Republic of the Philippines obligation and the accumulated interests up to and

SUPREME COURT including the time of actual repurchase;

Manila
3. Ordering the appellee Sta. Ignacia Rural Bank, Inc. to
THIRD DIVISION return to the appellee-spouses the purchase price of said
house and lots which is P47,500.00 including all the
  expenses incident thereto.

G.R. No. 97872 March 1, 1994 4. No costs.

STA. IGNACIA RURAL BANK, INC., petitioner,  SO ORDERED.

vs.
THE HONORABLE COURT OF APPEALS and SPS. CONRADO (pp. 27-28, Rollo.)
PABLO and JUANITA GONZALES, respondent.
The generative facts of the legal controversy, as synthesized by
Atienza and Atienza Law Office for petitioner. respondent court, are acceptable to herein petitioner, and are accordingly
adopted thusly:
Hermogenes E. Manglicmot for private respondents.
On January 14, 1980, the defendants Sta. Ignacia Rural
Bank, Inc. extended to the plaintiff-spouses Conrado
Pablo and Juanita Gonzales a loan totalling P12,109.75.
MELO, J.: As a security, the plaintiff-spouses executed in favor of
the defendant bank a Real Estate Mortgage (Exh. "A")
Aired in the petition for certiorari before us is the propriety of sustaining over their residential house and two (2) lots covered by
the decretal portion of the decision in CA-G.R. CV No. 25653 rendered Free Patent Title, OCT No. P-7941 (Exh. "E") located at
on February 1, 1991 by the Court of Appeals (Mendoza V., Chua, Victor Poblacion Norte, Mayantoc, Tarlac. The plaintiff-spouses
[P], JJ.) which authorized private respondents to repurchase the subject defaulted in the payment of their obligation, as a result of
realty from petitioner in this manner: which, the defendant bank filed with the Provincial Sheriff
of Tarlac a petition for extra-judicial foreclosure of their
WHEREFORE, the decision appealed from is hereby real estate mortgage under Act 3135. On July 28, 1981,
REVERSED, and in its stead judgment is rendered as the aforecited house and lots of the plaintiff-spouses were
follows: sold at public auction with the defendant bank as the
highest bidder for P13,168.35 (Exhs. "B"-"D", inclusive).
1. Annulling and cancelling the sale made by the appellee
Sta. Ignacia Rural Bank, Inc. of the subject house and lots Thereafter, the Certificate of Sale (Exh. "D") was
to and in favor of appellee-spouses Alberto Lucas and executed in favor of the defendant bank on September
Nelia Rico as well as Transfer Certificates of Title Nos. 29, 1981 and the same was registered with the Register
184687 and 184688 issued by the Register of Deeds of of Deeds of Tarlac on November 5, 1981 (Exh. "E-2").
Tarlac; The ownership of the subject house and lots was
consolidated in favor of the defendant bank virtue of the
final deed of sale executed on November 5, 1983 (Exh.
2. Ordering said appellee Sta. Ignacia Rural Bank, Inc. to
"I"). On December 19, 1984, the defendant bank sold the
allow the appellants to repurchase the subject house and
aforementioned real estates to defendant-spouses
lots for such amount as may correspond to the principal
 Alberto Lucas and Nelia Rico for P47,500.00 (Exh. "K"), provisions of the Public Land Act and the Rural Banks Act. In
and Transfer Certificates of Title Nos. 184687 and consequence, reversal followed upon the following apt observations:
184688 (Exhs. "L" and "M") over the house and lots were
subsequently issued in the name of said defendant- . . . The lower court failed to consider that the subject
spouses. parcels of residential lots were acquired by the appellants
under the provisions of the Public Land Law (C.A. 141).
Hence, the complaint for the repurchase of the subject Section 119 thereof provides, inter alia:
house and lots, annulment of title and damages filed on
March 20, 1986 by the plaintiff-spouses. After trial, the Every conveyance of land acquired under
lower court rendered the appealed decision, the decretal the Free Patent provisions, when proper,
portion of which states: shall be subject to repurchase by the
applicants, his widow, or legal heirs within
WHEREFORE, this case is hereby a period of five years from date of the
DISMISSED without pronouncement as to conveyance.
costs.
