Huerta Alba Resort, Inc. vs.

CA
G.R. No. 128567 Sept. 1, 2000
Purisima, J.

Facts: (ang daming ganap sa case huhu sorry)

- Petitioner Huerta Alba Resort (petitioner) obtained a loan of P8.5 Million from Intercon Fund
Resource, Inc. (Intercon) with the former instituting a security mortgage of 4 parcels of land in
favor of the latter.
o Intercon then assigned its mortgage right to private respondent Syndicated Management
Group, Inc. (SMG).
- After petitioner failed to pay the loan, SMG sought for the judicial foreclosure of the mortgage.
Petitioner in response questioned the assignment made by Intercon to SMG and the correctness of
the charges on the loan.
o Trial Court (TC): granted SMGs complaint; directed that petitioner pay the loan +
charges else the parcels of land will be sold to realize the debt.
o CA: dismissed petitioners appeal.
o SC: dismissed petitioners petition.
March 14, 1994: Petitioners MR denied; the SC decision became final and
executory.
- July 4, 1994: SMG filed with the trial court a motion for execution, which was granted by the TC.
o Petitioner filed an urgent motion to quash and set aside writ of execution, alleging that
the same was premature since the 150-day period for petitioner to pay the judgment
obligation has not yet lapsed and that petitioner has not yet defaulted in payment for
SMG has not yet demanded the same.
o This motion was denied by TC. Petitioner then filed an appeal to the CA.
- In the meantime, the scheduled auction proceeded and SMG was awarded the properties.
o Petitioner presented an ex-parte Motion for Clarification asking the TC whether or not
the 12 month-period of redemption for ordinary execution applied in the case.
o TC answered that it was a judicially foreclosed property, hence it was under Rule 68 of
the RoC. Petitioner filed an exception to the order, alleging that it was under the
regulation that govern sale of real estate under execution.
- Meanwhile, the CA resolved that the 150-day period should be computed from the date petitioner
was notified of the Entry of Judgment, and that the exercise of its equity of redemption expired on
Sept. 11, 1994. The same being expired, the Court declared the contention to be moot and
academic.
o Petitioner filed an MR, but was denied. Subsequently, the CAs decision became final and
executory.
- Feb. 10, 1995: SMG filed a Motion for Confirmation for Certificate of Sale, which was
confirmed by the TC. The TCTs of the parcels of land were then issued to SMG.
- Petitioner filed with the CA a Motion for Clarification seeking clarification of the date of
commencement of the 1 year period of the redemption of the properties.
o CA: merely noted the Motion, thus reasoning:
It previously ruled that petitioners equity of redemption should be counted not
from the receipt of petitioner of the records of the case BUT from the date
petitioner was notified of the entry of judgment.
 CA never made any mention of a one-year redemption because, in the first place,
the foreclosure was judicial, and as such, the mortgagor has only equity, not right
of redemption.
RA 337 (General Banking Act) states that a mortgagor of a bank, banking or
credit institution, whether the foreclosure was done judicially or extrajudicially,
has a period of one year to redeem the foreclosed property. The problem is, the
question of whether the SMG is a bank or a credit institution was never brought
before the CA.
- SMG filed for a motion for issuance of writ of possession with the TC.
o In opposition, petitioner filed a Motion to Compel SMG to Accept Redemption. This is
the first time petitioner asserted such right.
Petitioner theorized that since the original mortagee (Intercon) was a banking
institution, the same should apply to SMG. Therefore, it should have one year
from registration of the auction sale to redeem said property.
o TC: granted SMGs opposition; the latter still has 1 year to redeem.
o CA: reversed.
Hence, this petition (whew).

Held:

- Equity of redemption is different from the right of redemption.

o Right of redemption exists only in cases of extrajudicial foreclosure. It gives the party 1
year from the registration of the sheriffs certificate of foreclosure sale to redeem the
property.
o Equity of redemption exists in cases of judicial foreclosure. When confirmed by the
order of the courtshall operate to divest the rights of all the parties to the action and to
vest their rights in the purchaser, subject to such rights as may be allowed by law.
Equity redemption is simply 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 final.
EXCEPTIONS to this is if the mortgagee is the PNB or a bank or banking
institutions (as according to PNBs charter and RA 337), in which case the
mortgagor has 1 year (counted from the date of the registration of sale in the
Registry of Property) to redeem the property sold on foreclosure (the foreclosure
sale has to be confirmed by the court first.)
- Petitioner failed to seasonably invoke its purported right under RA 337.
o At the earliest opportunity, it should have ventilated its right under the said law. The
failure of petitioner to do so precludes it from doing so at this late stage of the case.

Petition Denied.