GR 83992; (January, 1993) (Digest)
G.R. No. 83992 January 27, 1993
RURAL BANK OF DAVAO CITY, INC., petitioner, vs. THE HONORABLE COURT OF APPEALS and GABRIEL ABELLANO and FRANCISCO SEQUITAN, respondents.
FACTS
On April 18, 1978, respondents Gabriel Abellano and Francisco Sequitan obtained a P45,000.00 loan from petitioner Rural Bank of Davao City, secured by a mortgage on their homestead land. On July 1, 1978, the National Housing Authority (NHA) filed an expropriation case for said land. Respondents defaulted on the loan, and the property was extrajudicially foreclosed. The foreclosure sale was held on November 9, 1979, and the certificate of sale was registered on December 7, 1979. Respondents failed to redeem the property within the two-year period provided in the Rural Banks’ Act, even after an extension. Petitioner consolidated its title on November 3, 1982. The expropriation court later set the compensation for the land at P490,000.00. On November 9, 1983, respondents notified petitioner of their desire to repurchase the property under Section 119 of the Public Land Act ( C.A. No. 141 ), which provides a five-year repurchase period for homesteads. Petitioner refused. Respondents filed a complaint for reconveyance and later amended it to claim the expropriation compensation, minus the repurchase price. The trial court ruled in favor of respondents, ordering petitioner to pay them the balance of the expropriation price after deducting the redemption amount. The Court of Appeals affirmed the decision.
ISSUE
1. Whether the two-year redemption period under the Rural Banks’ Act supersedes the five-year repurchase period for homestead lands under Section 119 of the Public Land Act.
2. Whether a homesteader who exercises the right to repurchase after the government has expropriated the property during the repurchase period is entitled to the expropriation compensation, less the repurchase price.
RULING
1. No. The two-year redemption period in the Rural Banks’ Act does not supersede the five-year repurchase period in the Public Land Act for homestead lands. The Public Land Act is a special law governing a specific class of property (homesteads), while the Rural Banks’ Act is a general law. The special law prevails. This is supported by the legislative history of the Rural Banks’ Act, which showed an intent not to alter the five-year period for homesteads, and by jurisprudence (Oliva vs. Lamadrid, Cassion vs. Banco Nacional Filipino).
2. Yes. The homesteaders are entitled to the compensation paid by the NHA for the expropriated property, less the repurchase price. The right to repurchase is not extinguished by the expropriation. Since the land can no longer be physically repurchased, reason, justice, and equity demand that the compensation, which substitutes for the land, be given to the homesteaders, after deducting the repurchase amount. The petition was denied.