SPOUSES BASILIO and NORMA HILAGA
vs.
RURAL BANK OF ISULAN (Cotabato, Inc., as represented by its Manager)
G.R. No. 179781 April 7, 2010
VILLARAMA, JR., J.:
FIRST DIVISION
FACTS:
Petitioners Basilio and Norma B. Hilaga were the owners of a parcel of land located at
Barrio Lopez Jaena, Norala, South Cotabato. On March 16, 1970, they obtained a loan from
respondent Rural Bank of Isulan for PhP 2,500. To secure the loan, they executed a Real Estate
Mortgage over the above-mentioned property. The petitioners failed to pay their obligation thus
the subject property was acquired by the bank as the highest bidder. Meanwhile, unknown to
the bank, a Free Patent had been issued in favor of the petitioners before the foreclosure sale.
More the seventeen years after the foreclosure sale, petitioner Basilio Hilaga sent a series
of letters to respondent bank’s lawyer conveying his desire to redeem the subject property but
the same has been unheeded.
Thus petitioners filed a complaint for Redemption of Foreclosed Mortgaged Property
Under [Act No. 3135] before the Regional Trial Court of Surallah, South Cotabato, Branch 26,
seeking to redeem the subject property from the respondent bank under the provisions of Act
No. 3135.
In its Answer with Counterclaim, the respondent bank averred that when the real estate
mortgage in its favor was executed, the parcel of land was merely covered by a tax declaration.
That unknown to the respondent bank, petitioners proceeded to apply for and cause the issuance
in 1976 of a free patent and torrens title to the land; hence, they are estopped to claim that the
parcel of land mortgaged is covered by a free patent and torrens title.
ISSUE:
Whether petitioners can still redeem their foreclosed property.
Held:
Section 5 of Republic Act No. 720, as amended by Republic Act Nos. 2670 and 5939,
specifically provides for the redemption period for lands foreclosed by rural banks. It provides in
part as follows:
Sec. 5. x x x
Loans may be granted by rural banks on the security of lands without Torrens titles where the
owner of private property can show five years or more of peaceful, continuous and uninterrupted
possession in the concept of an owner; x x x or of homesteads or free patent lands pending the
issuance of titles but already approved, the provisions of any law or regulations to the contrary
notwithstanding: Provided, That when the corresponding titles are issued the same shall be
delivered to the register of deeds of the province where such lands are situated for the
annotation of the encumbrance: x x x
x x x Provided, That when a homestead or free patent land is foreclosed, the homesteader or free
patent holder, as well as their heirs shall have the right to redeem the same within two years
from the date of foreclosure in case of a land not covered by a Torrens title or two years from
the date of the registration of the foreclosure in case of a land covered by a Torrens title x x x.
In the present case, petitioners admit that when the property was mortgaged, only the
tax declaration was presented. Although a free patent title was subsequently issued in their favor
on August 4, 1976, petitioners failed to inform the creditor rural bank of such issuance. As a
result, the certificate of sale was not registered or annotated on the free patent title. Petitioners
are estopped from redeeming the property based on the free patent title which was not
presented during the foreclosure sale nor delivered to the Register of Deeds for annotation of
the certificate of sale as required under Section 5 of Republic Act No. 720, as amended. Estoppel
in pais arises when one, by his acts, representations or admissions, or by his own silence when
he ought to speak out, intentionally or through culpable negligence, induces another to believe
certain facts to exist and such other rightfully relies and acts on such belief, so that he will be
prejudiced if the former is permitted to deny the existence of such facts.
It is undisputed that the foreclosed property was not yet covered by a Torrens title, being
merely covered by a Tax Declaration, when appellees mortgaged their property. Clearly, the right
of appellees to redeem their foreclosed property can only be exercised within two (2) years from
the date of foreclosure, as provided for under R.A. No. 720, as amended by R.A. No. 2670. When
the instant suit commenced on 31 May 1999, appellees right to redeem had already lapsed since
they had only until 1979 to exercise their right of redemption or within two (2) years from the
foreclosure proceedings in 1977.17
For the same reason, petitioners’ assertion that they will have five (5) years from the date
of registration of the sale to redeem the foreclosed property under Section 119 of the Public Land
Act has no merit, the reckoning period for the redemption period being properly from the date
of sale.