Accordingly, we do not sustain the trial court's above
SO ORDERED. pronouncement. We base our finding on the case of Oliva
vs. Lamadrid, 21 SCRA 737, a case in point, in which the
(pp. 21-22, Rollo.) High Tribunal ruled that there is no conflict between
Section 119 of C.A. 141 and Section 5, R.A. 720, as
With respect to the principal question of redemption, the court of origin amended, thus:
expressed the view that private respondents' cause of action could no
longer prosper because: It should be noted that the period of two
(2) years granted for the redemption of
While Section 119, C.A. 141 provides for a five-year property foreclosed under Section 5 of
period of redemption involving homestead and free patent Republic Act No. 720, as amended by
lands, Section 5, R.A. No. 720, as amended, provides for Republic Act No. 2670, refers to lands "not
a two-year redemption period in mortgage loans with rural covered by a Torrens Title, a homestead
banks. R.A. 720, as amended, being a special law and of or free patent", or to owners of lands
later enactment prevails over C.A. 141 which is a general "without torrens title", who can "show five
law. years or more of peaceful, continuous and
uninterrupted possession thereof in the
concept of an owner, or of homesteads or
The Certificate of Sale was registered on November 5,
free patent lands pending the issuance of
1981. The redemption period is counted from the
titles but already approved", or "of lands
registration of the certification of foreclosure sale
pending homestead or free patent titles".
(Gorospe vs. Santos, 69 SCRA 191). Pursuant to Section
Plaintiff, however, had, on the land in
5, R.A. 720, therefore, plaintiffs' right to redeem within the
question, a free patent and a Torrens title,
two-year period has already expired.
which were issued over 26 years prior to
the mortgage constituted in favor of the
(pp. 9-10, Rollo.) Bank. Accordingly, there is no conflict
between Section 119 of Commonwealth
When the same issue was ventilated by private respondents on appeal, Act No. 141 and Sections 5 of Republic
respondent Court of Appeals saw no conflict between the pertinent Act No. 720, as amended, and the period
 of two (2) years prescribed in the latter is July 22, 1972. In addition, Section 119 of
not applicable to him. Commonwealth Act 141 provides that
every conveyance of land acquired under
The case before us indubitably shows that the disputed the free patent or homestead patent
house and lots were covered by a Free Patent Title, provisions of the Public Land Act, when
Original Certificate of Title No. P-7941 (Exh. "E"). Thus, proper, shall be subject to repurchase by
Section 5 of R.A. 720, as amended, which provides for the applicant, his widow or legal heirs,
two (2) years from the date of foreclosure within which to within the period of five years from the
redeem, is clearly not applicable as said section refers to date of conveyance.
lands "not covered by a torrens title, a homestead or free
patent", or to owners of land "without torrens titles" who The five-year period of redemption fixed in
can "show five years or more of peaceful, continuous, and Section 119 of the Public Land Law of
uninterrupted possession in the concept of an owner, or homestead sold at extrajudicial
of homesteads or free patent lands pending the issuance foreclosure begins to run from the day
of titles but already approved", or "lands pending after the expiration of the one-year period
homestead or free patent titles". The applicable law, of repurchase allowed in an extrajudicial
therefore, is Section 119 of the Public Land Law (C.A. foreclosure. (Manuel vs. PNB, et al., 101
141), and not Section 5 of R.A. 720, as amended. Phil. 968). Hence, petitioners still had five
(5) years from July 22, 1972 (the
Now, as to whether the appellants had exercised their expiration of the redemption period under
right to redeem within the redemption period or whether Act 3135) within which to exercise their
such right had already prescribed, We again cite the right to repurchase under the Public Land
ruling of the Supreme Court in the recent case Act.
