Tolentino vs. CA


Ceferino de la Cruz, the owner of a homestead land, died in 1960; his heirs sold the land to the Tolentino spouses in 1962. In 1967, the de la Cruzes filed an action with the Court of First Instance in Davao to repurchase the land, since the law allows a five year period for repurchase of homestead lots. They said they had tried to repurchase the land several times extrajudicially, but the Tolentinos refused.
By that time, however, the Tolentinos had taken two mortgages on the land. When the first mortgage with BPI fell due, the land was auctioned, with BPI as the highest bidder. In 1969, it was registered to BPI.
However, the lower court decided in favor of the de la Cruzes, and they were allowed to repurchase the land from BPI for P16,000, and eventually acquired possession of the land in Sept. 1969.
Issue: In the case of a mortgage, is consignation necessary or is tender of payment enough? May a check be used for tender of payment and if so, when is the obligation extinguished? When the check is filled out or when it is encashed?

Facts of the case: After a homestead lot they had bought and mortgaged were ordered re-sold to the original owners by the court, Vicenta Tolentino went to BPI with a check for P16,000, trying to redeem the land. She was told that it was sold a year ago, when the court decision became final. However, the Tolentinos were told they could still redeem two other lots they had mortgaged with BPI after paying P75,995.07, the balance of the loan after the de la Cruzes had paid P16,000 for the homestead lot.

Instead of redeeming the two other lots, Vicenta consigned payment to the court, giving a crossed PNB check for P91,995.07, for the redemption of the three lots, including the homestead lot. However, she ordered payment stopped on the check the following day, upon advice of counsel and to protect her rights, she said. She said this was to prevent BPI from encashing the check without returning all the foreclosed properties. Then she filed a redemption case against BPI, imputing bad faith for failing to return all the foreclosed properties.

The complaint was dismissed. On appeal, one of the issues raised was the mode of consignation. Art. 1249 says that debts should be paid in the currency stipulated or, if it is not specified, then in legal tender. Since a check is not legal tender, BPI was not compelled to accept it.

Ratio: The court ruled that Art. 1249 does not apply in this case because the Tolentino’s debt was extinguished when the property was foreclosed and sold to satisfy the debt. What remained was their right to redeem said properties, which is not an obligation but a privilege. Once they exercise the right to redeem, they would then have an obligation to pay, but that obligation would be extinguished only when the check is encashed.
Since the formal offer to redeem was made during the period of redemption prescribed by law, the Tolentinos may redeem the two other properties mortgaged to BPI.
They were not allowed to redeem the homestead lot because the decision of the lower court was already final and there was no finding of grave abuse of jurisdiction that would justify a reversal of the decision.

Judgment: Tolentinos allowed to redeem the properties within 30 days from entry of judgment, plus 1% per month interest up to the time of redemption, together with taxes or assessments BPI may have paid after purchase.


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