LETICIA CO, assisted by her husband MUI YUK KONG, in substitution of CITADEL CITADEL INSUANCE INSUANCE ! SUETY SUETY CO", CO", INC", #$ainti%&a# #$ainti%&a##e$$ #e$$ee, ee, vs. '(ILI''INE NATIONAL )ANK, defendant&a##e$$ant" No" L&*+-" .une /0, +01/ FACTS: CTS: Ap Appe peal al from from the the deci decisi sion on of the the CFI. CFI. In 19 1962 62,, Stan Standa dard rd Parts arts Manfa Manfact ctrin rin! ! Corpor Corporati ation on "Stand "Standar ard# d# e$ec e$ected ted a real real estate estate mort!a mort!a!e !e co%erin! properties sitated in &a!io Cit', in fa%or of P(&, as secrit' for a P)**, ***.** loan. In 196+, Standard amended the real estate mort!a!e to inclde a propert' in Maati as secrit' to the increased loan amont of P1, ***,***.**. In the same 'ear, it also e$ected a chattel mort!a!e for its personal properties. The total loan of Standard amonted to P-, 296,*+.)6. Stan Standa darrd defa defal lte ted d on its its loan loan o/li o/li!a !ati tion ons s ths ths P(& P(& for foreclo eclose sed d the the mort!a!es. P(& prchased the foreclosed properties "0l' 19, 19- for the &a! &a!io io prop proper erti ties es A A! !st st , 19 19- for for the the Maa Maati ti prop proper ert' t'#. #. It also also consolidated titles to the properties located in &a!io 3hen Standard failed to redeem the properties 3ithin the redemption period. The title 3as issed on Ma' Ma' ), 19 196 6.. 4n Ma' Ma' 11-,, 19 196 6,, titl title e to the the Maa Maati ti prop proper ert' t' 3as 3as also also transferred to P(&. In the meantime, on March ), 196, Citadel 3rote P(& a letter e$pressin! its desire to redeem the Maati propert', it alle!in! to /e assi!nee of the ri!ht of redemption of Standard "assi!nment 3as made on Fe/rar' 2*, 196# 3ith respect to the said propert'. P(& refsed considerin! that its total claim of P+, +66,)-6.-2 is mch hi!her than Citadel5s oer of onl' P1, 621,9* as redemption price. 4n March 11, 1*6, Citadel consi!ned the pa'ment to the trial cort in an instant action. The trial cort rled in fa%or of Citadel ths this appeal. ISS7 ISS78: 8: het hethe herr Cita Citade dell e$er e$erci cise sed d its its ri!h ri!htt to redem edempt ptio ion n 3ith 3ithin in the the redemption period. 7;I(<: =es. The cort 3as constrained to se the date of the re!istration of the the cert certi> i>ca cate te of sale sale "Mar "March ch 11 11,, 19 19) )## de de to the the am/i am/i! !it it' ' in the the alle!ations of the parties. The provision of the PNB Charter are deemed included in mortgage loan contracts of PNB by virtue of express contractual incorporation :
Tender of RCBC manager’s check by way of mortgage loan redemption is a valid tender the RCBC being a bank of good repute! From all the fore!oin!, e are of the considered opinion and so hold that STA(@A@5sCITA@8;5s period of redemption 3as p to March 1*, 196. That CITA@8; >led its complaint to compel P(& to accept its redemption onl' on March 11, 196 is of no moment. The ne?i%ocal tender of redemption 3as made in the letter of Francisco S. Corps, its President, of March ), 196 accompanied /' a mana!er5s chec of the iDal Commercial &anin! Corporation, a 3ell no3n, /i! and repta/le /anin! instittion, for the amont it /elie%ed it shold pa' as redemption price. P(& reected it on the sole and onl' !rond that it considered the amont insEcient. The Cort, therefore, holds that the redemption 3as made on time, that is, 3ithin one 'ear "or e%en t3el%e months# from the date appearin! as the date of the re!istration of the certi>cate of sale. P"#" $%& otherwise known as the new PNB Charter which re'uires that redemption of PNBforeclosed properties should be made by payment in full of all PNB claims on the loan cannot be applied retroactively to loan contracts executed prior to its taking into e(ect on )ay * +%,- as otherwise the non. impairment of contracts clause will be violated for P"#" $%&’s re'uirements are more stringent on the borrower : Stated other3ise, /' %irte of the pro%ision of the mort!a!e contract precisel' cited /' P(&, namel', its para!raph "!#, ?oted earlier, P(& had the contractall' ac?ired option to resort either to its Charter, ep/lic Act 1+** or to Act +1+). hen it foreclosed the mort!a!e at isse, it chose Act +1+) " That 3as an option it freel' e$ercised 3ithot the least inter%ention of appellee. And it 3as e$ercised /efore P.@. 69- came into /ein!. In fact, the foreclosre sales too place in 19- 'et. And so, to mae the redemption s/ect to a s/se?ent la3 3old /e o/%iosl' predicial to the part' e$ercisin! the ri!ht to redeem. ithot considerin! the date the loan 3as secred and the date of the mort!a!e contract, and tain! into accont onl' the dates of the foreclosres and action sales, it is ?ite o/%ios that an' chan!e in the la3 !o%ernin! redemption that 3old mae it more diEclt than nder the la3 at the time of the sale cannot /e !i%en retroacti%e eect. 7nder the terms of the mort!a!e contract, the terms and conditions nder 3hich redemption ma' /e e$ercised are deemed part and parcel thereof 3hether the same /e merel' con%entional or imposed /' la3. To alter those terms in a manner predicial to the mort!a!or or the person redeemin! the propert' as his sccessorGinG interest after the foreclosres and sales 3old de>nitel' come 3ithin the constittional proscription a!ainst impairment of the o/li!ations of contracts. H88F48, the d!ment of the trial cort a!ainst the Philippine (ational &an herein on appeal is here/' modi>ed and another one is here/' rendered in fa%or of the said defendantGappellant /an in accordance 3ith the formla hereina/o%e stated, and, accordin!l', pon pa'ment /' ;8TICIA C4 of the amont de it prsant to the a/o%e comptation, P(& is here/' ordered to transfer the title to the propert' in ?estion to ;8TICIA C4. This pa'ment mst /e made 3ithin ten "1*# da's from the >nalit' of this d!ment.