of Belisario vs. Intermediate Appellate Court, 165 SCRA
101, in which it was held, inter alia: In this case, it will be recalled that the mortgaged house
and lots were sold at public auction to the appellee bank
The subject piece of land was sold at on July 28, 1981. However, the Sheriff's Certificate of
public auction to respondent PNB on Sale was registered only on November 5, 1981. Under
January 31, 1963. However, the Sheriff's Act 3135, the appellants may redeem the subject house
Certificate of Sale was registered only on and lots until November 5, 1982 being the last day of the
July 22, 1971. The redemption period, for one-year period of repurchase allowed by said law.
purposes of determining the time when a Following, then, the ruling of the Supreme Court in the
final Deed of Sale may be executed or case of Belisario vs. Intermediate Appellate Court, supra,
issued and the ownership of the registered the appellants still had five (5) years from November 5,
land consolidated in the purchaser at an 1982 (the expiration of the redemption period under Act
extrajudicial foreclosure sale under Act 3135), or until November 5, 1987, within which to exercise
3135, should be reckoned from the date of their right to repurchase under the Public Land Act.
the registration of the Certificate of Sale in
the Office of the Register of Deeds Moreover, for purposes of ascertaining whether
concerned and not from the date of public appellants exercised their right to repurchase effectively,
auction (PNB vs. CA, et. al., G.R. L-30831 we have only to consider their filing of the action for the
and L-31176, Nov. 21, 1979, 94 SCRA "repurchase of the subject house and lots, annulment of
357, 371). In this case, under Act 3135, title and damages" on March 20, 1986 against the
petitioners may redeem the property until appellee bank and the appellee-spouses, which was filed
within the five-year period to repurchase. The question long as within the redemption period, may
now of whether the appellant had actually tendered, be exercised irrespective of whether or not
deposited or consigned in court the redemption price for the mortgagee bank had subsequently
the subject house and lots becomes immaterial in view of conveyed the property to some other
the filing of said action to repurchase which has been party. (Villaflor vs. Barreto, 92 Phil. 297).
equivalent to an offer to redeem and has the effect per
se of preserving their right of recovering the disputed Following the above pronouncement, it is
house and lots. (Tolentino vs. Court of Appeals, 106 correct to state that herein appellants may
SCRA 513; Tioseco vs. Court of Appeals, 143 SCRA redeem the subject house and lots from
705). the appellee bank despite the conveyance
thereof to and in favor of the appellee-
Foregoing considered, the issue of spouses. Anent the redemption price, as
whether or not the appellants are still held in PNB vs. Landeta, supra, it should
entitled to redeem the subject house and be only such amount as may correspond
lots is already settled in their favor. The to the principal obligation and the
question to be determined now at this accumulated interest thereon up to and
juncture is whether the appellants should including the time of actual repurchase.
repurchase the property from the appellee Hence, the appellants should pay as
bank or from the appellee-spouses redemption price, the amount of the
because the amount to be paid by the principal obligation which is P10,000.00
appellants as consideration for the plus 12% interest per annum thereon, in
repurchase would depend upon whether addition, up to and including the time of
the appellants should repurchase from the actual repurchase.
former or from the latter. In the case of
Philippine National Bank vs. Landeta, 18 (pp. 23-26, Rollo.)
SCRA 272, the Supreme Court concurring
with this Court held, inter alia, that the Petitioner's motion for reconsideration did not merit favorable action 
mortgagor is entitled to repurchase the (p. 30, Rollo), hence the petition at bench which practically reiterates the
mortgaged property from the mortgagee similar disquisition below towards upholding the supremacy of the 2-year
bank and the amount to be paid therefor period under the Rural Banks Act over the 5-year limit for repurchase
should be only "such amount as may fixed by the Public Land Act (pp. 66-67, Rollo).
correspond to the principal obligation and
the accumulated interest up to and
The query raised by petitioner is far from novel or unsettled, since the
including the time of actual repurchase".
