The mortgage
between Grandwood and Metrobank, as the original mortgagee, was subject to the
provisions of Section 47 of R.A. No. 8791. Section 47 provides that when a
property of a juridical person is sold pursuant to an extrajudicial
foreclosure, it "shall have the right to redeem the property in accordance
with this provision until, but not after, the registration of the
Certificate of foreclosure sale with the applicable Register of Deeds which in
no case shall be more than three (3) months after foreclosure, whichever is
earlier
Measured by the
foregoing parameters, the Court finds that Grandwood's redemption was made out
of time as it was done after the certificate of sale was registered on
September 30, 2013. Pursuant to Section 47 of R.A. No. 8791, it only had three
(3) months from foreclosure or before the registration of the certificate
of foreclosure sale, whichever came first, to redeem the property
sole in the extrajudicial sale.
Such
interpretation is in harmony with the avowed purpose of R.A. No. 8791 in
providing for a shorter redemption period for juridical persons. In
Goldenway Merchandising Corporation v. Equitable PCI Bank, the Court explained
that the shortened period under Section 47 of R.A. No. 8791 served as
additional security for banks to maintain their solvency and liquidity, to wit:
The difference
in the treatment of juridical persons and natural persons was based on the
nature of the properties foreclosed - whether these are used as residence,
for which the more liberal one-year redemption period is retained, or used for
industrial or commercial purposes, in which case a shorter term is deemed
necessary to reduce the period of uncertainty in the ownership of property
and enable mortgagee-banks to dispose sooner of these acquired assets. It
must be underscored that the General Banking Law of 2000, crafted in the
aftermath of the 1997 Southeast Asian financial crisis, sought to reform the
General Banking Act of 1949 by fashioning a legal framework for maintaining a
safe and sound banking system. In this context, the amendment introduced by
Section 47 embodied one of such safe and sound practices aimed at ensuring the
solvency and liquidity of our banks. It cannot therefore be disputed that
the said provision amending the redemption period in Act 3135 was based on a
reasonable classification and germane to the purpose of the law.
To adopt
Grandwood's position that Section 47 of R.A. No. 8791 no longer applies would
defeat its very purpose to provide additional security to mortgagee-banks. The
shorter redemption period is an incentive which mortgagee-banks may use to
encourage prospective assignees to accept the assignment of credit for a
consideration. If the redemption period under R.A. No. 8791 would be
extended upon the assignment by the bank of its rights under a mortgage
contract, then it would be tedious for banks to find willing parties to be
subrogated in its place. Thus, it would adversely limit the bank's
opportunities to quickly dispose of its hard assets, and maintain its solvency
and liquidity.
To reiterate, the
shortened period of redemption provided in Section 47 of R.A. No. 8791 serves
as additional security and protection to mortgagee-banks in order for them to
maintain a solvent and liquid financial status. The period is not
extended by the mere fact that the bank assigned its interest to the mortgage
to a non-banking institution because the assignee merely steps into the shoes
of the mortgagee bank and acquires all its rights, interests and benefits under
the mortgage-including the shortened redemption period. Moreover, to extend the
redemption period would prejudice the ability of the banks to quickly dispose
of its hard assets to maintain solvency and liquidity.
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