Integrated Credit and Corporate Services v. Cabreza

 

Integrated Credit and Corporate Services v. Cabreza

G.R. No. 203520

February 15, 2021

 

FACTS:

Cabreza applied for the opening of a credit line with Citibank and secured it with a real estate mortgage over a house and lot he owns. When he defaulted, Citibank instituted a foreclosure proceedings where ICCS emerged as the highest bidder in the public auction. Two days before the expiration of the redemption period, Cabreza offered ICCS to redeem the subject property by paying the redemption price of P10 million to be paid in installments with Spouses Aguilar as guarantors. They entered into a Memorandum of Agreement where ICCS agreed to postpone the consolidation of title of the subject property. It further provided that it shall be deemed automatically terminated and cancelled upon default or non-compliance by Cabreza or the spouses Aguilar. The first three checks were deposited. The fourth check, however, was dishonored due to insufficient funds. Despite the nonpayment of the fourth check, the fifth check was still paid, cleared, and credited to the ICCS. ICCS then informed the Spouses that the title had already been consolidated and sold the property to Spouses Gan. This prompted Sps. Aguilar to institute a complaint against ICCS, spouses Gan, and Citibank. They argued that ICCS’ act of selling the subject property to the Sps Gan constituted double sale because the MOA constitutes a contract of sale.

ISSUE:

Whether or not there was a valid extension of the redemption period

HELD:

No. As reiterated by the SC in the case of GE Money Bank, Inc. v. Sps. Dizon, for there to be a valid extension of the redemption period, two requisites must be established:

1. Voluntary agreement of the parties to extend the redemption period; and

2. The debtor’s commitment to pay the redemption price on a fixed date.

In this case, the first requisite was not met. A valid extension must be made before the expiration of the redemption period. Though there's a meeting of the minds in the MOA, the Court is not convinced as to when the redemption period was voluntarily extended by the parties. The MOA itself provides that the redemption period has already expired without a valid redemption having been affected by Cabreza, and the ICCS is entitled to immediately consolidate ownership over the subject property. It also provides that what was deferred was the consolidation of title, not the postponement and extension of the redemption period. As correctly found by the RTC, the redemption period has already lapsed and ICCS became the absolute owner of the subject property. As provided in jurisprudence, the purchaser of a foreclosed property in a public auction becomes the absolute owner of the property upon expiration of the redemption period without a valid redemption exercised by mortgage.