matter of whether the time frame under the Rural Bank Act had
The High Tribunal rationalized that a
superseded the repurchase period prescribed by the Public Land Act
different ruling would render it easy for the
involving the foreclosure sale property acquired via a homestead patent
buyer at the foreclosure sale to render
was again recently resolved in the negative by this Division (Gutierrez,
nugatory the right of repurchase granted
Bidin, Davide [P], Romero, Melo, JJ.) in Rural Bank of Davao City. Inc.
by law to the owner who acquired the
vs. Court of Appeals (217 SCRA 554 [1993]) in this fashion:
property under the Public Land Act, by
making conveyance of the property for
amounts beyond the capacity of said The policy of homestead laws and the reason behind the
owner to pay. The High Court further foregoing provision are expressed by this Court in Pascua
stated that this right of repurchase, as vs. Talens in this wise:
 It is well-known that the homestead laws family may shelter and live beyond the
were designed to distribute disposable reach of financial misfortune, and to
agricultural lots of the State to land- inculcate in individuals those feelings of
destitute citizens for their home and independence which are essential to the
cultivation. Pursuant to such benevolent maintenance of free institutions.
intention the State prohibits the sale or Furthermore, the state itself is concerned
encumbrance of the homestead (Section that the citizens shall not be divested of a
116) within five years after the grant of the means of support, and reduced to
patent. After that five-year period the law pauperism. (Cook and Burgwall vs.
impliedly permits alienation of the McChristian, 4 Ca., 24; Franklin vs.
homestead, but in line with the primordial Coffee, 70 Am.. Dec., 292; Richardson vs.
purpose to favor with the homesteader Woodward, 104 Fed. Rep., 873; 21 Cyc.,
and his family the statute provides that 459).
such alienation or conveyance (Section
117) shall be subject to the right of The conservation of a family home is the
repurchase by the homesteader, his purpose of homestead laws. The policy of
widow or heirs within five years. This the state is to foster families as the factors
Section 117 is undoubtedly a complement of society, and thus promote general
of Section 116. It aims to preserve and welfare. The sentiment of patriotism and
keep in the family of the homesteader that independence, the spirit of free
portion of public land which the State had citizenship, the feeling of interest in public
gratuitously given to him. It would, affairs, are cultivated and fostered more
therefore, be in keeping with this readily when the citizen lives permanently
fundamental idea to hold, as we hold, that in his own home, with a sense of its
the right to repurchase exists not only protection and durability. (Waples on
when the original homesteader makes the Homestead and Exemptions, p. 3)
conveyance, but also when it is made by
his widows or heirs. This construction is Because of such underlying policy and reason, the right to
clearly deducible from the terms of the repurchase under Section 119 cannot be waived by the
statute. party entitled thereto, and applies with equal force to both
voluntary and involuntary conveyances. And, as early as
As pointedly stated earlier in Jocson vs. Soriano, in 1951, in Cassion vs. Banco Nacional Filipino, this Court
connection with homestead statutes: declared that such right is available in foreclosure sales of
lands covered by homestead or free patent. Consistently
Acts Nos. 1120 and 926 were patterned therewith, We have ruled in a number of cases that said
after the laws granting homestead rights Section 119 prevails over statutes which provide for a
and special privileges under the laws of shorter period of redemption in extrajudicial foreclosure
the United States and the various states of sales. We thus have consistent pronouncement in Paras
the Union. The statutes of the United vs. Court of Appeals, Oliva vs. Lamadrid, Belisario vs.
