51) GREGORIO Y. LIMPIN, and ROGELIO M. SARMIENTO, petitioners, vs. 5.
5. Ponce instituted a special civil action in the Intermediate Appellate
INTERMEDIATE APPELLATE COURT and GUILLERMO PONCE,
respondents. No. L-70987. September 29, 1988.
TOPIC: Foreclosure
Doctrine: EQUITY OF REDEMPTION
- 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 final, in accordance with Rule 68, or even
after the foreclosure sale but prior to its confirmation.
Issue:
Whether or not the equity of redemption recognized in favor of petitioner
Rogelio M. Sarmiento in this Courts judgment promulgated on January 30,
1987, still subsists and may be exercised, more than a year after that
judgment had become final and executory.
Facts:
1. Two lots were originally mortgaged in 1973 to private respondent
Ponce by their former owners, Sps. Aquino.
2. These two lots were afterwards sold in 1978 by the same Aquino
Spouses to Butuan Bay Wood Export Corporation.
o 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.
3. Limpin later sold the lots to his co-petitioner, Sarmiento.
4. A day before levy was made on the two lots in execution of the
judgment against Butuan Bay Wood Export CorporationPonce had
initiated judicial proceedings for the foreclosure of the mortgage over
said two (2) lots .
o Judgment was rendered in his favor and became
final; and at the ensuing foreclosure sale, the lots
were acquired by Ponce himself as highest bidder.
Ponce then moved for confirmation of the
foreclosure sale, but the Court refused to do so as
regards the two which had been subject of the
execution sale in Limpins favor
Court, impleading Limpin and Sarmiento as indispensable parties
respondents.
o Court rendered judgment on February 28, 1985 in
Ponces favor.
o Limpin and Sarmiento appealed;
o The judgment of this Court of January 30, 1987
dismissed Sarmientos and Limpins petition for
review on certiorari of the Appellate Courts decision
of February 28, 1985. It was declared that: the
sale to Ponce, as the highest bidder in the
foreclosure sale of the two lots in question
should have been confirmed, subject to Limpins
(and now Sarmientos) equity of redemption.
6. 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, at least until the Court a quo,
subsequently confirmed the sale and issued a writ of possession in
favor of Guillermo Ponce in June, 1987.
o He did not try to exercise that right before, at or
about the time of the confirmation of the foreclosure
sale by Judge Solano.
7. Nine months or so after entry of the judgment recognizing his equity
of redemption as successor-in-interest of the original mortgagors
Sarmiento finally bestirred himself to attempt to exercise his
unforeclosed equity of redemption.
o Court opined that this should be the subject of the
agreement between Ponce and Sarmiento.
8. Sarmiento then wrote to Ponce on March 23, 1988 offering P2.6
million as redemption price for the two lots originally covered by
TCTs Nos. 92836 and 92837, now 307100 and 307124.
o Ponces answer, dated March 25, 1988, rejected the
offer and averred that the period within which x x
(Sarmiento) could have exercised such right x x
(had) lapsed. Sarmiento reacted by filing a motion
with the Solano Court, dated March 29, 1988, asking
it to fix the redemption price x x and that the
implementation of the writ of possession be
provisionally deferred.
HELD: NO. The equity of redemption is, to be sure, different from and
should not be confused with the right of redemption.
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 saleexists 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 sheriffs certificate of foreclosure sale.
Where the foreclosure is judicially effected, however, no equivalent right of
redemption exists.
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 confirmed by an
order of the court, x x 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.
o 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 final, in accordance with Rule 68, or
even after the foreclosure sale but prior to its
confirmation.
Decision of January 30, 1987, which imported nothing less than a total
affirmance of the Decision of the Appellate Court, should therefore have
sufficiently alerted Sarmiento that confirmation could come at any time after
this Courts Decision became final, with or without any action from Ponce. He
cannot, in the circumstances, claim unfair surprise. He should, upon being
notified of this Courts 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 thisthe order confirming the foreclosure sale issuing only on
June 17, 1987had 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 confirmation (the record shows he did learn of it
within three [3] days after its issuance), 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.

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
confirmation of sale. The Decision of the Intermediate Appellate Court which
he and his predecessor, Limpin, had appealed to this Court specifically
ordered the Trial Court to confirmthe judicial foreclosure sale in favor of
Ponce over the two lots,

The rejection by this Court of Sarmientos and Limpins appeal in its own