28 HUERTA ALBA RESORT INC V CA AND SYNDICATED MANAGEMENT  RESORT filed with CA a Motion for Clarification seeking clarification
larification seeking clarification of the date of
GROUP INC
PURISIMA, J | SEP 1 2000
FACTS
 SMGI filed a complaint for judicial foreclosure of mortgage with preliminary
injunction before RTC Makati – sought foreclosure of 4 parcels of land mortgaged
by INTERCON
 SMGI instituted a civil case as mortgagee-assignee of a loan (P8.5M) obtained
by HUERTA ALBA RESORT from INTERCON (RESORT mortgaged parcels of
land as security for said loan)
o RESORT questioned assignment by INTERCON of its mortgage right to
SMGI, on the ground that the same was ultra vires; also questioned the
correctness of the charges and interest on the mortgage debt
 RTC: SMGI’s complaint for judicial foreclosure of mortgage GRANTED
 CA: RESORT’s appeal DISIMSSED (late payment of docket fees)
 SC: RESORT’S petition for certiorari DISMISSED, MR DENIED WITH FINALITY,
2ND MR DENIED (SC Resolution became final and executory and was entered in
the Book of Entries of Judgment)
 SMGI filed with RTC a motion for execution [GRANTED] – writ of execution,
Notice of Levy and Execution and Notice of Sheriff’s Sale for auction of properties
were issued
 RESORT filed Urgent Motion to Quash and Set Aside Writ of Execution – records
of the case were still with CA so issuance of the writ of execution was premature
since the 150-day period for RESORT to pay the judgment obligation had not yet
lapsed and it had not yet defaulted in payment since no demand was made
[DENIED]
o RTC said that the judgment had become final and executory and execution
was a matter of right and the issuance of the writ of execution became its
ministerial duty
 RESORT: Filed petition for certiorari and prohibition with preliminary injunction with
CA
 Scheduled auction of sale of properties proceeded and SMGI was declared the
highest bidder – covered by Certificate of Sale issued in favor of SMGI was
registered with the Registry of Deeds
 RESORT presented an Ex-Parte Motion for Clarification – clarify WON the 12-
month period of redemption for ordinary execution applied in this case
 RTC: Period of redemption of property should be governed by the rule on the sale
of judicially foreclosed property under Rule 68 ROC
 RESORT filed an Exception to the Order and Motion to Set Aside Order – Order
materially altered the Decision which declared that the satisfaction of judgment
shall be in the manner and under the regulation that govern sale of real estate
under execution
 CA: 150-day period within which RESORT may redeem properties should be
computed from the date RESORT was notified of the Entry of Judgment; and the
150-day period within which RESORT may exercise its equity of redemption
expired on SEP 11 1994 [MR DENIED]
 RTC: Confirmed the sale of properties to SMGI – all pending incidents relating to
the order had become moot and academic; TCTs to properties were issued to
SMGI
commencement of commencement of the 1-year period of redemption of the
properties (merely noted since the decision had become final and executory)
o CA: 150-day period of exercising equity of redemption should be counted not
from receipt of the court of records but from the date RESORT was notified of
the entry of judgment made by CA
o Did not make a pronouncement on the 1 year right of redemption
because the foreclosure is judicial and the mortgagor has only the equity
not the right of redemption
 RESORT opposed SMGI’s Motion for Issuance of Writ of Possession and filed a
Motion to Compel SMGI to accept redemption – first time RESORT asserted the
right to redeem properties under Sec 78 RA 337 (General Banking Act) –
original mortgagee, being a credit institution, its assignment of the mortgage credit
to RESPORT did not remove its coverage of SEC 78 (had right to redeem
properties within 1 year from registration of auction sale)
 RTC DENIED MOTION FOR WRIT OF POSSESSION – Sec 78 of General
Banking Act was applicable hence RESORT had until OCT 21 1995 to redeem;
MR DENIED
 CA: Petition for certiorari, prohibition and mandamus filed by SMGI GRANTED,
SET ASIDE RTC; DENIED RESORT’S MR
ISSUE: WON RESORT has 1 year right of redemption of the properties under Sec 78
RA 337 otherwise known as the General Banking Act? NO
What RESORT has been adjudged to have was only equity of redemption over
the properties not right of redemption.
 GREGORIO Y LIMPIN V IAC – The right of redemption in relation to mortgage –
prerogative to re-acquire mortgaged property after registration of the foreclosure
sale – exists 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 PNB or a bank or banking institution.