States as well as of the various states of Intermediate Appellate Court and Philippine National
the Union contain provisions for the Bank vs. De los Reyes. These cases, with the exception
granting and protection of homesteads. of Oliva, involved the question of which between the five
Their object is to provide a home for each (5) year repurchase period provided in Section 119 of
citizen of the Government, where his C.A. No. 141 or the one (1) year redemption period under
 Act No. 3135 should prevail. While Oliva is the only case, The amendment clarifies the rather vague language of
among those cited, that involves the Rural Banks' Act, the Section 5 as amended by R.A. No. 2670. The ambiguity
other cases reveal the clear intent of the law on lies in the fact that although the latter seems to speak of
redemption in foreclosure sales of properties acquired three (3) classes of lands, namely (a) those not covered
under the free patent or homestead statutes which have by a Torrens title, (b) homesteads lands and (c) free
been mortgaged to banks or banking institutions — i.e., to patent lands, the two-year redemption period may only be
resolutely and unqualifiedly apply the 5-year period enjoyed by the homesteader, the free patent holder or
provided for in Section 119 of C.A. No. 141 and, as their heirs. Moreover, the clause does not clarify whether
categorically stated in Paras and Belisario, to reckon the the land not covered by a Torrens title refers to
commencement of the said period from the expiration of unregistered land merely, or includes land acquired by a
the one-year period of redemption allowed in extrajudicial homestead or free patent not yet issued certificates of title
foreclosure. If such be the case in foreclosure sales of under the Torrens system. As amended, however, by R.A.
lands mortgaged to banks other than rural banks, then, by No. 5939, land acquired under the free patent or
reason of the express policy behind the Rural Banks' Act, homestead patent statutes may be redeemed within a
and following the rationale of Our ruling in Oliva, it is with two-year period; however, the commencement of said
greater reason that the 2-year redemption period in period is reckoned from the date of foreclosure, if such
Section 5 of the Rural Banks' Act should yield to the land is not yet covered by the Torrens title, or from the
period prescribed in Section 119 of C.A. No. 141. registration of the foreclosure — meaning, the certificates
Moreover, if this Court is to be consistent of sale — if it is already covered by Torrens title.
with Paras and Belisario, the 5-year repurchase period
under C.A. No. 141 should begin to run only from the Thus, following the clear intent of Oliva, since private
expiration of the 2-year period under the Rural Banks' Act. respondents' foreclosed property was acquired under the
It may be observed in this connection that Oliva was homestead laws, they had two (2) years from 7 December
decided in 31 October 1967, before the Rural Banks' Act, 1979 — when the certificate of sale was registered — or
as amended by R.A. No. 2670, the pertinent portion of until 7 December 1981, within which to redeem the land.
Section 5 only reads as follows: And, pursuant to Section 119 of C.A. No. 141, they had
five (5) years from 7 December 1981, within which to
Sec. 5. . . . Provided, That when a land not covered by a repurchase it. Since the private respondents offer to
Torrens Title, a homestead or free patent land is repurchase was made well within the said 5-year period,
foreclosed, the homesteader or free patent holder, as well the two (2) courts below correctly ruled in their favor.
as their heirs shall have the right to redeem the same
within two years from the date of foreclosure: . . . Furthermore, We wish to stress here that We are unable
to read in Section 5 of R.A. No. 720, as amended, any
As amended later by R.A. No. 5939, it reads: legislative intent to modify or repeal Section 199 of the
Public Land Act. Each speaks of and deals with a different
Sec. 5. . . . Provided, That when a homestead or free right. Specifically, the former merely liberalized the
patent land is foreclosed, the homesteader or free patent duration of an existing right of redemption in extrajudicial
holder, as well as their heirs shall have the right to foreclosure sales by extending the period of one (1) year
redeem the same within two years from the date of fixed in Act No. 3135, as amended by Act No. 4118, to
foreclosure in case of a land not covered by a Torrens title two (2) years insofar as lands acquired under free patent
or two years from the date of the registration of the and homestead statutes are concerned. The second
foreclosure in the case of a land covered by a Torrens speaks of the right to repurchase and prescribes the
title: . . . . period within which it may be exercised. These two (2)
rights are by no means synonymous. Under Act No. 3135,
the purchaser in a foreclosure sale has, during the property only upon the filing of a bond in an amount
redemption period, only an inchoate right and not the equivalent to the use of the property for a period of twelve
absolute right to the property with all the accompanying (12) months, indemnify the mortgagor in case it be shown
incidents. He only becomes an absolute owner of the that the sale was made without violating the mortgage or
property if it is not redeemed during the redemption without complying with the requirements of the Act. That
period. Upon the other hand, the right to repurchase is bond is not required after the purchaser has consolidated
based on the assumption that the person under obligation his title to the property following the mortgagor's failure to
to reconvey the property has the full title to the property exercise his right of redemption for in such a case, the
because it was voluntarily conveyed to him or that he had former has become the absolute owner thereof.