WHEREFORE, the petition for review on certiorari is hereby DENIED, for lack of merit.
HEIRS OF MAXIMO LABANON, represented by ALICIA LABANON CAÑEDO and the
PROVINCIAL ASSESSOR OF COTABATO
vs.
HEIRS OF CONSTANCIO LABANON, represented by ALBERTO MAKILANG
G.R. No. 160711 August 14, 2004
VELASCO, JR., J.:
SECOND DIVISION
FACTS:
Constancio Labanon settled upon, cultivated and introduced improvements on a
piece of alienable and disposable public agricultural land situated at Brgy. Lanao, Kidapawan,
Cotabato. Constancio then asked his brother, Maximo Labanon who was better educated to file
the corresponding public land application to which Maximo acceded. Eventually, the Homestead
Application by Maximo was approved and the Original Certificate of Title No. 41320 was issued
in his favor. In 1955, Maximo executed a notarized document denominated as "Assignment of
Rights and Ownership" to safeguard the ownership and interest of Constancio. In 1962, Maximo
executed a sworn statement reiterating his desire that Constancio, his heirs and assigns shall own
the eastern portion of the Lot. After Constancio’s death, his heirs extra-judicially settled his estate
with simultaneous sale over the aforesaid eastern portion of the lot in favor of Alberto Makilang.
However, the heirs of Maximo deprived the heirs of Constancio of their ownership over the
eastern portion of said lot. They argue that the heirs of Constancio can no longer question
Maximo’s ownership of the land after its registration under the principle of indefeasibility of a
Transfer Certificate of Title (TCT). The RTC ruled in favor of the defendant-heirs of Maximo
Labanon. However, the CA reversed the RTC decision upon appeal. Hence, this petition.
ISSUE:
Whether or not Original Certificate of Title No. 41320 issued on April 10, 1975 in
the name of MAXIMO LABANON be now considered indefeasible and conclusive.
HELD:
The principle of indefeasibility of a TCT is embodied in Section 32 of Presidential
Decree No. (PD) 1529, amending the Land Registration Act, which provides:
Section 32. Review of decree of registration; Innocent purchaser for value. The decree of
registration shall not be reopened or revised by reason of absence, minority, or other disability
of any person adversely affected thereby, nor by any proceeding in any court for reversing
judgments, subject, however, to the right of any person, including the government and the
branches thereof, deprived of land or of any estate or interest therein by such adjudication or
confirmation of title obtained by actual fraud, to file in the proper Court of First Instance a
petition for reopening and review of the decree of registration not later than one year from and
after the date of the entry of such decree of registration, but in no case shall such petition be
entertained by the court where an innocent purchaser for value has acquired the land or an
interest therein, whose rights may be prejudiced. Whenever the phrase "innocent purchaser for
value" or an equivalent phrase occurs in this Decree, it shall be deemed to include an innocent
lessee, mortgagee, or other encumbrancer for value.
Upon the expiration of said period of one year, the decree of registration and the
certificate of title issued shall become incontrovertible. Any person aggrieved by such decree of
registration in any case may pursue his remedy by action for damages against the applicant or
any other persons responsible for the fraud.
Contrary to petitioners’ interpretation, the aforequoted legal provision does not totally
deprive a party of any remedy to recover the property fraudulently registered in the name of
another. Section 32 of PD 1529 merely precludes the reopening of the registration proceedings
for titles covered by the Torrens System, but does not foreclose other remedies for the
reconveyance of the property to its rightful owner.
Petitioners as heirs of Maximo cannot disarrow the commitment made by their father
with respect to the subject property since they were merely subrogated to the rights and
obligations of their predecessor-in-interest. They simply stepped into the shoes of their
predecessor and must therefore recognize the rights of the heirs of Constancio over the eastern
portion of the lot. As the old adage goes, the spring cannot rise higher than its source.
WHEREFORE, the petition is DENIED.
CLARA ATONG VDA. DE PANALIGAN, et al.
vs.
