these lead to the conclusion that the subject properties may still be redeemed following the guidelines set forth in the Decision aforementioned.

    We now resolve the petitioners main argument.

    We note that West Negros asked for the reduction of the redemption price from P21,500,000.00 to P12,768,432.90 allegedly because of excessive interest charges.However, the issue as to the validity of these impositions was not squarely raised before nor passed upon by the trial court and the appellate court.In fact, in its order15 dated February 7, 1992, the trial court declared that there are no factual issues to be taken up through a full blown hearing on the merits.Rather, the questions posed in the pleadings are of law and, therefore, interpretation of the laws and rules pertinent to the issues at bar would substantially comply with due process.16 The Court of Appeals also said as much when it declared that the factual issues raised by DBP, e.g., the total indebtedness of BMC/West Negros,had been properly ventilated before the trial court.17 cralawred

    Accordingly, without determining the total outstanding obligation of BMC/West Negros, both the trial court and the Court of Appeals upheld the respondents theory that Section 30, Rule 39 of the Rules of Court and Act 3135, and not E.O. 81, apply in the determination of the redemption price.With our Decision declaring otherwise, however, West Negros now asks the Court to settle the issue as to the validity of the imposition of compounded interest, penalties and other charges to enable it to redeem the foreclosed properties.

    The determination of the validity or invalidity of these impositions turns on whether the parties stipulated on the imposition of compounded interest, penalties and other charges or whether DBP judicially demanded payment.According to West Negros, the imposition of compounded interest, penalties and other charges were not expressly stipulated upon.Neither did DBP judicially demand payment of the loan.DBP counters that the loan obtained by BMC in the amount of P2,400,000.00 was supported by the PN dated December 12, 1967.This PN was allegedly superseded by a supplemental document and PN both dated January 6, 1975 which authorized the imposition of compounded interest, penalties and other charges upon the outstanding obligation.

    These questions are largely factual in nature and beyond the province of this Court to determine, not being a trier of facts.18 Moreover, it is a fundamental rule of procedure that higher courts are precluded from entertaining matters neither alleged in the pleadings nor raised during the proceedings below, but ventilated for the first time only in a motion for reconsideration or on appeal.19 On appeal, only errors specifically assigned and properly argued in the brief will be considered, with the exception of those affecting jurisdiction over the subject matter as well as plain and clerical errors.20 cralawred

    These procedural rules notwithstanding, we find that the remand of this case to the Court of Appeals is both necessary and appropriate given the compelling legal and equitable considerations which this Court cannot ignore.Foremost of these is the fact that prior to the expiration of the redemption period on July 11, 1991, BMC agreed and committed to pay the redemption price then pegged at P21,500,000.00.This commitment binds West Negros which, as the assignee of BMC, merely stepped into the latters shoes, so to speak.West Negros, therefore, is estopped from claiming that the redemption price may be reduced to an amount lower than P21,500,000.00.

    This is especially significant in light of the fact that DBP, in essence, had extended the redemption period when it agreed to BMCs payment of 20% of the redemption price in installments beyond the redemption period.Had DBP not agreed to the extension, BMC would not have been able to exercise its right of redemption at all and ownership would have been consolidated at that point in favor of DBP.Moreover, contrary to West Negros contention, DBP is not estopped by its Bacolod branchs agreement to peg the redemption price at P21,500,000.00 and acceptance of the 20% installment because the Bacolod branch expressly made its agreement subject to the approval of its head office.

    This Court in its Decision ordered the payment of the balance of BMCs obligation, plus expenses and interest, to be computed as of the date of the public auction on 24 August 1989 as a condition for the redemption of the mortgaged properties.Perforce, the determination of the validity of the imposition of compounded interest, penalties and other charges and, as a consequence, the ascertainment of the total redemption price, are obviously indispensable to the complete adjudication of this case.To this end, the Court shall remand the case to the Court of Appeals for reception of evidence solely for the purpose of determining the basis for or the propriety of the imposition of compounded interest, penalties and other charges, and the computation of the total outstanding obligation/redemption price to be paid by West Negros, which, however, shall in no case be lower than P21,500,000.00.

