G.R. No. 247816 , July 15, 2020
Spouses Dionisio Duadua Sr. and Consolatriz de Peralta Duadua, substituted by their heirs Gliceria Duadua Tomboc, Dionisio P. Duadua, Jr., Bienvenido P. Duadua, Paul P. Duadua, Samuel P. Duadua, and Moises P. Duadua, Petitioners, vs. R.T. Dino Development Corporation represented by its President Rolando T. Dino, Spouses Esteban Fernandez, Jr. and Rose Fernandez, and the Department of Public Works and Highways represented by Engr. Tomas D. Rodriguez as the Officer-in-Charge-District Engineer of Sultan Kudarat Engineering District, Isulan, Sultan Kudarat, Respondents.

FACTS

Spouses Dionisio and Consolatriz Duadua were granted a homestead patent over a 49,889-square-meter parcel of land in Tacurong, Sultan Kudarat, and were issued Original Certificate of Title (OCT) No. (V-2866) P-2220 on January 25, 1954. On May 14, 1996, they sold the land to respondent R.T. Dino Development Corporation for P200,000.00, and Transfer Certificate of Title (TCT) No. 34211 was issued in the corporation’s name. On July 28, 1999, within five years from the sale, the Spouses Duadua informed R.T. Dino of their intent to repurchase the land under Section 119 of Commonwealth Act No. 141 (the Public Land Act). R.T. Dino refused, arguing that the Spouses Duadua’s real intent was to profit from a potential sale to the Department of Public Works and Highways (DPWH), that the actual purchase price was P1,100,000.00 (not P200,000.00 as stated in the deed), and that the land had been mortgaged to Spouses Esteban Fernandez, Jr. and Rose Fernandez for a P3,000,000.00 loan. The Spouses Duadua filed a complaint to compel repurchase, which was later amended to implead the Spouses Fernandez and the DPWH. The Regional Trial Court (RTC) dismissed the complaint, ruling that the Spouses Duadua were not land destitutes (as they owned another parcel), that allowing repurchase would exceed the five-hectare retention limit under the Comprehensive Agrarian Reform Law (CARL), and that they failed to prove the repurchase was for “home and cultivation.” The Court of Appeals (CA) initially reversed the RTC, upholding the right to repurchase, but upon R.T. Dino’s motion for reconsideration, issued an Amended Decision dismissing the complaint, holding that the purpose was merely “sentimental” and that the Spouses Duadua were no longer land destitutes. Petitioners, as heirs, elevated the case to the Supreme Court.

ISSUE

1. Whether the Court of Appeals erred in holding that petitioners and their deceased parents lost their right to repurchase the homestead land under Section 119 of the Public Land Act.
2. In the event repurchase is allowed, what is the proper repurchase price?

RULING

The Supreme Court GRANTED the petition, reversed the CA Amended Decision, and upheld the petitioners’ right to repurchase.
1. On the right to repurchase: The Court held that Section 119 of the Public Land Act expressly grants the homesteader or their heirs the right to repurchase within five years from conveyance. The Spouses Duadua validly exercised this right on July 28, 1999, within three years of the May 14, 1996 sale. The CA and RTC erred in imposing conditions not found in the law. The acquisition of another parcel of land does not disqualify a homesteader from repurchasing, as the Public Land Act does not prohibit it. The purpose of the law is to preserve the homestead for the family, and the Spouses Duadua’s motive (even if “sentimental”) is irrelevant. The CARL’s five-hectare retention limit does not apply to homestead grants predating its enactment. The fact that the heirs no longer reside on the land does not extinguish the right, as the law allows repurchase by “legal heirs” regardless of residence.
2. On the repurchase price: The Court held that the repurchase price should be the actual consideration of P1,100,000.00, not the P200,000.00 stated in the deed, as R.T. Dino had proven the higher amount. The mortgage of P3,000,000.00 to the Spouses Fernandez is not chargeable to petitioners, as they were not privy to that contract. The Court also affirmed the directive for R.T. Dino to pay additional capital gains and documentary stamp taxes (including surcharge, interest, and penalties) on the difference between P1,100,000.00 and P200,000.00, which had become final and executory.
DISPOSITIVE:
The Supreme Court reversed the CA Amended Decision dated May 10, 2019. Petitioners Heirs of Spouses Duadua are entitled to repurchase the land covered by OCT No. (V-2866) P-2220 (now TCT No. T-34211) from R.T. Dino Development Corporation upon payment of P1,100,000.00. R.T. Dino is ordered to reconvey the land and to pay the Bureau of Internal Revenue additional taxes based on the price difference.