COURT OF APPEALS
G.R. No. 112611 July 31, 1996
ROMERO, J.:
SECOND DIVISION
FACTS:
On August 13, 1956, the spouses Gaudencio Superioridad and Socorro Barrios,
private respondents herein, acquired a 79,509 square meter parcel of land located at Barrio 5,
Norala, South Cotabato under Homestead Patent No. V-5988. Consequently Original Certificate
of Title No; P-6776 (V-5988) over the subject Lot No. 744 (PLS-406-0) was issued in their names.
On January 13, 1973, the spouses Superioridad sold the subject property to Ariston
Panaligan and Clara Atong for P25,000.00. After a little over a year, or on February 11, 1974, the
spouses Panaligan sold the said lot to their four children, similarly for a consideration of
P25,000.00. Lot No. 744 was subdivided into four lots, Lot. Nos. 744-A, 744-B, 744-C and 744-D,
each with an area of 19,887 square meters, and the corresponding transfer certificates of title
were issued in favor of the spouses Elizabeth Panaligan and Carlos Palanog, Jr., Magdalena
Panaligan, Ariston Panaligan, Jr. and Rosalinda Panaligan.
On October 20, 1977, private respondent spouses Superioridad, filed a complaint for
repurchase of land under Section 119 of Commonwealth Act No. 1411 against the spouses
Panaligan and their children who were now the titled owners of the property in question.2 In
their answer, the Panaligans countered that private respondents abandoned their rights to the
property in question, that there was neither valid tender of payment nor consignation in court
and that they are not desirous of preserving the land for homestead purposes but for "gain and
speculative purposes."
ISSUE:
Whether or not in exercising the right of redemption, tender of payment of the
repurchase price is necessary.
HELD:
Before proceeding with the provision of law applicable in this case, it is necessary
to correct petitioners' misimpression that the Court of Appeals failed to apply our ruling in the
State Investment case. Said case is not applicable to the case at bar because it did not involve a
land granted under a homestead or free patent, but an ordinary parcel of land which was
mortgaged and foreclosed. Redemption was thus being exercised under civil law provisions and
not under Section 119 of Commonwealth Act No. 141, which is the legal provision in question in
instant case. Perforce, pronouncements in State Investment as regards the general rules of
redemption necessitating tender of payment do not apply to the case at bar which involves land
acquired under a homestead patent. What petitioners quoted was actually the Court ruling in
Belisario v. IAC, 165 SCRA 101,9 which case likewise did not involve land granted under a
homestead patent.
The right of repurchase sought to be exercised by private respondents and allowed both
the trial and appellate courts, is based on Section 119 of Commonwealth Act No. 141, the Public
Land Act. Said privilege is a part of the public policy to provide a home and decent living for
destitutes, aimed at promoting a class of independent small landholders which, needless to say,
is the bulwark of peace and order. 10
Section 119 of Commonwealth Act No. 141 provides:
Sec. 119. Every conveyance of land acquired under the free patent or homestead
provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs,
within a period of five years from date of the conveyance.
It is uncontroverted that private respondent spouses sold the land to petitioners on
January 13, 1973 and that a suit for reconveyance was filed on October 20, 1977. Said suit was
clearly within the five-year period to repurchase granted under the aforequoted legal provision.
The law is unambiguous. Tender of the payment of the repurchase price is not among the
requisites of the law and is therefore unnecessary, contrary to the petitioners' claims. In the case
of PNB v. CA, 179 SCRA 619, 11 with reference to two parcels of land acquired under a free patent
for which redemption within five years was conceded by petitioner therein, the Court held that
"(it) is not even necessary for the preservation of such a right of redemption to make an offer
redeem or tender of payment of purchase price within five years. The filing of an action to
redeem within that period is equivalent to a formal offer to redeem. There is not even a need for
cosignation of the redemption price." 12 It is thus immaterial that private respondents did not
readily deposit the repurchase price with the Clerk of Court.
As regards to the accusation of laches, we like rule in favor of private respondents. The
latter cannot be said to have slept on their rights or let an unreasonable length of time go by
before asserting their rights, after recognizing that they filed suit to recover the property within
the five-year period expressly provided for by law.
WHEREFORE, there being no reversible error in the questioned decision, the instant
petition for review is hereby DENIED