 Where a mortgage is foreclosed extrajudicially, Act 3135 – grants mortgagor the
right of redemption within 1 year from registration of the sheriff’s certificate of
foreclosure sale
 Where the foreclosure is judicially effected, no equivalent right of redemption
exists. A judicial foreclosure sale, when confirmed by an order of the court, shall
operate to divest the rights of all the parties to the action and to vest their rights in
the purchaser, subject to such rights of redemption as may be allowed by law.
o Rights allowed by law (i.e. even after confirmation by an order of the court)
are those granted by the charter of PNB (Acts No 2747 and 2938) and the
General Banking Act (RA 337) – these laws onfer on the mortgagor the right
to redeem the properties sold on foreclosure – after confirmation by the
court of the foreclosure sale – which right may be exercised within 1 year,
counted from date of registration of the certificate of sale in the Registry of
Property
o No such right of redemption exists in case of judicial foreclosure of a
mortgage if the mortgagee is not PNB or a bank or banking institution
– there exists only equity of redemption
 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 Sec 2 Rule
68, or even after the foreclosure sale but prior to its confirmation
 This is the mortgagor’s equity (not right) or redemption which may be reduced to a mockery and the administration of justice may be placed in
exercised by him even beyond the 90-day period ‘from the date of service of the disrepute.

order,’ and even after the foreclosure sale itself (before the order of confirmation
 RTC erred in still allowing RESORT to introduce evidence that SMGI’s
of the sale). After such order of confirmation, no redemption can be effected any
predecessor-in-interest was a credit institution, and to rule that RESORT was
longer.
entitled to avail of the provisions of Sec 78 RA 337
o In effect, RTC permitted RESORT to accomplish what it failed to do before CA
IN CASE AT BAR, RESORT failed to seasonably invoke its right under Sec 78 RA 337
(invoke right under Sec 78) although CA already found that the question of
– failed to assert a right to redeem in several crucial stages of the proceedings
whether SMGI is a bank or credit institution was never brought before CA
1. When it submitted its answer to the complaint for judicial foreclosure, did not make
any allegation in its answer regarding any right
SUMMARY
2. SEP 7 1994 – When it filed with RTC an Ex-parte Motion for Clarification, RESORT
The sale of the subject properties, as confirmed by the Order dated February 10, 1995
failed to allege and prove that SMGI’s predecessor in interest was a credit
of the trial court operated to divest the rights of all the parties to the action and to vest
institution and Sec 78 RA 337 was applicable
their rights in SMGI – THERE EXISTED ONLY EQUITY OF REDEMPTION (right of
 Merely asked RTC to clarify whether the sale of properties was execution sale
RESORT to extinguish the mortgage and retain ownership of the property by paying
or judicial foreclosure sale
the secured debt within 90-day period after the judgment became final)
3. When it presented before RTC an Exception to the Order and Motion to Set Aside
 The RESORT failed to exercise its equity of redemption within the prescribed
Said Order – RESORT was silent on the its right under Sec 78 and even failed to
period, redemption can no longer be effected
show SMGI’s predecessor in interest is a credit institution
 The confirmation of the sale and the issuance of the transfer certificates of title
 Just argued that the order materially altered the RTC’s decision
covering the subject properties to private respondent was then, in order.
4. When RTC came out with an order on FEB 10 1995 confirming the sale of
 RTC has the ministerial duty to place SMGI in the possession of subject
properties in favor of SMGI and declared that all pending incidents had become
moot and academic properties.
5. When RESORT filed on FEB 27 1995 a Motion for Clarification with CA seeking
clarification on date of commencement of 1 year redemption period
PETITION DENIED, CA NULL AND VOID, RTC AFFIRMED
 Never intimated any right under Sec 78 nor intimated that SMGI’s
predecessor-in-interest was a credit institution

LIMPIN V IAC – A judicial foreclosure sale, “when confirmed by an order of the court,
shall operate to divest the rights of all the parties to the action and to vest their rights in
the purchaser, subject to such rights of redemption as may be allowed by law, which
confer on the mortgagor, his successors in interest or any judgment creditor of the
mortgagor, the right to redeem the property sold on foreclosure after confirmation by
the court of the judicial foreclosure sale.
 IN CASE AT BAR, the claim that RESORT is entitled to the beneficial provisions
of Sec 78 RA 337 – since SMGI’s predecessor-in-interest is a credit institution – is
in the nature of a compulsory counterclaim which should have been averred in
RESORT’s answer to the complaint for judicial foreclosure
 The very purpose of a counterclaim would have been served had RESORT alleged
in its answer its purported right under Section 78 of R.A. No. 337: The rules of
counterclaim are designed to enable the disposition of a whole controversy of
interested parties’ conflicting claims, at one time and in one action, provided all
parties be brought before the court and the matter decided without prejudicing the
rights of the party
 The failure of petitioner to seasonably assert its alleged right under Section 78 of
R.A. No. 337 precludes it from so doing at this late stage of the case. Estoppel
may be successfully invoked if the party fails to raise the question in the
early stages of the proceedings.
 A party to a case who failed to invoke his claim in the main case, while having the
opportunity to do so, will be precluded, subsequently, from invoking his claim, even
if it were true, after the decision has become final, otherwise the judgment may be