Jaime Tan Jr.

vs CA
G.R. No. 136368; 16 Jan. 2002

Facts:

On January 22, 1981, Tan, for a consideration of P59,200 executed a deed of absolute
sale over the property in question in favor of spouses Jose Magdangal and Estrella
Magdangal. Simultaneous with the execution of this deed, the same contracting parties
entered into another agreement whereunder Tan was given one (1) year within which to
redeem or repurchase the property. Tan failed to redeem the property until his death on
January 4, 1988.

On May 2, 1988, Tan's heirs filed before the RTC at Davao City a suit against the
Magdangals for reformation of instrument alleging that while Tan and the Magdangals
denominated their agreement as deed of absolute sale, their real intention was to
conclude an equitable mortgage.

RTC rendered judgment finding for Tan, portion of which reads:

1) The Deed of Absolute Sale is, in accordance with the true intention of the parties,
hereby declared and reformed an equitable mortgage;

2) The plaintiff is ordered to pay the defendants within 120 days after the finality of this
decision P59,200 plus interest at the rate of 12% per annum from May 2, 1988, the date
the complaint was filed, until paid;

On Sept. 28, 1995, CA affirmed the decision of the RTC in toto. Both parties received
the decision of the appellate court on Oct. 5, 1995. On March 13, 1996, the clerk of
court of the appellate court entered in the Book of Entries of Judgement the decision
xxx and issued the corresponding Entry of Judgment which, on its face, stated that the
said decision has on Oct. 21, 1995 become final and executory.

Magdangals filed in the RTC a Motion for Consolidation and Writ of Possession alleging
that the 120-day period of redemption of the petitioner has expired.

On June 10, 1996, the RTC allowed the petitioner to redeem the lot in question. It ruled
that the 120-day redemption period should be reckoned from the date of Entry of
Judgment in the CA or from March 13, 1996. The redemption price was deposited on
April 17, 1996.

Issue:

What rule should govern the finality of judgment favorably obtained in the trial court by
the petitioner?
Held:

From 1991-1996, the years relevant to the case at bar, the rule that governs finality of
judgment is Rule 51 of the Revised Rules of Court. Its sections 10 and 11 provide:

SEC. 10. Entry of judgments and final resolutions. If no appeal or motion for new trial or
reconsideration is filed within the time provided in these Rules, the judgment or final
resolution shall forthwith be entered by the clerk in the book of entries of judgments.
The date when the judgments or final resolution becomes executory shall be deemed as
the date of its entry. The record shall contain the dispositive part of the judgment or final
resolution and shall be signed by the clerk, with a certificate that such judgment or final
resolution has become final and executory.

SEC.11. Execution of judgment. Except where the judgment or final order or resolution,
or a portion thereof, is ordered to be immediately executory, the motion for its execution
may only be filed in the proper court after its entry.

The 1997 Revised Rules of Civil Procedure, however, amended the rule on finality of
judgment by providing in section 1, Rule 39 as follows:

Section 1. Execution upon judgments or final orders. Execution shall issue as a matter
of right, on motion, upon a judgment or order that disposes of the action or proceeding
upon the expiration of the period to appeal therefrom if no appeal has been duly
perfected.

If the appeal has been duly perfected and finally resolved, the execution may forthwith
be applied for in the court of origin, on motion of the judgment obligee, submitting
therewith certified true copies of the judgment or judgments or final order or orders
sought to be enforced and of the entry thereof, with notice to the adverse party.

The appellate court may, on motion in the same case, when the interest of justice so
requires, direct the court of origin to issue the writ of execution.

SC hold that section 1, Rule 39 of the 1997 Revised Rules of Procedure should not be
given retroactive effect in this case as it would result in great injustice to the petitioner.
Undoubtedly, petitioner has the right to redeem the subject lot and this right is a
substantive right. Petitioner followed the procedural rule then existing as well as the
decisions of this Court governing the reckoning date of the period of redemption when
he redeemed the subject lot. Unfortunately for petitioner, the rule was changed by the
1997 Revised Rules of Procedure which if applied retroactively would result in his losing
the right to redeem the subject lot. It is difficult to reconcile the retroactive application of
this procedural rule with the rule of fairness. Petitioner cannot be penalized with the loss
of the subject lot when he faithfully followed the laws and the rule on the period of
redemption when he made the redemption.
Ratio:
1. Finality of Judgment: The Court reiterated that the finality of judgment is
governed by the rules in effect at the time the judgment was rendered. In this
case, the old rule, as interpreted in Cueto vs. Collantes, applied, and the
redemption period should be reckoned from the date of Entry of Judgment.

2. Retroactive Application of Procedural Rules: While procedural rules can generally

3. Equity and Fairness: The Court emphasized the importance of equity and
fairness in the application of procedural rules. The petitioner had followed the
existing rules and exercised his right to redeem the property within the prescribed
period. To apply a new rule retroactively and deprive him of this right would be
inequitable.

4. Substantive Rights: The right to redeem property is a substantive right, and