Rural Bank of Oroquieta (Mis. Occ.), Inc. vs. Court of Appeals

No. 53466. November 10, 1980.

Main Topic – Rule 68.


The failure of Serrano Spouses on paying the mortgaged debt resulted in Trial Court’s order for the sale at public auction of the mortgaged coconut land. The mortgaged lot was sold to the bank as the only bidder and there being no redemption within the one-year period (sec. 78, General Banking Law), the sheriff issued a final certificate of sale. The bank then sold the lot to Eufemia Mejos. Judge Genato issued an order directing the issuance of a writ of possession to the bank. 

Serrano Spouses filed a motion for the reconsideration of that order on the grounds that, because there was no judicial confirmation of the action sale, they still have an equity of redemption and could still pay the mortgage debt and that the auction sale was fraudulent and irregular. Judge Genato granted the motion for reconsideration.  The bank filed a manifestation and motion that the land had already been sold and, therefore, its acceptance of the redemption price amounting to P2,820.60 would not produce any legal effect The bank prayed that it should not be compelled to accept the proffered redemption price. The trial court denied the motion. The bank appealed with the Court of Appeals from the trial court’s order, allowing the redemption. The Serrano spouses filed a motion to dismiss the appeal on the ground that they had already deposited with the clerk of court the redemption price of P2,830. 

The bank filed with Court of Appeals by means of certiorari which was really a mandamus action to compel the trial court to give due course to its appeal. The Court of Appeals dismissed the petition.


Whether or not the trial court and the Court of Appeals erred in not giving due course to the bank’s appeal.


No. The Trial Court and the Court of Appeals acted correctly in refusing to give due course to the bank’s appeal not only because the order sought to be appealed is interlocutory but also because in the present posture of the case it is imperative that the trial court should consolidate the foreclosure case, Civil Case No. 2988, with the other case, Civil Case No. 3265 filed by the Serrano spouses for the annulment of the foreclosure sale and the subsequent sale of the mortgaged lot to the Mejos spouses. A decision cannot be rendered outright on the conflicting rights of the Serrano spouses, the bank and the Mejos spouses with respect to the mortgaged lot. The trial court should first try and resolve the issues arising out of the lack of judicial confirmation of the foreclosure sale and the subsequent sale of the mortgaged lot to a third person after the expiration of the one-year period for exercising the right of redemption.

In the instant case, where the foreclosure sale has not yet been confirmed but the statutory one-year period for redemption expired and the mortgaged lot was sold by the mortgagee (as the only bidder at the auction sale) to a third person, the trial court should give the purchaser a chance to be heard before requiring the mortgagee-bank to accept the redemption price tendered by the mortgagors.


That subsequent sale does not prevent the trial court from granting the mortgagor a period within which to redeem the mortgaged lot by paying the judgment debt and the expenses of the sale and costs.