    Finally, we have to debunk the challenge on the constitutionality of E.O. 81 on the ground that it violates the non-impairment clause of the Constitution as it allegedly allows the DBP to impose penalties and interest which were not originally agreed upon.It is well-settled that all presumptions are indulged in favor of constitutionality, such that one who attacks a statute, alleging unconstitutionality must prove its invalidity beyond a reasonable doubt.21 In fact, this Court does not decide questions of a constitutional nature unless that question is properly raised and presented in appropriate cases and is necessary to a determination of the case, i.e., the issue of constitutionality must be the very lis mota presented.22 cralawred

    WHEREFORE, the instant Motion for Reconsideration is GRANTED only insofar as it seeks the determination of the total redemption price to be paid by West Negros College, Inc. to the Development Bank of the Philippines which, however, shall not be lower than P21,500,000.00.For this purpose, the case is hereby REMANDED to the Court of Appeals which is directed to proceed accordingly with all deliberate dispatch.

    SO ORDERED.

    Quisumbing, (Acting Chairman), and Callejo, Sr., JJ., concur.

    Puno, (Chairman), J., on official leave.

    Austria-Martinez, J., no part.

    Endnotes:


    1 Rollo, pp. 348-381, with Annexes.

    2 Id. at 205-218.

    3 Id. at 205-210, Decision dated October 28, 2002.

    4 Id. at 66, Decision of the Court of Appeals dated August 7, 2001.

    5 Id. at 216.

    6 Id. at 216-218.

    7 Supra, note 1.

    8 Sec. 16.Right of Redemption.Any mortgagor of the Bank whose real property has been extrajudicially sold at public auction shall, within one (1) year counted from the date of registration of the certificate of sale, have the right to redeem the real property by paying to the Bank all of the latters claims against him, as determined by the Bank.

    The Bank may take possession of the foreclosed property during the redemption period. When the Bank takes possession during such period, it shall be entitled to the fruits of the property with no obligation to account for them, the same being considered compensation for the interest that would otherwise accrue on the account. Neither shall the Bank be obliged to post a bond for the purpose of such possession. [Underscoring supplied.]

    9 Supra, note 1 at 402-421.

    10 Id. at 471-475.

    11 Art. 1959.Without prejudice to the provisions of Article 2212, interest due and unpaid shall not earn interest.However, the contracting parties may by stipulation capitalize the interest due and unpaid, which as added principal, shall earn new interest.

    Art. 2212. Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point. Civil Code.

    12 Sec. 16, E.O. No. 81.

    13 Spouses Estanislao, Jr. v. Court of Appeals, 414 Phil. 509 (2001), citing Basbas v. Entena, 28 SCRA 665 (1969).

    14 Ibaan Rural Bank, Inc. v. Court of Appeals, 378 Phil. 707 (1999).

    15 RTC Records, pp. 102-109.

    16 Id. at 104.

    17 CA Records, p. 122, Decision of the Court of Appeals dated August 7, 2001.

    18 Mirasol v. CA, G.R. No. 128448, February 1, 2001, 351 SCRA 44; Suan v. NLRC, G.R. No. 141441, June 19, 2001, 358 SCRA 819.

    19 Solid Homes, Inc. v. CA, 341 Phil. 261 (1997) citing People v. Echegaray, G.R. No. 117472, February 7, 1997 citing Manila Bay Club Corporation v. Court of Appeals, 249 SCRA 303, October 13, 1995.

    20 Solid Homes, Inc. v. CA, supra, citing Sec. 7, Rule 51 of the Rules of Court.

    21 Caleon v. Agus Development Corporation, G.R. No. 77365, April 7, 1992, 207 SCRA 748, 751, citing Victoriano v. Elizaldo Rope Workers Union, 59 SCRA 54.

    22 Id. citing Tropical Homes, Inc. v. National Housing Authority, 152 SCRA 540.

    DBP v. West Negros College Inc : 152359 : May 21, 2004 : J. Tinga :
Second Division : Resolution


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