consolidated his title thereto by reason of redemptioner's
failure to reason of a redemptioner's failure to exercise his Thus, the rules on redemption in the case of an
right of redemption. Thus, in Paras vs. Court of Appeals, extrajudicial foreclosure of land acquired under free
this Court, adverting the Gonzalez vs. Calimbas, stated: patent or homestead statutes may be summarized as
follows: If the land is mortgaged to a rural bank under
After a careful study of the point raised in R.A. No. 720, as amended, the mortgagor may redeem
the present appeal by certiorari, we agree the property within two (2) years from the date of
with the Court of Appeals that the five- foreclosure or from the registration of the sheriff's
year period within which a homesteader or certificate of sale at such foreclosure if the property is not
his widow or heirs may repurchase a covered or is covered, respectively, by a Torrens title. If
homestead sold at public auction or the mortgagor fails to exercise such right, he or his heirs
foreclosure sale under Act 3135 as may still repurchase the property within five (5) years from
amended, begins not at the date of the the expiration of the two (2) year redemption period
sale when merely a certificate is issued by pursuant to Section 119 of the Public Land Act (C.A. No.
the Sheriff or other official, but rather on 141). If the land is mortgaged to parties other than rural
the day after the expiration of the period of banks, the mortgagor may redeem the property within one
repurchase, when deed of absolute sale is (1) year from the registration of the certificate of sale
executed and the property formally pursuant to Act No. 3135. If he fails to do so, he or his
transferred to the purchaser. As this Court heirs may repurchase the property within five (5) years
said in the case of Gonzales (sic) vs. from the expiration of the redemption period also pursuant
Calimbas and Poblete, 51 Phil. 355, the to Section 119 of the Public Land Act.
certificate of sale issued to the purchaser
at an auction sale is intended to be a mere (pp. 563-569.)
memorandum of the purchase. It does not
transfer the property but merely identifies Following the doctrine enunciated in the Rural Bank of Davao City case,
the purchaser and the property, states the it is clear from a perusal of the factual antecedents at bar that the plea for
price paid and the date when the right of repurchase was not time-barred at the time it was made. When the
redemption expires. The effective certificate of sale in favor of petitioner was registered with the Register of
conveyance is made by the deed of Deeds on November 5, 1981, private respondents had two years,
absolute sale executed after the expiration reckoned from said date, within which to redeem the property from
of the period of redemption. petitioner, and another five years, under Commonwealth Act No. 141,
counted from the expiration of the redemption period, to effect
As a consequence of the inchoate character of the right repurchase which private respondents precisely did when the suit below
during the redemption period, Act No. 3135 allows the was initiated on March 20, 1986.
purchaser at the foreclosure sale to take possession the
Neither can petitioner's invocation of Presidential Decree No. 1403 dated
June 6, 1978, which amended the relevantproviso on redemption under
the Rural Banks Act, be of significant relevance to the resolution of the
perceived predicament at hand in default of any repealing clause therein.
Withal, it is axiomatic in statutory construction that repeals of statute by
implication are not favored (Valdez vs. Tuazon, 40 Phil., 943 [1920]);
Philippine American Management Co., Inc., vs. Philippine American
Management Employees Association, 49 SCRA 194 [1973]; Agpalo,
Statutory Construction, 1986 ed., p. 295).

WHEREFORE, the petition is hereby DISMISSED and the decision of the

Court of Appeals AFFIRMED, with costs against petitioner.

SO ORDERED.